Municipal Water Leader February 2017 by Water Strategies

Volume 3 Issue 2

February 2017

Financing the Future of Water in Oklahoma: A Conversation With Chris Browning, Sam Samandi, and Bret Weingart of the Oklahoma City Water Utility

A Commitment to Growth By Kris Polly

uilding water and wastewater infrastructure systems to meet the needs of communities is no small feat. It requires leadership, foresight, and follow-through. It requires the collaboration of those who know their assets and potential best—local and regional leaders. This issue of Municipal Water Leader magazine focuses on leaders in Oklahoma, a state that has a demonstrated long-term commitment to growing its economy and, therefore, its water infrastructure. The stories and interviews on Oklahoma in this issue highlight the importance of leadership in creating and implementing long-term visions to help communities and regions grow. In our cover interview, we talk with Oklahoma City Water Utility General Manager Chris Browning, Engineer Sam Samandi, and Deputy Manager Bret Weingart to discusses how city leadership has helped central Oklahoma and its water supply portfolio to grow over the last 25 years through long-term planning and sound financial policies. By being “business minded,” as Mr. Browning describes it, the water utility is successfully building out its infrastructure to facilitate the city’s growth in a way that is fiscally sound and reasonable for its ratepayers. Oklahoma Water Resources Board Interim Director Julie Cunningham shares a similar vision from a statewide perspective. One of the missions of the board is to help facilitate water infrastructure financing in the state, which will require an investment of $82 billion to build capacity and rehab aging water infrastructure. Given the can-do attitude of the state’s communities, it is no surprise that Ms. Cunningham is “seeing creative and collaborative ideas as communities reach out to each other and coordinate on water planning” to make that investment.

Chris Gdanski, director of engineering services for the city of Enid, discusses a big project—a 70-mile pipeline— that will help provide water certainty to help grow the city and its neighbors along the pipeline. Ken Komiske, director of utilities for Norman, Oklahoma, talks about his city’s big project—an upgrade to its wastewater treatment plant— and how that fits into the city’s ongoing efforts to address environmental concerns and bolster its water supplies. Beyond Oklahoma, we hear from Amanda Grint on addressing ice jams in Nebraska. The Papio–Missouri Natural Resources District has worked with local stakeholders for years to combat the floods that creep around winter ice jams. We also have two important law articles that address issues critical to water providers: the ability to make a water transfer without requiring permits under the Clean Water Act and the authority to assess a tax or fee on parcels to which water service is provided. Our final story involves a real innovation: a device that cuts off water discharges from damaged fire hydrants. We hope you enjoy this issue of Municipal Water Leader. The people highlighted in this issue are all committed to creating the best environment for their respective communities to grow. This magazine applauds that commitment and the leadership they have exhibited in seeing that commitment through. Kris Polly is editor-in-chief of Municipal Water Leader and Irrigation Leader magazines. He is also president of Water Strategies LLC, a government relations, marketing, and publishing company he began in February 2009 for the purpose of representing and guiding water, power, and agricultural entities in their dealings with Congress, the Bureau of Reclamation, and other federal government agencies. He may be contacted at Kris.Polly@waterstrategies.com.

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Municipal Water Leader

FEBRUARY 2017

C O N T E N T S 2 A Commitment to Growth

VOLUME 3 ISSUE 2 Municipal Water Leader is published 10 times a year with combined issues for July/August and November/December by Water Strategies LLC 4 E Street SE, Washington, DC 20003 STAFF: Kris Polly, Editor-in-Chief John Crotty, Senior Writer Matt Dermody, Writer Robin Pursley, Graphic Designer Capital Copyediting LLC, Copyeditor SUBMISSIONS: Municipal Water Leader welcomes manuscript, photography, and art submissions. However, the right to edit or deny publishing submissions is reserved. Submissions are returned only on request. For more information, please contact John Crotty at (202) 698-0690 or John.Crotty@waterstrategies.com. ADVERTISING: Municipal Water Leader accepts one-quarter, half-page, and full-page ads. For more information on rates and placement, please contact Kris Polly at (703) 517-3962 or Municipal.Water.Leader@waterstrategies.com. CIRCULATION: Municipal Water Leader is distributed nationally to managers and boards of directors of water agencies with annual budgets of $10 million or more; the governors and state legislators in all 50 states; all members of Congress and select committee staff; and advertising sponsors. For address corrections or additions, please contact our office at Municipal.Water.Leader@waterstrategies.com. Copyright 2017 Water Strategies LLC. Municipal Water Leader relies on the excellent contributions of a variety of natural resources and water industry professionals who provide content for the magazine. However, the views and opinions expressed by these contributors are solely those of the original contributor and do not necessarily represent or reflect the policies or positions of Municipal Water Leader, its editors, or Water Strategies LLC. The acceptance and use of advertisements in Municipal Water Leader do not constitute a representation or warranty by Water Strategies LLC or Municipal Water Leader magazine regarding the products, services, claims, or companies advertised.

COVER PHOTO: Oklahoma City personnel inspect and repair flood damage sustained by the Atoka spillway, 2015. Municipal Water Leader

By Kris Polly

4 Financing the Future of Water in

Oklahoma: A Conversation With Chris Browning, Sam Samandi, and Bret Weingart of the Oklahoma City Water Utility

10 Facilitating Regional Solutions to

Water Challenges in Oklahoma: A Conversation With Oklahoma Water Development Board Interim Director Julie Cunningham

16 The Kaw Lake Project: Laying

the Groundwork for Regional Sustainability and Development

22 Providing a Return on Wastewater

Investment

By Ken Komiske

26 Blowing Ice Out of the Water on the Lower Platte River

By Amanda Grint

WATER LAW 28 Court Upholds EPA Rule Excluding

Water Transfers From Regulation Under the Federal Clean Water Act By Peter Nichols

32 Water Providers at Risk of Losing

Authority to Tax Non-Indian Lessees of Indian Land

By John Crotty

INNOVATORS 36 Hydrant Guard: Saving Water, Money, and Lives

Financing the Future of Water in Oklahoma:

A Conversation With Chris Browning, Sam Samandi, and Bret Weingart of the Oklahoma City Water Utility

Chris Browning

hrough the economic ups and downs of the last quarter century, Oklahoma City has continued to grow, thanks in no small part to its investments in infrastructure. As the city has expanded, so has its need for greater and more stable water supplies. Covering an area of 620 square miles, Oklahoma City’s population has grown and continues to grow to fill in that footprint. And while the population of Oklahoma City proper is currently about 610,000, the city’s water utility serves about 1.4 million people in central Oklahoma through service to nearby cities and other water utilities. The Oklahoma City Water Utilities Trust makes policy for the city’s water and wastewater utilities. The Trust’s five-member trust, consisting of the mayor, a council member, the city manager, and two citizens (recommended by the mayor and approved by the city council), seeks to ensure the efficient and effective operation of the city’s water and wastewater services. The Trust has helped guide the city’s commitments to wise and financially sound water and wastewater infrastructure investments. Over the years, the Trust and the water utility have exercised foresight, creative funding methods, and regional cooperation to keep the city on a path of growth and sustainability. Oklahoma City’s Water Utilities General Manager Chris Browning, Engineering Manager Sam Samandi, and Assistant Utilities Director Bret Weingart sat down with Municipal Water Leader’s editor-in-chief, Kris Polly, to discuss the challenge of connecting the city to new water sources and funding water projects and how those efforts will shape the water future of the city and the state. Kris Polly: What are Oklahoma City’s primary water sources?

