oral history interviews john b. buddjohnb.pdfsuggested citation: budd, john b., oral...

ORAL HISTORY INTERVIEWSJOHN B. BUDD

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STATUS OF INTERVIEWS:OPEN FOR RESEARCH

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Interviews Conducted and Edited by:Brit Allan StoreySenior HistorianBureau of Reclamation

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Interviews conducted–1994Interview edited and published–2008

Oral History ProgramBureau of ReclamationDenver, Colorado

SUGGESTED CITATION:

BUDD, JOHN B., ORAL HISTORYINTERVIEW. Transcript of tape-recorded Bureau ofReclamation Oral History Interviews conducted byBrit Allan Story, Senior Historian, Bureau ofReclamation, in 1994, in the regional offices of theBureau of Reclamation in Sacramento, California. Edited by Brit Allan Storey. Transcription byBarbara Heginbottom Jardee. Repository for therecord copy of the interview transcript is theNational Archives and Records Administration inCollege Park, Maryland.

Record copies of this transcript are printed on 20 lb., 100%cotton, archival quality paper. All other copies are printedon normal duplicating paper.

i

Oral history of John B. Budd

TABLE OF CONTENTS

TABLE OF CONTENTS . . . . . . . . . . . . . . i

STATEMENTS OF DONATION . . . xxxiii

INTRODUCTION . . . . . . . . . . . . . . xxxvii

ORAL HISTORY INTERVIEWS . . . . . . 1Born in Casper, Wyoming . . . . . . . . 1Father Worked for the Bureau of

Reclamation . . . . . . . . . . . . . . 1Moved to Indianola, Nebraska in 1947

. . . . . . . . . . . . . . . . . . . . . . . . 1Reclamation Housing in Indianola Was

in Barracks on an Old Prisoner ofWar Camp for Germans . . . . . 1

Attended Grammar School in Indianola. . . . . . . . . . . . . . . . . . . . . . . . 2

Moved to McCook, Nebraska, in 1952. . . . . . . . . . . . . . . . . . . . . . . . 2

Graduated from McCook High Schooland Attended Doane College . 2

Moved to Chicago to Become anInsurance Adjustor . . . . . . . . . 2

Worked for Atlas Tire, Battery, and

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Bureau of Reclamation History Program

Accessory Which SuppliedStandard Oil Companies' Stations

. . . . . . . . . . . . . . . . . . . . . . . . 3Owned and Operated a Service Station

in Birmingham, Alabama . . . . 3Father Died and He Moved to

California to Help His Mother 3Father and Mother Had Moved to

Coalinga and Then Los Banos,California, for Reclamation . . 4

In 1965 Took a Temporary Job withReclamation in Los Banos on aSurvey Crew . . . . . . . . . . . . . . 4

Moved to the Region in Sacramento in1967 . . . . . . . . . . . . . . . . . . . . 4

His Father, Jess Boyer Budd, Began toWork for Reclamation in 1932

. . . . . . . . . . . . . . . . . . . . . . . . 4Father Worked on Casper-Alcova

Project, Wyoming . . . . . . . . . 5Jess Budd Was a Civil Engineer Who

Worked on Location andPreconstruction . . . . . . . . . . . . 5

Jess Budd Moved to Coalinga,California, as Field Engineer forReaches 3, 4, and 5 of the SanLuis Canal . . . . . . . . . . . . . . . 5

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1964—Jess Budd Moved to Los Banosas Chief ofLocation/Preconstruction for theSan Luis Canal . . . . . . . . . . . . 6

Father's Education and Early Life . . 6Jess Budd "got a great deal of

satisfaction out of building stuff. .. ." . . . . . . . . . . . . . . . . . . . . . . 8

Reclamation Was a Small Organizationand Fairly Closely Knit . . . . 10

Living in the Reclamation Camp inIndianola, Nebraska . . . . . . . 11

Education Level at the ReclamationCamp Was Higher than in theTown . . . . . . . . . . . . . . . . . . 12

You Got to Know Your Neighbors'Problems Quickly . . . . . . . . . 12

Community Garden at the ReclamationCamp at Indianola . . . . . . . . 12

Feeling of Community at Indianola. . . . . . . . . . . . . . . . . . . . . . . 13

Things Changed When Staff Moved toMcCook . . . . . . . . . . . . . . . . 13

Office Relocated to McCook . . . . . 15Kansas River Project . . . . . . . . . . . 16Red Willow Dam . . . . . . . . . . . . . . 17Socializing in McCook . . . . . . . . . 17

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Father's Work in Location andPreconstruction . . . . . . . . . . . 19

Father's Specialty Was Canals andLaterals . . . . . . . . . . . . . . . . . 21

Community Garden at Indianola . . 21Canning Food . . . . . . . . . . . . . . . . 22Using the Locker Plant in Indianola

. . . . . . . . . . . . . . . . . . . . . . . 23Food Processing Was Often a

Cooperative Affair . . . . . . . . 23Most Vacations Centered Around Visits

to Family . . . . . . . . . . . . . . . 25Visiting Denver . . . . . . . . . . . . . . . 26Worked for Reclamation in Coalinga,

California, after His Junior Year. . . . . . . . . . . . . . . . . . . . . . . 28

Worked on a Survey Crew on the SanLuis Canal in Coalinga in 1961

. . . . . . . . . . . . . . . . . . . . . . . 29Father Moved to Los Banos as Location

and Preconstruction Wound Downat Coalinga . . . . . . . . . . . . . . 32

San Luis Canal . . . . . . . . . . . . . . . 33Region Was Responsible for Political

Activities with the State and theDesign—Field Constructed theProject . . . . . . . . . . . . . . . . . 34

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How the State and Reclamation Managethe San Luis Canal, a JointlyOwned Facility . . . . . . . . . . . 36

". . . Reclamation calls it San LuisCanal, the state calls it theCalifornia Aqueduct . . ." . . . 36

Reclamation Sometimes Has TroublePaying its Share of O&M for theSan Luis Canal . . . . . . . . . . . 38

Reclamation's Share of Water in the SanLuis Canal Is Roughly NinetyPercent Agricultural and TenPercent M&I . . . . . . . . . . . . . 38

Reclamation's Only Large M&ICustomer off the San Luis CanalIs the Santa Clara Valley WaterDistrict . . . . . . . . . . . . . . . . . 39

About Half of State Water in the SanLuis Canal Goes to theMetropolitan Water District ofSouthern California . . . . . . . 39

About Half of the State Water ProjectWater in the San Luis Canal Goesto Kern County for AgriculturalUse . . . . . . . . . . . . . . . . . . . . 40

How Pumping from the Delta and SanLuis Reservoir Supply Water to

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Users . . . . . . . . . . . . . . . . . . . 40How Electricity Generated on the

Central Valley Project Is Used onthe Project . . . . . . . . . . . . . . 41

Reclamation Delivers Power itGenerates Directly to PumpingPlants Through a TransmissionSystem Managed by the WesternArea Power Administration . 41

Dos Amigos Pumping Plant . . . . . 42". . . we pay WAPA an operation and

maintenance cost, but we do notpay them a capital cost for thegenerating facilities . . ." . . . . 43

Working as an Insurance ClaimsAdjustor for Liberty Mutual inChicago . . . . . . . . . . . . . . . . 44

Worked for Atlas, a Licensing Agentfor the Standard Oil Companies

. . . . . . . . . . . . . . . . . . . . . . . 45Took on a Service Station in

Birmingham, Alabama . . . . . 48Moved to Los Banos and Took a Job on

a Reclamation Survey Crew . 49". . . checking the grade behind the

slope trimmer on the canal . . .". . . . . . . . . . . . . . . . . . . . . . . 50

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". . . after about six months of that, why,I got moved onto a structure crew. . " . . . . . . . . . . . . . . . . . . . . 50

