SPOKANE VALLEY RECLAMATION PROJECT, WASHINGTON THURSDAY, JANUARY 25, 1962 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON IRRIGATION AND RECLAMATION, Washington, D.C. The Subcommittee met, pursuant to other business, in the committee room, New House Office Building, Hon. Walter Rogers (chairman of the subcommittee) presiding. Mr. ROGERS. The subcommittee will now take up consideration of H.R. 7407, by Mr. Horan, our colleague from the State of Washington, a bill to amend the act of September 16, 1959 (73 Stat. 561, 43 U.S.C. 615a), relating to the construction, operation, and maintenance of the Spokane Valley project. We have the Department of the Interior Report which is favorable, if amended. Without objection, H.R. 7407 and the Department report will be made a part of the record at this point. Hearing no objection, it is so ordered. (The documents follow:) [H.R. 7407, 87th Cong., 1st sess.] A BILL To amend the Act of September 16, 1959 (73 Stat. 561, 43 U.S.C. 615a) relating to the construction, operation, and maintenance of the Spokane Valley project Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act of September 16, 1959 (73 Stat. 561, 43 U.S.C. 615a), be amended as follows: (a) By amending section 1 thereof to add domestic, municipal, and industrial ses as purposes thereof. (b) By amending section 2 to read as follows: "In construction, operating, and maintaining the Spokane Valley project, the Secretary shall be governed by the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388, and acts amendatory thereof or supplementary thereto), except that (1) he may extend the base period of any contract entered into under section 9 of the Reclamation Project Act of 1939 (53 Stat. 1187; 43 U.S.C. 485 (h)), as amended, to not more than fifty years, exclusive of a development period if he finds such to be proper; (2) interest on the paid balance of the allocation to domestic, municipal, and industrial water supply shall be at a rate determined by the Secretary of the Treasury, as of the beginning of the fiscal year in which construction is initiated, on the basis of the Computed average interest rate payable by the Treasury upon its outstanding marketable public obligations which are neither due nor callable for redemption for fifteen years from date of issue; (3) the remaining cost of the project beyond the amount to be reimbursed or returned by the water users shall be accounted for in the same manner as provided in item (c) of section 2 of the Act of July 27, 1954 68 Stat. 568), and power and energy required for irrigation pumping for the Spokane Valley project shall be made available in the same manner as provided for therein. The amount to be repaid by the irrigators shall be collected by the contracting entity through annual assessments based upon combination turnout and acreage charges and/or through the use of such other methods as it and the Secretary may agree upon." (e) Section 3 thereof is amended by deleting therefrom the figure "$5,100,000" and inserting in lieu thereof the figure "$7,230,000". SPOKANE VALLEY PROJECT SUMMARY (H.R. 7407) Type of projects.-The Spokane Valley project is a small irrigation and municipal water project in the vicinity of Spokane, Wash. The project was authorized in 1959. The plan of development and repayment has been modified and the present legislation provides for reauthorization. The project works would consist of a closed-pipe pressure distribution system. Service area. The project would provide irrigation service to a total of 7,250 acres and, in addition, water would be supplied to municipal water distribution systems which are not a part of the project plan. Cost and allocations. The estimated cost of the project facilities is $7,178,000 of which $6,141,000 would be allocated to irrigation and $1,037,000 would be allocated to municipal water. Water supply and requirements.-Ground water from the aquifer underlying the valley would be the source of water for the project. The annual water requirements are estimated to be 18,420 acre-feet of which 18,060 acre-feet are initially for irrigation and 360 acre-feet are for municipal water supply. Municipal water requirements will increase in the future while irrigation requirements will decrease. Agricultural economy. The location of the project lands in relation to the city of Spokane has a strong influence on the agricultural economy which has developed. The areas most distant from Spokane are utilized for full-time farming operations while the areas close to Spokane are more highly subdivided into part-time farms. About 20 percent of the irrigable land is now devoted to fruit and truck-crop production with the remaining irrigated lands devoted to alfalfa, small grains, and pasture. The principal agricultural use in urban areas is for gardens and berries. Benefit-cost ratio.—On the basis of the Bureau's economic studies, the annual benefits from the development will exceed the costs by a ratio of 3.89 to 1. Repayment. The Bureau's repayment analysis indicates that the irrigation and municipal water users could repay about $5,960,000 or 82 percent of the total cost over a 50-year repayment period. The municipal water allocation would be repaid with interest. As provided in the legislation, the remaining amount of about $1,270,000 would be repaid from surplus power revenues of the Chief Joseph Dam project. Hon. WAYNE N. ASPINALL, U.S. DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D.C., September 11, 1961. Chairman, Committee on Interior and Insular Affairs, DEAR MR. ASPINALL: This responds to your request for the views of this Department on H.R. 7407, a bill to amend the act of September 16, 1959 (73 Stat. 561, 43 U.S.C. 615a), relating to the construction, operation, and maintenance of the Spokane Valley project. We recommend that the bill be enacted, if amended as suggested herein. The Spokane Valley project was authorized by the act of September 16, 1959, Public Law 86-276 (73 Stat. 561). The authorized