Sam Samandi

Chris Browning: Our water supply system has a large footprint, stretching across 250 miles, and our water distribution is served by about 3,400 miles of water pipeline ranging from 6 to 72 inches in diameter. Our northernmost water supply is Canton Reservoir, and our southeasternmost water source is McGee Creek and Lake Atoka. Two different watersheds serve as the city’s primary sources. The North Canadian River watershed includes Canton Reservoir, located 100 miles to the northwest of the city, and Lakes Hefner and Overholser, which are both located within Oklahoma City limits. To the southeast, the watershed includes the McGee Creek Reservoir and Lake Atoka. We pump water from those reservoirs into Lake Stanley Draper, located on the southeastern side of the city where we have a water treatment plant. Combined, we have approximately 211,000 acre-feet per year available. Kris Polly: How has the city adapted the way it supplies water to the city’s population growth?

Bret Weingart 4

Chris Browning: The growth we have seen has been impressive. But the city has been very progressive in going outside the region to obtain water supplies to keep us from depending on just one region in the event of a drought. Additionally, we have other measures that can lessen drought effects on the city and its water sources. Municipal Water Leader

Kris Polly: What kind of growth is the city expecting, and how do your plans fit into that? Chris Browning: We are anticipating a population growth of approximately 1.5 percent per year. We have long-term water supplies and believe our current supplies will be sufficient until at least 2060. We have also been looking at alternative ways to manage our water resources through the use of reclaimed water along with the development and implementation of conservation measures. Kris Polly: Describe your current work on the Lake Atoka pipeline project. Chris Browning: Our goal is to build a more resilient and reliable water system. We are currently designing a 100-mile, 72-inch pipeline that will run parallel to the current 60-inch pipe that goes from Lake Atoka to southeastern Oklahoma City. The new 72-inch pipe should be complete within the next 5 years at a cost of approximately $600 million. We are also building interconnections between the service areas of our Draper and Hefner water treatment plants, which will allow us to move water through the city to better manage water supplies and to provide service if either plant has a problem. They will be able to supplement each other during peak water demand periods in the summer. We are also installing standby generators at both plants. Our third treatment plant at Lake Overholser has been around a long time. Plans are to phase it out once the interconnections are in place. We’ll have two relatively new facilities with standby generation and interconnection between the two plants. In addition, our raw water supply will have the necessary redundancies both inside and outside the city. In terms of our raw water supply projects, we plan to rehabilitate the Atoka spillway within the next year. It sustained some serious damage in 2015 when we experienced 20 inches of above-average rainfall. Looking long term, we plan to build a 30-mile pipeline to the Kiamichi River, with completion by 2035, to give us the water supply negotiated in the recent settlement agreement. We are also undertaking a number of repair and replacement projects to increase the reliability of the system. Municipal Water Leader

The auxiliary pump station includes pumps that will distribute as much as 80 million gallons per day.

A new auxiliary pump station at the Draper Water Treatment Plant ensures dependability and resiliency for Oklahoma City’s tap water service.

Kris Polly: What are some of the challenges that you expect to face with these projects? Chris Browning: Financing has always been one of the biggest challenges to these projects. Right now, our 5-year capital program, which was approved by the Trust, totals about $1.5 billion, including the Atoka pipeline treatment plant upgrades and other pipeline upgrades. We expect to spend $2.5 billion over the next 10 years. We actually started this process a number of years ago. We knew we had these big projects worked out with the Trust, the community, and the city council to the point where we could fund these projects. We are a very financially stable organization with a Standard and Poor’s rating of AAA and a Moody’s Investor’s Service rating of Aaa, so we have low interest rates when borrowing money. The reason we were rated so highly is because of our regional capabilities and the stability of our rates. We are trying to be as business focused as we can to manage our capital responsibilities. To ensure financial stability, 5

we cover our debt service with our fixed fees. At the same time, we want our rates to be maintained at a level that is acceptable to our ratepayers. Bret Weingart: There were a few key financial plan objectives adopted by the Trust in 1994. The objectives have helped us create the credit capacity to issue the $1.5 billion worth of borrowing capacity, which we will need over the next 10 years. One of those objectives is a twotimes-coverage ratio: net revenue (gross revenues less our operating and maintenance cost) available to satisfy annual debt divided by our annual debt service. The minimum ratio in our bond covenants is 1.2 to 2.0Â percent more revenue than is needed to satisfy our annual debt service payments. However, we knew that we would need more than that because of asset depreciation. So our trustees set a policy of having revenue levels twice as large as our debt service amount to address annual depreciation expenses. The trustees set a second policy requiring us to have net revenue after paying debt service at least equal to the annual depreciation expense on our capital assets. So we have a net revenue policy, a coverage policy, and a pay-go policy equal to or greater than debt service coverage. The trustees wanted to avoid rate shock. So as the capital and operating plans grew, they were incrementally adjusting fees and charges.

We conducted long-term financial projections and sensitivity analyses on what we thought the capital plan should be and determined it prior to this current 10-year period of large investment. We should pay a much greater portion of our capital improvement plan under our paygo policy so we would have the capacity to take on debt. We started at 50 percent debt and 50 percent pay-go and started moving incrementally lower. Based on the decisions we made and the growth of the city, we believe that we will be able to maintain an average capital funding plan of 60 percent debt/40Â percent pay-go over the 10-year window. In 2008, Standard and Poorâ&#x20AC;&#x2122;s recommended we adopt a fixed-charge covered ratio. It will evaluate whether we could pay debt service from baseline fixed revenues alone. The trustees adopted a coverage policy such that base charges would cover our debt service. Kris Polly: How did the trustees sell this financial plan to your ratepayers? Bret Weingart: In 1993, I was asked to help formulate a long-term capital financial plan. We sat down with engineering, operations, and utilities leadership to come up with a series of choices that the trustees could make to propel the organization forward. At that same time, then-Mayor Ron Norick was guiding the community to

A new booster station and ground storage tank are being constructed to push more water to customers and as part of the interconnection project.

Municipal Water Leader

begin significantly investing in the city’s infrastructure through a 1 percent sales tax, called MAPS (Metropolitan Area Projects). Over the years, this effort was extended by the voters four times through 2017. Projects include building or renovation of many public schools, a triple A ballpark, a major sports arena, dams on a river to impound water, a 70-acre downtown park, a new convention center, a modern streetcar, and others. These improvements have helped the city further entice large employers to move employees and facilities to Oklahoma City. Of course, the utility didn’t get any of the funds from the sales tax, but we benefitted from the resulting investment and growth the city experienced as a result of these programs. So at that time, there was buy-in from the community and the ratepayers for continued infrastructure investment. That community reinvestment has continued ever since.

One of the booster stations in west Oklahoma City.

Kris Polly: Can you tell us what the water rights settlement reached between Oklahoma and the Chickasaw and Choctaw Tribes would mean for the city’s long-term water supply plans? Chris Browning: With the success of the water rights settlement agreement, we have added an additional 115,000 acre-feet of water supply from southeastern Oklahoma. That will prolong our water supply until at least 2060. We believe it will go beyond that given the consumption reduction measures we are implementing.

Municipal Water Leader

Upgrades to the booster stations will provide additional flow and pressure to meet increased water demand.

Sam Samandi: The settlement agreement was a significant undertaking for the state of Oklahoma and came to fruition through the cooperation and vision of the leadership of the Choctaw Nation, the Chickasaw Nation, the city of Oklahoma City, the state of Oklahoma, and the Oklahoma Water Resources Board. The agreement was settled within 5 years, which is typically unheard of. It provides a high level of security for Oklahoma City for a number of years to come. There are a lot of communities between the Kiamichi River basin to Oklahoma City that will benefit from the agreement as they expand and grow. In fact, it was part of the settlement agreement that water will be available to those communities between the basin and Oklahoma City. It is a big partnership. Bret Weingart: We have a long record of partnership with regional communities, and we remain involved with them. We have representatives at board meetings in the McGee Creek area, and we regularly sit down with our counterparts across southeastern Oklahoma. Kris Polly: How do water reuse and conservation fit into your water management programs?

