Water project shortfall leaves towns high and dry

SIOUX FALLS, S.D.  When President Obama's budget came out earlier this month, one thing was clear to Madison Mayor Gene Hexom: His town's wait for high-quality water probably will grow a lot longer.

The president's fiscal 2012 budget included just $493,000 for the Lewis & Clark Regional Water System, a paltry sum that officials say casts serious doubt on the timeframe for completing the project.

Considering the earmark moratorium that prevents Congress from steering more money toward the project — and the fact that all future construction costs are the responsibility of the federal government — it's a bitter development for officials in towns such as Madison that are scheduled to hook into the pipeline last.

"We realize that we're on the end of the line and it's going to take a few years," Hexom said. "But at this level of funding I'm very pessimistic."

Lewis & Clark will tap wells in the Missouri-Elk Point aquifer, process the water at a plant near Vermillion and pump it through 377 miles of pipe to wholesale customers in South Dakota, Iowa and Minnesota.

Of the 20 communities that are part of the project, nine will still be waiting when the treatment plant begins pumping water next summer — a scenario that assumes the project's backers can surmount a $6 million shortfall in this year's budget.

Madison would be the only South Dakota subscriber left out. The others are Sheldon, Sioux Center, Sibley and Hull in Iowa; and Worthington, Luverne, Lincoln-Pipestone Rural Water System and Rock County Rural Water in Minnesota.

These towns already have paid their share of the project's cost, but when they'll get a taste of the water is anybody's guess.

Troy Larson, the executive director of the Lewis & Clark project, said that even for a project as routinely underfunded as Lewis & Clark has been, the 2012 budget figure is absurdly low. If it stands, it would represent less than half of the organization's administrative budget — to say nothing about construction — and will mean further delays on a half-finished project that already is four years behind schedule.

"It's extremely frustrating for all the members, but particularly those in the outlying areas," Larson said.

"Once we have haves and have-nots, the have-nots are going to want their water as quickly as possible."

Madison will be the second-to-last town to hook into the system. And though Hexom said the town's water needs are basically flat, the city has been cautious with water use, for instance imposing year-round watering restrictions. At current rates of use, the city is in good shape, city engineer Chad Comes said. Still, the lack of additional capacity is keeping industry away.

"Can we take on economic development contracts that need lots of water?" Hexom said. "Probably not."

Another reason Madison chose to tap into the Lewis & Clark pipeline is the city's water quality issues. Madison has hard water, and treatment plant forewoman Connie Silva said she has been looking forward to getting Lewis & Clark water. Not that the city's water is necessarily bad, she said, "but as an operator you always want to do better."

Scott Wynja, the city manager in Sheldon, Iowa, said the shallow aquifer wells from which his town draws its water aren't adequate for a customer base that's growing 1% to 2% annually.

"We're quite concerned," he said. "I don't think people realize what a precious commodity water is."

There has been no serious talk about members dropping out since three Iowa subscribers did in 2003 and 2004, Larson said. For one, he said, the members have already put up the money — though in theory the board could approve a refund — and few have better options.

In the Lincoln-Pipestone Rural Water System in Minnesota, "the discussion has been more along the lines of, why didn't we ask for more water?" CEO Dennis Healy said.

While it waits for its turn to plug into Lewis & Clark, Healy's district is buying water from a nearby city and a rural water district in Iowa.

"It's not an emergency yet," he said, "but it could quickly become an emergency for us. If we exceed these sources, I don't know what we'll do next."

Former Sioux Falls mayor Gary Hanson helped get the Lewis & Clark pipeline project started two decades ago. He said it has been frustrating to see the government take on a promising infrastructure project and then "watch weeds grow around it."

Hanson, a former president of Lewis & Clark who now serves on the state's Public Utilities Commission, said planners knew from the time the project was incorporated in 1990 that it would take a long time to finish — the standing joke was that the system would eventually be called the Gary Hanson Memorial Pipeline. But 21 years?

"It's a huge, huge broken promise," he said.

Every year since 2003 project officials have requested $35 million for Lewis & Clark, the amount they say they need to finish it by 2018. They've never received that much.

According to Lewis & Clark's analysis, if the project were to get $20.4 million annually — the average appropriation from 2006 to last year — it would be done in 2023.

If that number drops to $10 million, however, it would be 2044 before outlying towns see any of the water. And the project's final price tag — estimated at $276 million in 2001 — would balloon to $638 million. The debt ceiling on the federal contribution has risen about 5% a year with inflation.

"It would be an all-around tough pill to swallow," Larson said of further delays. "And this is just — it's preposterous," he said, pointing to the 2044 projection.

And with "uncharted territory" of the earmark ban, there's a reason the $493,000 figure for fiscal year 2012 was so ominous, he said.

"We weren't worried before," he said. "We're worried now."

That's because in the past, the White House's outlay for Lewis & Clark has always been a token amount — it was understood that the number would then get a congressional bump. So it didn't matter, for instance, when President George W. Bush's administration zeroed out Lewis & Clark funding in 2009, because Congress went ahead and approved a record $27 million anyway.

But this September, as agencies submitted their budget requests to the Office of Management and Budget, "the handwriting was already on the wall" about earmarks, Larson said. The three-state congressional delegation pleaded with federal officials to offer a more realistic number, he said, but "the message went in one ear and out the other."

"We readily acknowledge, we would not be where we are today without the strong support from our tri-state congressional delegation," he said. "That being said, when we probably need them the most, they have benched themselves."

Larson said the $59.5 million in stimulus money that's paying for the treatment plant to be finished has been a godsend, but he said he thinks it's sometimes used as an excuse to direct money elsewhere.

"They may be thinking, wow, they've got all this stimulus money, they're good," he said. "Well, no, we're not good."

His message to Republicans who blame Democrats for the lowball budgeting and to Democrats who blame Republicans for the earmark ban: You're both right.