Municipal Water District. And they have all stated that if a smallprojects bill is enacted into law it would assist them in building additions to their waterworks system that are seriously needed and that cannot otherwise be financed at this time.

The common problem that many of our districts have is that over a great number of years economies have been built up on groundwater supply. These ground waters, over the period of years, have been overdrawn. As they are overdrawn, the economy slides. The cost of developing water increases to the point that many of them have to suspend operations and it gives spotted remaining developments. Many of the areas have surface distribution systems. Others are served from individual wells on individual farms.

As the condition of water shortage of the ground-water supply develops, it becomes necessary to tie these farms together with surface distribution systems in order to bring supplemental water or to stablize the irrigation process.

To meet these problems, we have in our district recently sold four bond issues, each in a separate little economy, such that each development has no direct relationship or direct benefit to an adjoining economy some 5 or 10 miles separated.

We have found that bonds are sold on the basis of evaluation of lands in their present condition and not on the basis of the value or economy that will ensue following the development.

In many cases where we have sold bonds, we have only partially done the job because that is as far as our credit would go. In many cases a reasonable development period would make the difference. In some cases it is necessary to have a very long term for repayment. In our particular district, we have an historical investment of over $15 million and, of course, a large part of that is now of very little value because of the depletion of ground water which renders the particular facility inadequate because of either being in the wrong location or because of originally being designed as gravity structures where it is now necessary to pump water.

Relative to the use of the land in our district, 97 percent of the farm owners own 160 acres or less, such that family farms of man and wife are under 320 acres, and these farmers farm 79 percent of the land. By necessity a rotation plan is widely practiced whereby one heavy high-value crop is planted every second or third year, with grain in the interim years, lending itself very favorably to a family farm unit of from three to five hundred acres.

At this point, I would like to state the viewpoint of our own particular district.

We have heard that possibly there is some objection to a bill that does not provide or account for land limitations. Now, although we have a heavy investment, as I have stated, on these lands, and the financing that we would need in the various valleys, separate valleys, would only be a veneer of financing on the top of what has already been invested, dating back as far as, in some cases, to 1890, we, in our district, if it is necessary, to secure a satisfactory small projects legislation, would be willing to pay interest on the excess land under a similar provision as is provided for financing that particular portion of a project that would be designated as a domestic portion of the system, having in mind that even the farmers have to drink water.

We find that the maximum cost of $5 million per project or undertaking is comfortably adequate to finance the largest improvement

district in our area, and that is provided that all the historical background or investment is not considered as part of the project. In some cases we may have 2 or 3 million dollars worth of system built back in 1890 or subsequent, that no longer serves any use. this limitation in the case of betterment is on the new project, this would be an adequate maximum.

And if

Having completed several million dollars worth of the waterwork systems of high quality design and rigid construction whereby all the engineering costs, from preliminary planning to and including the supervision of construction, amounted to less than 6%1⁄2 percent of the total construction cost, we feel that we have demonstrated that design and construction can be competently and adequately done at the local level provided assistance in financing is available.

I am submitting for the record a summary of the district's construction cost, prepared by independent auditors, substantiating my brief statement. And this report states in the summary, that in the opinion of these auditors, the schedules present fairly the total district's cost relating to engineering allocations.

Mr. ASPINALL. Unless there is an objection, the material will be made a part of the file and not printed as part of the hearings. Hearing none, it is so ordered.

(The material referred to will be found in the file of the committee.) Mr. BOEN. My recent experience with sale of bond issues for these districts indicates that in addition to having a high rate of interest and in addition to not having the reasonable development period that is necessary to get in business, that the term that is available on good salable bonds of this nature is very short.

In discussing these matters with other districts, we find that the problem is also the same, and I think that that has been evidenced by the resolutions that have been drafted and sent to legislators, especially from the National Reclamation Association, right up to and including the last conference in Portland, where it was urged that small-projects legislation be enacted into law essentially the same in principle as H. R. 5301 as passed by the House in the 83d Congress.

That is all I have to present at this time.

Mr. ASPINALL. If you will, please remain at the table.

Mr. BOEN. Mr. Chairman, I have a statement from Mr. Howard Stoddard, who has testified before this committee at previous times and he has asked that I present to you his statement, if you would receive it.

Mr. ASPINALL. Would you advise the committee whether it is in support or opposition to the legislation?