Chris Browning: TenÂ percent of our treated wastewater is used for industrial, irrigation, or other purposes. We are also negotiating with other large water users to use even more treated wastewater for those applications. Our goal is to maximize that resource to its full potential. We are well on our way. The governorâ&#x20AC;&#x2122;s statewide initiative is to use the same amount of water in 2060 that we are using today. The only way we can do that is to reduce our water footprint: Use less water for consumption and reuse more water for purposes other than consumption. Our long-term plan is to do just that to the best of our ability. Kris Polly: As you were undertaking all these projects, what were the biggest lessons you learned as you tried to move them forward? Chris Browning: A very strong financial plan is vital, along with a high-quality engineering and design team to build projects. The community also must have the vision to support the components required to make these projects happen. It is a group effort among financial, technical, political, and community stakeholders.

A new 42-inch water transmission main will provide water service to northwest Oklahoma City and transfer water between service areas as part of the interconnection project.

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Facilitating Regional Solutions to Water Challenges in Oklahoma: A Conversation With Oklahoma Water Development Board Interim Director Julie Cunningham

n Oklahoma, U.S. I-35 marks the dividing line that separates the arid high plains and mixed grass prairie from the comparatively water-rich timbered hills of the eastern half of the state. West of the line, irrigators, ranchers, and rural communities rely more heavily on groundwater supplies, and in the east, surface water is more abundant, providing water for most of the state’s larger cities. The hydrological divide makes statewide water planning and management complex. Tasked with overseeing that management, the Oklahoma Water Resources Board (OWRB) facilitates the planning and development of the state’s water resources to ensure water supplies in support of a strong economy and a safe, healthy environment for the state. The OWRB administers state water rights, water infrastructure grant and loan programs, and a water quality program that covers both surface and groundwater. Julie Cunningham knows the state water management challenges well and has spent her career working to address them. After graduating from Oklahoma State University, she spent her summers assessing water quality on Oklahoma’s reservoirs for the OWRB. Moving up the ranks, she oversaw the OWRB’s water quality standards development group before serving as assistant chief of its financial assistance program and chief of the planning and management division. Ms. Cunningham became OWRB interim director in October 2016. Ms. Cunningham recently sat down with Municipal Water Leader’s senior writer, John Crotty, to talk about the OWRB’s role in addressing water-related issues, the effect of smart water investment, and the benefits of regional collaboration on water conservation. John Crotty: What is the OWRB and what role does it play in the management of Oklahoma’s water supply? Julie Cunningham: The OWRB is made up of a ninemember board, appointed by the governor to represent all geographic regions, and a diverse staff of scientists, engineers, financial analysts, attorneys, and operations professionals. Our mission is to manage and improve the state’s water resources to ensure clean and reliable water supplies. In a nutshell, we keep the pulse of all aspects of water availability; infrastructure needs; and the quality and quantity of our lakes, rivers, and groundwater resources. We provide the science needed to make sound planning decisions, allocate water rights, develop policy, and provide

Julie Cunningham, in front of the OWRB’s entrance and the agency’s “legacy” logo.

financing to public water systems. The OWRB conducts statewide water planning through the Oklahoma Comprehensive Water Plan, which serves as our guiding document for implementing measures to ensure reliable future water supplies. The plan spans 50 years, and we are required by statute to update it every 10 years. For the most recent update, the Oklahoma legislature provided funding, which was matched by the U.S. Army Corps of Engineers, the U.S. Bureau of Reclamation, and the U.S. Geological Survey, to complete the most exhaustive study in state history. We developed 13 regional planning reports to provide information to local water planners, including projected supplies, demand, shortages, available water rights, and water suppliers. The plan also assessed the viability of expanding storage capacity through aquifer storage and recovery and tapping into unused marginal waters, including municipal wastewater and water produced in oil and gas production, that could be treated and used to ease the burden on freshwater supplies. We also conducted a robust public participation process that provided eight major policy recommendations. Financial planning for water infrastructure is another critical aspect of the board’s mission. A regional need survey identified that by 2060, Municipal Water Leader

Construction workers at an OWRB-funded wastewater treatment plant project in Norman, Oklahoma.

the state will have an $82 billion need for capital to construct additional treatment capacity and rehabilitate aging systems. Our grant and loan programs have financed over $3.6Â billion worth of projects. We administer the Drinking Water State Revolving Fund along with the Oklahoma Department of Environmental Quality. In 2012, State Question 764 was passed by voters to establish a water infrastructure credit enhancement reserve fund to provide additional security for increased leveraging. It is also a priority for us to administer those programs efficiently and manage risk to maintain our strong AAA credit ratings, which allow us to offer borrowers a lower interest rate. John Crotty: You talked about mapping the financial need for water infrastructure in the state plan. What specific needs are you working to meet? Julie Cunningham: We conducted a regional drinking water infrastructure needs assessment as part of the 2012 update to the state water plan. We received good feedback from public water suppliers on the status of their systems to project 50-year growth and increased capacity needs. We also work with them to maintain a running 5-year priority needs list to provide information that helps us plan for future bond issuances. Municipal Water Leader

Ms. Cunningham and several OWRB planning and management staffers tour a major dam rehabilitation project at Canton Lake. 11

OWRB's Kar Tang (right) inspects progress at a wastewater treatment plant construction site in Lexington, Oklahoma, with David Wyatt (left) of WDB Engineering.

John Crotty: Is there coordination among the state agencies in terms of growth projections or development targets? Julie Cunningham: We worked primarily with the Oklahoma Department of Environmental Quality, the Oklahoma Department of Commerce, and the U.S. Army Corps of Engineers and other state and federal agencies, as well as representatives from all water use sectors, to get the best growth projections possible. A total of 10 workgroups produced supplemental reports. Our lead engineering contractor also identified locations where the potential exists for shortages in physical water available, determined water quality issues that could cause local shortages due to prohibitive treatment costs, and assessed water permit availability. Oklahoma statutes require an initial determination of the quantity of water available in a particular location prior to issuing surface water rights and require us to base the quantity of groundwater appropriated from an aquifer to be based on the basin-wide maximum annual yield determination when permitting groundwater. John Crotty: How much do regional differences across the state influence how you view and address water supply challenges? Julie Cunningham: Rainfall decreases and evapotranspiration increases as you move from the eastern part of the state to the west. Generally, use of surface water for municipal, industrial, and hydropower generation dominates in the east and groundwater for irrigation and municipal use dominates in the west. The plan identified hot-spot areas where potential demand is projected to exceed supply. We have focused funding in those areas 12

for studies of various conservation strategies, marginal water, and regional planning methods to resolve supply shortages. During the last severe drought, state legislators and the governor enacted the Water for 2060 Fund for water efficiency projects, including automated metering and water line rehabilitation, and the Emergency Drought Relief Fund, which funded several groundwater well construction projects in drought-

stricken areas. Several municipalities, irrigator groups, agriculture producers, the oil and gas industry, and military bases have come together to form formal regional planning groups to develop short- and long-term solutions. As a result, several reservoir dredging projects have been completed to increase storage capacity to address both population growth and drought. John Crotty: What lessons have you learned from your planning process and financing program that may be of value to other states looking to finance water supply projects? Julie Cunningham: The water planning process allowed us to hear from the public and receive some good information about the diverse water needs around the state. Recent record droughts have dramatically raised the publicâ&#x20AC;&#x2122;s awareness of the real possibility and effect of water shortage and the need for water planning. The state legislature and the governor have been very supportive. The legislature passed the Water for 2060 Act, which set a statewide goal of consuming no more freshwater in 2060 than was consumed in 2010. Communities are discovering that implementing everyday water conservation programs can save significant quantities of water, and they are asking for a regulatory pathway to allow reuse and to develop groundwater storage opportunities. We are seeing creative and collaborative ideas as communities reach out to each other and coordinate on water planning. Collaboration between water users, an open and thoughtful process, and a commitment to addressing water challenges will be key to implementing water good policy solutions. Municipal Water Leader

The Kaw Lake Project: Laying the Groundwork for Regional Sustainability and Development

he city of Enid is located in northwestern Oklahoma, approximately 100 miles northwest of Oklahoma City. Home to Vance Air Force Base, Enid has a population of 50,000 residents and covers approximately 75 square miles. Continued urban growth and recent droughts have forced officials to explore longterm water supply options for Enid. The result is the development of a water supply project that is grand in scope and will transition the city from its sole reliance on groundwater to a mixture of both surface and groundwater. The heart of the project is the construction of a 70-mile pipeline from Kaw Lake, which is northeast of the city, to a new water treatment plant on the west side of the city.

