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1997 LEGISLATIVE REPORT
Wyoming Water Development Program - Strategic Plan
December 31, 1996
IV. Situation Analysis
Wyoming generates an average of 16 million acre feet of
water within its boundaries each year. An additional 2 million
acre feet of water is received through streamflow from other
states. Of this 18 million acre feet of water, Wyoming is
entitled, under the various interstate river compacts and court
decrees which divide the water among the states, to use or
consume approximately 4 million acre feet per year. Presently,
we use 2.8 million acre feet of this water. Approximately 1.2
million acre feet remains available for Wyoming's future use.
Both the water now in use and the water available for future use are
assets of the State of Wyoming and its citizens. The Wyoming
Water Development Program is a valuable tool in maintaining our
assets. The water demands of downstream states are increasing
and stressingthe limits of those states' water entitlements.
Some of those states are seeking variances to or challenging
historic interpretations of the same compacts and decrees that
guarantee Wyoming its share of the water. Further, the federal
government is seeking water to resolve endangered species and
environmental problems.
Court actions have indicated that the best way to preserve water
entitlements is to use them. Unfortunately, Wyoming's water
resources are not always where our citizens need them. The Wyoming
Water Development Program serves to provide and rehabilitate the
infrastructure to deliver water to the people that have water supply
problems and promotes the effective and efficient use of our water
entitlements, which serves to maintain and preserve those entitlements.
The Wyoming Water Development Program provides long-term economic
benefits to the State of Wyoming by providing water supplies for
the existing and future needs of Wyoming's citizens. Water
availability is a key ingredient for development of a stable
Wyoming economy. The projects provide short-term economic
benefits to the state in the form of jobs, increased material and
equipment sales, and other indirect benefits to local and state
economies.
The Wyoming Water Development Program has served to maintain
Wyoming's water entitlements and to assist Wyoming citizens in
meeting their water supply needs through planning and project
development. The program's client list includes seventy
(70) municipalities, thirty-four water districts, forty-five (45)
irrigation districts, ten (10) joint power boards, five (5)
counties and fourteen (14) water user groups.
A. Program Status - Water Resource Development
In 1977, the revenue which funds the New Development
Program was established. In 1982, the governor proposed and
the legislature provided the framework for the present
Water Development Program. In 1983, the revenue
which funds the Rehabilitation Program was established.
Since 1983, the program's water resource development
activities have evolved to the following:
1. New Development Program
The New Development Program serves to develop the
infrastructure necessary to supply unused and/or
unappropriated water to meet the present and future
needs of Wyoming and its citizens. Water supply
facilities such as dams, diversion structures,
groundwater wells and transmission pipelines can be
considered for the New Development Program. New
Development Program proceeds as expeditiously and
efficiently as possible toward the orderly development
of Wyoming's water resources. The criteria for scheduling
new development projects is based on the general
philosophy that effective beneficial use of Wyoming's
water will insure its preservation for Wyoming's
purposes. New development projects can proceed as
sponsored projects or state projects.
a. Sponsored Projects
The project sponsor is a municipality, irrigation
district, or other approved assessment district
which will realize the major direct benefits of the
project. The project sponsor must be willing and
capable of financially supporting at least 25% of
the project development costs plus all operation and
maintenance costs. The actual loan/grant mix is
based on the sponsor's ability to pay and the benefits
they will achieve from the project. Typically,
sponsors request project technical and financial
assistance from the WWDC through the application
process. If the application is approved, the
project is assigned a study level and can proceed
through construction if it is determined the project
is technically and economically feasible and if the
project serves to meet a water supply need or
alleviate a water supply problem.
The New Development Program provides the
opportunity for sponsors to develop water supplies
with an eye to the future. The supplies serve to
insure that lack of water will not inhibit
economic stability. The program has a
philosophy that water development can be achieved
through state/local partnerships. The sponsor
can complete a water supply project with state
funding assistance. If the water is used by the
sponsor to meet its needs, the project basically
belongs to the sponsor. However, if there is the
opportunity to sell water for other purposes, the
sponsor and state share in the revenues.
b. State Projects
The typical state project serves to benefit more
than one entity and is multipurpose in nature.
