Gov. seeks fed funds to fix ailing dam, wrangles with water developers
Gov. Mark Gordon has asked for federal Bipartisan Infrastructure Law money to fix the dangerous LaPrele Dam as he wrangles with state water developers over priorities for hundreds of millions of federal infrastructure and stimulus dollars.
The dam above Douglas meets conditions for aid outlined in the federal legislation that’s also called the Infrastructure Investments and Jobs Bill, Gordon wrote Jan. 10 in a letter to the commissioner of the U.S. Bureau of Reclamation. The request comes as the governor and Wyoming lawmakers jostle over millions of dollars in federal infrastructure and American Rescue Plan Act funds.
All told, water developers seek some $301 million in four bills the legislature will consider in its 2022 budget session that starts Feb. 14. Many of those appear to court federal funds from the American Rescue Plan Act and the Bipartisan Infrastructure Law although those measures largely support drinking water and unsafe structures, not new agricultural irrigation.
Tensions over control of the federal money surfaced in November when lawmakers rejected Gordon’s plan for Wyoming’s top five elected officials to administer a $95 million ARPA tranche in a pending water grant bill. Instead, the state’s Water Development Commission would be in charge, according to legislation lawmakers advanced late last year.
Members of the Select Water Committee want millions of dollars more than that, advancing other bills that seek another $206.6 million. The bulk is earmarked for storing, diverting and moving river flows for agricultural irrigation projects.
As the Legislature girds for its 2022 budget session, Gordon has hired a consultant to guide the state on what projects qualify for ARPA funds. U.S. Treasury Department guidelines released Jan. 6 appear to rule out agricultural dams, reservoirs and irrigation as candidates for those funds.
To further guide state spending, Gordon named an Infrastructure Investments and Jobs Act coordinator Friday who will analyze and prioritize grant applications “to make sure state entities align efforts to Wyoming’s values.”
LaPrele appears to be exhibit A for state priorities and seems to be an agricultural project that fits with federal infrastructure guidelines regarding safety. Gordon seeks certification from Bureau of Reclamation Commissioner M. Camille Camimlim Touton that the dangerous structure above Douglas qualifies for infrastructure-act support. Rehabilitation is unlikely and water developers estimate replacement would cost $50 million or more.
“[I]t is my understanding that the LaPrele Dam … meets the criteria … to qualify for Federal support,” Gordon’s Jan. 10 letter reads. “The dam has reached [the end of] its useful life, poses significant health and safety concerns and … I request the Federal support that has been authorized.”
Gordon had not received a response by Thursday, his spokesman Michael Pearlman said in an email. The infrastructure act directs water funding toward dams and reservoirs with safety problems, not new irrigation projects, according to the law, a summary and Wyoming lawmakers’ discussions.
The other federal relief package, the American Rescue Plan Act, also omits agriculture, irrigation and water-diversion infrastructure in favor of drinking water projects, a topic Gordon believes is best administered by the Office of State Lands and Investments.“It would seem most efficient to pass the overall grant application process and the administration of the grants [from a $95-million ARPA bill] to the Office of State Lands,” Randall Luthi, Gordon’s chief energy advisor, told the Legislature’s Select Water Committee in November. Gordon effectively leads the state land office as chairman of the Wyoming Board of Land Commissioners, which is made up of Wyoming’s five statewide elected officials and oversees the office.
On the other hand, legislators on the Select Water Committee control funding requests from the Wyoming Water Development Office and its governing commission.
Several of those water committee legislators lined up to bash Luthi’s and Gordon’s November ARPA entreaty with charges that the state land office director had said the agency was swamped. Instead, the water development office should be the top agency administering the proposed $95 million grant program, they insisted.
But Beth Blackwell, grants and loans manager at the state lands office, said the criticism was misplaced.
Any notion that the office is overwhelmed is a “misunderstanding” of testimony, she said. In describing a crush of work, office director Jenifer Scoggin had referred to the trust side of the lands bureau, Blackwell said. Grant administrators remain ready and capable, Blackwell said.