Assessing Supply and Need

All the city’s water supply currently comes from groundwater drawn from approximately 100 active wells west of the city and from wells in the Enid isolated terrace aquifer. Enid has five different well fields, most of which are outside the city limits. The most productive fields, Ames and Drummond, are located to the south and west of the city. That water reaches the city through a 30-inch concrete-reinforced pipe that was installed in the 1950s. The other well fields further west are about 45 miles away and bring water to the city via a 42-inch pipe. City of Enid Director of Engineering Chris Gdanski explained that in 2009, the city started to develop a master water plan with the understanding that the limiting factor on continued growth would be the amount of available groundwater. The city analyzed a variety of different options, including drilling more wells, obtaining more water rights, constructing lakes in the local area, and using Kaw Lake as a resource. Enid experienced a severe drought in 2014, which caused all the water storage lakes on the western side of the state to decline to critically low supply levels. “That was a real wake up call for us that added more urgency for us to find a better, more sustainable answer. We have both residential and agricultural water users who depend on the same water supply, and that is a higher level of demand than the aquifer can sustain,” Mr. Gdanski said.

Realizing the Plan

Enid officials eventually settled on the option to construct a pipeline to bring surface water to the city from Kaw Lake rather than build a new reservoir. “If we built a new lake, it might eventually fill up, or it might not. We could not invest that kind of money without assurance that it would fill up. Analysis of Kaw Lake water levels revealed

City of Enid Director of Engineering Chris Gdanski.

that even during the most recent drought, the water levels never went below 95 percent capacity,” Mr. Gdanski noted. He added that Kaw Lake was originally an Army Corps of Engineers project built for flood control and water supply. The first phase of the Kaw Lake project (Phase 1) is conceptual, in which the city took all design aspects of the project to 10 percent completion and obtained probable construction and operations and maintenance costs. This phase lasted 12 months and ended in July 2016. In January 2017, Enid began the next phase (Phase 2), which required taking all project components to 30 percent completion, starting the permitting process, and updating the probable construction costs. Consulting engineering firm Garver, of Norman, Oklahoma, provided program management, environmental services, and lead design services for Phase 1 and now Phase 2 of the program. “This is a once-in-a-generation type of project for the citizens of Enid and northwestern Oklahoma, and we are honored to be a partner in development of this regional water supply solution,” said Michael Graves, a vice president and program manager with Garver. Freese and Nichols Inc. (FNI) is working with Garver on the program management team. As the subconsultant on the project, FNI is focusing on routing the pipeline, preliminary design, and overall system hydraulics. Jeff Payne, PE, an FNI principal and vice president who manages the firm’s Dallasbased water and wastewater transmission and utilities group, Municipal Water Leader

of this project. They can tell a need from a want and proved it at the polls,” Mr. Gdanski noted.

One of Everything

says, “Enid is thinking long term and has recognized that a stable water supply is critical to the health of community.” After the completion of the first phase, city officials went to the community and asked via a referendum whether they wanted to proceed with the project and support it with bond issuance and penny sales tax increase. “We received 68 percent of the vote in favor, which is unheard of for a project of this size and scale. We were surprised but also impressed by how smart and savvy our citizens are, and how well they understood the importance

Mr. Gdanski stated that unlike most water development projects, the Kaw Lake project has “one of everything. We have an intake structure in a lake, a crosscountry pipeline, booster pump stations, and a surface water treatment plant that has to be built. None of these elements is problematic in and of itself, but the new water supply will have to interface with the groundwater system without compromising anything along the way. This project is complex with a lot of moving parts.” According to Mr. Gdanski, blending older groundwater and newer surface water infrastructure systems is the most challenging aspect of this project. “We have been using groundwater in this city since the beginning. We have a lot of pipes in the ground that are quite old, and

A preliminary route evaluation for Enid’s proposed water transmission pipe. Municipal Water Leader

we know we cannot switch from one source of water to another overnight. It will have to be done gradually to ensure that the existing pipes do not contribute to a drastic change in water quality aesthetics the community is already accustomed to,” he said. The joining of the water systems will be done on the west side of Enid, where the new water treatment plant will be built. Mr. Gdanski stated that this should be a straightforward process since the groundwater also flows from the west. He explained that the city would treat the surface water, join it with the groundwater through a clear well, and then distribute it through the pump stations.

Goals and Benefits

The goal of the Kaw Lake project is to have water running through the system in 2022. Mr. Gdanski believes the city is building a water supply that will meet its needs and facilitate additional growth for over 50 years once it is finished. “We have learned from other cities that have gone through similar situations. So we now get to follow that example by projecting how long the water will be available,” he said. As Jennifer Wasinger, account director for FNI’s Oklahoma region, explained, “This is a very exciting project for the city of Enid. It will help ensure the city’s viability for the next 50 years and beyond. The city is very proactive in its efforts to secure its water future.” An incidental benefit of the Kaw Lake project is that it ties in with the Oklahoma Comprehensive Water Plan. Mr. Gdanski explained that several years ago, the

state recognized a need for more water infrastructure in northwestern Oklahoma. Accordingly, Enid officials are looking at the needs of their city but are also reaching out to other communities along the way to see if there are opportunities for partnerships. Enid has had conversations with five other communities and several water irrigation districts that are located on the pipeline’s projected path about how they may be able to tap into the pipeline for the benefit of all involved. Ms. Wasinger highlighted, “The project has the potential to help the entire northwestern portion of the state.” Mr. Gdanski noted that it is important for the city of Enid to take care of its own problems while still being aware that some other communities around it are in more dire need of financial help to upgrade their water infrastructure systems. “People who live in large communities need to understand how different things are regarding water supply for smaller, rural areas. Many of these communities are in remote areas with independent water systems. They are proud of their self-reliance and need to be treated with respect,” he said. The approval of the bond and a sales tax to finance the project and the cooperation of regional leaders has given city officials confidence that they will succeed. Mr. Gdanski stated, “We are on the right track to meet our water needs for the present and future in a way that will allow us to grow while respecting appropriate environmental concerns, the sovereignty of Native American tribes, and the desire of local populations to chart their own course.”

A diagram of Enid’s proposed water treatment plant. 18

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PROVIDING A RETURN ON WASTEWATER INVESTMENT By Ken Komiske

his month, the city of Norman, Oklahoma, will bring its water reclamation facility to full operation after a 3-year major expansion. The facility, which was initially constructed in 1943, treats wastewater from the more than 100,000 residents of Norman and the University of Oklahoma (OU). The expansion will increase the facility’s capacity from 12 million gallons per day to 17 million gallons per day. Financed through an Oklahoma Water Resources Board State Revolving Fund loan, this project was the largest single loan ever provided by the state.

Anticipated By Planning, Driven By Compliance

Adopted in 2001, Norman’s Wastewater Master Plan set forth recommendations for the expansion and upgrade of its wastewater management system. It contemplated an expansion of the city’s wastewater facilities to meet the growth of the city and the university. However, the catalyst for the expansion project was the fact that every 5 years, the water reclamation facility has to get a new municipal discharge permit under the Oklahoma Pollution Discharge Elimination System permit system from the Oklahoma Department of Environmental Quality (ODEQ). The new permit required us to implement new technology and procedures to remain in compliance with state regulations. In 2013, ODEQ essentially began the facility expansion process by issuing a consent order to require Norman to use disinfection in its wastewater treatment plant and to have a higher dissolved oxygen rate in the effluent water discharged into the Canadian River, which borders the city on the west and southwest. With the facilities in use at that time, it was impossible for our facilities to meet both of those requirements.