Typically, state projects have difficult
permitting or political issues which must be
addressed, such as endangered species issues,
water quality impacts and/or resistance from
downstream states. The following is a listing and
brief status statement on the state projects:
- Buffalo Bill Enlargement. The project
has been completed.
- Deer Creek Dam and Reservoir. Pending
litigation has impacted the project schedule.
The WWDC is working with the Attorney
General's Office on the various law suits. The
WWDC is confident that the issues affecting
the Deer Creek Project will be successfully
resolved and the project will be constructed
in the near future.
- Sandstone Dam and Reservoir. The
environmental impact statement is being
prepared. The proposed 1997 Omnibus Water
Bill includes an amendment to the enabling
legislation to remove all reference to a
"Sandstone" dam and reservoir site in favor
of a "Little Snake River Valley" dam and
reservoir site.
2. Rehabilitation Program
The Rehabilitation Program serves to provide funding
assistance for the improvement of water projects
completed and in use for at least fifteen (15) years.
Improvements to insure dam safety, decrease operation
and maintenance costs, and provide a more efficient
means of using existing water supplies can be
considered for the Rehabilitation Program. The program
serves to insure that existing water supplies and supply
systems remain effective and viable.
Rehabilitation projects are typically initiated by an
application from a project sponsor. If the application
is approved, the project is assigned a study level and
can proceed through construction if it is determined
the project is technically and economically feasible.
The project sponsor must be willing and capable of
financially supporting at least 25% of the project
development costs plus all operation and maintenance
costs. The actual loan/grant mix is based on the
sponsor's ability to pay and the benefits that will
be achieved from the project.
B. Program Status - Water Resource Planning
1. Water Investment Management
During the development of the Department of Commerce,
the Wyoming Water Development Commission (WWDC) was
named as the successor agency to the Economic
Development and Stabilization Board for the administra-
tion of the state's investment in Buffalo Bill and
Fontenelle Reservoirs (Chapter 44 of the 1990 Session
Laws). Subsequently, the state acquired storage in
Palisades Reservoir (Chapter 18 of the 1991 Session
Laws). The WWDC is responsible for insuring that the
state's annual loan payments and operation and
maintenance obligations are met on the Buffalo Bill
Enlargement, Fontenelle Reservoir and Palisades Reser-
voir.
In addition, the WWDC collects payments against
outstanding project loans. Presently, all project loan
payments have been made. The WWDC also monitors
potential water sales from those completed projects in
which the state retained limited partnerships.
2. Instream Flow
The Water Development Commission has two roles relative
to the instream flow law. One is assigned by statute;
the other is implied by our duties as the water
development planning agency for the state.
a. WS 41-3-1004 assigns the Commission the
responsibility to generate feasibility reports for
all instream flow permit applications. The
reports are hydrological analyses of the water
availability in the reach of the stream in which
the applications apply. The analyses also
quantify existing water rights above and within
stream segments.
b. As the water development planning agency, the
Commission will also review the instream flow
requests to insure that they do not conflict with
future potential water development opportunities.
To date, sixty-eight (68) applications for instream
flow water rights have been prepared by the Wyoming
Game and Fish Department. As of December 1, 1996, the
WWDC has published fifty-one (51) feasibility studies.
The Wyoming Game and Fish Department has
indicated that it will be preparing four applications
per year for instream flow water rights.
3. Water Related Research
The Commission participates in research projects
relative to water development problems and issues which
are not necessarily project specific but are important
to general aspects of water development in Wyoming.
The Commission participates in research projects to
gather the information that will be needed to reduce
project costs and address permitting issues and
specific environmental problems.
The Commission has developed working relationships with
the State Engineer's Office, the U.S. Geological Survey
and University of Wyoming's Water Resources Center to
conduct research on such water related issues as
hydrologic modeling, flushing flows, irrigation
evapotranspiration, conveyance loss, and riparian zone
management. Past research projects have addressed
flushing flows, instream flows, irrigation evapotranspiration,
conveyance loss, riparian zone management, a computer
model library, and a water bibliography. In recent
years, the WWDC has reduced its participation in the
very general research and is concentrating on those
issues that impact project development and budgets.
4. Basin Wide Planning
The planning aspects of the Water Development Program
establish the framework for development strategies and
serve to identify and resolve water related issues.