plan of development provided for the irrigation of 10,290 acres of land comprising seven irrigation districts near Spokane, Wash., and a small adjacent area in Idaho. This area is now served a gravity supply of irrigation water by direct diversion from the Spokane River through a system of canals and flumes which in part are in a seriously deteriorated condition and subject to failure at any time. Construction of the Spokane Valley project was authorized to alleviate this situation. The plan of development involved a closed-pipe pressure system, using ground water in lieu of the present surface water supply for the sprinkler application of water. The construction cost was estimated at $5,100,000, all of which was allocated to irrigation. Of this total, $4,400,000 was to be repaid by the irrigators, and power revenues from the Chief Joseph Dam project were to be utilized to repay the remaining $700,000. Following authorization, some of the owners of project lands decided against participation in the project, feeling that they could obtain their irrigation water through their own resources at a lower cost. The $4,400,000 repayment amount specified in Public Law 86-276 was determined on the basis that 10,290 acres would participate in the project. With a reduction in project acreage, sufficient funds would not be available to repay this amount. As a result, amendment of the project legislation is necessary. Upon reconsideration of the needs of the area, it was concluded, in collaboration with local interests, that municipal water supply should be made a function of the project. This requires amending the authorizing legislation, since Public Law 86-276 provides only for a single-purpose irrigation project. Meetings were held with local interests to determine what future course of action to take, to seek advice on what development was wanted and would be supported, and to instigate the formation of one overall irrigation district covering the remaining project lands which would be responsible for negotiations with the Federal Government. As a result of these efforts, the Consolidated Irrigation District was formed in January 1961 by the overwhelming vote of 690 for and 46 against, and a new project plan has been evolved. As originally designed, the project plan calls for the use of bare steel pipe. Recent experience and study on the part of the Bureau of Reclamation in the general project area demonstrates the vulnerability of this pipe to corrosion, and indicates that a covered pipe should be used. It has been concluded that the proper design requires the use of a mortar-lined and coated steel pipe or asbestoscement pipe. Such an improved pipe, and other changes presently contemplated, would result in increased project costs, but at the same time materially add to the life of the distribution system and result in lower operating costs. Accordingly, the ceiling on appropriations for the Spokane Valley project specified in Public Law 86-276 must be increased. The basic project pipeline systems were designed for the delivery of irrigation water. The design criteria were reviewed considering the trend toward subdivision of the project lands. Improvements in the authorized plan are required to adapt the systems to municipal use, and possible future industrial use, including interconnections between systems to permit more economic pumping during the nonirrigation season, provision of 6-inch minimum pipe size, and other changes to improve the flexibility and efficiency of the systems. The original plan of development contemplated that irrigation pumping power would be purchased from the Washington Water Power Co. The present plan contemplates that power for irrigation water pumping would be purchased from the Bonneville Power Administration under provisions of the Chief Joseph Dam project authorizations, specifically section 2 of the act of July 27, 1954 (68 Stat. 568). Use of this provision of law would substantially reduce the annual power cost of the project and enhance the repayment aspects. The power for pumping municipal water supplies would be obtained from BPA at commercial rates applicable to this type of load. The revised plan of development would provide irrigation service to a total of 7,250 acres, of which 6,792 acres were included in the originally authorized plan. The remaining 458 acres are presently dry lands which have been taken into the newly formed Consolidated Irrigation District. All of the lands have been covered by a detailed land classification survey and are suitable for irrigation or homesite use. Ground water from the aquifer underlying the valley would be the source of water for the revised plan, as it was under the authorized plan. The supply is more than ample for the needs of the project. Water from this source is of excellent quality for irrigation and is being used without chlorination by over 30 domestic systems in the Spokane Valley. However, should the need for chlorination arise, necessary facilities could be provided by the district without difficulty. Under State law, the Spokane County Health Department, in cooperation with the State department of health conducts continuous surveys of all public water systems in the valley to insure that all water for human consumption will be potable. The project annual water requirements are estimated to be 18,420 acre-feet, of which 18,060 acre-feet are for irrigation and 360 acre-feet for municipal water supply in the initial years of project operation. The combined water requirements for these two purposes are expected to remain essentially constant over the repayment period. Projected future increases in municipal water requirements will be offset by reductions in irrigation requirements as the area becomes more highly subdivided and more land is devoted to non-water-consuming uses. The project water supply would be pumped from the ground-water aquifer into separate systems for each of 10 areas comprising the newly formed Consolidated Irrigation