Irrigation Leader February 2012

Volume 3 Issue 2

February 2012

Eric Wilkinson: Northern Colorado Water Conservancy District Balances Two Large Infrastructure Projects in Time of Limited Federal Funding

Investing in Infrastructure

By Kris Polly

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he Administration’s fiscal year 2013 budget request for the Bureau of Reclamation was released on February 13. Reclamation’s budget request is nearly $1 billion, as it has been for several years. Considering the state of the federal budget in general, that figure is probably generous. Considering the needs of our aging infrastructure and the economic engine water and power projects can provide our country, $1 billion is woefully inadequate.

Reclamation maintains 476 dams and 348 reservoirs, with the capacity to store 245 million acre-feet of water, irrigating about 10 million acres of land, providing water to over 31 million people, generating 40 million megawatthours of electricity, and providing recreation opportunities.

According to the Department of the Interior, these activities make an economic contribution of $55 billion and nearly 416,000 jobs. The value of water and power infrastructure is clear.

When I served as a deputy under Reclamation Commissioner Bob Johnson, I was able to meet and speak with a great number of people who have spent their careers at Reclamation. Many, like Commissioner Johnson, had worked at Reclamation for well over 30 years. While not all of them worked on the monumental projects like Glen Canyon Dam, their careers overlapped with people who had. From time to time, the Reclamation people I knew would share stories that had been told to them by their predecessors. I always enjoyed the stories as they provided great insight into the agency’s history. Anyone who had the pleasure to meet Commissioner Floyd Dominy, who lived to be 100, definitely came away understanding that there was a time when our country was truly interested in building economies and creating jobs. Reclamation’s past

budgets and projects directly reflected that interest.

While budgets and priorities fluctuate over time, the need for reliable water and power supplies continues to grow. Like true westerners, people faced with water supply challenges have found new sources to fund their needed infrastructure. In this issue of Irrigation Leader, Eric Wilkinson, General Manager of the Northern Colorado Water Conservancy District, explains how his district is building two off-stream storage reservoirs with very little federal funding.

Similarly, Utah aims to construct a $1.2 billion pipeline using substantial state funding. In an earlier time, such a large-scale project would have been spearheaded by the federal government. Utah’s efforts are yet another example of working to ensure that water infrastructure keeps pace with population growth and economic need.

Other state and local efforts highlighted in this issue include work in Nebraska to invest in infrastructure and use infrastructure solutions to maintain compliance with an interstate compact.

As the federal budget continues to shrink, efforts like these will become increasingly necessary. While Reclamation will continue to play an important role in creating and maintaining western water infrastructure, creative financing initiatives involving state and local entities will take on greater importance.

Kris Polly is editor-in-chief of Irrigation Leader magazine and president of Water Strategies, LLC, a government relations firm he began in February 2009 for the purpose representing and guiding water, power, and agricultural entities in their dealings with Congress, the Bureau of Reclamation, and other federal government agencies. He may be contacted by e-mailing Kris.Polly@waterstrategies.com.

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Irrigation Leader directly markets your message to the decision-makers on

irrigation and other water infrastructure projects. Hard copies of Irrigation Leader are mailed to the 600-plus irrigation district general managers and their respective boards of directors in the 17 western states; the U.S. Bureau of Reclamation; Congress; and a variety of western water-related organizations, engineering firms, and interested individuals. In other words, advertising in Irrigation Leader is like having nearly 8,500 people stop by your vendor booth.

For information on advertisement rates, packages, and placement, please contact Kris Polly by phoning (703) 517-3962, or by e-mailing Irrigation.Leader@waterstrategies.com.

FEBRUARY 2012

C O N T E N T S 2 Investing in Infrastructure

By Kris Polly

Volume 3

Issue 2

Irrigation Leader is published 10 times a year with combined issues for November-December and July-August by: Water Strategies, LLC P.O. Box 100576 Arlington, VA 22210 Staff: Kris Polly, Editor-in-Chief John Chisholm, Senior Writer Robin Pursley, Graphic Designer Capital Copyediting, LLC, Copy Editor SUBMISSIONS: Irrigation Leader welcomes manuscript, photography, and art submissions.

However, the right to edit or deny publishing submissions is reserved.

Submissions are returned only upon request.

ADVERTISING: Irrigation Leader accepts one-quarter, half-page, and full-page ads.

For more information on rates and placement, please contact Kris Polly by phoning (703) 517-3962, or by e-mailing Irrigation.Leader@waterstrategies.com.

CIRCULATION: Irrigation Leader is distributed to irrigation district managers and boards of directors in the 17 western states, Bureau of Reclamation officials, Members of Congress and committee staff, and advertising sponsors.

For address corrections or additions, please contact our office by e-mailing Irrigation.Leader@waterstrategies.com.

COVER PHOTO: Eric Wilkinson, General Manager of the Northern Colorado Water Conservancy District. Photo provided by Northern District staff.

Irrigation Leader

4 Northern Colorado Water Conservancy District

Balances Two Large Infrastructure Projects in Time of Limited Federal Funding

11 Utah Targets $1.2 billion Lake Powell Pipeline

Project to Promote Economic Growth

14 Infrastructure Partnerships Boost Habitat,

Benefit Operations

By Scott Yates

16 Reclamation Releases President’s Budget

Request of $1 Billion

17 Title Transfer Provides Project Financing,

Cost-Saving Benefits

By Tom Knutson

18 Nebraska Water Managers Take Control of

Funding, Infrastructure Issues District Focus:

24 Mancos Water Conservancy District Completes

Major Rehab Project, Aims for Efficiency Gains

By Gary Kennedy

Water Law:

26 Sackett v. EPA: Property and the Right to

Judicial Review

By Damien M. Schiff

International:

28 Australian Company Brings Efficient Irrigation

Technology to American Marketplace The Innovators:

30 Monsanto Aims to Improve Irrigation Testing

With Automated Rainout Shelter

3

Northern Colorado Water Conservancy District Balances Two Large Infrastructure Projects in Time of Limited Federal Funding

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s federal funding for large water infrastructure projects becomes increasingly limited, state and local entities are turning to alternative sources of financing to ensure water availability keeps pace with population growth.

Currently, the Northern Colorado Water Conservancy District is managing two major ongoing infrastructure projects that are designed to ensure adequate water supplies remain available to municipal population centers while avoiding the need to purchase and convert existing agricultural rights for municipal use, resulting in the drying up of vast areas of very productive irrigated farmland.