Moved into the Reclamation Office inLos Banos . . . . . . . . . . . . . . . 51

Programs Branch Did All the Reports. . . . . . . . . . . . . . . . . . . . . . . 51

Ted Peyton Headed the Program Officeand Was Very Detail Oriented

. . . . . . . . . . . . . . . . . . . . . . . 52Los Banos Was a Large Construction

Office at the Time . . . . . . . . 54". . . it was a big project–total project

approached half a billion dollars .. ." . . . . . . . . . . . . . . . . . . . . . 54

John Bucholtz, Project ConstructionEngineer at Los Banos . . . . . 55

Bucholtz Later Became ProjectConstruction Engineer for theTehachapi Crossing of the StateWater Project . . . . . . . . . . . . 57

Moved to the Region in 1967 When theLos Banos Office Downsized

. . . . . . . . . . . . . . . . . . . . . . . 60Applied for a Job as a Repayment

Specialist in Sacramento . . . 60"When I came to Sacramento, I never

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spent more than two weeks in thesecond step of any grade, until Igot my twelve. . . ." . . . . . . . 62

As a Repayment Specialist HeAdministered and NegotiatedContracts . . . . . . . . . . . . . . . 63

Worked on Developing Contracts withDiverters on the SacramentoRiver . . . . . . . . . . . . . . . . . . . 63

The Alternative to Contracting on theSacramento River Was EitherLitigation or Adjudication of theRiver . . . . . . . . . . . . . . . . . . . 67

1976 and 1977 Were Dry Years . . 74Riparian Water Diverters in California

. . . . . . . . . . . . . . . . . . . . . . . 75Pre-1914 California Water Rights . 76Reclamation's Water Right for the

Central Valley Project WasAssigned in 1927 . . . . . . . . . 77

In 1970 He Was Assigned to Work onthe San Luis Unit of the CentralValley Project . . . . . . . . . . . . 78

Subsidies and Repayment on theCentral Valley Project . . . . . 79

Excess Lands Issue on the CentralValley Project . . . . . . . . . . . . 81

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"There were a number of congressmenand senators who made theirliving beating up on Reclamation .. ." . . . . . . . . . . . . . . . . . . . . . 82

Congressman George Miller and theCentral Valley Project . . . . . 82

Trusts and the Reclamation Reform Act. . . . . . . . . . . . . . . . . . . . . . . 86

Senator Gaylord Nelson and AcreageLimitation in the Central ValleyProject . . . . . . . . . . . . . . . . . 88

Hearing Regarding the First WestlandsContract . . . . . . . . . . . . . . . . 88

Ralph Brody, Manager of the WestlandsDistrict . . . . . . . . . . . . . . . . . 89

The Vietnam War meant "We weregetting eight to ten million dollarsfor distribution systemconstruction, when we neededtwenty to thirty for an optimumconstruction schedule . . ." . . 89

"NEPA was enacted in '69, and nobodyenvisioned the impact that thatwas going to have. . . ." . . . . 90

". . . in hindsight I think Brody made asignificant mistake by not signingthe contract when he had the

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opportunity . . ." . . . . . . . . . . 91". . . one of the conditions that the

Senate imposed . . . was thatWestlands agreed to merge with aneighboring district called theWest Plains Water StorageDistrict. . . ." . . . . . . . . . . . . . 92

Westlands Offered to Provide theMoney for Construction IfReclamation Could Guarantee itWould Be Paid Back . . . . . . 94

Establishment of the San Luis TaskForce . . . . . . . . . . . . . . . . . . . 95

". . . there's still about 40,000 acres inWestlands and the West Plainsarea that do not have distributionsystem facilities. . . ." . . . . . . 96

". . . landowners . . . constructedpumping plants and pipelines . . .temporary facilities . . . aroundtwenty years old . . ." . . . . . . 96

During the Carter Administration ThereWere Westlands Issues withReclamation Staff in Washington

. . . . . . . . . . . . . . . . . . . . . . . 98Also Worked on Sacramento Valley

Canals and the San Felipe Unit

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Contracts . . . . . . . . . . . . . . . 98Worked as the Staff Guy for the San

Luis Task Force . . . . . . . . . 100Became a GS-12 in 1972 . . . . . . . 100"I got my thirteen [GS-13] in '89 when I

moved into the job that I'm innow. . . ." . . . . . . . . . . . . . . 101

Need for Negotiating Early RateAdjustments in Contracts . . 103

How Adjustable Rate Contracts Work. . . . . . . . . . . . . . . . . . . . . . 105

". . . the first contract with an adjustablerate was Contra Costa in 1970, butprior to that time, the rates werefixed: for ag water . . ." . . . 105

". . . it became evident to us that we hadto fix that situation . . . if youprojected 8-, 9-, 10-, 12 percentinflation rates . . . the water rate,just to cover O&M would have tobe $35.00 or $40.00 or the deficitwas going to be horrendous. . . ."

. . . . . . . . . . . . . . . . . . . . . . 106Reclamation's Long-term Contracting

. . . . . . . . . . . . . . . . . . . . . . 107". . . construction cost indexes . . .

[were] basically flat from 1950 . .

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." . . . . . . . . . . . . . . . . . . . . . 108". . . it took a while to adjust thinking to

[inflation in the 1960s and 1970s]. . ." . . . . . . . . . . . . . . . . . . . 108

". . . it became pretty evident that weneeded to provide [for inflation]in our contracts . . ." . . . . . . 108

"So once the adjustment in thought wasmade . . . we started looking at . . .how do you do it . . ." . . . . . 109

"And we spent a great deal of timetrying to develop the process,particularly for agricultural ratesetting. . . ." . . . . . . . . . . . . 109

". . . State Water Project . . . chargedbased on number of miles youwere away from the source . . ."

. . . . . . . . . . . . . . . . . . . . . . 110". . . they contend that there is no

subsidy involved in the StateWater Project, but . . . theirpricing structure was set up toaccommodate agriculture in KernCounty and have the MetropolitanWater District users . . . pay alarger share of the total costs thanthey otherwise would. . . ." . 110

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"We base our rates on what we call apostage stamp rate: that is, the guyat the head of the canal pays thesame as the guy at the end of thecanal for the same service. . . ."

. . . . . . . . . . . . . . . . . . . . . . 110". . . but that was the deal that was cut to

make a State Project viable, wasthat Met would pick up the lion'sshare of the costs, and they wouldstructure their rates in thatmanner. . ." . . . . . . . . . . . . . 111

". . . it took us a long time to walkthrough that process, and tobecome comfortable with annualadjustments. . . ." . . . . . . . . 111

". . . probably five years ago . . . werecognized we would have theability to, without hiring a wholebunch of people to do it, we'dhave the ability to be fairly timely.. . ." . . . . . . . . . . . . . . . . . . . 112

The 1970 Contra Costa Contract Calledfor Adjustment after Twenty-twoand Thirty-two Years . . . . . 113

In 1975 the San Felipe Contracts Calledfor Adjustment Every Five Years

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. . . . . . . . . . . . . . . . . . . . . . 113Part of the Ability to Adjust the

Contracts Regularly Had to Dowith Technological AdvancesWhich Made it Possible forReclamation to Respond MoreOften . . . . . . . . . . . . . . . . . . 114

Received a Performance Award forPutting Word Processing into theRepayment Branch . . . . . . . 114

Adjusting to New Technology . . 118San Luis Canal and California

Aqueduct . . . . . . . . . . . . . . 119The San Luis Unit of the Central Valley

Project Was Authorized as a JointState-Federal Facility . . . . . 119

California's California AqueductTravels 600 Miles from the Deltato San Diego . . . . . . . . . . . . 120

Reclamation Shares the San Luis Canalfrom the Delta to Kettleman City

. . . . . . . . . . . . . . . . . . . . . . 120Reclamation Pays the State to Operate

the Joint Facilities in the San LuisUnit . . . . . . . . . . . . . . . . . . . 121

State/Federal Communication overOperation of the San Luis Unit

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. . . . . . . . . . . . . . . . . . . . . . 121Periodically Reclamation Is Late Paying

its Share of Operating Costs forthe San Luis Unit . . . . . . . . 121

Reclamation Contractors on the SanLuis Canal . . . . . . . . . . . . . 122

How Reclamation Reviews California'sOperation of Joint Facilities in theSan Luis Unit . . . . . . . . . . . 123

Drainage Became a Major Issue in the1970s . . . . . . . . . . . . . . . . . 124

The San Luis Act RequiredReclamation to Provide Drainage

. . . . . . . . . . . . . . . . . . . . . . 125Existing Water Users Feared Westlands

Development Upslope MightAffect Their Land and Went toCourt to Stop Development 126

"We constructed about eighty miles ofthe San Luis Drain from theKesterson Reservoir site upstreamto about the southern third ofWestlands . . ." . . . . . . . . . . 126

". . . the issue of discharge of thedrainage water to the Deltabecame quite controversial. . . ."