Getting the Word Out

We first had to convince our city council that it was necessary to change wastewater rates to finance the expansion. After that, we had to obtain approval from our customers. Norman is unique in the state of Oklahoma in that it must seek ratepayer approval for any increase. The vote had to pass before we could even apply for a loan. To that end, we developed brochures and other literature to send to all our customers to educate them and gain their support. We included information about the proposal in the envelopes containing their sewer bills, and we posted additional information on our website. Everyone was well educated about the project by the time they went to vote on it. Our message was simple: The permit would precipitate

improvements to the environment, and to that, we had to add some facilities for treatment processes. At the same time, we were already operating at a rate of 11 million gallons per day at a plant rated for 12 million gallons per day, so we also proposed a capacity increase. The city proposed to pay for the facility upgrades with available funds and revenue bonds to be repaid by an excise tax for new construction (similar to a connection fee) and the increased wastewater rates. In November 2013, the residents of Norman voted to approve the increase in sewer service rates to finance a $58 million loan to fund expansion and improvement of its sewer treatment plant. More than 75 percent of our customers voted in favor of the project. It was our largest margin of passage ever for a rate increase, funding the largest loan ever taken out by the city of Norman.

Upgrading Infrastructure

We went through the conceptual design process with Garver Engineering, our engineering firm. Although state regulatory changes forced our hand to initiate this project, we realized we had an opportunity to do more than just achieve compliance—we could make upgrades to benefit the plant and our customers in the long run. Many of the components to be replaced by this project date back to at least 1980. Municipal Water Leader

The Norman water reclamation facility under construction.

Running a water treatment plant 24 hours a day, 7 days a week, means these components wear and can break down. We could not ignore the opportunities to both increase plant capacity and replace aging infrastructure. The replacement and construction program has been extensive. Norman has added two clarifiers, three new activated sludge aeration basins, a new sludge pump station and dewatering facility, a new ultraviolet (UV) facility, and a postaeration facility. We put new weirs and skimmer mechanisms in the primary clarifiers. We added a splitter box to divert the flow between the old and new sections of the plant. We also examined and cleaned out the digesters. Nearly every component of the plant was or will be upgraded. The treatment facility had primary and secondary treatment but no disinfection element. By adding the UV facility, we have created an additional treatment step and are providing better treatment. The city already provides effluent to be used at OU’s golf course. These new upgrades are the first of several steps necessary to allow the city to reuse water and establish alternative water supplies. In addition, Norman is dedicating almost $5 million toward odor control throughout the entire plant. Another aspect of the new permit is that the new plant was required to have some source of emergency power in case of a power failure due to severe weather. We now have five emergency generators that can keep the plant

Two new final clarifiers.

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running in case of a power outage. Our customers now have the benefit of a sewer treatment plant that is meeting regulations, has a better effluent that is being put into the river, is using modern equipment, and has the capacity needed to meet all of the community’s present and future needs. Construction proceeded smoothly despite challenges. One challenge was dealing with severe weather, including rain, snow, and other persistent precipitation. We also had some problems with total suspended solids levels at times, but the state worked with us to resolve those issues. The new clarifiers, pumping equipment, and other changes required us to run new large-diameter piping through the middle of the plant, which also caused some disruptions. But we were able to work through them and continue operations. Much of the credit for the relatively smooth construction process goes to our operators. They worked very hard to keep things running despite the interruptions, and did so without a single work-related injury to themselves or contractors.

Moving Forward

The upgraded plant is substantially complete. The consent order required us to make the disinfectant component operational as part of the permit and focus on the additional capacity later. The order required the city

One of the new final clarifiers in use.

to have the disinfectant facility up and running by January 1, 2017, and everything else had to be operational by July 1, 2017. We concentrated on the UV and postaeration facilities, which came online at the end of November 2016. By the end of January 2017, everything else will be working, but there are still some final details to attend to, including repairing roads that were damaged by heavy equipment. The future of Norman’s water infrastructure is bright. The added capacity of the sewer plant will bolster the city’s potential for future growth regardless of how quickly or slowly the community decides to expand. In addition, we are now putting out a healthier effluent stream and have newer, more efficient equipment for our operators to use. The next phase of upgrading our water infrastructure will focus on our water treatment plant. Adding another layer of treatment and being able to use our effluent to bulk up the reservoir will take our water treatment capabilities to the next level. This will allow us to better serve the environment, the city, and our customers well into the future. Ken Komiske is the director of utilities for Norman, Oklahoma. You can reach him at Ken.Komiske@NormanOK.gov.

The insides of a new centrifuge. This is one of two new centrifuges that will be used for thickening biosolids.

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Blowing Ice Out of the Water on the Lower Platte River By Amanda Grint

here are many challenges to providing water from the Lower Platte River to the people of eastern Nebraska, but one that is unique to water providers in colder regions is preventing ice from stopping the flow of water downstream. If uncorrected, ice jams will force water over the banks of the river and cause significant flooding. The Papioâ&#x20AC;&#x201C;Missouri Natural Resources District has several tools at its disposal to address this issue, including the use of dynamite to break up ice blockages on the river.

Working Together

The layout and bends of the Lower Platte River lend themselves to creating ice jams. Bends, sandbars, or other locations can cause ice to break up. The pieces of ice form a dam and prevent other pieces of ice from moving under, around, or through it. The ice then forces the water up over the banks of the river. Prior to 1993, regional stakeholders did not have a proactive approach to addressing ice-related flooding. That year, there was a large ice jam. While there were a lot of entities involved in addressing it, including the U.S. Army Corps of Engineers and the Nebraska Department of Natural Resources, there was no one entity that could make a final decision as to what to do about the ice jam. After that incident, the stakeholders decided to put a more regulated plan in place, prepare official communication systems, and implement triggers to proactively address ice jams, rather than to reactively address the subsequent flooding. In 1993, the stakeholders, which included the natural resources districts, the counties, the local governments, and the state of Nebraska, came together to establish an interlocal agreement. They set out to formalize a process for using explosives to clear ice jams. They created an account to fund those activities and established protocols clarifying when explosives could be used, who would be in charge of those efforts, and how county and local governments would be notified. The Papioâ&#x20AC;&#x201C;Missouri River Natural Resources District became the administering agency that, with input from the other stakeholders, would determine when to use explosives and contract with the demolition companies. Explosives, however, are the last resort for clearing ice jams. We have federal and state stakeholders involved in monitoring and reporting efforts. Such efforts include aerial photography, annual training, and weekly monitoring and reports. The federal government also provides some recommendations and technical assistance to the state, but the local entities are the ones that may come together under

An ice jam in 2015. In this case, the Papioâ&#x20AC;&#x201C;Missouri Natural Resources District and the regional stakeholders had the explosives contractor on site to finalize the explosives plan when the ice broke free on its own.

a demolition contract, if necessary. Each stakeholder is responsible for a percentage of the total cost of demolition based on how much each entity borders up against the part of the river where the work is being done.

Meeting, Monitoring, and Measuring

The interlocal agreement includes provisions for coordination and training among stakeholders. The training includes a meeting with all the people who do weekly ice observations and reports and the opportunity to go over the reporting process. The state houses the reporting database and the weekly summaries of the observation. The Army Corps discusses how to report on ice and gives an overview of the checklist of things to review. Taking aerial photographs and physical measurements of the ice are other important elements of the agreement. The Nebraska Emergency Management Agency handles the aerial photographs and uses state patrol helicopters to take video at the same time every year just before the river freezes in early December. The aerial flights also try to identify the main channel of the Platte River that migrates from year to year. It is important to know where the deeper water is before clearing an ice jam, so that we can use explosives at the optimum place. Municipal Water Leader

Dusting the ice with coal ash.