The first project, known as the Northern Integrated Supply Project (NISP), is intended to supply Northern Front Range water partners with 40,000 acre-feet of new water supplies.

NISP will result in the construction of two storage reservoirs and is estimated to cost $490 million. The second project, conducted under the auspices of Northern Water’s Municipal Subdistrict, is known as the Windy Gap Firming Project. The Windy Gap Firming Project will firm existing water rights and will also

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include the construction of a new reservoir at a total cost of approximately $270 million.

Importantly, Northern Water is not directly responsible for the financing of either project. Both initiatives are funded by Water Activity Enterprises. Formed under Colorado’s statutes governing water conservancy districts, these enterprises allow groups of water users to join forces under a Colorado water conservancy district to construct mutually beneficial water infrastructure.

The entities involved in the enterprises then contract with Northern Water to build the project at cost, enabling the parties to collaborate, cooperate, and leverage economies of scale and collective expertise.

Irrigation Leader’s editor-in-chief, Kris Polly, discussed Northern Water’s two ongoing projects with the district’s general manager, Eric Wilkinson, on January 19, 2012.

Kris Polly: Can you tell us a little about the two reservoir projects Northern Water is working on?

Irrigation Leader

Eric Wilkinson: Yes. We have two very large projects that we are trying to push through. One is for our constituents under the auspices of Northern Water, and the other is for participants in the Windy Gap Project, which is a project of our municipal subdistrict.

Kris Polly: Are the projects interrelated?

Eric Wilkinson: They are completely separate. The one that is being pursued by Northern Water is called the Northern Integrated Supply Project (NISP). It is a unique project. It not only takes advantage of unappropriated waters, but it also obtains about 50 percent of its yield from collaboration and cooperation with the agricultural community in the Cache La Poudre River Basin, partnering to exchange water that is diverted near the confluence of the Cache La Poudre and the South Platte Rivers. We will exchange water that we are able to divert near the confluence for water two large irrigation companies have historically diverted further upstream and then store the water that has been historically diverted by these companies in the new Glade Reservoir. Through this exchange, we will have repositioned the exchanged water so it is available for municipal and industrial uses.

The project being pursued by the municipal subdistrict, known as the Windy Gap Firming Project, is a 90,000 acre-foot reservoir that will be used to store water during years when there are adequate supplies, to be drawn upon when we are water short or if there are operational constraints that prevent us from diverting from the Colorado River. The Windy Gap Project uses excess capacity within the Colorado-Big Thompson (C-BT) Project to convey water from the western slope of Colorado to Colorado’s northern front range. In wet years, we are hampered because there is no excess capacity within the C-BT Project to move the Windy Gap water from the West Slope to the East Slope. As a result, in those years when the C-BT Project storage is full and spilling, we are also curtailed in the operation of the Windy Gap Project. So this will address both of those scenarios­—the dry year scenario and the wet year scenario.

Kris Polly: What is the status of construction of these two projects?

Eric Wilkinson: We started both of them through the National Environmental Policy Act (NEPA) compliance phase in 2003. We completed a draft environmental impact statement on both of them in 2008. We have a Irrigation Leader

final environmental impact statement on the Windy Gap Firming Project that we received on November 30, 2011.

Following the issuance of the draft environmental impact statement on NISP, the Army Corps of Engineers made the decision in February 2009 to move into a supplemental draft environmental impact statement, and we continue in that effort today. We hope to conclude that phase of NEPA compliance on NISP by the end of 2012, and it will probably take another year to complete the final draft of the environmental impact statement for NISP. We are then going into two years of design, which will take us to 2015, with construction hopefully starting in 2016.

On the Windy Gap Firming Project, we are now talking with Reclamation about the record of decision and moving forward with negotiations on a carriage contract that will be needed to integrate the operation of the firming project with the operation of the C-BT Project. We are hoping to have permits for the Windy Gap Firming Project by July or August 2012, and then we will go into a two-year design phase. It is a large project that is going to take about two years for design and then we will go into construction after that. Hopefully, we will begin construction by sometime in 2014 or early 2015.

Kris Polly: Why are the NISP and the Windy Gap Firming Project being regulated by different entities—the Army Corps and Reclamation, respectively?

Eric Wilkinson: The federal nexus we have on NISP is the wetland permit, the Clean Water Act Section 404 permit. The federal nexus we have on the Windy Gap Firming Project is the physical connection of the storage reservoir, which we call Chimney Hollow Reservoir, to 5

facilities in the C-BT. So if you look at it from that perspective, where your federal nexus is, it does make sense that we have two different lead federal agencies.

Kris Polly: How will the projects affect irrigated agriculture?

Eric Wilkinson: There are noagricultural participants in either of our projects.

However, considering the water supply scenarios that we are looking at in Colorado, between now and 2050 Colorado is going to need between 600,000 and 1 million additional acre-feet of water for municipal and industrial purposes. Both of these projects take advantage of available, unappropriated waters in Colorado, as well as cooperation with the agricultural community to provide an additional water supply.

For example, if we do not develop NISP as envisioned, the “no-action alternative� study shows that up to 60,000 acres of irrigated farmland would have to be dried up to provide the same amount of water NISP would yield on an annual basis. The alternative, without a doubt, to NISP is that the NISP participants will be forced to seek other water supplies. The no-action alternative shows that those other water supplies are going to be existing senior irrigation rights. The study shows that the no-action alternative is almost double the cost of completing NISP. The direct benefit to agriculture is that if NISP is built, it will prevent the dry-up of nearly 100 square miles of irrigated farmland. I think that is a significant benefit to agriculture. We have not done the same type of study for the Windy Gap Firming Project because it has some different characteristics.

Kris Polly: How much has been spent financing the two projects so far?

Eric Wilkinson: We have spent about $14 million on the Windy Gap Firming Project and about $10 million on NISP. The difference between the two is some property acquisitions that we did for the reservoir site for the Windy Gap Firming Project. We cooperated with Larimer County on some open space purchases, and the Chimney Hollow Reservoir will be an integral part of 6

Irrigation Leader

the county’s open-space program once it is constructed. For both projects, we have spent over $9 million on the studies alone. It has been fairly equal across the board in regard to study expenditures. When all is said and done, in regard to studies, NISP will end up expending significantly more money than we will spend on the Windy Gap Firming Project.