. . . . . . . . . . . . . . . . . . . . . . 126

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Operation Plan for Kesterson Reservoir. . . . . . . . . . . . . . . . . . . . . . 126

Reclamation was forbidden "to spendmoney acquiring land for thedrain north of Kesterson, until theState of California had a agreedon a point of discharge. . . ."

. . . . . . . . . . . . . . . . . . . . . . 127Westlands Wanted to Hook Drains to

the Existing Collection Facilityand Use Kesterson as EvaporationPonds . . . . . . . . . . . . . . . . . 127

Selenium in the Drain Water . . . . 128How Kesterson Became a Refuge

. . . . . . . . . . . . . . . . . . . . . . 128Selenium Concentration Proved Toxic

to Wildlife . . . . . . . . . . . . . 129"We've purchased additional land for

Fish and Wildlife to operate as arefuge, in a mitigation measurefor the reservoir. . . ." . . . . . 130

". . . we directed Westlands to plug theirdrains and quit discharging intothe San Luis Drain . . ." . . . 130

Westlands Sued over Closure of the SanLuis Drain and Other Issues

. . . . . . . . . . . . . . . . . . . . . . 130

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"Holum Memorandum" of 1964 Agreedto a Merger of Westlands with theWest Plains Water StorageDistrict and Negotiation of aWater Contract for the ExpandedArea . . . . . . . . . . . . . . . . . . 131

Westlands Is Managing Drainage Waterin Situ . . . . . . . . . . . . . . . . . 132

"The depth to shallow groundwater isdecreasing every year, and it's ahighly saline water . . ." . . . 132

"The Westlands District itself has spenta great deal of money looking atalternative forms of treatment fordrainage water to remove theundesirable constituents . . ."

. . . . . . . . . . . . . . . . . . . . . . 133Selenium Is Toxic in Very Small

Quantities . . . . . . . . . . . . . . 133". . . when the drain . . . reached its

maximum rate of flow, it wouldexport from the valley theequivalent of one 100-railroad-cartrain a day in salts. . . ." . . . 135

"It's managed now basically as dry land. . ." . . . . . . . . . . . . . . . . . . . 135

". . . we covered the reservoir site with

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dirt hauled in, several millionyards of material, and covered thereservoir site. . . ." . . . . . . . 136

San Luis Task Force . . . . . . . . . . 137". . . it was a political exercise,

originated by Congressman[George] Miller, whose principalmotivation was to putReclamation and the San LuisUnit in a bad light, and they did agreat job. . . ." . . . . . . . . . . . 138

Repayment of the San Luis Drain Costs. . . . . . . . . . . . . . . . . . . . . . 141

". . . there was no need for negotiationswith the water users, and noopportunity to do that until thecontract came up for renewal, butit left a major hole in that we wereaccumulating costs at a far greaterrate than we were getting anyrepayment. . . ." . . . . . . . . . 142

Served as Acting Chief of theRepayment Branch from 1980into 1982 . . . . . . . . . . . . . . 143

In 1982 Had a Heart Attack and DavidHouston Arrived as RegionalDirector . . . . . . . . . . . . . . . 145

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Work on the Coordinated OperationsAgreement for Operation andAccounting for Joint Facilities ofReclamation and the State WaterProject . . . . . . . . . . . . . . . . 145

". . . 1968 There Were SomeNegotiations on an AgreementThat Was Never Signed, butProvided a Framework . . . forDaily Operations. . . ." . . . . 146

Assumptions from the 1969 DraftCoordinated OperationsAgreement Did Not Prove Out

. . . . . . . . . . . . . . . . . . . . . . 147Negotiators Arrived at Another

Agreement in 1982 . . . . . . . 147Negotiations Resumed in 1983 and

Resulted in a Signed Agreementin 1986 . . . . . . . . . . . . . . . . 148

Changes Between 1965 and the SignedAgreement in 1986 . . . . . . . 148

Major Environmental ObligationsChanged Things . . . . . . . . . 149

"It became evident we couldn't justcontinue to add pieces to theproject to increase the capabilityof the project. . . ." . . . . . . . 149

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"Wild and Scenic Rivers Act was usedto foreclose any kind ofdevelopment on the North Coastof California, and about fortypercent of the state's water supplyflows down North Coast rivers . ." . . . . . . . . . . . . . . . . . . . . . 149

San Francisco Bay Was Added to theResponsibilities of Reclamation

. . . . . . . . . . . . . . . . . . . . . . 150Reclamation's Team for Negotiating the

Coordinated OperationsAgreement Included Four People

. . . . . . . . . . . . . . . . . . . . . . 151The State Used More and Higher Level

Staff in Negotiating theCoordinated OperationsAgreement than Did Reclamation

. . . . . . . . . . . . . . . . . . . . . . 152Issues Involved in Negotiation of the

Coordinated OperationsAgreement . . . . . . . . . . . . . 154

State Water Rights, in Reclamation'sView, Were Junior toReclamation's . . . . . . . . . . . 155

"In the Coordinated OperationsAgreement negotiations, we

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opened up the negotiations to thepublic . . ." . . . . . . . . . . . . . 156

Overview of the Central Valley Project. . . . . . . . . . . . . . . . . . . . . . 157

"Total project water use in the north isabout 2½ million acre feet, and inthe south about 4 million acre feet. . . the majority of the water inthe south, comes from the north . .." . . . . . . . . . . . . . . . . . . . . . 157

Operation of the Delta-Mendota Canal. . . . . . . . . . . . . . . . . . . . . . 159

Because it Is Used So Heavily it IsDifficult to Schedule Maintenanceon the Delta-Mendota Canal

. . . . . . . . . . . . . . . . . . . . . . 160Harvey O. Banks Pumping Plant, a

State Facility . . . . . . . . . . . . 160During 1987-1988 Negotiated a

Contract to Sell the State SurplusWater and They would ProvideExtra Conveyance Capacity onthe State Water Project . . . . 161

". . . new hydrology studies and newwater quality obligationseliminated any surplus water inour system, and any surplus

xxii


capacity in their system. So thecontract was pointless. . . ." 162

". . . it seems like I spent an awful lot oftime negotiating things that nevercame to fruition . . ." . . . . . . 163

Contractors on the State Water Project. . . . . . . . . . . . . . . . . . . . . . 163

Metropolitan Water District of SouthernCalifornia Is Basically Urban butDoes Provide Some Ag Water toHigh-value Crops . . . . . . . . 164

"The state contracts' total obligation isabout 4.2 million acre feet. . . .But . . . they are not capable ofdelivering that quantity. . . ."