The WWDC develops basin-wide plans identifying water
supply problems and water development opportunities.
Planning studies have been completed for Northeastern
Wyoming and the Big Horn River, Powder River, Tongue
River, Upper Bear River, Upper Green River, Upper
Laramie River and Wind River Basins.
These basin wide plans, as well as the project specific
evaluations, can be used to inventory water supplies,
estimate existing uses and outline basin-wide water
development strategies. Recently due to the number of
projects requiring staff time, the planning aspect of
the program has not progressed as perhaps it should.
Much of the existing planning information should be
updated. A $250,000, two-phase study has been recommended
by the Wyoming Water Development Commission to identify
planning needs and resources required to update the
state water plan. The Select Water Committee has voted
to sponsor the study as part of the 1997 Omnibus Water
Bill, Planning.
5. Groundwater Grant Program
The 1981 Session of the Wyoming Legislature enacted WS
41-2-119 which authorized the Water Development Commis-
sion to grant up to three million dollars to
incorporated cities and towns for feasibility studies
and exploration programs to evaluate the potential use
of underground water for municipal purposes.
Municipalities were eligible to receive up to $200,000
in state funds, and were required to provide 10% of
total project costs in local matching funds. In 1984,
the legislature amended WS 41-2-119 to add an
additional one million dollars to the account and to
increase the required local match from 10% to 25%.
Municipalities are required to submit an application
containing a detailed feasibility study of the area
where exploration is anticipated. If the data is
sufficient to indicate a high probability of locating
water, the Commission can award funds for exploratory
drilling. If no feasibility study exists, or if
existing data is judged inadequate, municipalities can
apply for funds to complete such a study. Approval of
feasibility study funding also reserves a specified
amount to be used for exploratory drilling. If the
funded study indicates a high probability of locating
groundwater, the Commission can authorize release of
exploratory drilling funds. If not, the Commission
will terminate the project at that point and return the
earmarked exploratory drilling funds to the groundwater
account for distribution to other communities.
As of July 1, 1996, 36 municipalities had received
assistance from the program.
C. Program Funding
1. Water Resource Development
The administration of the water resource development
activities costs approximately $1,715,000 per biennium.
These costs are included in the agency budget, which is
appropriated from Water Development Account No. 1.
This amount does not include project specific budgets
which are appropriated by the legislature as described
in the following paragraphs:
a. Water Development Account No. 1
The New Development Program is funded by Water
Development Account No. 1 [WS 41-2-124(a)(I)]
which has received general fund appropriations of
$117,600,000, receives revenues from a 1.5% excise
tax on coal, and receives the accrued interest on
the account's unspent balance. Legislative
approval must be granted prior to allocating water
development account funds to a particular project.
Income from the tax and interest and payments for
outstanding loans is approximately $25,000,000 per
year. In 1995, requests for project funding exceeded
the funds available. However, the WWDC is committed
to phase or delay projects to insure its recommendations
do not result in overruns of the account. In 1997,
the proposed omnibus water bills, if approved by
the legislature and signed into law by the governor,
will leave a balance of $5,628,610 in Water Development
Account No. 1.
b. Water Development Account No. 2
The Rehabilitation Program is funded by Water
Development Account No. 2 [WS 41-2-124(a)(ii)]
which receives revenues from a 0.167% severance
tax on oil and gas and the interest accrued on the
account's unspent balance. Legislative approval
must be granted prior to allocating water
development account funds to a particular project.
Income from the tax and interest and payments for
outstanding loans is approximately $7,000,000 per
year. In 1995, requests for project funding
exceeded the funds available. However, the WWDC is
committed to phase or delay projects to insure its
recommendations do not result in overruns of the
account. In 1997, the proposed omnibus water bill,
if approved by the legislature and signed into law
by the governor, will leave a balance of $3,885,212
in Water Development Account No. 2.
2. Water Resource Planning
The administration of the water resource planning
activities costs approximately $1,282,000 per biennium.