Monitoring and reporting on the status of the ice starts after the training meeting. A variety of governmental agencies, from natural resources districts to counties to state parks, and volunteer citizens assist in the process. Local and state agencies then report on their findings every week, and the state compiles those reports into a weekly summary. The only agencies that report specifically on ice thickness are our district and the U.S. Geological Survey. To perform the ice measurements, workers tie themselves to something secure, walk across the ice, drill down, and take the necessary measurements. Neither our district nor the U.S. Geological Survey will conduct this testing unless it is determined to be safe. Due to warmer winters, it has been several years since it was deemed safe enough to take ice measurements. When we have done the measurements, we have also generated a profile of the river and sent it out to the other stakeholders. It has been helpful in determining the size of ice sections as they move.

Assessing and Mitigating Risk

Because of the risks involved, there are a lot of insurance requirements for working in the water and for working with the explosives. In fact, the majority of our costs for using explosives are due to insurance. Since 2011, there has been an increase in requirements both for insurance and for transporting dynamite. The amount of money needed to carry out this process has increased, so we have a contract with a building explosives contractor. The insurance provisions for the contractor include a requirement for it to do a seismic survey to monitor the effects of demolitions on nearby buildings and residences. We cannot always predict or control where ice jams will occur, so we have to assess whether the cost of implementing the demolition contract is worth the cost to the areas being flooded. Before proceeding with demolition activities in a given area, we consider

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the nature of the land at risk of flooding and the danger to surrounding populations or infrastructure. There can be residential homes, bridges, roads, or agricultural land within the flooded areas, so we have to assess risks and costs accordingly.

Demolition Activities and Alternatives

While we have not completed a demolition with our current contractor, in the past we have used a helicopter to fly low, hover, and drop the dynamite to the correct place in the ice jam, where it is subsequently detonated. Demolition typically starts at the downstream end and moves up from there. The goal is to create a channel and move water through it so it can move the rest of the ice. It is similar to the process that nature uses to move ice. An alternative to explosives is dusting. Pilots dust coal ash or other materials on the ice with concentrations in the main channel. Dusting is only beneficial after mid-February, at which point the angle of the sun will allow the ash to warm the temperature of the ice and the river and disintegrate the larger sections of ice. The U.S. Army Corps Cold Regions Research and Engineering Lab has a member in Omaha, and he does an assessment of the river at the request of the state every year to determine whether dusting will help. Our federal partners favor dusting, if possible, as a first line of defense to address ice jams. Overall, the use of explosives to remove ice jams is a unique solution to a unique problem. It is not suited for every river or water system that has ice issues, but we have found ways to use it effectively to protect people, property, roads, bridges, and farms from dangerous winter flooding. Amanda Grint is the water resources engineer for the Papioâ&#x20AC;&#x201C;Missouri River Natural Resources District. You can contact her at agrint@papionrd.org.

Court Upholds EPA Rule Excluding Water Transfers From Regulation Under the Federal Clean Water Act WATER LAW

By Peter Nichols

ater transfers are essential to delivering water to where it is needed. Decades of litigation following enactment of the federal Clean Water Act in 1972, however, questioned whether water transfers are subject to the National Pollutant Discharge Elimination (NPDES) program that historically applies to municipal wastewater and industrial discharges. 33 U.S.C. § 1342. After a string of court losses dating from 1995, a majority opinion from a three-judge panel of the 2nd Circuit Court of Appeals (NY) reversed the trial court on January 18 and reinstated the U.S. Environmental Protection Agency’s (EPA) Water Transfers Rule, which excludes water transfers from the NPDES program.

What’s At Stake?

Since most western precipitation falls as snow, western water providers must capture water when and where the snow melts, far from the West’s urban and

agricultural centers. Providers divert and deliver water from other watersheds through natural rivers and lakes, as wells as through conveyance facilities such as reservoirs, aqueducts, ditches, canals, and pipelines for municipal, agricultural, industrial, commercial, and other beneficial uses across the West. Without this extensive infrastructure for water transfers, many of the nation’s great cities could not exist, including Albuquerque, Colorado Springs, Denver, Las Vegas, Los Angeles, Phoenix, Reno, Salt Lake City, San Diego, San Francisco, Santa Fe, and Seattle. Similarly, many nationally important agricultural regions could not grow crops, including the Central and Imperial Valleys of California, Weld and Larimer Counties in Colorado, the Snake River Valley of Idaho, and the Yakima Valley of Washington. All told, western transfers serve over 100 million people, including 90 million urban residents. A critical legal issue for every water provider and water user across the West, and indeed much of the country, is whether physically transferring water from

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The litigation brought together water providers from the West and the East that rely upon water transfers for daily operations.

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its source to its place of use is subject to NPDES permitting. The NPDES program essentially requires that discharged water meet the water quality standards for every one of more than 100 parameters in the receiving waters on a daily basis. Water transfers, however, cannot meet all water quality standards all the time because of natural geological conditions present at the source, after passing through saline geological formations, receiving inflows from brackish hot springs, or during spring snowmelt and storm events. It could cost $4.6 billion per year, after a capital investment of $9 billion, to treat western interbasin transfers to avoid the potential to cause or contribute to a violation of the water quality standards of the receiving waters. Costs of such magnitude are neither feasible nor justified to treat naturally occurring constituents found in source waters that do not impair beneficial uses. If subjected to NPDES requirements, providers would face a choice between curtailing transfers and shorting water users or incurring fines of $51,570 per day. This would be the dilemma, even though EPA concluded that water transfers are generally not responsible for the presence of pollutants in the waters they transport. 73 Fed. Reg. 33,678, 33,702 ( June 13, 2008).

History of Litigation

Since the 1990s, numerous courts, including the U.S. Supreme Court, have held that, at a minimum, water transfers between “meaningfully distinct” water bodies are subject to NPDES permitting. In response to the Supreme Court’s 2004 Miccosukee ruling, 541 U.S. 95, EPA promulgated its Water Transfers Rule in 2008, which “excludes” water transfers from NPDES permitting. 40 C.F.R. § 122.3(i). The rule, however, faced challenges across the nation. The 11th Circuit Court of Appeals (Atlanta) applied EPA’s Rule in Miccosukee-related litigation over an Everglades transfer, while the 9th Circuit Court of Appeals (San Francisco) applied the Supreme Court’s meaningfully distinct test to Klamath Straights transfers in Oregon. The numerous direct challenges to the rule itself came together in the U.S. District Court for the Southern District of New York. In 2014, the court vacated EPA’s rule to the extent it is inconsistent with the phrase “navigable waters” and remanded the rule to the extent EPA did not provide a reasoned explanation for its interpretation. 8 F. Supp. 3d 500 (SDNY 2014). EPA, a dozen western states, two dozen western water providers, New York City, and the South Florida Water Management District appealed. Following briefing, the 2nd Circuit Court of Appeals held oral argument in New York City on December 1, 2015, and issued a split decision upholding the rule on January 18, 2017.

