Hearings and Business Meetings

SD-366 Energy Committee Hearing Room 10:00 AM

Jim T. Dunlap

Mr.

Statement of Jim Dunlap

on behalf of the

New Mexico Rural Water Association

Upper La Plata Water Users, and the

National Rural Water Association

before the Committee on Energy and Natural Resource

U.S. Senate, Washington, DC

May 11, 2005

__________________________________

 

Mr. Chairman, Members of the Committee - my name is Jim Dunlap, I am President of the Upper La Plata Water District in New Mexico.  I am a rancher, farm equipment business owner and I am currently the Chairman of the Interstate Stream Commission for the state of New Mexico.  All of these organizations and every state rural water association join me in thanking you and this Committee for your support for rural and small communities in our efforts to improve and protect our drinking water – and for the opportunity to testify before the Committee on your bill; S. 895.

 

Before discussing the details of the bill, let me say how happy I am to have New Mexico’s two Senators, with separate party affiliations, holding the chair and ranking positions on this Committee - working to better rural America’s water and looking at the Bureau as an agency to do it.  I may be out of my league on how to express my appreciation to both of you simultaneously, but it is an understatement to say all of rural New Mexico and all rural Americans are very appreciative for your efforts.  In addition to being supportive of the legislation, I am also relieved that Senators Domenici and Bingaman worked out their differences in their bills from last year – before having me here on the record to testify.

 

Many western rural areas have never had adequate water supplies and have a need for a reliable water supply to attract and maintain rural economic and public health.  The nexus of three trends or realities is resulting in a problem that merits additional federal water development assistance.  These realities include: many U.S. rural households don’t have decent, if any water service.  Second, that unfunded mandates disproportionately impact rural households and these mandates are increasing.  The third is quantity – many rural areas in the west never had adequate water supplies.  Expanding the Bureau’s mission to develop rural water supplies is the right step toward a solution to the water problems facing the rural west.  To broaden the scope of the Bureau to drinking water is a bold and dramatic new initiative for western American – and one that is sincerely supported and welcomed by rural communities and families.  Here to fore, the Bureau of Reclamation has made water development, and the corollary human progress, of western American one of the unique enterprises of modern civilization; reordering the understating of society’s interaction with its natural environmental. 

 

Senators Domemici and Bingaman are now compelled to try to evolve the Bureau into meeting the west’s future rural water supply needs.  Currently there is no governmental instrument assessing the long-term needs and planning of western states’ rural water supply.  This is happening at the same time that development is advancing in many western states.  If we want to “do it right” – be the most effective, far-sighted, and at the same time limit and unintended consequences – we need the comprehensive, long-term and locally supported planning effort that is proposed in S. 895.  Such a new direction for the Bureau will result in improvements for western rural water supplies in the coming decades that will compare to the Bureau’s historical advances in water development for energy, agriculture and commercial development.

 

Mr. Chairman, allow me to give you a brief example of what is commonplace in the west.  I am currently working to develop a means to regionalize the growing city of Durango, Colorado and 2 large unincorporated areas, one in Colorado and one adjacent to it in New Mexico.  Residents of both of these rural areas (one up on Red Mesa) are either hauling water or have an extremely limited supply.  That’s right, they fill up their trucks to drive (haul) water to their houses to drink and use for cooking.  Due to the complexity and variety of the problems in each of these communities – the only real solution is a regional cooperative effort.  In this example, it is critical to note that the unused municipal and industrial water rights held by the Conservancy District could be used by the other communities if there was a large distribution system to move the drinking water.  This is just the type of situation that could be solved by your legislation.

 

One of the main concerns in our testimony last year was to include an independent process of submitting projects to the Bureau to serve as an incentive for timely analysis and completion of projects.  I would like to thank the authors for including such a provision in the bill.  My written testimony includes a few suggestions for enhancing the legislation including technical assistance, independent engineering, annexation protection, etc.  However they are minor and should prove to be non-controversial.  I will only briefly mention them here to put them into the record - not diverting attention away from our overwhelming support and appreciation of this legislation.

 

I would like to acknowledge that small and rural communities sincerely appreciate the thought that went into the bill.  If this legislation is enacted, the Bureau will come to be known as a solution to immediate and long-term western rural water challenges.  We will see dramatic public health improvements; farm families receiving clean water for the first time, entire regions that have been out of compliance with drinking water regulations for years developing solutions, and intractable western water arguments being settled with communities moving forward.  We encourage the committee and the Congress to make the Bureau a permanent and recognized solution to some of the county’s most challenging water issues. 