District. Each system would consist of one or more wells, multiple pumping units, and an elevated tank reservoir. The capacity of the main trunk irrigation system would be adequate to provide municipal water, which would be distributed through separate systems by tapping the main supply lines at controlled points. The municipal water distribution systems are not a part of the project plan and would be added by the district as need develops. The plan includes the cost of facilities to distribute Federal power to project pumps, but these transmission lines would not be constructed if suitable wheeling arrangements can be made. The estimated cost of project facilities based on January 1961 prices is $7,178,000. Annual operating costs for the project will increase as the project area becomes more highly subdivided and the number of irrigation turnouts and municipal water services increase. Annual costs of operation, maintenance, replacements, and pumping power are estimated at $81,300 initially and $117,600 after 50 years of project operation. Irrigation agriculture is the dominant use of the 7,250 acres of land in the Consolidated Irrigation District. However, the location of project lands in relation to the city of Spokane has had a very strong influence on the agricultural economy which has developed. The areas most distant from Spokane are utilized primarily for full-time farming operations. Those close to Spokane and major transportation arterials are more highly subdivided into part-time farms and rural homesite units. About 20 percent of the irrigablel and is now devoted to fruit and truck crop production. Most of the remaining irrigated lands are planted to alfalfa, small grain, and pasture. The principal agricultural use of lands in the urban areas is for gardens and berries. A base charge of $11.25 per acre annually and an annual service charge of $20 per turnout is recommended for the Spokane Valley project. This combination charge will permit a variable water assessment which will keep the cost of irrigation service on full-time farms within payment capacity and at the same time obtain payments from small tracts commensurate with the cost of providing irrigation service. Under this arrangement, the projected revenues from the irrigation water users will increase from $115,500 in the first year of operation to $181,800 in repayment year 31. No development period is considered necessary. The municipal water supply would be furnished on the basis of a charge of $20 annually per service. Revenues from this source are projected to increase from $27,200 annually under initial conditions to a maximum of $100,000 annually after year 30. Benefits of the revised plan of development would exceed the associated costs in the ratio of 3.89 to 1 over a 100-year period of analysis. Using only direct benefits over a 50-year period of analysis, the ratio would be 1.20 to 1. The cost of the proposed project is allocated between the irrigation and municipal water supply functions, using the separable cost-remaining benefits method. The results of this allocation are as follows: The costs allocated to irrigation would be repayable without interest and the costs allocated to municipal water supply, including interest during construction, would be repayable with interest (an interest rate of 2.742 percent was used, consistent with recent enactments of the Congress). A 50-year repayment period would apply to both purposes. A detailed payout study indicates that water users (including both irrigation and municipal) probably could repay $5,963,000 of the reimbursable project costs, or 82 percent of the total. The irrigators could repay $3,714,000 over the 50-year period. The municipal water users could repay $1,091,000 allocated to municipal water supply, including interest on the unpaid capital investment, within 37 years. Through continuation of payments at the same level of charges for the remainder of the 50-year payout period, net revenues in the amount of $1,158,000 would be available for financial assistance to irrigation. The Consolidated Irrigation District has expressed its willingness to contract with the United States for repayment on behalf of the irrigators and the municipal water users on this basis. Financial assistance in the amount of $1,269,000 would be required from power revenues of the Chief Joseph Dam. We recommend that the bill be amended as follows: (1) To clarify the intent of the bill, page 2, line 23, should be amended by striking the words "and/or" and substituting therefor the word "and". (2) To properly reflect the cost of the project the figure "$7,230,000" appearing on page 3, line 3, should be changed to read "$7,232,000". Enclosed is a statement concerning estimated personnel and other requirements for the Spokane Valley project as required by Public Law 801, 84th Congress. We are also enclosing, at the request of the Bureau of the Budget, the regional director's reappraisal report of this project. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, KENNETH HOLUM, Assistant Secretary of the Interior. SPOKANE VALLEY PROJECT, WASHINGTON Estimated additional man-years of employment and expenditures, as required under Public Law 801, 84th Cong. Mr. ROGERS. Our colleague from Washington, Mr. Horan, has been patiently waiting while we went into these other matters, and the Chair will recognize you for a discussion of your bill. STATEMENT OF HON. WALT HORAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON Mr. HORAN. I want to thank you for scheduling an early hearing on this legislation which is of vital importance to the people of the Spokane Valley in the Fifth Congressional District which I have the honor to represent in the Congress. Officials of the Spokane Valley project, as well as officials of the Bureau of Reclamation are here today and they will be able to provide you with specific details relative to the operations of the project plan. Thus, I will not elaborate on these points. 80207-62- 2 |