Hearing of the Environment and Public Works Committee - Questioning by Sen. Inhofe, Hearing on Army Corps of Engineers Civil Works Program

Hearing

Inhofe: Well, thank you very much, Mr. Chairman. I might add that when this happens, and it does happen quite often, we normally get more stuff done with about half of them here. So, I think we're going to be alright. I do have a couple of questions and I'm sorry, Mr. James, that I wasn't here during your opening comments because I would have enjoyed that. We've had some similarities in our background and similar frustrations too.

Let me just mention, just to get one thing behind us here. I want to thank the Corps for their work in getting the WRDA 2018 guidance done as quickly as you have. The City of Bartlesville, Oklahoma -- and this is one that we've worked on for a long period of time -- Bartlesville is a small city north of Tulsa. It's one that had really serious problems in water storage. And so, what we did was get together and try to find out a way that we could knock down some of the price of this which came through as $100 million over a 10-year period. Now, that's something where that community, there's just no way that they would be able to come up with that.

And so, people are forced and communities are forced into situations where they might have to do it themselves and figure out ways to do it to make it come into compliance and all that. So, what happened was in that case, that was right before the last WRDA bill, Water Resources and Development Act. And I actually had to put an amendment on there to negotiate that down to something that was livable. Now, it ended up working. That's a happy ending story. And, by the way, none of the stuff I want to mention happened during your watch. It was always before, so that's one of the problems you and I talked about it even before you or your confirmation.

So, unortunately, there's another city, a larger city, Enid, Oklahoma, and it seems like the Corps price structure is affecting that about the same way as it did Bartlesville, Oklahoma. During talks with the local district, the Corps provided the community with price estimates and the city planned accordingly. And when I say planned accordingly, they actually had to pass a bond issue and we're talking about around a $4.5 million estimate as to what it was going to cost for this storage to take place. Now, we passed the bond issue. In fact, the bond issue was in 2016. And after that took place, we found out that -- I would use the word that they were blindsided -- by the Corps coming in and saying what they failed to do was to get all of the compound interest rates from the time when this first went into effect which would have been in 1976 that is when a lake called Kaw Lake was actually made.

Now, the court has the authority to make changes and they didn't do it in the case of the Bartlesville. So in Bartlesville I had to actually put an amendment on the WRDA bill. Now it looks like if this isn't changed that we would have to do the same thing here. And so what I would just like to kind of explore what your thoughts are that as you are faced with these situations you are getting a whisper from your left and so you might want to take that into consideration, too. How do we handle situations like this? If they had known that this thing that started out to be a $4.5 million contract or liability, they had to end up adding to that $8.5 million making the total amount $13 million instead of the $4.5 million that came from a bond issue. Now that's just on its face something that shouldn't happen and it happened because they were not aware. There is a lot of noise about when they are preparing the $4.5 million bond issue what the cost was going to be. And so that's what happened and that is how we got into that situation.

So I have two things that I am concerned about. I would like to know in that particular case is there something that we can actually do right now because I think it is within the purview of the authority of the court to do something about that? And then secondly to preclude that from happening again. Does all of that make sense to you in terms of what happened?

James: Yes, sir, if I may let General Spellmon address that first, and then I will follow up quickly with my thoughts.

Inhofe: Good.

Spellmon: Yes, sir. Yes, we are taking action here. We owe the Secretary by August a revised rulemaking for the water supply rule. The dynamic situation that you are describing really can be traced back to the 1958 Water Supply Act where the Secretary of the Army is authorized to provide storage to local communities for water supply purposes provided that those entities agreed to pay their fair share of the cost to store that water. And so in some of these cases you have entities that are requesting storage behind a dam that may have extensive operation cost, maintenance cost, repair or rehabilitation cost and so the entity ends up bearing a percentage of that burden. The rule that we are taking to the Secretary in August, we are trying to bring more consistency and clarity to the public in a way we go about this at over 100 reservoirs across the corps.

Inhofe: Well, yeah, consistently and what about fairness? Shouldn't that be in there, too? I mean what is your reaction? It always bothers me when I hear a response -- this is something started in 1958 as if we have been doing it wrong all of these years so let's keep doing it wrong. That is what my fear is and what your recommendation may be to the Secretary.

Spellmon: Yes, sir, so over those 100 reservoirs that I just described, I will tell you there is very little consistency across the Corps in this practice and again that's the intent of the revised rules that we want to take to the Secretary.

Inhofe: Mr. Secretary, then also is there anything specifically on the Kaw Lake problem that could be -- I know it could be but should be addressed now?

James: Yes, sir, to answer that directly it should be addressed the same way that the Bartlesville was addressed in my opinion. Hopefully you wouldn't have to add legislation to do that.

I'll just make this comment. I am looking forward to getting this water supply rule, this new one on my desk. I'm trying to help the Corps stretch what appropriation we get as far as I can help them stretch that appropriation. But I am also--

you know when I came to this town, I was kind of known as the flood control guy and I guess I was kind of the flood control guy where I have lived all of my life. But I have discovered since then that there are other issues in parts of the country that I was not aware of, water supply being one of those issues. I have tried very hard to learn that issue and I am looking forward to getting that. So in the long run I will try to be helping the users as best I can without breaking law and I will also try to be helping the Corps get it right.

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