Water Resources Review Committee (09/27/2013)

Final
STAFF SUMMARY OF MEETING

WATER RESOURCES REVIEW COMMITTEE

Date:	09/27/2013	ATTENDANCE

Time:	09:11 AM to 05:14 PM	Brophy	*
		Coram	X
Place:	SCR 356	Hodge	*
		Jones	E
This Meeting was called to order by		Mitsch Bush	X
	Senator Schwartz	Roberts	X
		Sonnenberg	E
This Report was prepared by		Vigil	X
	Brooke Maddaford	Fischer	X
		Schwartz	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Flood Impacts to Water Oil Gas Infrastructure Flood Impacts to Colorado Agriculture Update on Colorado Water Plan Flood Impacts to Wastewater and Drinking Water Best Management Practices for Urban Landscapes Urban Water Conservation Measures General Fund and State Severance Tax Forecast Dams Under Storage Restrictions CWCB Funding Recommendations of the IBCC Public Testimony		Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only Committee discussion only

09:11 AM -- Flood Impacts to Water Oil Gas Infrastructure

09:11 AM -- Mike King, Executive Director, Colorado Department of Natural Resources (DNR), thanked the responders involved in the recent floods in Colorado. He discussed the roll of dam inspectors and oil and gas staff during the flood, and talked about the field flight he recently took to view the effects of the flooding. Mr. King described the challenges that the oil and gas industry has faced remediating flood effects while still operating. Mr. King answered questions from the committee regarding what he observed while on the recognisance flight and said that the impact was enormous but narrow. He talked about the impacts to roads, bridges, and agricultural lands, and discussed the work that needs to be done on water infrastructure. He discussed the roles that he expects the Colorado Water Conservation Board (CWCB) construction fund bill to play as flood clean-up proceeds and said that DNR will be evaluating if additional funding will be needed. Mr. King estimated that 37,000 gallons of oil and gas product were lost into the river because of the flood. He discussed changes in river channels that he observed and answered questions from the committee regarding the Governor's consideration of a special session of the legislature as a result of the flood.

09:25 AM -- Matthew Lepore, Director, Colorado Oil and Gas Conservation Commission (COGCC), described the impacts of the flood on oil and gas infrastructure in Colorado. He said that the impacts are "relatively" limited and said that he has confidence that recovery will be complete. Mr. Lepore described various aspects of a map depicting the flooding (Attachment A) and talked about floodplain mapping. He said that the most accurate floodplain map that applies to the effects seen as a result of this flood are found in FEMA's 500-year floodplain map. Mr. Lepore talked about some of the efforts that the COGCC has undertaken to mitigate the effects of the flood on oil and gas infrastructure. He said that the COGCC has visited 850 oil and gas locations. Mr. Lepore described some of the damage that has been observed and said that the oil and gas industry "shut-in" (or stopped from producing) 1,900 wells during or after the flood. He said that as of September 26, 2013, 1,000 wells were still shut-in. Mr. Lepore offered details of some of the impacts to oil and gas infrastructure including that 890 barrels of material, largely crude oil and natural gas liquids, were spilled as a result of the flooding. He said that an additional 60 sites were impacted but that they weren't damaged. Mr. Lepore said that hydraulic fracturing operations are being monitored and talked about some of the details of that monitoring. He discussed the possibility of the COGCC requesting all operators to produce chemical inventories and described additional activities that have been implemented to encourage communication between industry professionals and the public. Mr. Lepore said the COGCC is creating a protocol so that the public may inform the COGCC of potentially affected oil and gas sites and stated that the COGCC is committed to a thorough clean-up that addresses both short-term and long-term concerns. He answered questions from the committee regarding the emergency response fund, precautions that are currently in place and being considered regarding oil and gas sites that are located in floodplains, specifics of the two largest spills sites, where and how the emergency response fund moneys will be applied, and how gas stations have been affected by the flood.

