Crider, Hon. Tom, mayor, city of Cordell, Okla. Engleman, Charles E., president, Foss Reservoir Master Conservancy Harris, Hon. Fred R., a U.S. Senator from the State of Oklahoma.. Holum, Kenneth, Assistant Secretary for Water and Power Development, Department of the Interior, accompanied by Jack A. Hunter, Maurice N. Langley, and Charles H. Clark... Monroney, Hon. A. S. Mike, a U.S. Senator from the State of Oklahoma. Nonast, Paul, representing the mayor of Bessie, Okla, and member of the board of directors of the city of Bessie, Okla.. Phelps, Joe, consulting engineer, Phelps, Spitz, Ammerman, & Thomas, Inc., of Oklahoma City, Okla., consulting engineers for Master Smith, Hon. James V., a Representative in Congress from the Sixth Steed, Hon. Tom, a U.S. Representative in Congress from the State of COMMUNICATIONS Holum, Kenneth, Assistant Secretary of the Interior: Letter to Hon. 31 Katz, William E., vice president, Ionics, Inc.: Letter to Hon. Clinton P. Anderson, chairman, Water and Power Resources Subcommittee, dated 75 FOSS RESERVOIR, OKLA. THURSDAY, AUGUST 10, 1967 U.S. SENATE, SUBCOMMITTEE ON WATER AND POWER RESOURCES OF THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Washington, D.C. The subcommittee met pursuant to notice at 10:05 a.m., in room 3110, New Senate Office Building, Senator Henry M. Jackson (chairman of the full committee) presiding. Present: Senators Jackson, Jordan, Burdick, and Allott. Also Present: Jerry T. Verkler, staff director; Stewart French, chief counsel; Roy Whitacre, professional staff member; William Van Ness, special assistant, and Darryl Hart, assistant minority counsel. Senator JACKSON. The Chair will turn over further proceedings now to the able chairman of the subcommittee, Senator Anderson, in connection with the next item on the agenda, S. 1946, a bill to amend the repayment contract with the Foss Reservoir and for other purposes. The Foss Reservoir is a part of the Washita River Basin reclamation project, authorized in 1956. Although the project is completed, the water has been of such poor quality that it cannot be used for municipal and industrial purposes. This bill, if enacted, would provide for the construction of a 3million-gallon-per-day water treatment plant in the Foss Reservoir. The cost would be nonreimbursable. Before calling our first witness, a copy of the bill and any executive communications that have been received will be placed in the record. (The documents referred to follow:) [S. 1946, 90th Cong., first sess.] A BILL To amend the repayment contract with the Foss Reservoir Master Conservancy District, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, (a) for the purpose of promoting the Federal saline water conversion and the Federal water pollution control programs, the Secretary of the Interior is authorized (1) to enter into an agreement with the Foss Reservoir Master Conservancy District of Clinton, Oklahoma, providing for (A) the construction by such district of a three-million-gallon-per-day plant to treat water stored in Foss Reservoir, Washita River Basin project, Oklahoma, in accordance with plans approved by the Secretary and subject to right of the Secretary to review all costs of such construction and to provide for the operation of such plant pursuant to an agreement entered into under section 2 of this Act, and (B) the amendment of the existing repayment contract with such district, numbered 14-06-500-322, dated February 14, 1958, as amended, in order to reduce the amount of the construction charge obligation under such contret by the amount of the cost of the construction of such plant; or (2) to construct such plant with funds appropriated for the purpose of this Act. 1 (b) The Secretary of the Interior is authorized to provide for such additional features in such plant whether constructed pursuant to clause (1) or (2) of subsection (a), as will best promote the purposes of such Federal programs. SEC. 2. The Secretary of the Interior is further authorized to enter into such agreements with the Foss Reservoir Master Conservancy District as may be necessary to provide for (1) the operation and maintenance of any plant constructed pursuant to the first section of this Act in such manner as will best promote the Federal saline water conversion and Federal water pollution control programs, and (2) the payment of such equitable portion of the cost of such maintenance and operation as the Secretary determines in view of the contribution of such plant to such programs. SEC. 3. The Secretary of the Interior is authorized to relieve the Foss Reservoir Master Conservancy District (1) of the obligation of making any further construction charge payments under the contract referred to in the first section of this Act, and (2) of any interest accrual on its total obligation, until the initial delivery of water for municipal use from the plant constructed pursuant to this Act. The Secretary is also authorized (a) to refund to such district the amount of $218,364.62 representing the amount already paid under such contract and to revise such contract by adding such amount to the obligation for future payment, and (b) to further revise such contract so that future construction charge payments will be rescheduled in a manner satisfactory to the Secretary over a period not to exceed fifty years from the date of such initial delivery of water from such plant. Hon. HENRY M. JACKSON, EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., August 10, 1967. Chairman, Committee on Interior and Insular Affairs, DEAR MR. CHAIRMAN: This is in reply to your letter of June 22, 1967, requesting the views of the Bureau of the Budget on S. 1946, a bill "To amead the repayment contract with the Foss Reservoir Master Conservancy District, and for other purposes." This bill, if enacted, would authorize the Secretary of the Interior to construct a three-million-gallon-per-day desalting plant and to undertake additional measures for the purpose of improving the quality of water stored in the Foss Reservoir in Oklahoma. The Department of the Interior, in a report it is submitting to your Committee, recommends the substitution of alternative language for the language of S. 1946. This draft language