Reclamation Facility Title Transfer Act of 2006 Statement ofWilliam E. Rinne, Acting Commissioner,Bureau of ReclamationU.S. Department of the InteriorBefore theEnergy and Natural Resources CommitteeSubcommittee on Water and PowerU.S. SenateonS 3832Reclamation Facility Title Transfer Act of 2006 September 21, 2006 Madam Chairwoman and members of the Subcommittee, I am William Rinne, Acting Commissioner of the Bureau of Reclamation. I am pleased to provide the views of the Department of the Interior on S. 3832, The Reclamation Facility Title Transfer Act of 2006. We support passage of this measure. S. 3832 would require the Secretary of the Interior to establish criteria to transfer title to Reclamation facilities and for other purposes. The Department believes that S. 3832 is consistent with an initiative that the Bureau of Reclamation currently has underway, that I will outline in my statement. We also believe that the goals of S. 3832 would be furthered by those efforts and we would appreciate the opportunity to work together to develop a comprehensive approach to title transfer. Background In 1995, the Bureau of Reclamation began an effort to facilitate the transfer of title to Reclamation projects and facilities in a consistent and comprehensive way. Reclamation developed a process known as the Framework for the Transfer of Title - establishing a process whereby interested non-Federal entities would work with and through Reclamation to identify and address all of the issues that would enable the title transfer to move forward. Once completed, Reclamation and the entity interested in taking title would work with the Congress to gain the necessary authorization for such a title transfer. Over the past ten years, the process has evolved and improved as we worked through various transfers some were successful and some not. Over that time period, we've learned important lessons and have modified the process to improve the efficiency and reduce the associated costs. Since 1996, the Bureau of Reclamation has transferred title to eighteen (18) projects or parts of projects across the west - pursuant to various Acts of Congress. On October 2, 2006, several features of the Provo River Project including the Salt Lake Aqueduct, as authorized by P.L. 108-382, are scheduled to be conveyed to the Metropolitan Water District of Salt Lake and Sandy. The remaining features of this project, that are authorized to be transferred by that Act, are scheduled to be transferred by the end of 2007. Before that can take place, however, several water districts and municipalities that benefit from these facilities are working together to address a number of complicated post-transfer project management operational issues. There are two additional transfers that are authorized and awaiting completion. In both of these cases, the districts receiving title are completing real estate surveys and preparing the quit claim deeds necessary to record the change of ownership with the county. In addition, there are two other authorized transfers which require compliance with various Federal laws including the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA) as called for by the authorizing legislation. Since each project is unique, each of the authorizing laws enacted has different terms. Each requires that different actions be taken prior to transfer such as the completion of the process under NEPA, or agreements with State and local agencies over recreation or cultural resources management. Lessons Learned While Reclamation has had success with title transfer of projects and facilities over the past ten years, we remain concerned that the process still takes too long, is potentially too costly and the number of new proposed transfers is declining. We believe that there may be a number of opportunities of mutual benefit that could come from the transfer of projects or facilities that are not being realized. As such we have undertaken a number of important activities that I want to outline that fit in with the goals of S. 3832. Comprehensive Review of Title Transfer: In 2003, a Team lead by the Department of the Interior's Office of Policy Analysis undertook a comprehensive review of Reclamation's title transfer effort. The review looked, not only at the process, but also at the individual transfers that succeeded and those that did not move forward. This effort included a survey of Reclamation employees involved in title transfer, a water users workshop and numerous interviews with water users that both pursued title transfer and those that opted not to pursue title transfer. It also included interviews with stakeholders from states, local governments, the environmental community and congressional staff members who were involved in various legislative efforts related to individual transfers at the time. With that data, the Team identified a number of important lessons and a number of programmatic changes were implemented to make the process more efficient and cost effective. I would like to highlight some of the lessons that this Team identified: Each Project is Unique: One of the early lessons that we learned and that is reinforced with each new title transfer effort is that each project and set of facilities is unique. Each project was authorized to address a particular set of circumstances, both hydrologic as well as economic. As such, a "cookie cutter" or "one size fits all approach" wouldn't meet the needs of the water users, the customers, other stakeholders or Reclamation. That isn't to say that there cannot be a set of criteria developed, but those would need to be flexible. No Such Thing As a "Simple Project": Many Reclamation projects may appear to be "simple" title transfers or "simple" projects for title transfer because complex or controversial issues are absent. However, even the "simple" title transfers such as those involving the American Fall Reservoir District #2 in Idaho, the Carpinteria Valley Water District in California, and the San Diego Aqueduct in California, had unique complexities that were unknown when we started the process that must be identified and addressed. Older projects or projects with facilities that cover a relatively large geographical area and particularly those where significant amounts of land or structures, such as houses or warehouses, are to be conveyed, tend