Saturday, March 28, 2009

Water, water every where.

Sardis Lake was created when the U.S. Army Corps of Engineers constructed the dam in 1974 under a contract with the state of Oklahoma for the purpose of selling water to municpalities and industrial customers in Oklahoma. Oklahoma agreed to make 50 annual payments and pay the costs of operating the dam and the lake. However, the state was unable to sell the water it needed to recover its costs so the state discontinued payments to the federal government in 1997 (after 3 payments).The federal government sued the state for breach of contract and recovery of funds. The case wound its way through the courts and eventually Oklahoma lost the case when the Supreme court declined to hear the case.

State Treasurer Scott Meacham was quoted saying "We will have to sit down and negotiate an agreement." Ho Hum.

Well, the 15 million cost of the dam has now grown to a 71 million dollar bill and now the federal government wants its money and has threatened to with hold other federal funding until this is settled. Ho Hum.

The law of river waters is real clear. Use it, or lose it to down stream users. Oklahomans, particularly those in the Southeast think that the water is theirs for drinking and fishing. The Choctaws think that the water belongs to them. Texas wants the water. Central Oklahoma wants the water. The Legislature wants out!

How can Scott Meacham negotiate a deal, some say for around 40 million, without the legislature, which has no money? Watch out Rainy Day Fund. Who are the malfeasors here? In 1984 the state could have paid 15 million dollars and it would be over. Do you know what the current response is? "Well forty million is a bargain, it would cost 170 million to build that dam today." This is Oklahoma economic thinking at its best.

This issue seems dwarfed by the fact that Texas is going to end up with all the excess Oklahoma water before Oklahoma makes the move to hold on to it. There is however a move by a group, a loose group though, of Central Oklahoma Water Users who want to build a pipeline to Central Oklahoma from the Southeast part of the state. Better yet they want to use the proceeds from the sale of water to finance water infrastructure. Meanwhile the "Comprehensive Water Plan" for the state will be ready in 2011.

Simple questions. Where is the leadership here? Where is the money coming from?

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