Kris Polly: How are the projects being financed?

Eric Wilkinson: Under a provision of Colorado state law, conservancy districts can create Water Activity Enterprises. Those enterprises can focus on the development, design, construction, operation, and maintenance of specific water projects. Both of these projects are being developed under that mantle.

We have used Water Activity Enterprises successfully on numerous occasions at Northern Water. Participants that want to develop a water project come to us because we have had success in putting projects forward and implementing them. They come to us and ask us to act, in essence, as their agent, to move the project forward. As such, the physical projects are owned by Northern Water or our municipal subdistrict, but participants in the project actually own the capacity within the project.

For example, in a pipeline project, each participant owns a pro rata share of the flow capacity within a certain segment of the pipe. With a reservoir, they would own a certain number of acre-feet of the total capacity of the reservoir. The amount they pay toward the development and operation of the project depends upon the amount of participation or benefits they want to derive from the project.

The district works with permitting agencies, completes the design and construction, and then operates and maintains the project. We pass the costs associated with these activities along to the project participants. We do not use any tax money or any assessments from, for example, the C-BT Project on any of these projects. We bill out our hours on a one-for-one basis to the participants. Whatever costs we incur are passed directly, without markup or administrative costs.

This proves to be a fairly efficient way of doing business because then we can have the equipment here we need to maintain those projects. That equipment can then be utilized on the several projects that we operate and maintain, allowing us to be more efficient. We can also have an enhanced workforce capable of handling things more expeditiously, and we can keep employees busy working on Irrigation Leader

a number of Water Activity Enterprises, plus the C-BT Project, plus the Windy Gap Project, so it works out very well.

Kris Polly: Are the Water Activity Enterprises funded solely by the project participants?

Eric Wilkinson: Yes. Project participants are wholly responsible for the costs. To date, we have required a commitment from the participants for the funding of project activities ahead of those costs being incurred. We have asked for contributions ahead of time, so the district has the money in the bank to move forward and is assured that it is not held liable for any costs that are incurred. As we enter into a project construction contract, the money for that contract is already in the bank.

To date, it has been up to the participants to individually secure the funding for their individual portion of a project.

They have done that in a number of ways, including bond markets, using Construction Fund loans from the Colorado Water Conservation Board, and loans and funds from the Colorado Water Resources and Power Development Authority. But Northern Water does not become involved in the process used by project participants to finance their portion of the projects. What we see are the results of their financing efforts.

There is some discussion among the participants in these two projects of maybe pooling their interests and financing each of the projects as a group. That would have to be done in a way that did not result in liability to Northern Water or the subdistrict. We are exploring those options right 7

now. Because actual construction is still well into the future, project participants have the luxury of looking at those options and can figure out if they want to do something in a different way than has historically been done, particularly on these larger and more costly projects.

Kris Polly: How would you characterize the membership of the Water Activity Enterprises?

Eric Wilkinson: The general category I would use is water users. They are mostly all municipal entities or special water districts, which, in Colorado, are water districts that were developed in the 1960s and 70s to serve areas that were not served by municipal water systems. We refer to them as “rural domestics," because that is how they started, but now they have really evolved and some of them are serving large portions of some of the larger cities in this area. These rural domestics have historically served the areas around these cities and as these cities grow into the previously rural areas, these domestic water districts continue to provide water service.

Kris Polly: Is there any Reclamation or Corps money in these big projects, or is this largely being funded by state and local sources?

Eric Wilkinson: The studies are being totally funded by the Water Activity Enterprise participants using their available cash reserves. The participants are using their funds to participate in the study and in the NEPA compliance efforts. No federal funds are going into this, with one exception. With Reclamation being the lead agency on the Windy Gap Firming Project, any costs it incurs are part of the billing for the NEPA compliance, which is paid by the participants. On the other hand, with the Army Corps of Engineers’ work on NISP, any personnel costs incurred by it for NEPA compliance efforts are not passed along to Northern Water and the project participants but are instead absorbed by the Corps. The participants are paying the third-party consultants that are doing the NEPA work for each project

Kris Polly: What would your message be to district managers and their boards of directors that are considering similar infrastructure projects?

Eric Wilkinson: I think you are going to have to be looking at all available sources of financing. The state of Colorado is in a budget crunch right now, which has somewhat limited the amount of money that is available through some of our agencies such as the Colorado Water Resources and Power Development Authority and the Colorado Water Conservation Board in the form of loans.

I would advocate that the states continue to develop and enhance the programs that they have to make funds available at a reasonable interest rate for the development of water projects. It is in the states’ best interest to ensure that there are adequate water supplies. I sit on the Colorado Water Conservation Board, and providing funding for the state’s water resources at a reasonable interest rate is an important component of its mission.

My counsel would be for states to continue to look for ways to facilitate funding of water projects either through loans or grants and maybe even look at the availability of funds to mitigate some of the environmental effects by making projects multipurpose. I have a philosophy that I have advocated both locally and statewide: there are opportunities as you are building these projects to include environmental enhancements, but those enhancements should not solely be the responsibility of the project participants. In many cases, it is those enhancements that cause the costs of these projects to escalate and in some cases make them infeasible. If there is a common benefit such as an environmental benefit or enhancement that can be realized from a project, the public as a whole should be willing to step up and contribute to those enhancements.

The public should not have to be fully responsible for them, but should share with the project participants the responsibility for addressing those issues.

Kris Polly: With the federal budget in steep decline, it sounds like Northern Water is doing something different.

Eric Wilkinson: By necessity. There is not much money around anymore for federal funding. It just does not seem to be considered an available source of funding anymore because of the difficulty in trying to get it and the limited availability.

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Irrigation Leader

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Utah Targets $1.2 Billion Lake Powell Pipeline Project to Promote Economic Growth

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o support continued economic growth, Utah plans to construct a 139-mile pipeline to supply municipal and industrial water to the southwestern part of the state. Estimates indicate that if the new infrastructure is not online by the early 2020s, serious consideration may need to be given to curtailing water use.

“There has been a lot of growth in demand,” said Washington County Water Conservancy District General Manager Ron Thompson, noting that the region continues to grow at a rate of 6.2 percent annually. “As in any economy, water is critical.”

Feasibility studies for the pipeline project began in the late 1990s. Currently, organizers anticipate connecting Lake Powell to Sand Hollow Reservoir in Washington County using 69-inch pipe. Smaller 30-inch pipe will be used to convey additional water to Cedar City and Kane County. Up to 100,000 acre-feet of water would travel through the new conveyances annually.