0927AttachmentA.pdf

09:57 AM -- Alan Gilbert, Special Assistant to the Department of Natural Resources' Executive Director for Flood Response, talked about emergency responses to the flood and said that all of Colorado's government is pulling together to help the people of Colorado. He stated that his job is to support all involved to ensure safety and to ensure that clean-up is done completely so that all departments may be restored to full operating condition.

10:00 AM -- Mr. King answered questions from the committee regarding the expediting of the permitting process so that rebuilding of infrastructure can begin as quickly as safely as possible without putting the environment in jeopardy.

10:03 AM -- Flood Impacts to Colorado Agriculture

10:03 AM -- John Salazar, Commissioner of Agriculture, Colorado Department of Agriculture, summarized his discussions with the United States Department of Agriculture (USDA) regarding how many acres have been impacted or damaged by the flood. Commissioner Salazar said that the financial impacts are currently unknown, but emphasized the importance of rebuilding water infrastructure, including reservoirs and dams. He discussed the role of Federal Crop Insurance and of the Farm Bill and said that resources may be limited because of provisions within the Farm Bill. Commissioner Salazar discussed financial estimates from various reservoir and irrigation companies regarding the funds they need to rebuild and showed photos to the committee of some of the flood impacts on agricultural lands. Ron Carlton, Deputy Commissioner, Colorado Department of Agriculture, answered questions from the committee regarding how dairy operations have been impacted by the flood. Commissioner Salazar also addressed this question and answered questions regarding the impacts of compromised water quality on agriculture and the effects of silt deposit on agricultural lands. Deputy Commissioner Carlton also discussed this topic.

10:17 AM -- Update on Colorado Water Plan

10:18 AM -- James Eklund, Director, Colorado Water Conservation Board (CWCB), discussed the nexus between the Colorado Water Plan (CWP) and the recent flooding. He said that 164 diversion structures have been impacted by the flood, 128 construction fund projects are in flood impacted counties, and 33 stream gauges have been impacted by the flood. Mr. Eklund said that the efforts to create the CWP will not be slowed due to the flood and talked about the development structure of the CWP. He discussed the role of the basin roundtables and discussed the initial framework of the CWP that is currently being developed. Mr. Eklund talked about the time spent with stakeholders with both rural and urban water interests and discussed permanent agricultural "buy and dry" methods. Mr. Eklund answered questions from the committee regarding funding needs that have been identified by the CWCB for the loan and grant programs.

10:28 AM -- John Stulp, Interbasin Compact Committee (IBCC) Director and Special Policy Advisor to the Governor for Water, discussed the development of the CWP including consensus on items discussed during the "low and no regrets" conversation that occurred in August. Mr. Stulp talked about the participation of the IBCC members in the CWCB meeting in Telluride and the next IBCC meeting occurring on October 1 in Denver. Mr. Stulp discussed the process and collaboration involved in deciding how to move forward with the creation of the CWP and concerns regarding flood impacts on reservoir infrastructure. Mr. Stulp answered questions from the committee regarding public participation in the creation of the CWP. Committee discussion ensued regarding the transfer of funds away from water infrastructure during recent budget shortfalls. Mr. Ecklund and Mr. Stulp responded to questions from the committee regarding the need for and potential processes for public comments on the CWP. Mr. Stulp responded to questions from the committee regarding negative public responses to the roundtable discussion process. Mr. Eklund shared that www.ColoradoWaterPlan.com will be online as of November 1 and is expected to offer useful information regarding the CWP. Mr. Eklund answered questions from the committee regarding the funding of the basin roundtable efforts, financial support that is offered to basin roundtables to alleviate some of the burden on local resources, and the expected role that the the basin roundtable water plans will play in the larger CWP. Mr. Eklund and Mr. Stulp continued answering questions from the committee regarding the timing requirements for the completion of the CWP.