would provide for adjustments in the existing repayment contract with the Foss Reservoir Master Conservancy District to assist the District in solving its water supply problems and would authorize a Federal feasibility investigation to provide a basis for identifying alternative solutions. The Bureau of the Budget would not object to enactment of S. 1946 if amended as recommended in the report of the Department of the Interior. Sincerely yours, WILFRED H. ROMMEL, Assistant Director for Legislative Reference. Hon. HENRY M. JACKSON, DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D.C., August 9, 1967. Chairman, Committee on Interior and Insular Affairs, DEAR SENATOR JACKSON: This responds to your request for the views of this Department on S. 1946, a bill "To amend the repayment contract with the Foss Reservoir Master Conservancy District, and for other purposes." Pursuant to the proposals outlined in this report, we recommend that a substitute bill be enacted. In May 1967, the Department appointed a special board of consulting engineers to study the problems associated with the poor quality of water available from Foss Reservoir of the Washita River Basin Project, Oklahoma. The board made its initial report to the Department on July 28, 1967. A copy of that report is enclosed for your information. The board's recommendations have been included in this report, and have our concurrence. Under Section 1 of S. 1946, the Secretary of the Interior would be authorized to enter into an agreement for the District to construct a 3-million-gallon-per-day (m.g.d.) desalination plant, the plans for which would be subject to approval by the Secretary. The existing repayment contract with the District, numbered 1406-500-322, dated February 14, 1958, as amended, would be further amended to reduce the construction charge obligation thereunder by the amount of the cost of constructing the plant. As an alternative, the Secretary could construct such plant with funds appropriated for this purpose. The Secretary would also be authorized to construct additional plant capacity as needed. Section 2 would further authorize the Secretary to enter into an agreement with the District for the operation and maintenance of the desalination plant in such manner as will benefit the Federal saline water conversion and water pollution control programs, and to provide for payment of the cost of such operation and maintenance as he determined equitable in view of the contribution of such plant to such Federal programs. Under Section 3 the Secretary would be authorized to relieve the District (1) of the obligation of making any further construction charge payments under its contract and (2) of any interest accrual of its total obligation, until the initial delivery of water is made from the desalination plant. The amounts already paid by the District, totaling $218,364.62, would be refunded by the Secretary. The remaining obligation would be rescheduled over a period not to exceed 50 years from the date initial delivery of water is made from the plant. The provisions of section 3 would be implemented through an amendatory repayment contract. Incurred first-stage reimbursable construction costs of the Foss Division allocable to the District presently total about $6,626,000. This includes $1,155,000 for dam and reservoir costs and $5,471,000 for aqueduct costs. Interest during construction computed through June 30, 1966, amounts to $916,000 bringing the total obligation to $7,542,000. Repayment is scheduled over a 50-year period, with annual installments varying from $148,000 to $390,030. The first payment was made in full in 1965. About 56 percent of the 1966 payment has been received by the Government. The Act of Congress approved February 25, 1956 (Public Law 84-419, 70 Stat. 28), authorized the construction, operation, and maintenance of the Washita River Basin Project for municipal and industrial water, irrigation, flood control, fish and wildlife, and recreation purposes. First-stage construction of the Foss Division was essentially completed December 31, 1964, when the construction office was closed. This included the dam and reservoir, appurtenant facilities, an aqueduct and pumping plants for delivery of municipal and industrial water, and operation and maintenance headquarters and caretaker buildings. The responsibility for operation and maintenance of first-stage facilities was transferred to the Foss Reservoir Master Conservancy District, effective January 1, 1965. Until late in 1966, it was contemplated that the District would construct and operate a central water treatment plant for treating and softening project water for its member cities. Because the member cities were unable to agree on the need for a central treatment plant and a method of financing it, considerable time has elapsed since the initial storage of water in Foss Reservoir. During 1965, plans were developed by a firm of consulting engineers retained by the District to construct a 3 m.g.d. conventional treatment plant. Finances to the extent of $365,000 were assured by the Community Facilities Administration under a bond purchase arrangement. While the loan was still under consideration by the CFA, the consulting firm withdrew and a new firm was retained by the District. After much further examination and investigation of the water quality of Foss Reservoir, the new consulting firm determined that water quality was such that conventional treatment would not produce a potable water supply. The firm recommended desalination. Desalination would present the problem of the effect of brine disposal on water pollution control downstream from the dam. Construction costs and operation and maintenance of the desalination plant and brine disposal system would be financially prohibitive for the District to underwrite. The consulting firm for the District determined that the construction of a 3 m.g.d. desalination plant would cost about $2 million exclusive of the cost of brine disposal facilities. This estimate has been confirmed by the Office of Saline Water. The Water Quality Section of the Definite Plan Report, Volume II, Foss Division, dated January 1958, estimated in Table 28, page B-138, that the Foss |