. . . . . . . . . . . . . . . . . . . . . . 164"Their delivery capability is around 2½

to 3 million acre feet a year. . . .". . . . . . . . . . . . . . . . . . . . . . 165

Peripheral Canal . . . . . . . . . . . . . 166"The idea of a Peripheral Canal has

been around at least fifty years . .." . . . . . . . . . . . . . . . . . . . . . 166

". . . Peripheral Canal has beenassumed. . . . [because] theinternal Delta channels are notadequate to move the quantities of

xxiii


water . . . that have to be moved . .." . . . . . . . . . . . . . . . . . . . . . 166

"The Delta is a prolific fishery, introuble now . . ." . . . . . . . . . 167

State and Federal Pumping PlantsConfuse the Fish in TheirMigrations and Movements 167

"We proposed Peripheral Canal, and infact we did a feasibility report . . .that went on the shelf in 1967. And basically . . . we hadconcluded that the issue was toocontroversial . . ." . . . . . . . . 168

". . . it's one of these things that if youhad done it . . . you may not haverun into the environmentalproblems that you have now. . . ."

. . . . . . . . . . . . . . . . . . . . . . 168"The concept was very simple . . . build

a canal that took the majority ofthe water that was going to beexported at the pumps out of theSacramento River . . . [run] itthrough a canal around theperiphery of the Delta to thepumps . . . each time that the canalwould cross a natural stream

xxiv


channel, you would . . . releasewater into this channel and . . .create a constant . . . downstreamflow in all of the Delta channels . .." . . . . . . . . . . . . . . . . . . . . . 169

The Peripheral Canal Became aPolitical Issue . . . . . . . . . . . 170

". . . nobody has been able to promotethe idea with any kind of success. The California Department ofFish and Game has consistentlyadvocated construction of anisolated facility . . ." . . . . . . 170

"I think the scientific community isslowly but surely arriving at aconsensus that something similarto a Peripheral Canal is absolutelynecessary to protect theenvironmental health of the Delta. . ." . . . . . . . . . . . . . . . . . . . 171

". . . as I recall, our proposal was for afacility that had a capacity ofabout 18,000, maybe 20,000 cubicfeet per second. . . ." . . . . . . 172

". . . intended also to provide a prettygood habitat for resident fishery . .. but you needed the capacity at

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that size so that you could makethe releases . . ." . . . . . . . . . 172

"It [Peripheral Canal] will get built . . .It's just the event that triggers ithas probably not happened yet . .." . . . . . . . . . . . . . . . . . . . . . 173

Peripheral Canal Was Part of theOriginal Plans for the Project

. . . . . . . . . . . . . . . . . . . . . . 174Current Thinking about the Peripheral

Canal Is as an EnvironmentalFeature . . . . . . . . . . . . . . . . 175

Peripheral Canal Would Allow BetterControl of Water in the Delta

. . . . . . . . . . . . . . . . . . . . . . 175Irrigators in the Delta Were among the

Original Opponents of thePeripheral Canal . . . . . . . . . 176

In the 1970s Delta Farmers WereReplaced by Environmentalists atWater Quality Meetings . . . 176

Delta Irrigators Wanted to Assure HighQuality Water and Maintenanceof Levees in the Delta . . . . . 177

Effects of Levee Failure in the Delta. . . . . . . . . . . . . . . . . . . . . . 178

Reclamation Has Avoided Spending

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Money on Levee Maintenance inthe Delta . . . . . . . . . . . . . . . 178

The Peripheral Canal Would Mean lessIncentive to Keep the DeltaLevees in Good Condition . 178

Why Peripheral Canal Has Not BeenBuilt . . . . . . . . . . . . . . . . . . 179

Peripheral Canal Faces Strong PoliticalOpposition . . . . . . . . . . . . . 180

Northern California Opposes SendingWater to Southern California

. . . . . . . . . . . . . . . . . . . . . . 182Fisheries in the Delta . . . . . . . . . . 185Striped Bass . . . . . . . . . . . . . . . . . 186Winter Run Chinook Salmon . . . 187Delta Smelt . . . . . . . . . . . . . . . . . 187Striped Bass . . . . . . . . . . . . . . . . . 188Salmon Smolts Fall Prey to Striped

Bass . . . . . . . . . . . . . . . . . . 188Water Quality Issues in the Delta 189Water Quality in the Delta Is Geared to

the Needs of Corn . . . . . . . . 190Coordinated Operations Agreement for

the State Water Project andCentral Valley Project . . . . 190

The Projects Share Facilities and theCoordinated Operations

xxvii


Agreement Details How the WaterAccounting Is Taken Care of

. . . . . . . . . . . . . . . . . . . . . . 191Coordinated Operations Agreement

Negotiations Began in 1960 andthe Parties Signed an Agreementin 1986 . . . . . . . . . . . . . . . . 192

Coordinated Operations AgreementAlso Details How Surplus Flowsin the Delta Are Split Between theTwo Projects . . . . . . . . . . . . 194

In the Early 1980s Reclamation and theState Thought There Would BeSurplus Water in the CentralValley Project and SurplusPumping Capacity in the StateProject . . . . . . . . . . . . . . . . 195

Paragraph 10-H of the CoordinatedOperations Agreement Arrangedfor Negotiation of an Agreementfor Reclamation to Trade Waterfor State Conveyance Capability

. . . . . . . . . . . . . . . . . . . . . . 196". . . there was an ethic that was

developed towards the waterconservation in the SacramentoValley that basically eliminated

xxviii


that return flow. . . ." . . . . . 197". . . it's evident to everyone involved

that the quantities of water thatwere assumed to be available inthe '80s, simply are not available .. ." . . . . . . . . . . . . . . . . . . . . 197

"They weren't going to make pumpingcapacity available to us unless wesold them some water. So thewhole package just sort of fellapart . . ." . . . . . . . . . . . . . . 198

Promotions after Moving to Sacramento. . . . . . . . . . . . . . . . . . . . . . 198

In 1989 Became Regional LiaisonOfficer . . . . . . . . . . . . . . . . 199

"Most of my assignments come from . .. the regional director. . . ." . 199

The Regional Liaison Officer PreparesResponses to CongressionalInquiries and Prepares Commentsor Testimony on LegislationAffecting the Mid-Pacific Region

. . . . . . . . . . . . . . . . . . . . . . 200"The other part of my job is doing just

about anything that needs doingand that fits with my background.. . ." . . . . . . . . . . . . . . . . . . . 200

xxix


Often Serves as Tour Guide for Visitors. . . . . . . . . . . . . . . . . . . . . . 200

Good Working Relationships withMembers of Congress andStaffers . . . . . . . . . . . . . . . . 201

Congressional Staff . . . . . . . . . . . 201". . . I think [members and staff are]

fairly open. The major exception,of course, being Miller andBradley's staff. Their agenda isdefinitely hidden. . . ." . . . . 204

P.L. 102-575, of Which Title XXXIV isthe Central Valley ProjectImprovement Act (CVPIA) 204

Some Staff Are Having TroubleAdjusting to Changes atReclamation . . . . . . . . . . . . 205

CVPIA Accelerated Change atReclamation . . . . . . . . . . . . 207

CVPIA Made Three Water Allocations. . . . . . . . . . . . . . . . . . . . . . 208

Reclamation and the Fish and WildlifeService Disagree on Interpretationof CVPIA . . . . . . . . . . . . . . 208

Cutting Back 10- or 15 Percent Can BeDone, but 30- to 40 Percent IsMuch Harder . . . . . . . . . . . 210

xxx


"There was a lawsuit filed by Westlands[asking that we comply] . . . withthe National EnvironmentalPolicy Act. And just the thoughtthat Fish and Wildlife Service hadto comply with NEPA, drovethose people nuts. . . . ." . . . 211

Reclamation's Interaction with WaterUsers . . . . . . . . . . . . . . . . . . 213

As Technology and KnowledgeExpanded We Began to IdentifyProblems We Didn't Know aboutPreviously . . . . . . . . . . . . . . 215

Red Bluff Diversion Dam on theSacramento River . . . . . . . . 216

Recent Events Have Alienated WaterUsers . . . . . . . . . . . . . . . . . . 217

Bob Pafford as Regional Director 218Ed Horton, Acting Regional Director

. . . . . . . . . . . . . . . . . . . . . . 219Billy Martin, Regional Director . 220Mike Catino, Regional Director . 221David Houston, Regional Director

. . . . . . . . . . . . . . . . . . . . . . 222". . . there wasn't any question that the

stuff we were doing out here wasbeing done to assist election of

xxxi


Republican members of Congress,governors, senators, stateassembly. . . ." . . . . . . . . . . 226

David Houston and Jim Ziglar . . 227Larry Hancock, Regional Director

. . . . . . . . . . . . . . . . . . . . . . 227Roger Patterson, Regional Director

. . . . . . . . . . . . . . . . . . . . . . 228

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(Intentionally blank)

xxxiii


STATEMENTS OF DONATION

xxxiv


xxxv


xxxvi


xxxvii


INTRODUCTION

In 1988, Reclamation began to create a historyprogram. While headquartered in Denver, the historyprogram was developed as a bureau-wide program.