Court’s Recent Decision

The majority opinion of the 2nd Circuit panel applied traditional Chevron deference, 467 U.S. 837 (1984), to uphold EPA’s rule, explaining: “At step one of the Chevron analysis, we conclude—as did

the district court—that the Clean Water Act does not speak directly to the precise question of whether NPDES permits are required for water transfers, and that it is therefore necessary to proceed to Chevron’s second step. At step two of the Chevron analysis, we conclude—contrary to the district court—that the Water Transfers Rule’s interpretation of the Clean Water Act is reasonable. We view the EPA’s promulgation of the Water Transfers Rule here as precisely the sort of policymaking decision that the Supreme Court designed the Chevron framework to insulate from judicial second‐ (or third‐) guessing. [] The Act does not require that water quality be improved whatever the cost or means, and the Rule preserves state authority over many aspects of water regulation [including water allocations], gives regulators flexibility to balance the need to improve water quality with the potentially high costs of compliance with an NPDES permitting program, and allows for several alternative means for regulating water transfers.” Slip Op., at 11-12. The majority distinguished the Circuit’s prior holdings in Catskills I and II, concluding that those decisions did not hold the Clean Water Act to be unambiguous with regard to water transfers. Slip Op., at 39. The dissent, however, believed that the plain language of the act is unambiguous and clearly expresses Congress’s intent to prohibit the transfer of polluted water from one water body to another distinct water body without a permit—analysis that parallels earlier decisions of the 2nd Circuit. Dissent, at 2; see also, Catskills Mountains Chapter of Trout Unltd. v. NYC (Catskills I), 273 F.3d 481 (2nd Cir. 2001); Catskills II, 451 F.3d 77 (2nd Cir. 2006). The dissent may foretell a motion by the plaintiffs for reconsideration en banc by the entire 2nd Circuit Court of Appeals, which could reverse the majority opinion. Peter Nichols is a partner at Berg Hill Greenleaf Ruscitti LLP in Boulder, Colorado. Mr. Nichols practices water, water quality, environmental, and conservation law. He has been the lead counsel for Western Water Providers, special assistant attorney general for the States of Colorado and New Mexico, and co-counsel for other western states on water transfers issues since Miccosukee (2003). His other clients include water conservation and conservancy entities, irrigation and water districts, municipalities, land trusts, energy and mining companies, and farmers and ranchers. You can reach Mr. Nichols at (303) 345-2642 or pdn@bhgrlaw.com. Municipal Water Leader

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Water Providers at Risk of Losing Authority to Tax Non-Indian Lessees of Indian Land

WATER LAW

By John Crotty

n 2013, we covered a federal rule that addressed the local taxation of possessory interests on non-Indian lessees of Indian land in our sister publication, Irrigation Leader magazine. Four years later, we return to the issue, as it has made its way through the courts with the potential to upend the ability of Riverside County, California (the county), to collect a general revenue possessory interest tax on the lessees of trust lands within the Agua Caliente Band of Cahuilla Indians (the tribe) reservation.

This case is of particular interest to water providers because its end result may affect the ability of water utilities that currently serve non-Indian lessees on Indian lands to levy taxes to meet operational and contractual obligations. In addition, if the federal rule preempts a water providerâ&#x20AC;&#x2122;s authority to levy assessments or taxes for services, it could create a disproportionate burden on water users on non-Indian land. Under this scenario, a utility could provide the exact same water service to two adjacent parcels, one on Indian land that pays no tax on such service and one on non-Indian land that does. While this is a significant optics problem for water providers Westwide, for California water providers, the resulting disproportionate charge for services to non-Indian parcels would likely violate the California Constitution (via Proposition 218â&#x20AC;&#x2122;s proportionality requirements for special benefits conferred to a parcel by a special district).

The Rule

In December 2012, the U.S. Department of the Interior published a final rule that modified the Bureau of Indian Affairs (BIA) process for approving tribal leases in order to accelerate the leasing process and remove uncertainties associated with entering into leases with tribes. The rule set forth new regulations to address residential, business, wind energy evaluation, and wind and solar development leases on Indian land and removed the existing regulations

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for nonagricultural leases. It also prohibited state and local governments from imposing taxes on improvements, services, and other value generated by non-Indian lessees located on Indian lands. The regulations apply the federal prohibition of state and municipal taxation to (1) permanent improvements on the leased land, without regard to ownership of those improvements (25 C.F.R. § 162.017(a)); (2) activities under a lease conducted on the leased premises, including any charge or tax on “business use, privilege, public utility, excise, gross revenue taxes” (25 C.F.R. § 162.017(b)); or (3) the leasehold or possessory interest (25 C.F.R. § 162.017(c)). In sum, the rule prohibits the levy of property taxes, business license taxes, utility user taxes, and sales taxes on non-Indian residences or business operating on Indian land.

Opinion on a Motion for Judgment on the Pleadings

Back in early 2014, the tribe filed a complaint against Riverside County to invalidate the county’s tax on lessees’

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possessory interest in lands and permanent improvements on the tribe’s land and enjoin any further collection of the tax. Agua Caliente Band of Cahuilla Indians v. Riverside County, et al., Case No. ED CV 14-007 DMG (C.D. Calif. 2014) (Agua Caliente). The county filed a motion for judgment on the pleadings, which was denied by the federal district court in February 2016. In its opinion on the motion, the district court evaluated the county’s general revenue tax through the lens of White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) (Bracker). In Bracker, the U.S. Supreme Court employed a balancing test to assess whether a state tax law applied to an Indian reservation, weighing to whom the tax is applied, the primary purpose of the tax, and whether the tax interferes with a comprehensive congressional scheme regulating Indian tribes and reservations. The Bracker court described the test as a “particularized inquiry into the nature of the state, federal, and tribal interests at stake . . . designed to determine whether, in the specific context, the exercise of state authority would violate federal law.” Id. at 145. Applying Bracker, the district court weighed the interests

of the federal government, the tribe, and the county. It found a strong federal interest in the comprehensiveness of the Indian leasing regulations and “in promoting the traditional goals of Indian self-sovereignty, economic development, and tribal well-being, as well as uniformity in the governance of tribal leasing.” Based on the allegations set forth by the tribe, the district court also found a strong tribal interest because the tribe has forgone its own tax revenues to avoid double taxation of the lessees subject to the county’s general revenue tax. Finally, the district court determined that the county’s “general interest in raising revenue, weighed against a lack of connection between the services provided and the activity being taxed,” did not overcome federal and tribal interests. In conclusion, the court found that the federal rule preempted the county’s possessory interest tax on nonIndian lessees on the tribe’s land and denied the county’s motion for judgment on the pleadings. As the trial proceeds, the district court will be seeking evidence of the tribe’s lost tax revenues and of how the county spends its possessory interest tax revenues. However, the opinion on the motion for judgment on the pleadings is a good indication that the court is likely to rule in favor of the tribe.

Nexus With the Local Water Agency

The Desert Water Agency (DWA) is the water provider for greater Palm Springs. Its service area overlaps with the tribe’s land such that DWA serves thousands of parcels on tribal land, including those with non-Indian lessees. To meet its operational needs and contractual obligations to the California State Water Project, DWA levies assessments on properties within its boundaries: a groundwater replenishment assessment charged to pumpers to replenish the aquifer, an ad valorem tax levied via the county and used to repay State Water Project debt, and a water service charge used for water service. Soon after the tribe filed its complaint against the county, DWA successfully intervened as a defendant, arguing that the scope of the BIA rule implicates its assessments and tax. In 2015, the district court granted the tribe’s motion for partial voluntary dismissal of its claims as to the DWA ad valorem tax, the groundwater replenishment fee, and the water service charge. DWA remains involved in the case to the extent that it receives a percentage of the county’s general revenue tax that is at issue. The federal rule and subsequent district court opinions in Agua Caliente have created uncertainty as to whether DWA will continue to have the authority to levy those assessment, fees, and taxes on those parcels on Indian land to which it provides service. A final ruling in Agua Caliente will not preclude the tribe from suing DWA in the future

on the issue of whether DWA assessments are preempted by federal regulations.

Evaluating DWA’s Assessments

When looking at DWA’s particular situation through the lens of the Bracker test, it would appear that the groundwater replenishment assessment, the property tax, and the water service charge neither preempt federal Indian leasing regulations nor represent an unlawful infringement of tribal self-government. DWA’s replenishment assessment applies to all pumpers equally, regardless of whether they are on Indian land. The purpose of the assessment is to compensate DWA for the service of obtaining water supplies for its customers. Unlike the tax at issue in Bracker and the possessory interest tax at issue in Agua Caliente, the DWA assessment is not for general purposes. In addition, DWA’s ad valorem tax is narrowly tailored to repay California for infrastructure investments that enable the residents of Palm Springs, as well as neighboring Indian lands and surrounding areas, to receive water.   So, at first glance, the narrow scope and purposes of DWA’s water assessments and tax appear to create a strong local interest capable of outweighing federal and tribal interests. The district court in Agua Caliente, however, will not be making that decision, creating a lot uncertainty—for the agency and its ratepayers—around the agency’s ability to fund its basic services and meet its obligations to the state of California.