Despite the need for the project, financing remains a significant hurdle. The fate of the $1.2 billion project will likely be determined by the state legislature, which is considering various potential funding mechanisms. “We had a number of discussions over the course of the summer about how to fund the project,” said Eric Millis, Deputy Director of the Utah Division of Water Resources. “A number of options are on the table.”

One such option is a statewide sales tax allocation.

While Utah already sets aside 1/16th of 1 percent of its sales tax—approximately $31 million annually—for water

Irrigation Leader

resources projects, an additional allocation could be made to fund the Lake Powell Pipeline and other water projects around the state. “Utah has a history of using a sales tax to fund infrastructure,” said Thompson. “As I talk to people across the West, more often than not people have been talking about a sales tax as one of the funding ideas.”

Though the sales tax approach was recently discussed by a state Water Issues Task Force, any allocation would have to be approved by the legislature. “They have not yet given a formal ‘yes’ or ‘no’,” said Millis.

Thompson indicated that Utah is historically conservative with state water project financing and is likely to begin setting aside funds to pay for the pipeline long before construction actually begins. “I think in the next two years there will be an attempt to start setting aside some money,” he said.

The project remains in the design and environmental review phase. To date, approximately 30 percent of the design process is complete. “Until we have a record of decision on National Environmental Policy Act compliance, it doesn’t make much sense to move forward on a lot of these other items,” Thompson said. “It is pretty hard to get projects shovel-ready when you have to go through years of environmental analysis.”

For more information on the Lake Powell Pipeline Project, visit the Utah Division of Water Resources website at www.water.utah.gov/LakePowellPipeline.

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Infrastructure Partnerships Boost Habitat, Benefit Operations

By Scott Yates

I

n the West, water scarcity has long been a fact of life.

Securing water to meet diverse and growing needs— from agriculture to municipalities to river health—is the greatest challenge facing the West today.

More than ever, for ranch and farm producers to maintain their competitiveness and sustain their livelihoods, they have to make sure they are using water as efficiently as possible.

But they face a daunting obstacle: our nation’s irrigation infrastructure is rapidly aging. Across the West, thousands of small diversion dams and irrigation ditches are more than a half-century old. Often, these creaky patchwork systems are anything but efficient. Besides imposing high maintenance and labor costs on landowners, aging infrastructure also exacts a costly toll on fish and wildlife by fragmenting habitat, blocking fish passage, degrading water quality, and draining healthy stream flows.

At the same time, for many ranchers, implementing new irrigation technology and infrastructure is complicated and cost prohibitive.

That’s where the Farm Bill’s little-known but highly effective Title II conservation programs—EQIP, AWEP, WHIP, and others—play a key role. For more than seven decades, these Farm Bill programs have helped fund infrastructure upgrades and conservation projects that benefit ranch and farm operations while protecting stream health and wildlife habitat.

The Wildlife Habitat Incentives Program (WHIP), for instance, is a voluntary program that pays up to 75 percent of the cost of

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habitat improvements that benefit threatened species on private farm and ranch lands—even nonagricultural land is covered. The Agricultural Water Enhancement Program (AWEP) focuses on funding technology upgrades and activities that promote ground and surface water conservation and water quality.

In a region where water has long been a source of fights, these programs foster good-faith collaboration among landowners, agencies, conservation groups, and other partners that leverages resources in a way that benefits everyone.

It amazes me how often, especially in the West, the challenges of enhancing trout habitat intersect with the challenges of modernizing ranch and farm operations. The two often go hand in hand, as these Farm Bill programs recognize.

One recent example: on the Little Bear River in northern Utah, David Bess and his family worked with Trout Unlimited (TU), The Nature Conservancy, and other public and private partners to plan and implement several irrigation upgrades, including a modified diversion dam and a conversion from flood irrigation to pivot sprinklers—changes that slashed water use by more than 50 percent during the hot summer months without compromising production. Some of

Irrigation Leader

those water savings will go back into the river to maintain healthy flows for populations of native Bonneville cutthroat trout.

An added bonus: the irrigation pipes were fitted with small hydropower turbines, which provide a clean, renewable source of energy to run the pivot sprinklers.

A family-run ranch gets a more efficient and profitable operation. The rivers get healthy flows and restored wildlife and fish habitat. Taxpayers get shovel-ready and highly leveraged projects that make scarce federal dollars go much farther in putting people to work and improving our food supply.

What’s not to like?

The project would not have happened without the help of Farm Bill Conservation Program funding.

TU helped the Bess ranch identify Farm Bill opportunities for their property, negotiate the applications process, and coordinate the plan with a diverse array of partners. At all times, the Bess family was in the driver’s seat about infrastructure changes. All TU did was help find the resources and expertise to make it happen.

Another partnership example: in the Smiths Fork River valley in the southwest corner of Wyoming, traditional family ranches and native fisheries are part of a proud heritage. For the last five years, TU has partnered with private landowners, the Natural Resources Conservation Service, and other agency partners to find innovative solutions for upgrading aging irrigation infrastructure and improving the Bonneville cutthroat trout habitat. Among other things, TU and the Natural Resources Conservation Service have replaced push-up dams throughout the valley with permanent structures designed to guarantee fish passage and reduce maintenance by water users. Fish screens have been placed on Coal Creek, Grade Creek, and the mainstem Smiths Fork diversions to prevent fish entrainment and provide clean water for irrigation systems. On Grade Creek, TU and the landowner rebuilt approximately 5,000 feet of degraded and dewatered stream channel while setting up an alternative diversion and piped water delivery system to ensure fish could migrate to historic spawning and rearing habitat.

Ranching and farming is a tough business. Families who have worked the land for generations to raise our beef or grow our food do so today on thin margins. In a volatile economy, the Farm Bill’s conservation programs help to ensure that our water sources and infrastructure—and the Irrigation Leader

ranches and farms that depend on them—are efficient, healthy, and sustainable.

As the above stories suggest, though, upgrading infrastructure is not just about finding funds—it’s about building partnerships and community. While our complex water challenges are likely to be addressed through a variety of local, state, regional, and federal resources, maintaining the ability to partner and “act locally” will be critical to our success.

At least that has been my experience. TU's Western Water Project started from the recognition that the health of our rivers, fisheries, and wildlife depends in large part on water flow decisions and practices at the state and local levels.

