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2001 LEGISLATIVE REPORT
General Comments/Overview/Executive Summary
December 31, 2000
IV. Situation Analysis
Wyoming generates an average of 16 million acre feet of surface water within its boundaries each
year. An additional 2 million acre feet of surface water is received through streamflow from
other states. Of this 18 million acre feet of surface water, Wyoming is entitled, under the various
interstate river compacts and court decrees, which divide the surface water among the states, to
use or consume approximately 4 million acre feet per year. Presently, the state uses 2.8 million
acre feet of this water. Approximately 1.2 million acre feet remains available for Wyoming's
future use.
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
these assets. The water demands of downstream states are increasing as these states approach or
exceed limits of their water entitlements. Consequently, Wyoming may expect requests for
variances or challenges to the historic interpretations of the compacts and decrees that guarantee
Wyoming a share of water originating in the state. Further, the federal government is seeking
water to resolve endangered species and environmental problems that are occurring downstream.
Court decisions have validated the position that water entitlements are best protected by
beneficial use. Unfortunately, Wyoming's water resources are not always located where they are
needed. The Wyoming Water Development Program serves to provide and rehabilitate the
infrastructure to deliver water to the people with water supply problems and to promote the
effective and efficient use of the states water, thus maintaining Wyoming's 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.
Construction of water 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 has assisted Wyoming citizens in meeting water supply needs through planning and
project development. The program's client list includes eight (8) counties, eighty-two (82)
municipalities, fifty-nine (59) water districts, fifty-three (53) irrigation districts, ten (10) joint
power boards and twenty-one (21) water user groups.
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A. Program Status - Water Resource Development
In 1977, the revenue source which funds the New Development
Program was established. In 1982, the Governor proposed and
the Legislature implemented the framework for the present
Water Development Program. In 1983, the revenue stream
which funds the Rehabilitation Program was established.
Since 1983, the program's water resource development
activities have evolved to the following:
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1. New Development Program
The New Development Program provides planning services and construction funds for
the infrastructure necessary to supply unused and/or unappropriated water to meet the
present and future needs of Wyoming and its citizens. Water supply and storage facilities
such as dams, diversion structures, groundwater wells and transmission pipelines are
eligible for consideration under the New Development Program. The New Development
Program is dedicated to the efficient and expeditious development of water resources,
consistent with state policy, Wyoming water laws and the needs of the citizens of the
state. 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.
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a. Sponsored Projects
The project sponsor is a municipality, irrigation district, or other approved
assessment district which may be the major beneficiary 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.
Typically, sponsors request project specific technical and financial assistance
from the Wyoming Water Development Commission through the application
process. If the application is approved by the Commission, the project is
assigned a study level. If the project is determined to be technically and
economically feasible and serves to meet a water supply need or alleviate a
water supply problem, the Commission may recommend that construction
funding be appropriated by the legislature.
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 growth or stability. The program has a
philosophy that water development can be achieved through state and local
partnerships. The sponsor can complete a water supply project with state funding
assistance. The actual loan/grant mix is based on WWDC funding criteria and
the sponsor's ability to pay. 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
A state project typically benefits more than one entity and is multipurpose in
nature. State projects often 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 and stands ready to meet
future municipal and industrial growth and development. The Buffalo Bill
Enlargement has a firm yield of 74,000 acre feet at the mouth of the Shoshone
River.
- Deer Creek Dam and Reservoir. Litigation and the Endangered Species
Act have impacted the project schedule which has led to the consideration of the
Pathfinder Modification Project as a possible alternative to the eventual
construction of the Deer Creek Project. The WWDC is working with the
Attorney General's Office on the various law suits. Depending on the outcome
of the North Platte lawsuit, either the Deer Creek project or the Pathfinder
Modification Project may be constructed.
- Little Snake River Valley Dam and Reservoir. The final environmental
impact statement has been prepared. The final mitigation plan is nearing
completion and the Record of Decision is in draft form.
2. Rehabilitation Program
The Rehabilitation Program provides 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 insures 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 WWDC funding criteria and the sponsor's ability to pay.
B. Program Status - Water Resource Planning
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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 administration 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 Reservoir.
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.
