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<br />regarding the purchase of federal storage reallocated
<br />from water quality to municipal and industrial
<br />purposes. The MOU, which expires in 1996,
<br />established an interim pricing policy allowing the state
<br />to purchase reallocated storage at the original
<br />construction cost and interest rates, in one lump sum.
<br />Given these favorable terms, compared to current
<br />federal policy, the state hopes to acquire more storage
<br />rights. The Kansas Water Office has recommended
<br />the state legislature modify state law requiring local
<br />repurchase commitments before the state may buy
<br />such rights. The legislature must also find a funding
<br />mechanism for the proposed acquisitions.
<br />
<br />Kansas' original storage contracis with the Corps
<br />were negotiated under the 1958 Federal Water Supply
<br />Act, which allowed the state to add up to an additional
<br />30% to the storage capacity of a proposed federal
<br />flood control project, at state cost, for "future'
<br />municipal and industrial needs. The state was allowed
<br />to repay the additional construction costs over 50
<br />years, with interest at then current rates (2-4%). While
<br />contracts negotiated under the 1985 MOU require a
<br />lump-sum payment, capital costs are calculated based
<br />on original construction costs and interest rates.
<br />Under the MOU, Kansas created a Water Assurance
<br />Program, established a $4M escrow account, obtained
<br />water quality reservation rights, and promised to
<br />protect water quality releases. The Corps agreed to
<br />conduct reallocation studies, and give Kansas a right
<br />of first refusal on storage eligible for reallocation.
<br />
<br />While state municipal water supplies are currently
<br />adequate, the drought has raised concern over control
<br />of reservoir storage. In 1991, the Corps quickly drew
<br />down Milford, Tuttle Creek and Perry Lakes in the
<br />Kansas Basin to support Missouri River navigation.
<br />The navigation benefits appeared to be slim, while the
<br />impact on recreation and the threat of a multi-year
<br />drought led the state to consider purchasing the
<br />storage to remove it from Corps' control.
<br />
<br />The state considered acquiring complete control of
<br />all storage and assuming all capital, operation and
<br />maintenance costs. State finances, however, were a
<br />constraint. Also, whereas the Corps has discretionary
<br />authority to reallocate up to 50,000 acre-feet, or 15%
<br />of total storage in a project, whichever is less, any
<br />additional reallocations require Congressional
<br />approval. Acquiring available storage within the
<br />discretionary authority of the Corps appears to be
<br />
<br />practical and cost-effective in providing state control
<br />over some stored water.
<br />
<br />.
<br />
<br />Potential sources of funding include the Kansas
<br />State Water Plan Fund, with annual revenue of about
<br />$16M, use of the general fund, revenue or general
<br />obligation bonds, or Kansas' state water marketing
<br />program, which includes a small development fund.
<br />Some combination of these sources will likely be used
<br />if the plan goes ahead, with purchases spread over
<br />the next 3-4 years. For more information contact the
<br />Kansas Water Office, (913) 296-3185.
<br />
<br />WATER RESOURCES/PUBUCATlONS
<br />
<br />Texas
<br />
<br />Texas Auditor Lawrence F. Alwin, CPA, has
<br />presented a report to the Texas Legislative Audit
<br />Committee entitled 'Texas Water Resources
<br />Management: A Critical Review." The transmittal letter
<br />says, in part: 'Texas is not well prepared to respond to
<br />the emerging water resource management challenges
<br />posed by continued economic expansion, population
<br />growth, or a period of extended drought. The State
<br />needs a process to address the interrelated and often
<br />conflicting issues of water supply, water quality, and
<br />the environment.' It opines, "Texas lacks clear
<br />statewide policies and goals for water resource
<br />management.... We recommend that the legislature
<br />create a state water resources coordinating council to
<br />formulate statewide policy recommendations and
<br />goals...." The letter concludes, "This review...highlights
<br />a number of critical issues and recommendations....
<br />We wish to thank the Texas Water Development
<br />Board, the Texas Water Commission, and the
<br />numerous other agencies and individuals involved in
<br />water resource management for their cooperation and
<br />assistance.' For information contact the Texas State
<br />Auditor, P.O. Box 12067, Austin, TX 78711-2067; (512)
<br />479-4700. Refer to SAO Report No. 3-081.
<br />
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<br />
<br />MEETINGS
<br />
<br />The Western States Water Council's Fifth Biennial
<br />Water Policy Seminar and quarterly meetings will be
<br />held April 22-23 in Washington, D.C. at the Quality
<br />Hotel on Capitol Hill. The Seminar meeting will include
<br />roundtable discussions on federal/state relations in
<br />water resources and the reauthorization of the Clean
<br />Water Act. Speakers are being confirmed.
<br />
<br />The WESTERN STATES WATER COUNCIL is an organization of representatives appointed by the Governors of .
<br />member states - Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota,
<br />Oregon, South Dakota, Texas, Utah, Washington, and Wyoming, and associate member state Oklahoma
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