Consider that one diversion upgrade on a single ranch can open up dozens of miles of stream habitat to trout.

That’s incredibly exciting.

In the last decade, we’ve partnered with local ranchers, landowners, and agencies on scores of on-the-ground projects to restore and reconnect fragmented river systems.

By listening to folks, building strong relationships, and working in good faith, we’ve been able to find pragmatic solutions that meet diverse needs, from fish to farms.

TU and our partners have amassed a track record of success that clearly shows the benefits of partnership and innovation.

I think that’s a model for the future.

At the same time, we have only scratched the surface in terms of shovel-ready projects in the West. There is a tremendous backlog of irrigation upgrades that, addressed together, could drive an economic renewal of our working landscapes and communities.

And what works for landowners’ bottom lines will also help preserve our natural heritage and western way of life for future generations.

What are we waiting for?

Scott Yates is director of the Western Water Project for Trout Unlimited, a 140,000-member-strong sportsmen’s group whose mission is to conserve, protect, and restore North America’s cold water fisheries and their watersheds. He may be contacted by e-mailing syates@tu.org.

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Reclamation Releases President’s Budget Request of $1 Billion

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n February 13, Reclamation released the President’s fiscal year 2013 budget request, which totals $1 billion.

“The President’s budget supports Reclamation’s continued progress on the key priorities of our water agenda as we work to help address water resource challenges in the American West,” Reclamation Commissioner Michael Connor said in a press release announcing the budget request. “The budget announced today emphasizes our commitment to create and sustain jobs by continuing to promote efficient water deliveries and power generation, while also actively implementing critical river restoration programs that will help ensure certainty and sustainability in Western water management.”

Reclamation aims to allocate $818.6 million to its water and related resources account. Within this account, planning, construction, water conservation activities, management of Reclamation lands, and actions to address the impacts of Reclamation projects on fish and wildlife are slated to receive $395.6 million. Operation, maintenance, and rehabilitation activities at Reclamation facilities, including dam safety, are scheduled to receive $423.1 million.

Importantly, the budget includes $7.3 million in loan funding under the authority provided by P.L. 111-11 for extraordinary operation and maintenance activities. These funds can be used by Reclamation project operators to minimize the risk of imminent harm to public health, safety, or property.

Budget highlights touted by Reclamation include work in ecosystem restoration, renewable energy and cooperative landscape conservation, and the WaterSMART program, among others.

Ecosystem Restoration

Reclamation’s budget request includes funds for recovering endangered species and threatened watershed ecosystems. Budgeted amounts include $128.0 million for specific restoration efforts in California’s Central Valley Project.

Other highlights projects include funding for a multispecies conservation program in the lower Colorado River basin ($17.8 million), Endangered Species Act

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recovery programs throughout the western states ($18.9 million), environmental protection efforts associated with the Klamath River project ($18.6 million), the California Bay-Delta program ($36.0 million), the Middle Rio Grande’s endangered species collaborative program ($22.5 million), and salmon recovery efforts in the Columbia and Snake Rivers ($18.0 million).

Renewable Energy and Cooperative Landscape Conservation The request includes funding to support Reclamation’s continued efforts to respond to the impact of climate change on water supply in the western states. Budget items include $6.5 million for ongoing work in support of Westwide climate risk assessments, landscape conservation cooperatives, and research efforts. Reclamation is also working with the Department of Energy and the Army Corps of Engineers to determine potential climate change effects on hydropower generation.

WaterSMART Program

Reclamation proposed $53.9 million in funding for its WaterSMART program, which aims to assist local entities in implementing programs targeting water conservation and management goals. Potential projects that would be funded include voluntary water banks, demand reduction activities, water conservation and reuse programs, and improved energy efficiency projects.

Other Highlights

The Administration has proposed that $21.0 million in funding for the Central Utah Project Completion Act be transitioned to Reclamation’s purview. Previously, the project was funded separately from the Reclamation budget.

Additionally, $87.5 million is slated for the Dam Safety Program, to continue risk management and reduction efforts.

The complete fiscal year 2013 Reclamation budget request can be found at www.usbr.gov/budget.

Irrigation Leader

Title Transfer Provides Project Financing, Cost-Saving Benefits

By Tom Knutson

I

n 2002, the Loup Basin Reclamation District accomplished a title transfer seven years in the making. Overall, the transfer provided the district with excellent opportunities to accomplish projects on its own for the Farwell and Sargent Irrigation Districts. However, no benefit has been as great as the ability to finance infrastructure projects independently, without the need to rely on cumbersome federal review processes.

A prime example of Sargent’s ability to accomplish projects more efficiently subsequent to title transfer was our rehabilitation work on the Milburn Diversion Dam. Prior to title transfer, the district would have been required to obtain congressionally authorized appropriations for the $1.4 million project. This process can be incredibly cumbersome and too often results in aging infrastructure not receiving necessary maintenance in a timely fashion.

In contrast, Sargent was able to use creative methods to obtain funding for more than half of the rehabilitation project costs. First, we approached the Nebraska Game and Parks Commission about funding part of the project in exchange for the construction of a fishway. The commission had been interested in building the fishway for a number of years and ultimately contributed $550,000 to the project cost.

Next, we approached two local natural resources districts that manage ground water use in Nebraska. The districts stood to benefit from the rehabilitation project because of ancillary ground water recharge. After meeting with both districts, they agreed to collectively contribute $85,000 to the total project cost.

Once we obtained the funding from these other sources, the district then approached the Nebraska Environment Trust, which is often likely to provide funding for projects with a diverse range of participants. Ultimately, the trust

Irrigation Leader

agreed to contribute $140,000 in grant funding to support the project.

At the end of the day, Sargent was able to completely rehabilitate a diversion dam that had issues since 1970 by cobbling together funds from diverse sources. This simply would not have been possible had title remained with the federal government.

Additionally, completing the rehabilitation project independently helped to create cost savings that would not have been otherwise available. For example, had the project still been under federal contract at the time of the rehabilitation, we would have been required to use Reclamation engineers to complete an initial study.

Instead, we were able to use private engineers for a far lower cost. Further, National Environmental Policy Act compliance would have increased the cost of the project by 5–10 percent. Instead, we were able to work directly with one of our project partners, the Nebraska Game and Parks Commission, to ensure environmental compliance.