One component of Reclamation's history program is its oralhistory activity. The primary objectives of Reclamation'soral history activities are: preservation of historical data notnormally available through Reclamation records(supplementing already available data on the whole range ofReclamation's history); making the preserved data availableto researchers inside and outside Reclamation.

The senior historian of the Bureau of Reclamation developedand directs the oral history program. Questions, comments,and suggestions may be addressed to the senior historian.

Brit Allan StoreySenior Historian

Land Resources Office (84-53000)Office of Program and Policy ServicesBureau of ReclamationP. O. Box 25007Denver, Colorado 80225-0007(303) 445-2918FAX: (720) 544-0639E-mail: [email protected]

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(INTENTIONALLY BLANK)

1


ORAL HISTORY INTERVIEWSJohn B. Budd

This is Brit Allan Storey, senior historian of the Bureau ofReclamation, interviewing John B. Budd, of theSacramento Office of the Bureau of Reclamation, in theregional office of the Bureau of Reclamation inSacramento, California, on March the16th, 1994, at aboutnine o'clock in the morning, this is Tape 1.

Storey: Mr. Budd, could you tell me where you wereborn and raised and educated and how you cameto be at Reclamation, please.

Born in Casper, Wyoming

Budd: Sure. I was born in Casper, Wyoming, in 1940.

Father Worked for the Bureau of Reclamation

Moved to Indianola, Nebraska in 1947

My father was a Bureau of Reclamationemployee, and therefore we moved from oneproject to another, and in 1947 we moved toIndianola, Nebraska, and that really began myformal education, I guess, in the Nebraska schoolsystem. The living quarters in Indianola, whichwas a town of about 800, were a differentexperience.

Reclamation Housing in Indianola Was inBarracks on an Old Prisoner of War Camp for

Germans

The town, of course, had no housing available.

2


There was a major Reclamation project proposedfor that area, there were a significant number ofpeople moving in, so we lived in barracks thathad been used as prisoner of war camp forGerman P-O-Ws during World War II. And theyconverted that into government housing, we livedthere.

Attended Grammar School in Indianola

I went to grammar school in Indianola, and thenin 1952, when I would have been the beginningof sixth grade, my parents moved to McCookabout eleven miles away.

Moved to McCook, Nebraska, in 1952

They had a house built there, and the office wasbeing moved from the prisoner of war camp intoMcCook, which was a town of about 6,000,maybe 7,000.

Graduated from McCook High School andAttended Doane College

We moved to McCook, I graduated fromMcCook High School in 1958, and went toDoane College in Crete, Nebraska.

Moved to Chicago to Become an InsuranceAdjustor

Graduated from there with a degree in economicsin 1962, and my first job out of school was as anadjustor for an insurance company in Chicago,and that was a real eye-opener for a kid from

3


Nebraska to move into Chicago and beginworking on insurance claims–the big city and thepoverty and the slums and the nature of theinsurance claims business was something that Ireally wasn't ready for. Doctors and lawyers, inmy experience, were always the pillars of thecommunity, and in the insurance claims business,why, you run into a pretty seedy group in manyinstances.

Worked for Atlas Tire, Battery, and AccessoryWhich Supplied Standard Oil Companies' Stations

So that lasted for about a year, and I went towork for the Atlas Tire, Battery, and Accessoryorganization, which supplied the Standard OilCompanies with tires for their service stations.

Owned and Operated a Service Station inBirmingham, Alabama

And after about a year of that, why, I decided Ineeded to own a service station, since that'swhere all the money was being made, and Imoved to Birmingham, Alabama, and took over anew Standard Oil of Indiana station down there. And that lasted about nine months, and Ipromptly went bankrupt for a number of reasons.

Father Died and He Moved to California to HelpHis Mother

About the time the business was failing, why, myfather passed away.

Father and Mother Had Moved to Coalinga and

4


Then Los Banos, California, for Reclamation

They had, in the meantime, left McCook andmoved to Coalinga, California, and then to LosBanos, California, where he was working on theSan Luis Project. My mother's health was okay,but she was having a tough time adjusting to myfather's death, and I was also. With no gainfulemployment in Birmingham, why, I packed upand moved to Los Banos.

In 1965 Took a Temporary Job with Reclamationin Los Banos on a Survey Crew

And about the only job in town there was atemporary job with Reclamation. I took thattemporary job. I was known by most of the folksin Reclamation there–at least my father wasknown. The project construction engineer I hadknown–his son and I had grown up together. Itwas kind of like an old family gathering, and thetemporary appointment led to a permanentappointment, and when the construction in SanLuis began to wind down, why, I moved up toSacramento, and I've been in Sacramento [since]1967.

Moved to the Region in Sacramento in 1967

I moved to Los Banos in '65, then to Sacramentoin '67, and I've been here ever since.

Storey: Okay. Let's go back. What's your father's name?

His Father, Jess Boyer Budd, Began to Work forReclamation in 1932

5

1. There may be some confusion about the canals in the San LuisUnit of the Central Valley Project. From Reclamation's Tracy PumpingPlant to the San Luis Forebay and Reservoir Federal water flows in theDelta-Mendota Canal. From California's Harvey O. Banks Pumping

(continued...)


Budd: My father's name was Jess Boyer Budd. Hestarted with Reclamation in 1932. I'm not surewhere he started, but he worked on a couple ofpipeline projects in Arizona, but most of that wasdetail assignments rather than permanentassignments.

Father Worked on Casper-Alcova Project,Wyoming

The first permanent assignment that I rememberis the Casper assignment, on the Casper-AlcovaProject.

Storey: What did he do?

Jess Budd Was a Civil Engineer Who Worked onLocation and Preconstruction

Budd: He was a civil engineer. Later on in his career,why, from McCook, 1947 until 1965 when hepassed away, he was location andpreconstruction. He was a field engineer,surveys, gathering design data and that sort ofthing out of McCook for the Kansas RiverProjects facilities.

Jess Budd Moved to Coalinga, California, as FieldEngineer for Reaches 3, 4, and 5 of the San Luis

Canal1

6

1. (...continued)Plant water flows to the forebay and reservoir in the CaliforniaAqueduct. South of the San Luis Reservoir and Forebay is a jointfacility known to the state as the California Aqueduct and toReclamation as the San Luis Canal.


Then when he moved to Coalinga, California, hewas field engineer in the Coalinga Office, had theresponsibility for location and preconstruction forReaches 3, 4, and 5 of the San Luis Canal, andthat was in 1962.

1964—Jess Budd Moved to Los Banos as Chief ofLocation/Preconstruction for the San Luis Canal

In '64 he moved to Los Banos and took over thejob of chief of location/ preconstruction for theSan Luis Canal.

Storey: Do you remember where he was educated?

Father's Education and Early Life

Budd: He's a graduate of the University of Wyoming,1931.