10:58 AM -- Flood Impacts to Wastewater and Drinking Water

10:59 AM -- Steve Gunderson, Director, Water Quality Control Division (WQCD), provided a document to the committee (Attachment B) describing flood impacts to drinking water and wastewater infrastructure. Mr. Gunderson shared a timeline of the activities of the WQCD related to the flood and described some examples of wastewater treatment plants that were effected by the flood. He discussed boiled water/bottled water advisories that were given, including some that have been lifted. He talked about the media inquiries that the division has received and estimated that approximately 20 million gallons of sewage were released. He said that Environmental Protection Agency (EPA) and the Federal Emergency Management Agency (FEMA) invited engineers from the division to help assess drinking water and wastewater plants and offer preliminary damage cost assessments. Mr. Gunderson discussed various photos included in Attachment B including stream channel movement experienced in Lyons and flood impacts to sand and gravel operations. Mr. Gunderson talked about how the flood affected the Upper Thompson water treatment plant and said that Lyons's drinking water system was destroyed. He discussed FEMA's requirements for offering financial aid to flood affected communities, water sampling procedures that the division has undertaken, and the effects of the flood on gas stations. Mr. Gunderson answered questions from the committee regarding FEMA's threshold for offering financial aid to flood affected communities and the division's authority to not fine business and municipalities that are out of compliance with division requirements.

0927AttachmentB.pdf

11:20 AM -- Barry Cress, Public Works Specialist, Department of Local Affairs (DOLA), discussed the department's role in setting up disaster assistance centers, creating preliminary damage assessments, and the prioritization of needs. He talked about the hierarchy of various funding sources available to flood affected communities and the department's collaboration with the Chief Recovery Officer. Mr. Cress responded to questions from the committee regarding county thresholds for public assistance and matching dollars for public facilities the department's program to assist flood affected communities.

11:27 AM -- Michael Brod, Executive Director, Colorado Water Resources and Power Development Authority (CWRPDA), discussed the CWRPDA's efforts to coordinate with other funding authorities to help determine the priorities for where funds are needed most. He discussed the fund amounts that are currently approved for various programs that will aid with flood recovery. Mr. Brod discussed FEMA's reimbursement model and said that CWRPDA may be able to offer a local match for FEMA funding. He also talked about the need for assessments that are being performed to inform the amount of financial aid that is needed. He discussed some long term effects of the flood including how revenue interruptions may affect infrastructure and said that CWRPDA is looking at how to help entities recover from interruptions to revenue streams due to the flood. Mr. Brod answered questions from the committee regarding flexibility within the projects eligibility list for drinking water and wastewater financing. Mr. Cress answered questions from the committee regarding FEMA's threshold for financial assistance. Mr. Brod responded to questions from the committee regarding the potential for additional funding sources. Mr. Cress responded to questions from the committee regarding energy impact assistance grants that might be directed toward recovery efforts or emergency response efforts.

11:42 AM -- Best Management Practices for Urban Landscapes

11:43 AM -- Kristen Fefes, GreenCO Executive Team and Legislative Liaison for GreenCO, distributed a printout of their presentation (Attachment C) to the committee. Ms. Fefes explained that GreenCO is comprised of seven landscape related trade groups and said they are involved in both the construction and agriculture industries. Ms. Fefes talked about the role of water in urban landscapes and stressed the equal importance of the design, installation, and maintenance in creating and maintaining healthy urban landscapes.

0927AttachmentC.pdf

11:49 AM -- Brenda O'Brien Water Projects Manager and Best Management Practices Outreach, GreenCO, discussed the evolution of GreenCO's Best Management Practices (BMP), the GreenCO's BMP manual and its role in GreenCO's training program, and identified the organizations that helped to develop the BMP manual. Ms. O'Brien talked about the integration of GreenCO's BMPs into local practice including the roles that Governor Owen, the CWCB, and the Colorado Department of Public Health and Environment (CDPHE) played in that integration. She gave an overview of some of GreenCO's BMP outreach efforts including the creation and distribution of educational fact sheets and "how-to" videos. Ms. O'Brien talked about GreenCO's future goals related to BMPs.

12:01 PM -- Ms. Fefes talked about recent BMP legislative efforts including House Bill 10-1358, concerning a requirement for new home builders to offer home buyers water efficiency options, and Senate Bill 13-183, concerning water conservation measures in common interest communities. She discussed legislative policies and commitments made by GreenCO.