have complicating issues that arise unexpectedly. Land records associated with older projects may be missing or the quality of the information in existing records is poor. Projects covering a wide geographical area, such as the San Diego Aqueduct, have a large volume of land records which must be located, assembled, and reviewed. Develop Local Agreements Prior to the Legislative Process: While Reclamation's title transfer process has evolved, we believe that one central tenet of the process continues to hold true. Since each project is unique and has their own potentially complex circumstances, the analysis of the implications of that transfer should be completed and an agreement should be reached on the terms and conditions before seeking authorization of the transfer of projects and facilities. Early on in the title transfer effort, some districts opted not to go through Reclamation's locally negotiated process. Instead, they immediately approached their congressional representatives in hopes of getting legislation passed and the facilities transferred quickly. In most cases, this proved to be a slower route than those that went through Reclamation's cooperative process. In many of these cases, there were issues or controversies related to the facilities that were not addressed at the local level between customers and stakeholders of the facilities. Instead, they were being negotiated through the legislative process. In some situations, where legislation was authorized prior to the analysis being completed, circumstances or problems were identified that required further legislative action to address, thereby delaying the ultimate transfer even further. In many recent cases, we have seen districts and interested non-Federal entities work with Reclamation to complete all the necessary analysis and public involvement, then reach an agreement prior to pursuing the legislative authorization from Congress. This has made the legislative process less controversial and has made implementation, once the transfer was authorized, smoother, less costly and more efficient. Two excellent examples are two proposed transfers currently before this Committee -- S. 2129, the American Falls Reservoir District #2 Conveyance Act of 2005 and S. 1965, the Yakima Tieton Irrigation District of 2005. In both these cases, Reclamation worked closely with the districts, the states involved and other stakeholders to identify all the issues and concerns and reached agreements. In doing so, we worked through some complications that arose, we reached agreement and the Administration was able to enthusiastically support both bills in testimony before this Committee. Not a Significant Budgetary Savings Available: When the title transfer effort began in 1995, there was an expectation that title transfer would result in a smaller Bureau of Reclamation (in terms of fewer staff and/or lower appropriations levels). While Reclamation's budget declined by 19% (between 1992 and 2000) and the number of Reclamation employees (FTEs) was reduced by 26 percent during this timeframe, this result has not occurred as a result of title transfer. The explanation for this is multifaceted: Nearly all those facilities transferred to date were already being operated and maintained by non-Federal entities. This means that neither Reclamation employees nor Reclamation appropriated funds were being used to operate and maintain the facilities. Therefore, there is limited budgetary savings, related to project operations, to be identified. Reclamation's administration of the facilities prior to transfer involved relatively few Reclamation employees (by FTE) and limited appropriated funds were associated with the projects and facilities that have been transferred. In those cases where some staff time may have been freed up, those resources have been redirected to other ongoing issues faced by their offices. The administration costs avoided due to the transfers have been relatively minor. Only relatively small facilities which tend to be widely scattered across Reclamation's jurisdictional areas have been transferred thereby diluting any potential Reclamation-wide, region or even area office impacts. In other words, there has not been a concentration of title transfers which would result in a significant savings. Managing for Excellence While Reclamation's work thus far has lead to procedural improvements and efficiencies, we determined that we needed to take further steps to find ways to reap the benefits of title transfer for Reclamation and for its customers. In 2006, as part of the Secretary's Managing for Excellence initiative (M4E), a Team was established to "determine if opportunities exist for mutually beneficial transfer of title to project sponsors in order to eliminate Reclamation's responsibility and costs for those facilities." This M4E Team is following up on the previous effort to identify the barriers that exist and the incentives that may encourage more entities to pursue title transfers. The M4E Team, using the data, conclusions and analysis of the previous effort is developing a set of recommendations on how Reclamation might reinvigorate its title transfer effort finding ways to reduce the barriers that discourage entities from pursuing title transfer and identifying appropriate incentives that might encourage entities to pursue title transfer. The Team received significant input from stakeholders at the Managing for Excellence workshop held in July, 2006 in Las Vegas, NV and they are expected to complete their effort early in 2007. We believe that the result of that effort will provide a significant benefit to meeting the goals that the sponsors have identified, and which we share, for title transfer. We hope we will have the opportunity to continue to work with this Committee when that Team's effort has been completed. We laud and share the goal identified in S 3832 for title transfer of Reclamation projects and facilities. Transferring title can result in increased efficiencies and other benefits that would be of significant importance to both the project beneficiaries as well as Reclamation. Furthermore, we believe that our M4E effort will add significant value to meeting this goal and we look forward to working with the Committee in this effort. That concludes my statement. I would be happy to answer any questions.