 

Mr. Chairman, I strongly support the objective of having the Bureau fund more rural water development.  The key points I want to make today with regard S.895 are:

 

  • There is a great need for public health, economic viability, and compliance for additional financial resources for rural water development.
  • In certain circumstances, it is more cost-effective to develop large region water supplies as opposed to multiple local supplies.
  • The Bureau of Reclamation should get into rural water development as they have a unique mission not accomplished by other federal agencies (namely the U.S. Department of Agriculture and the U.S. Environmental Protection Agency).
  • The unique situation of rural communities should make them the priority for federal assistance for drinking water.
  • We support the bill’s provision for a local or independent process that could determine cost, feasibility, coordination and planning in the legislation.
  • Due to the unique federal mission proposed in the bill, any new water initiative within the Bureau of Reclamation should include significant annual appropriations – comparable to EPA’s approximately $800 million state revolving fund and USDA’s approximately $700 million loan and grant effort.
  • The west has changed since the passage of the original authorizing statutes for the Bureau of Reclamation.  Currently we are faced with new challenges including the growing need for municipal and industrial (M&I) water.  We may need to modify the mission of the Bureau and its ability to assist in providing M&I water.

 

There is a great need for public health, economic viability, and compliance for additional financial resources for rural water development.

 

The nexus of federal unfunded mandates, the fact that many rural areas have never had adequate water supplies, the shortage of local water supplies in the west, and need for a reliable water supply to attract and maintain any rural economic health reflects the great need for additional rural water development.

 

According to the USDA at least 2.2 million rural Americans live with critical quality and accessibility problems with their drinking water, including an estimated 730,000 people who have no running water in their homes (USDA study available on the internet at www.ruralwater.org/water2000.pdf).  About five million more rural residents are affected by less critical, but still significant, water problems, as defined by the federal Safe Drinking Water Act. These problems include undersized or poorly protected water sources, a lack of adequate storage facilities, and antiquated distribution systems.  Today, many rural families are still hauling water to their homes and farms.  In La Plata County, Colorado – an area near my home that we are trying to organize into a rural water district, lack of water is forcing hundreds of families to haul water for their home use and their livestock.  Their wells and springs are drying up due to the drought.  The results of the U.S. Department of Agriculture’s (USDA) six-month assessment of the nation’s most critical safe drinking water investment needs show that as many as eight million people have critical or serious drinking water quality problems.  According to the 1990 Census, there are about 1.1 million people without indoor plumbing (RUS).

 

Rural Americans have been living with inadequate water conditions that large communities could never imagine.  For example: the Village of Hatch, New Mexico is located on the west side of the Rio Grande River in Dona Ana County.  The County, in southern New Mexico borders both the State of Texas and the Republic of Mexico.  Hatch is in northern Dona Ana County approximately 40 miles north of Las Cruces, the county seat and a community of over 130,000.  The large metropolitan area of El Paso, TXJuarez, Mexico lies 80 miles to the south.

 

Hatch is an incorporated community with a population of 1,136.  However, due to the seasonal nature of agriculture, the main economic base, the population fluctuates as migrant laborers move in and out.  The Village operates a community water system serving the Village and outlying rural areas including approximately 799 residents residing in the two “Colonias” known as Rodey and Placitas.  The total population served by the water system is estimated at 2500.  More than 75% of the population consists of minorities, primarily Hispanics.  Projected population in the service area by the year 2010 is 3570.  There is one health clinic, funded by the former Farmers Home Administration, two grocery stores, seven restaurants, a post office, two bank branch offices, two convenience stores, one motel, one public laundry, and several other retail and service-related businesses.  Average income is extremely low as the 1990 census shows a Median Household Income (MHI) of $12,975, well below the National Poverty Line of $16,050.  The New Mexico Statewide Non-Metropolitan MHI is $21,656.

 

Rural Utilities Service (RUS) recently funded a water system improvements project to add additional storage capacity and run transmission lines directly from the storage tanks site to Placitas and Rodey.  Before this project, water ran from the tanks to Hatch’s distribution system, and then back uphill to the two Colonias.  During summer peak usage, the Colonias experienced zero water pressure.  The RUS project corrected this situation.  Hatch, along with the Colonias, received the direct benefit of the additional storage.

 

Small communities are often in the greatest need, lacking the technical resources to comply with federal mandates because of their limited economies of scale and lack of technical expertise. Of the approximately 54,000 community water systems in the country, more than 50,000 serve populations under 10,000.  Due to a lack of economies of scale, small-town consumers often pay high water and sewer rates. Water bills of more than $50 per month are not uncommon in rural areas. At the same time, the rural areas have a greater percentage of poverty and lower median household income.  This results in a very high compliance cost per household in rural systems coupled with an increased inability to pay.

