State Looks for Creative Ways to Buy Water

November 30, 2004

Idaho water officials will ask farmers to make an offer if they want to sell water, the Idaho Statesman reported.


According to the report, the request for water, which is limited to people who divert water from the Snake and its tributaries above Hells Canyon, is aimed at finding out how much water is available.


A panel appointed by the governor, the Idaho Water Board, which plans and helps fund water development, wants to buy 280,000 acre-feet of water to settle a dispute between groundwater and spring users in the Magic Valley and eastern Idaho. It also wants to ensure the state can meet its commitments to flush water downstream to aid endangered salmon migration.


According to officials, meeting that commitment will protect access to water in federal reservoirs like Lucky Peak, where Boise gets some of its water supply.


But a legislative interim panel, seeking to put together a package to resolve the southern Idaho water dispute, isn't done yet, according to the Idaho Statesman.


Sen. Laird Noh, R-Kimberly, co-chairman of the committee said, "There's still more work to be done."


The report revealed that the Water Resource Board doesn't have any money yet to buy water; however, it is considering selling bonds. Lawmakers also learned that bonding carries with it strict requirements that could limit their options for resolution. The requirements would come from the Internal Revenue Service, if the state wanted to issue lower interest tax-free bonds, or from bonding companies.


A bond attorney from Boise, Rick Skinner, said that a broad-based fee will be necessary along with strict enforcement provisions to ensure water users pay the fee. The fee, along with payments from the federal Bureau of Reclamation for the water used for salmon, would be dedicated to paying back the bonds.


According to Skinner, water districts would have to be required to turn off the water if a user doesn't pay his fee. If they continued to refuse to pay, a lien would have to be placed on their property to give bondholders the security they need.


Skinner also added that the payments from the federal government for salmon water are currently lease payments. They would have to change to outright grants or subsidies for the IRS to consider the bonds they secure as tax exempt.


The bonding proposal is part of a wide-ranging plan to dry up hundreds of thousands of acres of farms, buy out spring users, and to soak billions of gallons of water into the ground to stabilize the aquifer that underlies 10,000 square miles of Idaho from Ashton to King Hill. Any settlement will need approval of the Idaho Legislature and Gov. Dirk Kempthorne. A combination of groundwater pumping, reduced flood irrigation and the worst drought on record have dropped the water level in the aquifer by as much as 60 feet in some places and reduced spring flows into the Snake River, the Idaho Statesman reported.


Under state law, Idaho Department of Water Resources Director Karl Dreher could force thousands of farmers and businesses who pump water from the aquifer to shut off their pumps to meet the demands of other water users with older, senior rights. The sudden shutdown would bankrupt thousands of businesses and cost the state's economy up to $900 million, Dreher said.

Source:

The Idaho Statesman

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