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a. W.S. 41-3-1004 assigns the Commission the responsibility to prepare 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, eighty (80) applications for instream flow water rights have been prepared by the
Wyoming Game and Fish Department. As of December 31, 2000, the WWDC has published
seventy-one (71) 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 the University of Wyoming to conduct research on such water related
issues as hydrologic modeling, flushing flows, irrigation evapotranspiration, conveyance loss,
and riparian zone management.
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 that identify 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.
Chapter 81, 1999 Session Laws, authorized the Commission to implement and administer the
statewide water planning process. Studies on the Bear River, Green River/Little Snake, the
Tongue/Powder and Northeast Wyoming River Basins are currently underway. The Green/Little Snake
and Bear River Basin plans will be completed in January, 2001. The WWDC anticipates completing
the initial basin plans for all seven of the states major river basins in five to seven years.
The planning staff will continue to update each basin plan on a regular basis with the ongoing
assistance of the Basin Advisory Groups. The major products of the planning process will be the
seven basin plans and their regular updates, and a renewable statewide water resources data
base.
5. Groundwater Grant Program
The 1981 Session of the Wyoming Legislature enacted W.S. 41-2-119 which authorized
the Water Development Commission 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 W.S. 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, 2000, 36 municipalities had received assistance from the program.
C. Program Funding
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1. Water Resource Development
The administrative costs of the Water Development Commission are approximately
$2,595,000 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
[W.S. 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 $23,000,000 per year. The WWDC is committed to phase or
delay projects to insure its recommendations do not result in overruns of the
account.
By enacting W.S. 16-1-301 the Legislature authorized the use of water
development account funds to meet federal matching grant requirements through
the year 2003. The federal capitalization grant and the states matching share
will be used to finance a drinking water state revolving loan fund (DWSRF)
program. The DWSRF program may be used to fund improvements to water
treatment systems and other Safe Drinking Water Act compliance issues. This
program is not included in the annual omnibus water bill. Water Development
program funds are appropriated automatically by statute to match 10% of the
federal capitalization grant.
b. Water Development Account No. 2
The Rehabilitation Program is funded by Water Development Account No. 2
[W.S. 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 $5,100,000 per year. In 1995 and in 1999,
requests for project funding exceeded the funds available. The WWDC is
committed to phase or delay projects to insure its recommendations do not result
in overruns of the account.
By enacting W.S. 16-1-301 the legislature authorized the use of water
development account funds to meet federal matching grant requirements through
the year 2003. The federal capitalization grant and the states matching share
will be used to finance a drinking water state revolving loan fund (DWSRF)
program. The DWSRF program may be used to fund improvements to water
treatment systems and other Safe Drinking Water Act compliance issues. This
program is not included in the annual omnibus water bill. Water Development
Program funds are appropriated automatically by statute to match 10% of the
capitalization grant.
2. Water Resource Planning
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a. Water Investment Management
These activities are funded by the agency budget, which has historically been
appropriated from Water Development Account No. 1. 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 loan payment and operation/maintenance obligations to the Bureau of
Reclamation.
b. Instream Flow
The WWDC requests $100,000 per biennium for
consultant services for completion of some instream flow feasibility studies.
c. Water Related Research
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 $69,000 per biennium. Current
research related expenditures authorized in the Omnibus Water Bill -Planning
are $140,000 annually.
d. Basin Wide Planning
Depending on the complexity, basin wide planning studies cost between
$200,000 and $1,500,000. Much of the water planning data should be updated.
Studies on the Bear River, Green River/Little Snake, Northeast Wyoming and the
Tongue/Powder River Basins are currently underway. The operation of the
Water Resource Data System and other necessary contract services costs
approximately $750,000 per biennium.
e. Groundwater Grant Program
Of the $4,000,000 appropriation, approximately $150,000 remains available for
program funding. There are no current 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 1, 2000, $110,822,296 has been expended 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 $41,284,873.
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, seven new development dam projects and fourteen dam
rehabilitation projects have been completed. The Buffalo Municipal project (Tie Hack Dam and
Reservoir), Sheridan's Twin Lakes Dam and Reservoir, and the Greybull Valley Irrigation
District Roach Gulch project have recently been completed. The Water Development Office
recently received the Clean Water Act, Section 404 Permit from the U.S. Army Corps of
Engineers for the Little Snake River Valley Dam and Reservoir project (High Savery).