“We are a very separate little group within the office that administers 12 different grant loan programs,” she said. That includes clean- and drinking-water grants ARPA strongly supports. “I just wanted to clarify that because there seems to be a misunderstanding,” Blackwell said.
House Bill 0006 — ARPA funds for water and wastewater projects, proposes the $95 million be principally controlled by the Water Development Office, with input from the state lands office and Wyoming Department of Environmental Quality. Since the bill was filed, the U.S. Department of the Treasury has reaffirmed that funds are meant for drinking water, not irrigation.
“The final rule does not include infrastructure projects related to dams and reservoirs … unless they meet the conditions discussed … drinking water and the management of wastewater and storm water,” the rule states.
Wyoming’s Select Water Committee last week recommended passage of three other sizable water bills, including the Water Development Office’s annual omnibus planning and construction bills. Those two total $51.8 million, funded largely through the diversion of a portion of mineral severance taxes.
The third committee bill “Supplemental water development — funding,” calls for $154.8 million without identifying a revenue source. Counting the ARPA bill, planning bill, construction bill and supplemental-funding bill, water developers are seeking to scoop up some $301 million.
Some of the four major projects proposed for funding in the supplemental water bill are troubled by unreliable cost estimates and other price increases. The $70.3 million bid for a 10-times expansion of the Upper Leavitt Reservoir north of Shell in Big Horn County, for example, recently came in $31 million over the original $39 million estimate.
That bid could be a harbinger.
“We’ve been through these cycles before where material costs are very high and volatile,” Interim State Engineer Brandon Gebhart told the Select Water Committee last week. “There’s a lot of unknowns … there’s a lot of [federal] money coming out [that] put[s] a stress on labor force, the ability to get projects completed as well as [on] materials across the country.”
The supplemental water bill also calls for $35 million for the Alkali Reservoir, also in Big Horn County. The estimate for that project near Hyattville jumped by $24 million in 2020, from $35 million in 2015 to $59 million and the project has an existing $59 million appropriation.
Engineers attribute that 69% increase to geotechnical investigations that revealed a crummy site and embankment material. Construction bids have yet to be advertised for and let.
Another $25 million in the supplemental water bill would upgrade the Fontenelle Dam in Lincoln County, a project that’s been estimated to cost anywhere from $8.2 million to $37.5 million, according to reporting by the Rock Springs Rocket Miner.
Another $21.8 million would aid reconstruction of damaged irrigation tunnels in Goshen County.
The 130-foot-high LaPrele Dam, subject of Gordon’s infrastructure request to the USBOR, was built in 1909, is in danger of an “abrupt,” catastrophic failure and is a hazard looming above Douglas, Ayers Natural Bridge Park and Interstate 25. Its design, age and geologic environment make it so dangerous that operators have limited the amount of water stored behind it.
“Ensuring that storage and irrigation infrastructure is safe and resilient is crucial to the lives and livelihoods of the citizens of Wyoming,” Gordon’s letter to Reclamation Commissioner Touton reads. “The rehabilitation of aging water infrastructure is a top priority for my administration, our Congressional delegation and this state as a whole.”
Gordon made that assertion despite opposition to the Infrastructure Investments and Jobs Bill from Wyoming’s entire congressional delegation. U.S. Sens. John Barrasso and Cynthia Lummis and U.S. Rep. Liz Cheney all voted against the measure.
When the Wyoming Legislature convenes it will see a Gordon budget that’s “fairly flat,” compared to last year, Sen. Mike Gierau (D-Jackson), a member of the Joint Appropriations Committee told the Select Water Committee last week. The Appropriations Committee wanted to “stick with things that we thought would really help the economy,” Gierau said.
“I think water really was top of that list,” he said.
Regarding ARPA funds, “we left a significant amount of money for the floors [of the Wyoming House and Senate]… to let the members bring ideas of their own,” Gierau said. “I know there’s a lot of ideas percolating out there about what to do with that money.”