 

Drinking water regulatory requirements affecting small drinking water systems have steadily increased since enactment of the Safe Drinking Water Act (SDWA) in 1974.  Not only has the number of regulated contaminants increased, but regulations have also increased in complexity.  Small communities are facing a compounding effect from each new regulation implemented by EPA.  That is, compliance with one particular regulation may be much more difficult as a result of one or more prior regulations, or one or more future regulations.  Currently, National Primary Drinking Water Regulations are set for 92 contaminants. These include turbidity, 8 microbials or indicator organisms, 4 radionuclides, 19 inorganic contaminants, and 60 organic contaminants. Maximum contaminant levels have been set for 83 contaminants and 9 contaminants have treatment technique requirements.  EPA is currently in the process of developing new regulations as required by the SDWA including Long-Term 1 Enhanced Surface Water Treatment Rule, Long-Term 2, Ground Water Rule, Arsenic, Radon, Stage 2 Disinfection Byproducts, and Candidate Contaminant List.  The EPA list of communities that are likely to be out of compliance with the arsenic rule can be found on the internet at: www.ruralwater.org/arsenicus.xls

 

In certain circumstances, it is more cost-effective to develop large region water supplies as opposed to multiple local supplies.

 

The reason -- that over 9 out of every 10 U.S. water supplies serve populations under 10,000 people -- it has historically been more economical to build smaller utilities than expand larger ones.  The cost of running main lines a few miles can be cost prohibitive.  However, in certain circumstances, it is more cost effective (especially over the long-term) to build larger or region water supplies.  The factors that are used in making these complex decisions include future regulations which may require centralized treatment, the need to share one supply that may be far from many of the communities, the need for a distribution system to share water rights, projected growth, economic planning, etc. 

 

For example, the regional Rocky Boys rural water supply, authorized by Congress for Bureau construction will allow many smaller communities to comply with the EPA’s Surface Water Treatment Rule which they can’t afford on their own, it will ensure long-term supply to numerous communities that currently lack quality supplies, it will provide an economy of scale for future regulations like disinfection by-products, and it will ensure the necessary infrastructure for those local economies.

 

Another example is the Navajo-Gallup pipeline project in New Mexico.  This is a project to supply much needed drinking water to the Navajo Reservation, parts of the Jicarilla Apache Indian Reservation and to the city of Gallup.  This will involve 41 Chapters in New Mexico and two Chapters in Arizona (a Chapter is similar to county government).  It will involve a population of some 98,000 people utilizing 38,000 acre-feet of surface water and 4,000 acre-feet of ground water.  The project will start from Farmington, NM with a 48-inch pipeline and extend to the community called Yah Ta Hey, which is adjacent to the City of Gallup.  This pipeline will be approximately 520,000 feet with laterals to Window Rock, Arizona and Crownpoint, New Mexico, with lateral extensions of 388,000 feet.  There will be a separate lateral extending from Cutter Dam to Pueblo Contado and Ojo Encino.  This lateral will be approximately 400,000 feet in length.

 

The Bureau of Reclamation should get into rural water development as they have a unique mission not accomplished by other federal agencies (namely the U.S. Department of Agriculture and the U.S. Environmental Protection Agency).

 

In the New Mexico-Colorado example provided in the previous section, there is no federal or state agency with the mission of looking at this type of project.  We are organizing the parties as an ad hoc project and using local funds to do the planning.  This project includes two states, multiple communities, conservancy districts, and unincorporated areas.  Such a project does not fall within the USDA’s rural water program guidelines for area and density of users.  The list of communities funded last year by USDA is available on the internet at www.ruralwater.org/report2003.  This program is truly the most successful rural public health and economic development program in the country.  It was the reason piped water came to my community in 1966.   It needs to be continued and funding needs to be increased, however, it has its own mission and it currently cannot meet the demands of the communities that fit into its guidelines.  I believe S. 895 creates a new federal agency mission to assess and fund the type of project needed in New Mexico-Colorado and the rest of the western states.  If projects would better fit in the USDA program or the EPA program then they should be referred to those agencies.   However, it is clear to us working in the western states that there currently is no program to meet many of these pressing water problems.

 

The unique situation of rural communities should make them the priority for federal assistance for drinking water.