12:04 PM

The committee recessed for lunch.

01:35 PM -- Urban Water Conservation Measures

The committee came back to order.

01:35 PM -- Frank Kinder, Co-Chair, Colorado WaterWise Board of Directors, had staff distribute several documents to the committee (Attachments D, E, F, and G). Mr. Kinder discussed the mission of Colorado WaterWise, the composition of the WaterWise board of directors, and WaterWise's primary objectives, strategic outcomes, and goals. Mr. Kinder discussed the WaterWise guidebook of best practices and explained that the guidebook is organized into three sections that describe foundational practices, outdoor water use practices, and indoor water use practices. He highlighted some of the topics discussed in each section of the guidebook including, but not limited to, various foundational concepts; landscape water budgets; regulations for landscape design; water efficient design and installation; irrigation efficiency evaluations; rules for new construction; high efficiency residential fixture replacement; water evaluations; audits and business efficiency improvements; and practices for residential and commercial sectors. Mr. Kinder talked about the agenda for the upcoming WaterWise Water Conservation Summit, occurring in Denver on October 25, 2013 and he also discussed the free pre-conference workshop occurring in Denver on October 24, 2013. Mr. Kinder answered questions from the committee regarding WaterWise's annual financial goals and the number of gallons saved each year as a result of the implementation of conservation measures, conservation advocacy, the qualifications required to be considered a WaterSense home, the percentage of WaterSense homes in Colorado Springs, and projections for future water use.

0927AttachmentD.pdf

0927AttachmentE.pdf

0927AttachmentF.pdf

0927AttachmentG.pdf

02:03 PM -- General Fund and State Severance Tax Forecast

02:03 PM -- Natalie Mullis, Chief Economist, Colorado Legislative Council Staff (LCS), talked about the revenue forecast and general fund surplus that is expected this year. Staff distributed the Economic and Revenue Forecast (Attachment H) to the committee. Ms. Mullis discussed the General Fund surplus of about $1 billion that is expected at the end of 2013. Ms. Mullis talked about the discrepancies between Legislative Council's economic forecast and the forecast from the Office of State Planning and Budgeting (OSPB). She discussed how laws that are passed on the state or federal level may affect the General Fund reserve and talked about expectations for revenue for FY 2014-15 and FY 2015-16. She answered questions from the committee regarding how the implementation of sequestration is reflected in the economic and revenue forecast. She discussed the economic forecast and the role that actions of the federal government plays in Colorado's economic forecast including interest rates. Ms. Mullis talked about difference in expectations between OSPB and LCS regarding individual income taxes from capital gains. She discussed how expectations of the economic impact of the flood on Colorado's economy is speculative at this time, but said that natural disasters often cause an immediate sharp drop in economic activity followed by a sharp increase in economic activity. She said that it it likely that the flood will shift economic activity related to jobs and income and that communities that were isolated by the flood will most likely feel the greatest effects as their infrastructure has been significantly impacted by the flood. She said that Northern Colorado's agriculture and ranching community may be greatly affected by the flood as a great amount of feed was deemed unusable because of the flood. Ms. Mullis talked about the flood's effects on Colorado's drought and said that the impacts on oil and gas development is expected to be minimal. Committee discussion ensued regarding the transfer of funds, during the recent recession, into the General Fund that would have previously been put toward water infrastructure.