Mr. BOEN. Mr. Chairman, Mr. Stoddard states that he speaks for 15 local districts in the Central Valley area of California, and that they strongly support the principles of the small-projects legislation. And also contained in his report is a summary of cost estimates on the various projects justifying the principles of the bill.

Mr. ASPINALL. May I see the statement, please?

(The document was handed to the chairman.)

Mr. ASPINALL. Unless there is an objection, the statement will be made a part of the hearings at this place.

Hearing none, it is so ordered.

(The statement of Mr. Stoddard follows:)

STATEMENT OF HOWARD STODDARD, CONSULTING ENGINEER OF LOS BANOS, CALIF.

I am Howard Stoddard, a civil engineer, partner in the firm of Stoddard & Karrer, civil engineers, with offices in Los Banos and Fresno, Calif. I graduated from the University of California in 1936 with a degree of bachelor of science in civil engineering. I have been a registered civil engineer in California since 1942. I am a member of the American Society of Civil Engineers and of the American Geophysical Union.

I was employed with the United States Bureau of Reclamation as an engineer on the Central Valley project in California for 12 years from 1936 to 1948. In 1948 I established an office for the private practice of civil engineering at Los Banos, Calif., specializing in irrigation and allied water matters. Since 1948 I have been actively engaged in these activities. In 1952, I formed a partnership and opened an office at Fresno, Calif., under the name of Stoddard & Karrer. Our firm is retained as consulting engineers for 12 irrigation and water districts and similar organizations. The area served by these districts exceeds 1,500,000 acres. We also perform civil engineering services for other agencies and individuals.

Fifteen irrigation districts in California have authorized me to represent them at this hearing, these districts having a gross area of over 600,000 acres. They support the principles of the proposed small-projects legislation and urge its passage.

While our experience has been principally in the field of constructing irrigation distribution systems, the problems involved in the construction of small projects are generally of the same magnitude as those in distribution system construction. It has been found by experience in constructing distribution systems in the Central Valley that irrigation districts can design and construct such systems for costs of between 30 percent and 50 percent below costs of similar systems designed and constructed under Bureau of Reclamation supervision. As an illustration of this fact, I would like to present some comparative figures for the proposed lateral system for Solano Irrigation District, Solano County, Calif. The gross irrigable area with the district totals 75,487 acres, of which 67,481 acres can be served by gravity. The balance of the area, 8,006 acres, can only be served by a relatively expensive pumping system.

In October of 1952 the Bureau of Reclamation prepared an estimate of design and construction of a system for the Solano district. The district then instructed our firm, as engineers for the district, to prepare an estimate for comparison. So that the comparison could be valid we used substantially the same criteria as those used by the Bureau and prepared an estimate to cover the cost of design and construction of a system that would perform the same services as that proposed by the Bureau. A comparison of the two estimates is as follows:

Comparison of estimates of cost: U. S. Bureau of Reclamation and Stoddard & Karrer

The difference in cost results from two factors: (1) The actual cost of construction exclusive of incidental costs is roughly $1 million less in our estimate. (2) The incidental costs including costs of surveys, designs, supervision of construction, legal and advertising expenses, etc., are some 30 percent less in our estimate than in the Bureau's. Savings in incidental costs amount to about $2,300,000.

We are confident that a first-class system can be built for the $7,369,000 shown in our estimate, if designed and constructed by the irrigation district. Our quantities and unit prices are generous, so that contractor's bids should be actually lower than those used in the estimate.

In further support of the contention that local agencies can construct systems at substantial savings as compared with Bureau constructed systems, we have had experience in such constructions during the past few years. In the case of the Chowchilla Water District in Madera County, Calif., we have constructed a partial system under an improvement district type of development. Maximum costs within the district approximate $50 per acre. In other parts of the district costs have been as low as $10 to $20 an acre. While the low costs result in part from utilization of natural channels for conveyance of water as a part of the distribution system, the area where the system cost the maximum of $50 per acre is served by a first-class system including a considerable length of large diamete" pipelines. The $50 per acre figure is approximately 50 percent of cost of similar systems constructed by the Bureau.

Mr. J. F. Sorensen, chief engineer and manager for the Orange Cove Irrigation District, has developed information for my use in support of this legislation. Mr. Sorensen holds a bachelor of science degree from the University of California in civil engineering. He is a registered engineer in California and a member of the American Society of Civil Engineers. Mr. Sorensen has had extensive experience in all phases of irrigation engineering and is well qualified to discuss costs of constructing irrigation distribution systems.