Construction is anticipated to commence the fall of 2001. The Deer Creek Project is delayed
pending the outcome of the North Platte Litigation. Other dams in the planning process are the
enlargement of the Ray Lake Dam on the Little Wind River and storage on the Wind River
upstream of Riverton in Fremont County and, as an alternative to Deer Creek, the Pathfinder
modification project.
There are reasons the number of dams in the Water Development Program are less than originally
anticipated. The first and foremost reason is cost. It is very difficult for a project sponsor to
afford a storage facility even with the most favorable financing terms available. 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, after two and one-
half years, 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. In 1996, at the conclusion of the
permitting process for the Buffalo Municipal Dam, the actual costs related to permit acquisition
were approximately $650,000. 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
Little Snake River Valley Dam and Reservoir Project (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 argument 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", therefore the impacts to wetlands and aquatic habitat
resulting from the project were not warranted, no matter how well those impacts were to be
mitigated. This 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,
intended as a supplemental agricultural water supply, 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 an analysis of how water development funds
have been spent over the past nineteen years. The following is a breakdown of total program
expenditures from 1980 to June 30, 1999:
From program history and projections into the future, the following conclusions can be made 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. The agricultural
industry is presently concentrating on 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.
The agricultural projects that rely on federal storage projects can expect financial impacts
caused by unfunded federal mandates relating to dam safety, water conservation,
endangered species and environmental protection.
2. The major expenditures in the state project 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. It is difficult to acquire the necessary
federal permits and clearances for construction of large mainstream dams and reservoirs.
In addition, the costs associated with construction of large mainstream dams are extreme.
For the short term, it is anticipated that multi-purpose state project expenditures will be
limited to enlargements of existing facilities to replace storage lost due to silt
accumulation, to construction of small off channel reservoirs, and to construction of other
miscellaneous projects which serve more than one type of use, e.g. diversion structures
that provide water for irrigation while simultaneously accommodating fishery needs.
3. The domestic category includes municipal and special district projects.
Municipalities and other public water systems have been the major beneficiaries of the
Wyoming Water Development Program. Communities must not only be concerned with
the quantity of water it can supply for culinary, irrigation, and fire flow purposes, but
must insure that the water quality meets ever-changing EPA requirements. Further, as
urban populations increase, the amount of water communities must supply for public
health and welfare purposes must also increase. Municipalities are aware that they need
enough good quality water to meet their existing demands, and 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 20 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.
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
Wyoming's previously 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 the municipal
water supply systems so they can be more reactive in solving the problems of the
surrounding subdivisions. In the short term, for those subdivisions already formed, it is
apparent that the Wyoming Water Development Program will be considering additional
requests for funding assistance from special districts. However, the legislature enacted
measures during the 2000 budget session that amended existing subdivision regulations
to thoroughly address water and sewer health and safety needs. This action, coupled with
improvement and expansion of municipal systems to be more reactive in solving water
supply problems of the surrounding subdivisions, may provide the necessary long term
solutions for special districts.
4. 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
Resource Data System 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 20 years. However, the program continues to serve the principle that initiated
the program; the effective and efficient use of water entitlements is necessary to 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 17 staff members. Over the past five
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. In 1999, the legislature authorized 3 additional staff
to conduct river basin planning.
The Wyoming Water Development Office includes a Planning Division, a Construction
Division and a Basin Planning Division. Each division is managed by an administrator
who also assists with department and project management. The Planning and
Construction divisions have four project managers who are responsible for day-to-day
project administration and special projects. The Basin Planning division has one project
manager and one technical support staff person. 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 be the Operating Criteria of the Construction
Division, Wyoming Water Development Office. The Basin Planning Division serves to
administer basin planning studies, assist the Director and the WWDC in making funding
recommendations and perform the basin planning functions of the agency. 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, administrators and project managers are supported by a small fiscal control
and secretarial staff.
Individual project administration has been the primary priority of the staff. However,
because of renewed interest in the statewide water planning process, additional staff has
been authorized for basin planning purposes. Staff requirements and the project work
load for project managers are determined by the number of projects within the program,
not necessarily 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 and to produce state-of-the-art plans
and projects.
The WWDC uses private sector consultants for the preparation of river basin plans and
project technical studies such as Level I Reconnaissance Studies and Level II Feasibility
Studies. Further, the WWDC contracts with the project sponsors to serve as the lead
agency during the Level III Construction process. The project sponsors use the private
sector for project plans and specifications. The project sponsors are 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.
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