Army Engineers May Back Down on Move to Charge for Water

A top Army official agreed Thursday to reconsider a newly instituted policy that allows the Corps of Engineers to charge cities, counties and other local agencies hundreds of thousands of dollars for services that the corps traditionally has given away.

The action grew out of a dispute involving the Orange County Water District, which has protested the corps’ plans to charge an estimated $150,000 a year for water from the Prado Dam that otherwise would be released into the sea. The Prado Dam case was seen by some officials as a trial run at enforcing the new policy across the nation.

However, following a Capitol Hill meeting with members of Orange County’s congressional delegation and county water district officials, Robert W. Page, assistant secretary of the Army for civil works, said the Army may back off.

“We’re going to look at what the policy is, what it really means,” said Page, whose office supervises the Corps of Engineers.

“I don’t want something to happen here where we get a national policy . . . that’s going to be detrimental,” he said. “If that’s the case, then the policy is no good. If it’s not productive and it doesn’t serve the nation, I don’t think it’s a good policy.”

The recent policy change, made in response to growing concerns about federal budget deficits, could affect every community that benefits directly or indirectly from corps projects, including flood control and harbor dredging.

The revenue-raising plan would allow the corps to charge fees to public agencies based on the market value of the benefits that result from the corps’ work. Such benefits include the release of water from corps dams so local governments can capture the water in municipal reservoirs.

In many cases, including water reclamation, the value of the benefit would be far greater than the actual cost the corps incurs in providing it.

Orange County Reps. C. Christopher Cox (R-Newport Beach), Dana Rohrabacher (R-Lomita) and Ron Packard (R-Carlsbad) said they were pleased with the results of the meeting with Page and a deputy.

“I think the (new revenue) policy is being dropped like a hot potato,” said Cox, who organized the meeting.

“The corps here today acknowledged that their new policy is not one contained in (published corps) regulations, and does not have any specific legal authority,” said Cox, who was formerly an assistant legal counsel in the Ronald Reagan White House.

“This is a policy that they literally have written and are trying out on Orange County,” said Packard, whose district includes southern Orange County. “We wanted to remind them . . . that this will become a national policy that will apply to projects all across this country.”

Said Rohrabacher, whose district includes northwestern Orange County, “This is a monkey wrench thrown into the works at a time when people have already dedicated enormous time and effort and resources to a (water district reclamation) project.”

William R. Mills, general manager of the Orange County Water District, and James F. McConnell, Orange County’s Washington lobbyist, also attended the meeting.

The county water district, which maintains a vast underground reservoir that feeds about 40 local water districts, for years has informally arranged with the corps to use water from the Prado Dam in Riverside County to replenish the district’s underground water supply.

To do that, the corps must fill the reservoir behind the dam to a higher than normal level, and then release the water slowly so the water district can divert it from the Santa Ana River channel into “recharging ponds.” The ponds allow the water to seep into the deep deposits of gravel and sand that form the underground reservoir.

Several years ago, the water district sought to formalize its agreement with the corps, and agreed to pay for any costs that the water reclamation project might entail. Those costs could reach an estimated $15 million.

The first phase of the plan, which would involve reclaiming about 5,000 acre-feet of water (about 1.6 billion gallons) a year, would cost an estimated $3 million to $5 million. The money would largely pay for partial reconstruction of a habitat for an endangered bird species that would be flooded by the rising water.

The second phase of the reclamation project would add an additional 3,000 acre-feet of water to the district’s reserves, but would cost as much as $10 million more because a much larger area of the bird habitat would be flooded.

Last August, the Army told the water district that it would, as part of the new reclamation agreement, in effect charge the district for half of the value of the Prado Dam water that the corps formerly had given away.

According to Mills, the numbers work out this way:

If the district purchased 5,000 acre-feet of water on the open market, it could expect to spend about $500,000. The estimated annual cost of the improvements required for the first phase of the reclamation project is about $200,000. That leaves the district with a net annual savings of $300,000 over what it would spend if it acquired the extra water from an agency other than the Army.

Under its new revenue policy, the corps maintained that it would charge a fee equal to half of that savings, or about $150,000 a year, Mills explained.