Storey: As a civil engineer?

Budd: Yes.

Storey: So he came to Reclamation during theDepression. (Budd: Uh-hmm.) Did he everdiscuss the relationship of coming toReclamation in the Depression with you? Did heever talk about that?

7


Budd: He talked about, there was a gap of about a yearbetween the time he graduated and the time hecame to work with Reclamation. He was bornand raised in Big Piney, Wyoming, which isranch country, relatively small community. Hisgrandfather had settled there in the 1870s, and sohis family was well established in thecommunity. His father was the postmaster whenthe Republicans were in, his mother was thepostmaster when the Democrats were in, and itworked out fairly well. But after his collegedays, why, he spent about a year knockingaround from one job to another–most of the timehe was driving a truck, and the majority of thattime it was a coal truck. That was in the BigPiney area.

When he finally located a government job, whythen he relocated to Casper. But things weretough in the Depression in Wyoming, as theywere everywhere. The impression I have, and Iguess need to keep in mind, I never knew him asan adult, really, we never spent much timetogether. After I graduated from college, why, Iwas gone. Really, after I graduated from highschool. I would see them on summers, but therest of the time I was gone, so we didn't get muchof a chance to explore the good old days when hewas a boy, and that sort of thing. But theimpression I had is that the folks in westernWyoming that were involved in cattle ranching,pulled their operations back and pared themdown a little bit, but there really wasn't asignificant change in what was going on inwestern Wyoming. The beef market was okay,they could grow what they needed for

8


subsistence, they always had plenty of steak onthe table, it was not a problem. And that part ofthe country was never particularly prosperousanyway, so the fact that some areas of thecountry had gone downhill really didn't havemuch of an impact on the Big Piney area.

Storey: Did his Mom and Dad put him through school? Did he work his way through school? Do youhappen to know how that worked?

Budd: He had odd jobs, but I think for the most part hecould rely on his family. If you split it up, again,the impression I have is about, probably he wasresponsible for about a third of it, and the familytwo-thirds of the cost of going through school. He worked, he had jobs on campus, he had jobsduring the summer. He never could be just astudent, but he did have help from his parents. They were not well-to-do people, but there wasenough.

Storey: What was his attitude about working forReclamation?

Jess Budd "got a great deal of satisfaction out ofbuilding stuff. . . ."

Budd: I think he really enjoyed it. I know he got a greatdeal of satisfaction out of building stuff. I thinkthat was the thing that really kept him around,because there were times when he would comehome frustrated and bitch about this, or complainabout that, or especially when he was workingwith the contractor's folks and the contractor'sforemen were making half again as much as he

9


was, or twice, and didn't have near the educationhe did. He felt real frustrated about that. Andwhen you asked him, "Well, why don't you go towork for the contractor?" why, there were severalreasons: One being the seasonal nature of thework, and job-to-job hopping on a much shorterturnaround time than if you worked forReclamation. But the second one, I think, wasthat he had a real sense of accomplishment, thatthirty years, forty years, whatever, he could goback and look at things that had been constructedand say, "I had a hand in doing that. I decidedwhere it would go," or "the planning data that Igathered was a significant contribution toconstruction of these facilities. I think he feltthat development of the water supplies for thesmall communities in the West had dramaticeffects on the local economies, on the localpeople, and almost invariably, as far asReclamation was concerned, they were positiveeffects. Particularly, I think that was true duringhis lifetime. The negative things that have shownup over the last few years were things that werenot an issue or a concern thirty years ago. So hegot a great deal of satisfaction from his job. Hethought he was making a contribution to thecountry that he lived in, and that, overall, therewas something there that he could be realsatisfied being a part of.

Storey: Did he talk a lot about that?

Budd: Not a lot. He wasn't a particularly talkativeindividual, but every once in a while, when you'dask him, "Well, if you don't like the pay, or ifyou're mad at So-and-So, why are you doing

10


this?" why, he'd be a little forthcoming about thatkind of stuff. But he was not a particularlytalkative individual. He was kind of close.

Storey: Were there a lot of tensions with supervisors andother employees of Reclamation, do you think?

Reclamation Was a Small Organization and FairlyClosely Knit

Budd: No, I don't think so. I think, for the most part, Iwould think certainly less than you would havein a normal organization. I think Reclamation,historically, because of just the nature of theorganization, the fact that it's small. After you'vebeen around about fifteen or twenty years, why,you know almost everybody, you've run acrossthem–particularly in your line of work. If you'rein construction, you will have moved from oneproject to another; if you're in preconstruction,the same thing. You end up circulating, and ifyou don't know an individual personally, youknow somebody who does, or somebody who'stalked about them. And there are very fewsurprises in the supervisor-employeerelationships because everybody knowseverybody else, they know what to expect fromthem, whether he's a good boss or mediocre;good employee, mediocre. And I think that thefamily relationships that were there, the feelingof family, probably made working forReclamation a better place to work thanmost–certainly most Federal agencies–andprobably better than most–if you ignore the paysituation–better than most private organizations.

11


Storey: If I'm understanding you, you're saying that therewas sort of a community spirit in the Bureau ofReclamation?

Living in the Reclamation Camp in Indianola,Nebraska

Budd: Yeah, no question about it. When we lived inIndianola, you got to keep in mind that what wehad there were tar paper barracks in the middle ofNebraska, and the first winter we were there, Ican remember walking to the top of the place welived, on the snow. The wind blew snowdriftsout there that was just–it was horrendous: two orthree weeks of blizzard. It was downright cold. And what they had done, is they had had barracksconverted into apartments, and each barrack therewould be three or four apartments, depending onwhether it was a GS-2's apartment, or whether itwas a GS-14's. The more grade you had, thebigger apartment you were entitled to. But thatcommunity was isolated, it was four or five milesfrom town–"town" being Indianola, which wasnot a lot bigger than the government camp. Ithink there were about 400 people, ultimately,that lived . . . Ah, it may not be that many–closerto 200 people–that lived in the camp, and 800lived in town. So the town wasn't a lot biggerthan the government housing. McCook, the next-largest town, was about twelve miles away, andthat was only 7,000. And to go to someplacebigger, why, you were five or six hours. So youwere isolated.

Education Level at the Reclamation Camp Was

12


Higher than in the Town

You had a sense of community, becauseeverybody there, their level of education washigher than the local community–keep in mind asmall, rural, Nebraska farming community–not alot of the folks there had college degrees, and asignificant portion of the people working for theBureau were engineers or geologists or otherfolks who have a fair amount of technicaltraining. And they spoke the same language,they were involved in the same activities, theylived very closely.

You Got to Know Your Neighbors' ProblemsQuickly

Some of the apartments, the walls were just paperthin, so you got to know what kind of problemsyour neighbors had real quickly.

Community Garden at the Reclamation Camp atIndianola

And there was a community garden, andyou'd go out in the spring and they would hire alocal farmer to come in and plow it and till it upand disc it. And I think there's probably somecompetition to lay out the water distributionsystem for the garden, given that all these guyswere civil engineers building canals and that sortof thing, why, they had a fairly sophisticatedwater distribution system. Everybody had a plot,you drew a number and that got your garden plot. Almost everybody in the camp had a garden. Isuspect part of it was a carryover from the

13


victory gardens that everyone had during the war,but it was a gathering place, socially. In theevenings, after work, why, the families would goout and work in the gardens. They'd be weedingor planting or doing whatever was necessary,maybe picking, if you had something that wasmature or ripe. And the kids played together, theadults talked and gardened, and if somebody'szucchini was ripe before somebody else's, why,you know, everybody shared. That's probablywhere the rumor that there's only one zucchiniplant in the whole world got started, becauseeverybody had zucchini.