These costs are included in the agency budget, which is
appropriated from Water Development Account No. 1.
a. Water Investment Management
These activities are funded by the agency budget,
which has historically been appropriated from
Water Development Account No. 1. The
administrative costs of this program are
approximately $8,000 per biennium. However, as
project financial commitments on Fontenelle
Reservoir cannot be met with existing revenues
from water sales, appropriations of $540,000 per
biennium are needed to meet our loan payment and
operation/maintenance obligations to the Bureau of
Reclamation.
b. Instream Flow
The administrative costs associated with the
preparation of instream flow report are
approximately $54,000 per biennium. In addition,
the WWDC requests $100,000 per biennium for
consultant services for completion of some
instream flow feasibility studies.
c. Water Related Research
The administrative costs associated with water
related research including special assignments
from the governor and legislature are
approximately $95,000 per biennium. Over the
past ten years, the budget for contract services
for this work has been reduced by the WWDC from
$250,000 to $25,000 per biennium. In addition,
the state's involvement in interstate endangered
species efforts is funded from this budget
category, which costs approximately $68,000 per
biennium.
d. Basin Wide Planning
Depending on the complexity, basin wide planning
studies cost between $150,000 and $500,000. Much
of the existing water planning data should be
updated. The operation of the Water Resource Data
System and other necessary contract services costs
approximately $468,000 per biennium. It costs
approximately $24,000 to administer the planning
efforts.
e. Groundwater Grant Program
Of the $4,000,000 appropriation, there is
approximately $300,000 left in program funding.
At this time, there are no plans to seek additional
funding. Administration of the program costs are
minimal.
3. Other
The Wyoming Legislature has periodically appropriated
funds from the water development accounts to fund the
operation of state government, special projects, and
litigation. As of July 30, 1994, $72,700,000 has been
appropriated from Water Development Account Nos. 1 and
2 for these non-project purposes. In addition, through
an executive order by the Governor, the interest income
to be received by the accounts was diverted to the general
fund for three years, which impacted the accounts by
approximately $47,000,000. The Omnibus Water Bill -
Planning contains provisions for an additional $5,000,000
for litigation.
D. Program Evolution
In order to develop a strategic plan for the program, the
history and future of the Wyoming Water Development Program
must first be considered. During the 1982 legislative
session, funding was requested for 28 different projects.
Over one-half of the projects included new dams or
rehabilitation of existing dams. By contrast, during the
1995 legislative session, construction funding was requested
for 18 different projects. None of those projects included
a dam.
While dam construction and rehabilitation remains an
important element of the Water Development Program, the
number of dam projects will not be as great as other water
development projects. To date, six (6) dam projects and
fourteen (14) dam rehabilitation projects have been
completed. Federal permits have been obtained for the
Buffalo Municipal and Sheridan's Twin Lakes Dam. The
Buffalo Municipal project and the Sheridan Twin lakes
project are currently under construction. The
environmental impact statements are underway for the
Greybull Valley and Sandsone Dams. The Deer Creek Dam
is still delayed pending the outcome of the North Platte
Litigation, but should be constructed as soon as possible.
The only other dam in the planning process is the enlargement
of the Ray Lake Dam on the Little Wind River in Fremont County.
Why is the number of dams in the Water Development Program less
than originally anticipated? First and foremost, the answer is
cost. It is very difficult for a project sponsor to afford a
storage facility even with the most favorable financing terms
now available within the program. Second, the federal permitting
processing is more costly, time consuming and restrictive than
it was in 1982. For example, in 1985, the federal 404 permit for
the Sulphur Creek Dam was obtained in nine months. The
permitting process cost was approximately $50,000. In 1995, we
were still awaiting the issuance of the 404 Permit for the
Buffalo Municipal Dam, a smaller and less complex project than
the Sulphur Creek Dam, after two and one half years. By the
time the 404 permit was acquired for the Buffalo Municipal
project, WWDC had expended over $250,000. New federal
requirements for wetlands mitigation, purpose and need
criteria, and alternative analyses are the major reasons for
the increased costs.
The impact of federal requirements on the program can best
be demonstrated by the history of the Sandstone Project.