In addition to project cost savings, title transfer provided the district with the opportunity to issue bonds pledged against its assets. Sargent funded its portion of the Milburn Diversion Dam project costs by issuing bonds pledged against projects assets. Bonding authority will continue to be an important part of the district’s ability to finance future infrastructure projects.

Tom Knutson is the general manager of the Loup Basin Reclamation District in Farwell, Nebraska.

He can be reached by phone at (308) 336-3341.

17

Nebraska Water Managers Take Control of Funding, Infrastructure Issues

W

ater supply-and-demand issues in Nebraska’s Republican River Basin forced a choice a few years ago: either hope that state funding would pay for needed projects over the long term, or implement a local funding mechanism to ensure projects would proceed.

Faced with this climate of uncertain state funding, Nebraska lawmakers and water managers in the Republican Basin chose the latter, and the results have been substantial.

This year, a water-management district in southwest Nebraska that oversees three counties and about 450,000 irrigated acres, the Upper Republican Natural Resources District (URNRD), will begin construction on a $13 million–$16 million river augmentation project.

The project will be funded with the relatively new, local funding tool—a $10-per-acre occupation tax on irrigated acres paid by irrigators in the district. The funding tool was approved by Nebraska lawmakers and was recently upheld as constitutional by the Nebraska Supreme Court.

The augmentation project has the potential to add 10,000–15,000 acre-feet to the Republican River Basin every three years or so. This will help the district do its part to help the state of Nebraska maintain compliance with an interstate compact regarding the Republican River.

Downstream surface and ground water users outside of the URNRD will also be aided by the project.

“The occupation tax will help protect one of the most productive agricultural regions in Nebraska and, by helping the state maintain compliance, decrease chances that people

18

outside of our area will have to pay for any consequences of not staying in compliance with the Republican River Compact,” said Jasper Fanning, Manager of the URNRD. The occupation tax has not caused an uproar in the URNRD, where irrigators understand the economic benefits of projects such as the augmentation project and appreciate the need to maintain compliance with the compact.

Construction of the augmentation project will begin this year. A four-mile pipeline will transport ground water that otherwise would have been used to irrigate crops to a tributary of the Republican River. The land with the ground water wells that will be used to pump the water will be retired from irrigated use to offset water that will be pumped for the augmentation project. The land purchased to provide the offsets and that has been retired from irrigation was bought by the URNRD for $10 million last year, using the occupation tax. The $10 million is part of the total estimated $13 million–$16 million cost of the project.

Occupation tax dollars are also being used in the URNRD to retire other irrigated acres that have substantial impacts on stream flow.

Paying for projects that generate stream flow does not negate the need to reduce consumptive use of water and the URNRD is actively working on rules and projects designed to accomplish this. Projects such as augmentation funded with the occupation tax will help prevent sudden and severe regulations that would be unnecessarily harmful to both surface and ground water users in the Republican Basin.

Irrigation Leader

Note: 1. Registered well information provided by the Nebraska Department of Natural Resources, June 2010.

2. Registered well locations are positioned from well registration forms. Some errors may exist due to data input and inaccuracies within well registration records.

Prepared By:

MA

& Miller & Associates

CONSULTING ENGINEERS, P.C.

Kearney, NE - (308) 234-6456 Irrigation Leader

Modeled Well Locations Upper Republican NRD Proposed Stream Flow Enhancement Site Nebraska 19

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District Focus

Mancos Water Conservancy District Completes Major Rehab Project, Aims for Efficiency Gains

By Gary Kennedy

C

onstructed in the late 1940s, the Mancos Project in southwest Colorado supplies water to 13,500 irrigated acres. The Mancos Water Conservancy District (MWCD), which manages the project, substantially completed a $6.5 million rehabilitation initiative last year that aimed to overhaul decades-old project infrastructure.

At 7,000 feet in elevation, much of the district consists of grass, hay, and alfalfa crops. Of the 10,000 acre-foot storage capacity of the project’s Jackson Gulch Reservoir, 8,400 acre-feet are allocated to the district. Typically, around 6,000 acre-feet of water is used annually for irrigation that supplements the 19 inches of annual moisture received in the region.

The rehabilitation project aimed to secure water for the region’s agricultural sector that depends on the continued availability of irrigation to support rural

livelihoods. However, given the initiative’s high cost and inability of local districts to finance the project independently, obtaining the requisite funding for the project was critical.

First, MWCD asked for an increase in the mil levy on the region’s water districts. This brought in an additional $100,000. Then, the district went to Congress and obtained $1.75 million in appropriations funding via Reclamation’s budget. MWCD also contributed to the project using local funds.

In addition to the rehabilitation project, area ditch companies are working with farmers to improve the efficiency of their systems. Using funding provided by the Natural Resources Conservation Service, the companies are working to pipe their over 30 ditches. This 24

has enabled some farmers to install pivot irrigation in areas that were once reserved for flood irrigation alone.

MWCD itself has also worked to line open canals using concrete and water-tight sealants. This effort has not only ensured that district operations become more efficient, but has helped to control salinity concerns. By keeping water from leaching into the ground, there is less salty water returning to the river.

In addition to the district’s rehabilitation and efficiency efforts, it is reviewing additional hydropower generation capability. In 1995, MWCD launched a 250-kilowatt plant. However, because the district operates its reservoir off-river, water is not run through the canal system year-round, and the hydropower plant only operates seasonally.

MWCD is currently exploring additional hydropower opportunities, but has run into a stumbling block as the authorizing legislation for the original plant has been interpreted to not cover the entire project. As much legislation has largely stalled in Congress, it is unclear whether the district will be able to develop additional hydropower capacity.

Gary Kennedy is the superintendent for the Mancos Water Conservancy District in Mancos, Colorado. For more information on MWCD, visit its website at www.jacksongulchrehab.info.

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Water Law

Sackett v. EPA:

26

Property and the Right to Judicial Review

By Damien M. Schiff

O

n January 9, 2012, the United States Supreme Court heard oral argument in Sackett v.

United States Environmental Protection Agency (EPA), a case concerning whether landowners have the right to their day in court when EPA orders them not to use their property because of its alleged “wetlands” status. In my capacity as an attorney with the Pacific Legal Foundation, I argued the case on behalf of Mike and Chantell Sackett. The argument proved to be a great opportunity to learn what the justices think about this case.