0927AttachmentH.pdf

02:25 PM -- Marc Carey, Colorado Legislative Council Staff, distributed a document from Mr. Carey to the committee (Attachment I). Mr. Carey talked about the current allocation of state severance tax revenue and said that 50 percent of the revenue is allocated to DNR and 50 percent is allocated to DOLA. He talked about LCS's projected severance tax revenue forecast which includes total collections amounting to about $176 million in FY 2013-14. Mr. Carey said that OSPB projects that total severance tax collections will amount to around $211 million. Mr. Carey described historical severance tax revenue over the past 12 years and offered explanations for some of the changes. He explained the oil and gas severance tax structure including the statutory tax rate, credits, and the effective tax rate. He talked about average county, school, and special district mill levies and oil and gas production from 2001-2013 in various Colorado counties. Mr. Carey answered questions from the committee regarding the amount of severance tax received by the state from Weld County that is affected by the county's mill levies. Mr. Carey talked about the production of small "stripper wells" in various Colorado counties and discussed the economic impact of a decreasing number of stripper wells. Mr. Carey answered questions from the committee regarding the impacts of coal development on total severance tax revenue and the $50 million cap on the perpetual base account.

0927AttachmentI.pdf

02:55 PM -- Dams Under Storage Restrictions

02:55 PM -- Dick Wolfe, State Engineer, Division of Water Resources, talked about the division's response to the flood and thanked various staff and responders for their efforts during and after the flood. Staff distributed various documents and maps from the department (Attachment J, Attachment K, Attachment L, Attachment M, Attachment N, Attachment O, Attachment P and Attachment Q) to the committee. He discussed the initial assessments of the losses as a result of the flood and said that the division has focused on three areas during and after the flood: assessment of dam integrity, assessment of gauging station equipment and structures, and assessment of diversion structures.

0927AttachmentQ.pdf

03:03 PM -- Bill McCormick, Chief of Dam Safety, Division of Water Resources, said that he would be discussing the risks involved in dam safety and defined his use of the word "risk." Mr. McCormick said that the division's dam safety risk management strategy includes minimizing the probability of failure by training dam safety engineers, educating dam owners, and enforcing dam storage restrictions. Mr. McCormick discussed storage restrictions as a tool to maintain the safe condition of dams and the effects of dam location and volume on overall storage. Mr. McCormick discussed the map depicting the volume of storage that is currently restricted (Attachment M) and compared the number of dams on the restricted storage list (Attachment L) to the total number of dams in Colorado. Committee discussion ensued regarding the volume of water storage allowed for dams on the restricted list. Mr. Wolfe answered questions from the committee regarding the amount of acre feet of water that has left the state as a result of the flood. Mr. McCormick answered questions from the committee regarding current concerns regarding dams and the possibility of large amounts of snow this winter. Mr. McCormick answered questions from the committee about challenges encountered by small districts regarding water storage on US Forest Service (USFS). Mr. McCormick discussed how and when the division became aware of the flooding and its affects on dams. He talked about the division's response timeline including the emergency dam inspection program and dam safety activities. Mr. McCormick summarized the division's activities during and after the flood including forensic analysis of the 9 dams that failed. He discussed the accumulated precipitation in some flood affected counties and addressed concerns about specific dams including the activation of spillways, problems controlling inflows, and slope buttressing. Mr. McCormick talked about small dams that were in distress as a result of the flood and gave examples of dams that became dangerous as a result of the flood. Mr. McCormick explained the division's emergency dam inspections program including the inspections status to date (Attachment N). Mr. McCormick showed the committee a short television news piece aired on 9News on the emergency dam inspections program and cost.

03:56 PM -- Scott Cuthbertson, Deputy State Engineer, Division of Water Resources, described his role within the division. Mr. Cuthbertson talked about the satellite monitoring and hydrography program and damage to stream gage stations as a result of the flood. He referred to the photos shown in Attachment R. Mr. Cuthbertson described the stream flow gauging program and discussed flood affected stream gages in the South Platte Basin (Attachment P) and flood affected diversion structures in the South Platte Basin (Attachment Q). He discussed the repairs needed to repair various diversion structures and associated costs. Mr. Wolfe answered questions from the committee about quantification of flood effects and mobilization of resources.