The Orange Cove District has substantially completed a distribution system under Mr. Sorensen's supervision. His information shows that by constructing their own system the Orange Cove Irrigation District was able to complete for an average cost of about $56 per acre a system comparable to one estimated by the Bureau to cost $188 per acre. While the system may not equal the one proposed by the Bureau in some respects, it is operating satisfactorily in serving the lands of the Orange Cove Irrigation District.

Mr. Sorensen showed that substantial savings were possible not only in actual construction costs, but also in incidental costs where the district saved 25 percent of the total cost of the completed system on that item alone.

The experiences quoted above, together with the experience of a number of other districts in California, clearly indicate that very substantial savings can be accomplished through local design and construction of small irrigation projects. This saving might, in many cases, mean the difference between feasibility and nonfeasibility of a small irrigation project. Many small irrigation projects designed and constructed by water-users organizations and financed with interest free Federal funds will be financially feasible where the same projects designed and constructed by water-users organizations with private financing or designed and constructed by the Bureau with interest-free funds would not be financially feasible.

The

In the past it has been possible to secure authorization for the construction of reclamation projects with the costs being returned to the Federal Treasury over a 40-year period with no interest charge on the costs allocated to irrigation. proposed legislation would make it possible for a local agency to have the advantage of the same type of financing and at the same time could make very substantial savings in the costs of the project through a program of local design and construction. The proposed legislation is a very effective way to carry on the well-established reclamation program and accomplish savings both to the water users and to the United States.

Mr. ASPINALL. Thank you, Mr. Boen.
Mr. BOEN. Thank you, Mr. Chairman.

Mr. ASPINALL. The next witness is Floyd Bonge, director, Eastern Municipal Water District, Hemet, Calif.

Do you have a prepared statement?

Mr. BONGE. I do not have a prepared statement, Mr. Chairman. Mr. ASPINALL. We shall be glad to listen to your presentation.

STATEMENT OF FLOYD BONGE, DIRECTOR, EASTERN MUNICIPAL WATER DISTRICT, HEMET, CALIF.

Mr. BONGE. I am a director of the Eastern Municipal Water District, the same district in which Mr. Boen is general manager and chief engineer. I am also a rancher, a farmer, in the Perris Valley of Riverside County, which is just out of Riverside a little way, near March Field.

My experience in that particular area has dated back some 20 years. I came to the valley when it had a good strong economy, due to the water conditions in the valley, low lift, cheap power, cheap operating costs, and an economy that had been built up for more than 50 years. Gradually, those water tables receded, power costs increased, equipment costs increased, and finally in a good many instances small water companies and small farmers who were operating on a limited basis were forced to give up their properties and go out of business because of the limited operation that they were able to carry on with the small amount of water that they were able to pump, bearing in mind that all of our water in the area is ground water.

During my time there, and in some parts of the valley, the water tables have fallen from 25 feet to as much as 280 feet, which, of course, makes it uneconomic to pump on a small scale and in most instances on a large scale.

Prior to that time there were large interests that came in there and bought large tracts of land, built huge pipelines and pumped the water out into another area where citrus was the main crop, which allowed them to do that particular job. When the water quality became undesirable for citrus, they moved out, sold the land, and that land is a part of the property that Mr. Boen speaks of here that is in the category of large holdings now that have gone back into grain farming, which reduced the land values on the tax rolls from a ratio of $60 to $150 an acre to where it is now down to $20 and $30, by virtue of having lost this water.

I personally am the vice president of the now defunct water company that went through the same evolution.

When I got my ranch, it had 150 acres of walnut trees and about that many grapes on it. I had to pull them out because of lack of water, lack of ability to refinance the water company that had been in existence for 40 years, and the deterioration of the system at that time, to replace the system with the water that was then available to be on an economical basis for the replacement of the system could not justify it. Money was not available for that kind of a project to do that. We could not justify the repayment on what water we had left or a repayment of what it would have taken to reestablish the system on the water that we were then able to pump. So, naturally, we had to abandon the water system.

20 acres.

We had quite a strong economy over a period of years that has built up in the poultry business. Those people operate from 10 to Sometimes they have 5,000 to 50,000 birds of various and sundry kinds, turkeys, and so forth. Those people, in many instances, have had to abandon their holdings just for the sake of insufficient water being available to them to carry on their flocks. They have had to move out in a good many instances because they were not financially able to drill additional wells or bring in additional supplies.