Originally, the WWDC sought a 404 permit for a 52,000 acre
foot reservoir that would yield 12,000 acre feet of water
per year for irrigation purposes and 20,000 acre feet of
water per year for future industrial use. The U.S. Army
Corps of Engineers denied the permit using the logic that
there was no specific defined use for 20,000 acre feet of
the water, the project did not meet the federal requirements
for "purpose and need", and therefore the impacts to wetlands
and aquatic habitat resulting from the project was not
warranted, no matter how well those impacts were to be
mitigated. This single decision severely impacted the ability of
the program to construct storage projects and market water
for future uses.
More recently, the federal agencies have interpreted their
rules and regulations to develop a position that they can
only issue permits for the "least environmentally damaging
alternative" that meet the federal perspective of "purpose
and need". Unfortunately, the federal perspective of
"purpose and need" tends to ignore state goals and
objectives such as increased recreation, hydropower
production, instream flow releases and economic development.
The result is the construction of small, single purpose
projects. If this position prevails, dam construction will
be limited to small, off-channel reservoirs supplied by
canals diverting water from streams and rivers. For
example, the Greybull Valley Project consists of a
30,000 acre foot off-channel reservoir supplied by a canal
and diversion structure on the Greybull River.
Another indicator of the history of the program is to look
at how the money within the program over the past thirteen
years. The following is a breakdown of total program
expenditures from 1980 to June 30, 1996 for the various
types of projects:
Type | Total Expenditure ($-millions) | Percentage |
1. Agricultural | 47.4 | 10.4 |
2. Multipurpose | 65.2 | 14.4 |
3. Municipal | 248.9 | 54.8 |
4. Special Districts | 24.6 | 5.4 |
5. Non-Project | 59.0 | 15.0 |
Total | 453.9 | 100.0 |
From the above information and some educated guesses, we can
make the following conclusions relative to the next five
years:
1. While the Water Development Program has provided
assistance to several agricultural projects, those
projects have been relatively small in scope. Typically,
the agricultural industry is interested in preserving
what they have rather than developing new supplies.
With one exception, the Wyoming Water Development
Program has not been requested to assist in
a water project that would place new lands under
production. In the next five years, the demand for
project assistance for agricultural projects will
remain as it has in the past. However, those
agricultural projects that rely on federal storage
projects can expect unfunded federal mandates relating
to dam safety, water conservation and environmental
protection.
2. The major expenditures in the multi-purpose
category have been for the state's share of the
construction of the recently completed Buffalo Bill Dam
Enlargement and the repair and maintenance of
Fontenelle Dam.
3. The municipalities have been the major
beneficiaries of the Wyoming Water Development Program.
The obvious reason is that they have the biggest and
most pressing problems that are most costly to resolve.
Communities must not only be concerned with the quantity
of water it can supply for culinary, irrigation, and
fire flow purposes, it must also insure that the water
quality meets ever-changing EPA requirements. Further,
the amount of water communities must supply on a firm
annual basis, without storage, for public health and
welfare purposes is increasing. In addition,
municipalities are aware that they need enough good
quality water to not only meet their existing demands,
but also the demands of the increasing number of
subdivisions presently outside their corporate limits
as well as enough water to insure future economic growth.
The Wyoming Water Development Program has been responsive
to the needs of Wyoming communities for the past twelve
years and while major municipal water supply projects
have been funded, demands on the program for municipal
purposes will continue for the next five years and beyond.
4. Special districts that provide domestic water are
faced with the same EPA requirements as municipalities.
The Water Development Program is receiving more
requests for funding assistance from special districts.
The problem, in part, can be explained by our relatively
weak subdivision laws. Subdivisions served
by shallow groundwater wells are experiencing water
quality problems caused by septic systems as population
densities increase. The long term solutions are to
improve subdivision laws and requirmentes and to
improve the municipal water supply systems so they can
be more reactive in solving the problems of the
surrounding subdivisions. However, in the short term,
it is apparent that the Wyoming Water Development
Program will be seeing more and more requests for
funding assistance from special districts.
5. Non-project expenditures relate to appropriations
made from the water development accounts to augment the
general fund. For example, the agency budgets for the
Water Development Office, State Engineer's Office, and
Water Resources Center have been appropriated from the
water accounts. In addition, an appropriation was made
to supplement the funding for education. The state's
costs for water related litigation is also funded from
the water development accounts.