Feeling of Community at Indianola

But you knew everybody. They built an ice rinkfor the kids, got a piece of heavy equipment outthere and bulldozed out a thing about the size ofa football field, put up some dikes and filled itwith water, and when it froze, why, we skated. When it was slush, why, we skated or didwhatever you could do with mud and slush. Butit really was a community. The interests of thepeople were the same, and I think there wassome . . . I don't know whose part it was on,whether it was on the part of the local folks, orjust on the part of the Bureau people, but therewas not a lot of interface with the localpeople–particularly in Indianola.

Things Changed When Staff Moved to McCook

When the office moved to McCook, thatchanged, and I'm not sure whether maybe it's myperception as I grew older, but I don't remember

14


very much going on with the local communitywhen Indianola was the headquarters.

Storey: Do you remember anything when you went toschool about any tensions between theReclamation kids and the town kids in Indianola?

Budd: In Indianola I think there was. We came in fromthe camp in a group. I don't remember muchabout it, but in thinking about it, I don'tremember having a lot of friends who lived intown. My friends were the ones that lived out atthe camp and whose parents worked forReclamation. I don't remember a lot of friends intown. And that was in elementary school.

Storey: Do you remember any other social activitiesbesides gardening and ice skating out at thecamp?

Budd: There were Christmas parties for the kids. I canremember Santa Claus showing up out there. They did an awful lot of stuff. There was arecreation hall, and there were adult socialactivities, of course, the kids weren't invited to. They had a number of dances, dinners, potlucks,that sort of thing. I would venture at least oneactivity a week that involved most, if not all, ofthe people as invitees. Whether they participatedthat particular week would have been up to them. And I think potlucks with a record player and anopen bar were probably the most common,dinner-dancing, relatively inexpensive way tospend a weekend evening.

Storey: They would do that at the recreation hall?

15


Budd: Yeah.

Storey: What was in the recreation hall? What was itlike, do you remember?

Budd: All I remember is a big room. I don't rememberanything other than that.

Storey: Basketball? Nothing like that?

Budd: Nope.

Storey: Well now, why did you all start moving . . . Dideverybody move to McCook?

Office Relocated to McCook

Budd: The move to McCook was spread over a coupleof years, but the office was being relocated toMcCook. I can't tell you why. My presumptionis to move the people into the mainstream of thecommunity. The other assumption is that thehousing there at the camp was marginal. I mean,the places were drafty, there was no airconditioning, the heating was a central heatingplant that was a long ways away from some ofthe units, and so some of the places were cold inthe wintertime–particularly if you get a blizzard,why, the wind would howl. I can rememberhearing the noise the wind made when it blew. You could hear it howling. I shiver now thinkingabout how cold I felt. I don't remember that Ireally was cold, but I think the housing waspretty marginal. I suspect all of the facilitieswere pretty well stressed, and people startedmoving as they could afford to, because the

16


commute wasn't that bad. It was a twelve-milecommute, which is nothing today, and most ofthat would have been fifty miles an hour, or sixtyon a paved highway. So they began to move toMcCook as housing caught up to the demand. Ithink that was the biggest part of the problem isthere simply wasn't any housing available, eitherin McCook or Indianola, for that many people. Itwas a major influx of folks into a communitythat–I don't think McCook is a whole lot largernow than it was then. And that's forty years ago. So the infrastructure simply wasn't there whenthe project got cranked up. It took a while for theschools, for the community itself, and forhousing to be available to handle that manypeople. I suspect that's why the office waslocated where it was to begin with, and probablypart of the reason then that they moved wasbecause what they had really wasn't adequate fortheir needs.

Storey: Was the camp at Indianola on the project?

Kansas River Project

Budd: No, the Kansas River Project was scattered over,well, probably a hundred miles, maybe furtherfrom Enders. I can't remember the name of thecommunity. Enders Lake, anyway. I can'tremember the name of the dam. In the west, on atributary to the Republican River, down intoKansas, on down on Elder Creek and some of theother creeks down in Kansas. It was spread overquite an area, and there was nothing proposed orunder construction in the immediate area. In fact,there never was.

17


Red Willow Dam

Eventually they built Red Willow Dam, whichwas just north of McCook about eight or tenmiles, but that wasn't built until well into theproject construction days.

Storey: When your family and other folks began to moveto McCook, did the community feeling of theReclamation people change?

Socializing in McCook

Budd: I think to some degree. I think for the kids it waseasier. I know for me it was. I didn't have aproblem getting involved in the communityactivities there–I was involved in sports anddoing all the stuff that kids in school do, so therewas very little, I had no feeling of isolation. Ihad some good friends all through high school–infact, most of my friends in high school were fromMcCook, rather than from Reclamation. I don'tthink there was a problem. Certainly when Iremember the social crowd that my parents hungaround with, again, for the most part, it wasReclamation employees gathering–their bridgeclubs, their dinner gathering groups and that sortof thing– were Reclamation employees. Mymother was pretty active in church and we gotinvolved in church activities and met a lot of thelocal people through that. And that wasn'tsomething that had happened when we were inIndianola. We'd gone to church, but it hadn'tbeen a particularly active part of our family. That changed in McCook, I'm not sure why–adifferent minister, a different church–for

18

2. Note that in the text of these interviews, as opposed toheadings, information in parentheses, ( ), is actually on the tape. Information in brackets, [ ], has been added to the tape either by theeditor to clarify meaning or at the request of the interviewee in order tocorrect, enlarge, or clarify the interview as it was originally spoken. Words have sometimes been struck out by editor or interviewee inorder to clarify meaning or eliminate repetition. In the case ofstrikeouts, that material has been printed at 50% density to aid inreading the interviews but assuring that the struckout material isreadable.The transcriber and editor have removed some extraneous words suchas false starts and repetitions without indicating their removal. Themeaning of the interview has not been changed by this editing.


whatever reason, that did change. There was stilla separation. You still had the same basicproblem that the guys, for the most part it wasguys, working for Reclamation, had differentinterests, different backgrounds, than the localfolks. The local folks were primarily themerchants, schoolteachers, who were obviouslythe better-educated of the local people. It was arailroad town, so there were some railroad folksthere, but again, the level of education, theinterest, the job ties, all that stuff I think stillprevailed. And because it was, I guess, a smalltown, it was very easy to see all of your friends,your business associates, socially. If you gotscattered out over fifty miles, if you were livingin Denver, for example, or in Sacramento–myfriends here [Sacramento]2 are primarilynonbusiness friends, and I would think maybegeography has something to do with it.

Storey: What did you say your father specialized in?

Budd: Location, preconstruction.

19


Storey: What did that consist of?

Father's Work in Location and Preconstruction

Budd: They did most of the surveying. If you had aproposed project, why, your planners would drawsome preliminary plans and the preconstructionpeople would then go out, take those plans, andgo out and do the surveys necessary for thedesign and construction people to do the finaldesign work on the project. And onceconstruction started, they also did somesurveying during construction, but most of it wasthe preliminary work prior to the final designsbeing made.

Storey: And that's what your father specialized in? (Budd: Right.) Did he ever mention anyparticular problems they had in that? People notwanting to let them on the land, or anything else?

Budd: He talked some about that, but it was not a bigproblem for the most part. You'd have a feweccentric landowners, but . . . .

END SIDE 1, TAPE 1. MARCH 16, 1994.BEGINNING SIDE 2, TAPE 1. MARCH 16, 1994.

Budd: Most of the people were anxious for the projectto be constructed, and they were more thancooperative. They would provide whateveraccess was necessary, a drink of water on a hotday, or a cup of coffee on a cold day. It was agood relationship, very, very few problems. Every once in a while you'd run into someonewho . . . For the most part, any condemnation

20


proceedings that took place were not donebecause the guy didn't want to sell, it was donebecause the guy didn't agree with the price. Mydad testified in court on some condemnationcases involving the former category, that is, theguy doesn't want to sell. My father would haveto testify with respect to why location wasnecessary across this property, if you ran thecanal a different route, for example, what theincreased cost was, or what the engineeringproblems would be in selecting an alternative,and why it was necessary to locate the facilitywhere it was located. But again, that wasn't alarge part of his job.