04:02 PM -- Eric Wilkinson, General Manager, Northern Colorado Water Conservancy District, distributed photos from the district of flood damaged canals (Attachment R). Mr. Wilkenson talked about the Saint Vrain River Diversions map (Attachment S) and described the damage seen in the photos in Attachment R. Mr. Wilkinson stated that the current cost estimates of damages from the flood from the State Engineer's Office may be low and discussed some of the expected costs to repair infrastructure. He stressed the need for additional funds to be appropriated, and current funds to be preserved, from the construction fund and the severance tax trust fund perpetual base account to help repair the water infrastructure in Colorado. He asked the committee to consider enhancing the availability of funds from these two funds to meet the demand to rebuild structures damaged from the flood. He also asked the committee to consider various changes to loan programs for loans that are used in flood rehabilitation projects and stressed the importance of timing as it relates to infrastructure repairs and water storage. Mr. Wilkinson discussed non-reimbursable funds in the CWCB Construction Fund bill and the district's collaboration with the CWCB.

0927AttachmentR.pdf

0927AttachmentS.pdf

04:22 PM -- Mr. Wolfe answered questions from the committee regarding the forecasting of severe weather events.

04:23 PM -- CWCB Funding

04:24 PM -- Mr. Eklund discussed the $1.65 million grant that the CWCB recently approved for flood related repairs, the CWCB funding formula, the severance tax forecast, and the possibility of financial contributions to repair water infrastructure that may be available from insurance payments and FEMA payments.

04:27 PM -- Tim Feehan, Finance Section Chief, CWCB, discussed the CWCB's role in helping to repair water infrastructure damaged by the flood. He answered questions from the committee regarding financial estimations related to flood damage. Mr. Feehan talked about existing loans that are part of the CWCB's loan program and the CWCB Construction Fund bill. He discussed specific details regarding the Water Infrastructure and Supply Efficiency (WISE) Project and the Chatfield Project.

04:36 PM -- Mr. Eklund answered questions from the committee regarding the prioritization of funding for water infrastructure projects in need of repair as a result of the flood as well as those in need of repair independent of the flood. Committee discussion ensued on this topic. Mr. Eklund continued to answer questions from the committee regarding funds that may be available from the construction fund versus the severance tax perpetual base account.

04:41 PM -- Mr. Feehan answered questions from the committee regarding potential alternative funding options for the Chatfield Reallocation Project. He continued to answer questions regarding current balances in the perpetual base account and the construction fund.

04:42 PM -- Mr. Eklund answered questions from the committee about the funding priorities of the CWCB and if the CWCB's current loan granting authority is sufficient to address the flood impacts. Mr. Eklund continued to answer questions from the committee regarding if a decrease in severance tax funds as a result of the impacts of the flood on oil and gas development in Weld county is expected. Mr. Feehan addressed a question from the committee regarding storage projects and Senate Bill 13-236 concerning transfers of moneys related to capital construction.

04:53 PM -- Senator Schwartz invited everyone to attend the October 1, 2013, Interbasin Compact Committee (IBCC) meeting in Denver at the Colorado History Museum.

04:54 PM -- Recommendations of the IBCC

Mr. Stulp invited the committee to attend the upcoming IBCC meeting as well as all future meetings and talked about the frequency of such meetings.

04:56 PM -- Becky Mitchell, Section Chief, Water Supply Planning, CWCB, distributed a document detailing the No/Low Regrets Action Plan (Attachment T). Ms. Mitchell discussed the history of the No/Low Regrets Action Plan and defined the term "no and low regrets." Ms. Mitchell talked about foundational means to address the water supply gap in Colorado including conservation strategies, agricultural transfers, and possible new supply options. She discussed non-consumptive values, water storage, and the importance of acting on possible solutions to addressing Colorado's water supply gap. Ms. Mitchell and Mr. Stulp discussed legislative concepts related to addressing the water supply gap and the CWCB's public outreach and education efforts. Ms. Mitchell answered questions from the committee regarding basin implementation water plans that are currently being developed. Committee discussion ensued regarding terminology related to water supply and water re-allocation as well as water consumption and water conservation.

0927AttachmentT.pdf

05:12 PM -- Public Testimony

Senator Schwartz opened the public testimony phase. No one expressed interest in testifying, so the public testimony phase was closed.

05:14 PM

The meeting adjourned.