 

Many water organizations have been petitioning Congress for additional water infrastructure funding through increased authorizations and appropriations in EPA and the Bureau.  However, rural communities face greater economic and often greater public health needs than most of these organizations.  No large community consumer pays $100.00 a month for drinking water service.  However, in the western states, this is not uncommon in rural districts.  Also, compliance costs are typically much higher in smaller utilities.  For example, Desert Sands water district in Anthony, New Mexico formed a water association more than two decades ago that finally provided clean water.  However, to comply with the new arsenic rule, their estimates show customers' monthly water bills would at least triple under the new standard.  The average bill last July was $32.18 per household.  An Associated Press article (www.ruralwater.org/desartsands.htm) showed that one of the district’s wells contained arsenic at 10.4 ppb and that “many Desert Sands customers are factory or farm workers who live in wind-beaten mobile homes or modest frame houses on small, sandy, treeless lots separated by rickety metal fences. The sand that blows across the flat desert is deep enough in some of the area's unpaved roads for cars to get stuck.”  Affording a rate increase of three fold will be dramatic to say the least.

 

The bill recognizes this unique situation of rural America and the cost of providing safe water service.  We are grateful for this recognition and the bill’s attempt to ameliorate this situation.

 

Please retain the bill’s local or independent process that could determine cost, feasibility, coordination and planning in the legislation

 

S. 895 provides for a new authorization for the Bureau to study opportunities to construct rural water projects and report back to Congress on feasible projects for funding – through the Congressional appropriations process.  We think this is the proper way to try to identity feasible projects.  Also, we support the authorization of a new process that would act as an incentive for the Bureau to develop cost-effective projects in a timely manner.  This option for local advocacy would serve as an incentive for the Bureau to work cooperatively with the locals.  If the local organizations and the Bureau had different options on which projects were feasible and how they should be designed, Congress could be provided both options – and the Bureau would be able to comment on any local plan/study submitted to Congress.  This would also serve as an incentive to move projects through the process in a timely manner.

 

Any new initiative within the Bureau of Reclamation should include significant annual appropriations.

 

Thank you Senator Domenici and Senator Bingaman for introducing this bill.  Rural America is grateful.  I appreciate the details and thought that went into S. 895 that seeks to find the best ways to divide up the intergovernmental responsibilities to plan, design, build, and fund public drinking water supplies under the federal umbrella.  I have over 30 years of experience dealing with the various levels of government and the various federal funding agencies.  I have learned that it can be a long, complicated and bureaucratic process.  We support the effort to craft legislation that will allow the Bureau to fund the water supplies that evolve from the studies and assessments.  The main ingredient in a successful Bureau of Reclamation drinking water initiative will be a commitment from the federal government to a significant amount of annual appropriations.  When communities see funding available to solve their compliance, supply, and rural public health needs – they will put it to sound use immediately.  The agency will come to be known as a solution to immediate and long-term water challenges.  We will see dramatic public health improvements; farm families receiving clean water for the first time, entire regions that have been out of compliance for years developing solutions, and intractable western water arguments being settled with communities moving forward.  This has happened under the Bureau’s direction in ad hoc manners in some western states.  We encourage the committee to change this and make the Bureau a permanent and recognized solution to some of the county’s most challenging water issues by establishing an authorization for annual funding comparable to the USDA and EPA. 

 

Background on State Rural Water Associations

 

Each state rural water association membership is comprised of small non-profit water systems and small towns. All members have water supply operations as their primary daily activity. Membership averages about 400-500 communities per state, with systems from all geographic areas of each state. These are active members - who continuously participate in the training and technical assistance program in an effort to improve their drinking water. This program actively assists all small water systems whether they are members of the state association or not. With a significant turnover in water operators and board members - and the ever-increasing regulatory burden - the need for training and technical assistance remains constant.  The problem with delivering safe drinking water is that improving drinking water in small communities is more of a RESOURCE problem than a REGULATORY problem. Every community wants to provide safe water and meet all drinking water standards. After all, local water systems are operated by people whose families drink the water every day, who are locally elected by their community, and who know, first-hand, how much their community can afford. Without the support of local people, regulations alone won't protect drinking water.  Many small communities rely on volunteers or part-time administrators to operate their local water supplies.

 

In my personal experience, two teachers, four farmers, one banker, and a group of kids from the Future Farmers of America acted locally to bring the first piped drinking water to my part of San Juan County in 1966. I was one of the two teachers. The community had been relying on ground water from individual shallow wells contaminated with minerals, oil, and methane gas for their farms and some household uses. Safe water used for drinking needed to be hauled in from town. We organized the 175 families in the area to incorporate a small rural water system and accept responsibility for repaying a 420 thousand-dollar start up loan from the U.S. Department of Agriculture's Farmers' Home Administration. At that time we did not have enough people to meet the threshold for population density to repay a loan, so a few of us accepted more than one water meter on our property. It was all the community could do to make the payments on the loans and the operations and maintenance of the systems was taken care of by community volunteers. Today, we have over 2,500 families on the system that has allowed for economic development in the area with over 100 new taxable businesses.