Before discussing the argument, a bit of background. In 2005, the Sacketts purchased an approximately half-acre lot within an existing residential subdivision in Priest Lake, Idaho, to build their family home. In 2007, after having obtained all local building permits, the Sacketts began construction.

Shortly thereafter, EPA agents came on to the property and ordered a halt to the home construction, contending that the site contained wetlands regulated under the Clean Water Act. Although the Sacketts immediately stopped their work, EPA nevertheless issued a formal “compliance order” against them, charging them with having violated the Clean Water Act, requiring them to restore the site to its supposed wetlands status, and threatening the Sacketts with tens of thousands of dollars per day in fines if they did not immediately comply. The Sacketts then came to Pacific Legal Foundation for help, and we agreed to file a lawsuit in federal court to challenge the compliance order on the ground that EPA has no authority over the Sacketts’ property.

Unfortunately, the district court dismissed the lawsuit and the Ninth Circuit Court of Appeals affirmed, reasoning that landowners have no right to sue EPA over a compliance order and instead must either apply for a Clean Water Act wetlands permit (which they did not believe they even needed) or ignore the order and invite EPA to bring a civil action against them. The Sacketts next sought review in the Supreme Court, which agreed to hear the case to address two issues: whether the Sacketts can sue EPA under the Administrative Procedure Act (the principal law that individuals harmed by federal agency action use to obtain redress for their injuries), and if not,

whether the compliance order violates the Sacketts’ due process rights under the United States Constitution.

Going in to the argument, I had expected that the justices would exhibit a great deal of interest in the constitutional question, i.e., whether the compliance order has deprived the Sacketts of their property and if so, whether the Clean Water Act affords the Sacketts adequate review of that property deprivation.

Surprisingly, the justices did not ask any questions of either me or EPA’s attorney concerning due process.

Instead, the justices’ questions for me focused on the type of remedy that the Sacketts would be entitled to if the Court were to rule in their favor. For example, Justice Ginsburg wanted to know whether the Sacketts only challenge the compliance order’s conclusion that their property contains wetlands, or whether they dispute other aspects of the order. Justice Scalia asked about the nature and extent of the record that EPA would submit on remand, and what the standard of review would be. My theme throughout the argument was that, although allowing the Sacketts’ action to proceed might not prove the perfect remedy, something is better than nothing, and as things now stand, the Sacketts have been given no remedy for the losses that the compliance order has caused.

Although the questioning directed toward me was vigorous, the questioning directed toward EPA’s attorney, Deputy Solicitor General Malcolm Stewart, was much more pointed, contentious, and at times tense. For example, Justice Alito asked, “Mr. Stewart, if you . . . related the facts of this case as they came to us to an ordinary homeowner, don’t you think most ordinary homeowners would say this kind of thing can’t happen in the United States?” When Mr. Stewart conceded that EPA does not always have a complete record when it issues compliance orders, Justice Alito again highlighted the unfairness of the agency’s practice, “That makes the EPA’s conduct here even more outrageous: We – we think now that this is wetlands that are – that qualify; so, we’re going to hit you with the compliance order, but, you know, when we look into it more thoroughly in the future, we might change our mind.” Trying to characterize the compliance order as merely a friendly invitation to the Sacketts to talk to EPA, Mr. Stewart was interrupted by the Chief Justice, “You get a compliance order. You don’t think your property has wetlands. What do you Irrigation Leader

do?” When Mr. Stewart suggested an after-the-fact permit, the Chief Justice remarked, “You wouldn’t do that, right?

You know you’ll never get an after-the-fact permit if the EPA has sent you a compliance order saying you’ve got wetlands.” The tough questioning did not, however, come exclusively from the more conservative justices. Indeed, at one point Justice Kagan called one of EPA’s arguments “strange,” and Justice Breyer observed that to rule in EPA’s favor would require the overturning of 75 years of judicial precedent authorizing individuals to challenge final agency action.

It is always a dicey business to predict how the Supreme Court will decide a case based on oral argument, yet certainly it would be fair to conclude that the court not only understands the Sacketts’ arguments, but also sympathizes with their plight and views EPA’s arguments with extreme circumspection. If the court does rule for the Sacketts, such a decision would be a great victory not just for the Idaho couple, but for landowners throughout the country as well. EPA issues between 1,500 and 3,000 compliance orders every year, and under current law, compliance order recipients have no effective means of protecting their property rights. Either they must give up and become punching bags for government abuse, or “bet the farm” and incur the risk of ruinous civil penalties. A favorable decision from the Supreme Court would mean that whenever EPA charges a landowner with having violated the Clean Water Act and issues a compliance order against him, that landowner has the right to sue EPA in federal court and obtain redress for his injuries.

Allowing an agency to bully innocent people and abuse its congressional mandate is neither good policy nor good government. Thus, a win in Sackett v. EPA is a result that environmentalists as well as property rights advocates should support.

Damien Schiff is a senior staff attorney with the Pacific Legal Foundation,s National Litigation Center in Sacramento, California.

He specializes in cases pertaining to the Endangered Species Act and the Clean Water Act. For more information on the Pacific Legal Foundation, visit its website at www.pacificlegal.org.

Integrated Water Planning, Permitting, Design & Construction Services SUPPLY MANAGEMENT PERMIT COMPLIANCE OPERATION OPTIMIZATION RENEWAL & REPLACEMENT WATER QUALITY CONTROL CLIMATE CHANGE STUDIES SOURCE AUGMENTATION POWER GENERATION WATER TRANSMISSION John Maxwell, P.E. 360.570.4400 www.hdrinc.com/water

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(575) 526-2101 Fax (575) 526-2506 Email: Irrigation Leader

slh@lclaw-nm.com

International

Australian Company Brings Efficient Irrigation Technology to American Marketplace

I

Photos show Rubicon gate systems used by GoulburnMurray Water (GMW). GMW manages the largest irrigation area in Australia, covering an area of 26,200 square miles.

More than 10,000 automated Rubicon gates and meters have been installed to offer real-time communication back to their office via a network of 70 solar powered repeaters.

2,400 miles of canal have been automated to date. On project completion there will be more than 20,000 SCADA sites. Using Rubicon’s technology, GMW is on track to save 340,000 acre-feet per year. This savings equates to a new distribution efficiency of 84%, an improvement of 20%.

28

n 1995, four former employees of the Australian Rural Water Corporation and a software engineer embarked on a venture to bring their knowledge of irrigation modernization to the private market. Since its founding, their company— Rubicon—has grown to distribute its products worldwide.