In summary, the scope of the Wyoming Water Development
Program has changed over the past thirteen years. The
changes have been made to meet the needs of Wyoming
citizens, while continuing to serve the principle that initiated
the program, the effective and efficient use of our water
entitlements will preserve Wyoming's water for Wyoming's
future.
E. Program Operation
Originally, the Interdepartmental Water Conference, the
predecessor to the Wyoming Water Development Commission, was
staffed by the State Engineer's Office Water Planning
Program. In 1979, the Wyoming Water Development Commission
was formed and an independent staff was developed. This
move was made to streamline the administration of the
program and make it more effective.
The statutory authority for the Wyoming Water Development
Program is vested with the ten member Wyoming Water
Development Commission (WWDC) which meets 8 to 12 times per
year. The program is administered through the Wyoming Water
Development Office (WWDO) which includes a director and 13
staff members. The operating budget is approximately
$1,900,000 per biennium. Over the past five (5) years, the
commission and staff have overseen and administered project
expenditures averaging approximately $30 million dollars per
year.
The Wyoming Legislature has periodically increased the
responsibilities of the WWDC and WWDO. In 1986, the
administration of the construction of water development
projects was transferred from the Department of Economic
Planning and Development (DEPAD) to the WWDC. Again, in
1986, the Legislature made the WWDC an integral party to the
administration of the instream flow law. In 1991, the
management of the state's water investments was transferred
from the Economic Development and Stabilization Board to the
WWDC.
The Wyoming Water Development Office includes a Planning
Division and Construction Division. Each division is
managed by an administrator who also assists with department
and project management. The Planning Division serves to
administer project studies (Level I Reconnaissance
Studies and Level II Feasibility Studies), assist the
Director and WWDC in making funding recommendations, and
perform the planning functions of the agency. The operation
of the Planning Division is guided by the "Operating
Criteria of the Wyoming Water Development Program". The
Construction Division serves to administer Level III
Construction Projects. The operation of the Construction
Division is guided by the "Operating Criteria of the
Construction Division, Wyoming Water Development Office".
The director is responsible for the operation of the entire
program, serves as the contact with the WWDC, Governor, and
Legislature, and performs special assignments for the
Governor. The director and administrators are supported by
a small fiscal control and secretarial staff.
Project administration is the staff priority due to the
funding involved. Planning efforts are completed only
when staff time allows. Given the number of planning and
construction projects, there has been minimal staff time
available for basin-wide planning. Staffing is effected
more by the number of projects within the program than it
is by the amount of appropriations. Administering a small
project can be as time consuming as working on a larger
project. The WWDC will continue to use improved technology
to reduce administrative costs. However, if the number and
complexity of the projects continues to increase and if planning
efforts are to improve, additional project managers may be
needed within the next five years.
Presently, the WWDC uses the private sector for the
preparation of project technical studies such as Level I
Reconnaissance Studies and Level II Feasibility Studies.
Further, the WWDC contracts with the project sponsors, the
municipality or district benefitting from the project, to
serve as the lead agency during the Level III Construction
Process. The project sponsors typically use the private sector for
project plans and specifications. Further, the project
sponsors are typically required to solicit bids from private
contractors for project construction.
While the statutes pertaining to the Wyoming Water
Development Program provide guidance and the framework for
the program, they were intentionally meant to be very broad.
The Wyoming Water Development Commission was instructed by
statute to develop the priorities, guidelines, and criteria
for the program. The "Operating Criteria of the Wyoming
Water Development Program" developed by the WWDC, in
consultation with the Legislative Select Water Committee,
serves this purpose. The criteria is reviewed on an annual
basis to insure it directs the program in an efficient and
effective manner and continues to address the needs of
Wyoming in a manner consistent with available program
resources.
Presently, there are two state agencies providing funding
assistance for water projects. The WWDC provides funding
for water supply projects, while the State Land and
Investment Board provides funding for water treatment and
distribution projects. Despite the existing excellent
relationship between the agencies, this arrangement does
cause confusion with prospective clients and can result
in delays when both agencies are involved. In 1991, during
the reorganization of state government, there was a
discussion relative to the combining of the staffs for the
Farm Loan Board and the WWDO. However, this proposal was
rejected by the Joint Agriculture, Public Lands, and Water
Resources Committee.
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