Water Agencies on Notice

In light of the uncertainty created by the 2013 federal regulations governing Indian leases and the ongoing Agua Caliente proceedings, any state or local tax, even if levied by a water utility for a specific purpose, may be preempted by federal law. Water providers like DWA may face a situation in which they may not be able to continue to provide water to existing customers on Indian land or, alternatively, in which customers whose improvements are not on Indian land will shoulder a disproportionate tax burden to pay for a district’s operations, maintenance, and contractual obligations. John Crotty is counsel to Water Strategies LLC and senior writer for Municipal Water Leader and Irrigation Leader magazines. Mr. Crotty may be contacted at (202) 740-3142 or John.Crotty@waterstrategies.com.

Municipal Water Leader

THE INNOVATORS

HYDRANT GUARD:

Saving Water, Money, and Lives

amaged fire hydrants can discharge tens of thousands of gallons of water onto streets, sidewalks, and buildings after being hit by cars or otherwise compromised. Mel Plummer set out to address this problem with Hydrant Guard, which is designed to shut off the water escaping from hydrants when they are sheared by vehicles. Mr. Plummer began working on Hydrant Guard in 2010 when his son, who was in training to be an inspector, was discussing water line issues with his trainers. His son asked if anything could be done to stop fire hydrants from discharging so much water after being struck or damaged. His instructor said there was no solution and there never would be. After his son relayed that conversation, Mr. Plummer’s first thought was, “Not for long!” In 2012, Mr. Plummer redoubled his efforts after a young man in the valley area of Los Angeles turned a corner too fast and hit a hydrant and power pole. The downed power lines came in contact with the water and electrified it. Two women attempted to rescue the driver after witnessing the accident, and both were killed by the electrically charged water. A police officer was also injured along with several other residents who tried to help. “After hearing about that incident, I visited the site the next day and determined to move forward with development of a solution, so this would not happen again,” Mr. Plummer said. The Hydrant Guard company has spent the past 2 years doing final engineering and design work, examining the competition in the market, lining up manufacturing partners, and laying the groundwork for full production. Hydrant Guard is now ready to bring its product to market. The company has a strong management team and advisors, such as a retired fire marshall/chief who spent 38 years with the Los Angeles Fire Department, including time managing the department’s hydrant division. This advisor is supportive of Hydrant Guard; he considers it a “critical device that will prevent the chronic loss of water and protect our first responders.” He is prepared to go to fire departments across the country to gain their support. Mr. Plummer stated, “We want fire departments to see Hydrant Guard as a solution to them having to be called out to turn off fire hydrants, especially since those calls tend to come late at night or on weekends. Shutting off hydrants is also dangerous and time consuming for fire fighters, taking them away from addressing other emergencies.” In addition, although fire fighters may arrive on the

The Hydrant Guard valve unit ready to be installed on a hydrant.

scene quickly, the shutoff valve for the hydrant may not be close to the spewing hydrant and may not be easily accessible. The valve can be on the sidewalk or the parkway or in the street. In the worst-case scenario, the valve is not located until the water provider crews arrive. Another issue associated with hydrant breaks is water aesthetics. Since the hydrant supply lines are purged only once a year, the water is often brownish when it comes out of the pipe. The brown color results when the dormant supply lines run to the hydrants. When a hydrant is sheared, that water is forced through the lines and ends up flowing into homes for some time after an incident, causing residents to call their water company to complain about the discoloration of the water. Mr. Plummer’s hope is that cities and water providers will look to Hydrant Guard as a quick and affordable way to mitigate these problems. The Hydrant Guard consists of two valves that are mounted between the hydrant and the flange of the water supply pipe. The valves normally sit in the middle of the water flow parallel to the walls to allow for normal flow. One valve prevents back flow, and the other prevents the surge of water from the sheared hydrant. Breakaway bolts hold the unit in place. The bolts are hallowed out so that they will break after the hydrant is hit by a car or other object, separating the hydrant from the flange before the water main pipe itself is broken or damaged. Once the hydrant breaks off, the valves rapidly rotate until they are perpendicular to the water. The flow of water stops, but a small amount is allowed to pass Municipal Water Leader

Tests showing the difference between a hydrant struck by a car without Hydrant Guard in place (left), and one with Hydrant Guard installed (right).

through, creating what is called a witness stream that alerts personnel that the hydrant needs attention. Mr. Plummer noted that what makes Hydrant Guard unique is that it is installed completely above grade—from the sidewalk or street. He said that other devices currently on the market are installed below the surface or grade of the sidewalk or street, which increases installation cost due to the excavation required to install them. The above-grade installation of Hydrant Guard and the simplicity of its breakaway design allows repair crews to reinstall or replace the damaged hydrant quickly. He also noted that Hydrant Guard’s “reset cost is approximately half of other products, and it only requires reinstallation of new breakaway bolts, allowing the product to be back in service quickly. Other products require the purchase of replacement parts, which increases the cost and time to reset.” At the outset, Hydrant Guard plans to establish a pilot program “that would allow us to keep a high level of quality control and work out any technical issues before we begin to expand. Hydrant Guard’s plan is to target California when the product is officially introduced in June or July 2017,” Mr. Plummer said. The company has a multilayered marketing approach. In addition to appealing to cities and fire departments, Hydrant Guard appeals to environmentalists, state representatives, and water companies. Mr. Plummer explained that these groups are interested in stopping the flow of water during an incident because that water has already been allocated and paid for but is being wasted and eventually runs back into Municipal Water Leader

the ocean and cannot be reclaimed or used. Hydrant Guard is manufactured completely in the United States. Mr. Plummer said he is working with a consortium of manufacturers. The company is hoping that demand will increase upon market entry, creating more jobs in America. Mr. Plummer said Hydrant Guard’s motto—Protecting People, Property, and Systems—aptly summarizes the company’s mission. He asserted, “We want to prevent injuries to people resulting from hydrant incidents, stop large amounts of property damage that water can inflict, and keep our water systems safe from systemic damage. It is important to note that the Hydrant Guard minimizes water hammer, friction/flow losses, and back flow and surge protection, all in one device. We now have a product that meets all these criteria while being affordable and simple to install.” For more information, please visit the Hydrant Guard website at www.hydrantguard.com, or contact Chief Technical Officer Mel Plummer at mel@hydrantguard.com. 37

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2017 CALENDAR February 4–7

National Association of Clean Water Agencies, Winter Conference, Tampa, FL

February 6–8

National Rural Water Association, Rural Water Rally, Washington, DC

February 7–10

American Water Works Association & Water Environment Foundation, The Utility Management Conference, Tampa, FL

February 22–24

Northwest Hydroelectric Association, Annual Conference, Portland, OR

February 25–March 1 National Association of Counties, Legislative Conference, Washington, DC March 6–8

National Waterways Conference, Legislative Summit, Washington, DC

March 19–22

American Water Works Association, Sustainable Water Management Conference, New Orleans, LA

March 19–25

National Association of Clean Water Agencies, Water Week 2017, Washington, DC

March 20–22

National Water Resources Association, Federal Water Issues Conference, Washington, DC

March 26–29

Association of Metropolitan Water Agencies, Water Policy Conference, Washington, DC

April 11–12

National Rural Water Association, 2017 Regional/Water District Issues Forum, Washington, DC ___________________________________________________________________________

To include your event in the calendar, e-mail Municipal.Water.Leader@waterstrategies.com.