The founders’ efforts began as part of a government initiative to promote smart operation of irrigation works. However, a bureaucratic reshuffling in the mid-1990s left their initiative without a primary sponsor.

“We were partway through releasing major software changes in 1994 when the government decided to disband the central agency,” said Rubicon Co-Founder Tony Oakes, noting that several new waterrelated agencies were created. “We had the opportunity to go and work with the largest of the new organizations, but were encouraged to set up business by ourselves.”

Rubicon’s initial product offerings were oriented around three lines. First, the company developed a software solution to assist irrigation districts with water ordering and management. The solution included interactive voice response technology to help farmers more easily place orders, as well as the tools for districts to better plan and schedule water deliveries.

“We knew that if irrigation districts had the technology to support their Irrigation Leader

For more information on Rubicon in the United States, visit its website at www.rubiconwater.com.

Irrigation Leader

Rubicon Gate in Chile.

Photos: Michael Kai

administrative and planning programs, they could run with a lot more efficiency,” Oakes said.

Rubicon also designed and began manufacturing automated aluminum gates to replace the old manual drop board system that had been relied upon by districts for decades. Finally, the company implemented SCADA systems for districts by customizing off-theshelf products.

“We provided these strategies in Australia for 2–3 years, but became aware in the late 1990s that there was an opportunity to integrate the three technologies together,” Oakes said. “We pursued some academic institutions and embarked on a research program to apply modern control mechanisms to the centuries-old operation of operating canals.”

Ultimately, Rubicon developed a partnership with the University of Melbourne that enabled it to develop and test flow management technology in a laboratory setting and utilize this to provide advanced control outcomes. “Through our relationship with the university, we have developed a unique technology,” Oakes said. “It gave us an unprecedented level of accuracy. . . . We’ve really built the technology from the ground up.”

The company first entered the United States in 2004, but decided in 2008 that the market required a formal, specialized approach. “We needed local people, a local presence, and local support,” Oakes suggested. “We have really sought to build that since then.”

While Rubicon initially began marketing its irrigation management software in the United States, the company quickly realized that American irrigation districts then lacked the volumetric allocations common in Australia that made the software particularly useful.

With this knowledge, Rubicon instead began marketing its gates and SCADA technology, which have proven to be successful in the American market.

“We’re now starting to see irrigation districts recognizing there is the potential to automate a large part of their system,” Oakes said. “They’re looking at it from the perspective of what the costs and benefits actually are.”

In addition to the United States, Rubicon now operates across the globe, from China and India to Chile and Mexico. This broad range of markets has enabled the company to implement its products in a diverse range of environments. “We have implemented our technology on steep-sloping, concrete-lined canals and in all sorts of challenging conditions,” Oakes said.

“We are very confident that we have seen many of the situations we are likely to encounter in each of these countries.”

Factory in Shepparton, Australia 29

The Innovators 30

Monsanto Aims to Improve Irrigation Testing With Automated Rainout Shelter

L

ong a proponent of a systemsbased approach to managing drought, Monsanto is working to improve testing at its Gothenburg, Nebraska, Water Utilization Learning Center. Previous trials encountered difficulties in replicating extreme drought conditions as unexpected rainfall made it difficult to implement a controlled environment. Additionally, a single hail storm could destroy an entire test crop.

To mitigate the impact of the unpredictability of these precipitation events, Monsanto is working to install an automated rainout shelter to cover the test crop as rain approaches. At 80-by-140 feet in size, the shelter has been placed on rails and covers about a fifth of an acre. Once automation is installed, the test crop can be covered within two minutes.

“We’re trying to understand plant-water relationships through systems-based methods,” said Chandler Mazour, the manager of the facility, noting that conducting the tests in a greenhouse would not be appropriate because it will not allow Monsanto to properly reproduce the sun’s wavelength. “This allows us to grow the crop as it normally would grow.”

Further enabling Monsanto to control the amount and rate of irrigation on its test crop, a moisture barrier has been installed 6 feet underground. Each plot also has its own irrigation system.

“It’s all about trying to put better solutions in customers’ hands to help manage drought more effectively,” said Mazour. “We can precisely control the amount of water in 36 different ways.”

While similar to other rainout shelters commercially available, the new construction differs due to the sheer scale of automation installed. Each plot will have moisture sensors, and Monsanto hopes to look at different moisture profiles in the soil.

“We’re just experimenting with different ways to scientifically look at plant-water interaction and bring solutions to help farmers manage drought at a higher level,” said Mazour.

Monsanto hopes to have the rainout shelter’s automated capability online by April. “It will be a lot of fun to take a look at some things that have never really been studied before,” said Mazour, noting that the learning center team is working to ensure the safety of the structure before operations begin. “With people around the building, safety is of the utmost importance.”

For more information on Monsanto’s Water Utilization Learning Center in Gothenburg, Nebraska, visit its website at www.monsanto.com/products/Pages/gothenberg-learning-center.aspx.

Irrigation Leader

Integrated Water Planning, Permitting, Design, Optimization & Construction Services

2012 CALENDAR

John Maxwell, P.E. 360.570.4400 www.hdrinc.com/water

Feb. 23–24

Family Farm Alliance, Annual Meeting and Conference, Las Vegas, NV

Feb. 28–Mar. 1

Assn. of California Water Agencies, Washington Conference, Washington, DC

Mar. 6–8

Nevada Water Resources Assn., Annual Conference, Las Vegas, NV

Mar. 7–9

Texas Water Conservation Assn., Annual Convention, Dallas, TX

Mar. 12–14

Utah Water Users Assn., Water Users Workshop, St. George, UT

Mar. 11–14

Nebraska Assn. of Resources Districts, Washington Conference, Washington, DC

Mar. 26–28

National Water Resources Assn., Federal Water Issues Conference, Washington, DC

May 8–11

Assn. of California Water Agencies, Spring Conference & Exhibition, Monterey, CA

May 18

Agri-Business Council of Arizona, Annual Meeting, Phoenix, AZ

Jun. 13–15

Texas Water Conservation Assn., Mid-Year Conference, Horseshoe Bay, TX

Jun. 18–19

Idaho Water Users Assn., Summer Water Law Seminar & Workshop, Sun Valley, ID

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Past issues of Irrigation Leader are archived at www.WaterandPowerReport.com