Storey: So they were exploring alternative locations forthe project during this?

Budd: Sure. Yeah. And alternative from the standpointof minor variations, as opposed to major changes. It would be minor variations due to localtopography, rather than alternative projectformulation plans.

Storey: The way we would think of it under NEPA[National Environmental Protection Act] forinstance.

Budd: Right.

Storey: In this process was your father mostly thinkingabout the location of canals and smaller features?

Budd: Yes.

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Storey: In other words, the dams, the location of storagereservoirs would be set by somebody else?

Father's Specialty Was Canals and Laterals

Budd: Yes. His specialty was canals and laterals, andsomebody else did the dam location work. Thatwas the way it was broken down, yeah.

Storey: Did he ever talk about problems or things thatworked well in canal locations? Do youremember any conversations?

Budd: I don't remember any conversations about . . .

Storey: Do you remember any conversations about waterrights?

Budd: No. Water rights weren't an issue that he wasinvolved in. I would presume that there would besignificant disputes over water rights, but thatwas not something that he was involved in, and Idon't recall any conversations about water rights.

Storey: Do you remember anything about water rights ordisputes over water in your youth in thatcommunity?

Budd: No.

Storey: That's interesting. I know myself and RolandRobison, from Upper Colorado, his and myearliest memory is of a water rights discussionwith family friends.

Community Garden at Indianola

22


While you were out at Indianola, what kindof garden crops were you growing?

Budd: I particularly remember peas, but they were peas,corn, squash. There was "one zucchini plant"that fed the whole world, and I don't likezucchini, I guess that's why I remember it. Therewas, rather than an individual melon plot, therewas a community melon area, where they plantedtwo or three acres of cantaloupe and watermelonand you helped yourself to whatever you wantedout of that area, and everybody volunteered laborand went over and weeded and watered and thatsort of thing. Green beans. But I particularlyremember the peas because I liked to go out andpick them right off the vine. I got in trouble forthat a lot. I'd help myself, and invariably thesweetest ones were the youngest and thetenderest, and those hadn't matured, and mymother always objected to that, that she wasn'tgetting her money's worth if you picked theyoung tender pea pods and ate those. You weresupposed to let them mature into full-grown peas.

Storey: I had puppies that used to go pick our peas. (Budd: Oh, is that right?) They would go out andeat them right off the vine. Do you rememberanything about preserving food?

Canning Food

Budd: Oh, there was always something being canned. There was a strawberry patch out there, mymother made strawberry preserves. She would

23


buy fruit and pears, peaches, and can that. Shecanned beans. This was before the days ofgeneral freezer application, but there was alocker plant in town and we had a locker. Andthey would buy a quarter of a beef, andoccasionally freeze some produce. It was not areal generally accepted way to preserve stuff atthat time. It was mostly canned beans and fruitof one kind or another. She made all of her ownjams and jellies and that sort of thing.

Storey: You say the locker plant was in town, whichtown?

Using the Locker Plant in Indianola

Budd: In Indianola. There was one in McCook too, butIndianola had one of it's own.

Storey: So it was maybe three miles away.

Budd: Yeah.

Storey: Was this a general practice among theReclamation folks, or do you know?

Food Processing Was Often a Cooperative Affair

Budd: Yeah, I think so. I think almost everybody– and Iknow that it would be–I won't say a communityaffair–but it would be a cooperative affair. Ifstrawberries were in, why, there would be four orfive people in somebody's kitchen putting upstrawberry preserves. If it was bean time, why,there would be a group of people doing that. Itwas not usually an individual effort, it was a

24


community or a cooperative effort. It's easier tohave somebody doing rings, somebody doingjars, somebody cutting beans or whatever it was,and turn it into a minor factory operation.

Storey: Did you ever get involved in that?

Budd: Oh yeah, I washed beans and shelled peas, andgot to peel fruit. Yeah, the kind of stuff that mostkids get involved in.

Storey: You mentioned that the garden plots were chosenby lot. Does that mean that it changed everyyear?

Budd: Yes.

Storey: So that becomes a problem with a fruit likestrawberries, for instance, which are perennial. Was that also a common plot, or how was thathandled?

Budd: I don't remember. Strawberries may have been acommon plot. I don't remember.

Storey: Do you remember anything about whether therewas somebody sort of ramrodding the gardenactivity or anything like that?

Budd: I don't remember. I was eight, ten years old, so Iwouldn't have been necessarily privy to that,unless it was a major flap. I'm sure that therewas a chairman of the garden committee, but Idon't know that there was any controversy or thatit ran smoothly. I have no recollection of it.

25


Storey: Do you have any idea how big your garden plotwas?

Budd: Oh, it was huge, but I have no idea how big itwas.

Storey: Huge to a ten-year-old maybe.

Budd: I went back in '88 and took a look at the housethat I grew up in, and I hadn't seen it for twenty-six years, I guess. I was amazed at how small itwas. It always seemed like it was anadequate–actually, pretty good-size house when Iwas a kid growing up in it. But when I went andtook a look at it, I couldn't believe that thatwas–whoa! that's just a little teeny house. So thegarden plot, I suspect, is the same way. It mayhave been 100 by 50 [feet] or something like that,but I know when we were out there hoeing weedsor picking or doing whatever, it just seemed likefrom one end to the other was an awful longways.

Storey: When you're talking about the house you grew upin, you're talking about the McCook house?

Budd: Yes.

Storey: Did you all go on vacations?

Most Vacations Centered Around Visits to Family

Budd: Usually a vacation . . . I only remember onevacation that wasn't related to a family visit ofone kind or another, and that was in 1957, Iguess, when we came . . . This was kind of

26


business related. My mother was a nationaldelegate for the Nebraska P-T-A [Parent TeacherAssociation], and their conference was in SanFrancisco. So we came to California. Well,actually, I guess it was related to a family visit,because my dad's sister was living in SanBernardino, so after three or four days in SanFrancisco, we went to San Bernardino, and thendown to Disneyland. It still was a family-relatedexercise. The vacations primarily were visits tomy mother's folks who lived in South Dakota, ormy father's family who lived in Wyoming.

Visiting Denver

There would be a day trip, a weekend maybe, ifwe went to Denver. I don't remember going toOmaha, and they were about the same distance. But occasionally we'd go to Denver, maybe along weekend. And there were a couple ofamusement parks there, Elitch's Gardens, andanother one, I don't remember the other one. (Storey: Lakeside?) Lakeside, that was it, yeah. We would get to do something like that. But interms of, say, a two-week vacation to gosomeplace or to go camping or something likethat, why, we never–my dad wasn't a camper. His attitude was, he spent all day outside, almostall the time, and he didn't need to do that on hisvacation. He liked to play golf, but we didn'ttake any trips.

Storey: Did his job involve a lot of travel?

Budd: He was gone probably every other week. He

27


traveled a lot, for the most part down into theKansas part of the project. He would be in thefield . . . I suppose if you figured it out it'dprobably be pretty close to twenty weeks out ofthe year–maybe not all week, but three or fourdays.

Storey: In other words, he was not at home at night.

Budd: Not that much. He was home more than half thetime, but he was gone a lot.

Storey: What did that mean to the family?

Budd: Well, I always looked forward to him cominghome, because he always brought a comic bookhome. He was there whenever anythingimportant was going on when I was in highschool, he was always there for the weekends,and when we were doing that kind of stuff. Mymother didn't work. I assume other than just nothaving him there, why, there wasn't a majordisruption in routine. If my mother had a joboutside of the home and had to take care of thehome too, why, it would have been asignificantly greater burden on her, trying to takecare of my sister and me. But she never talkedvery much about it, even later when we did talkabout him. She never had a problem with theamount of travel involved in his jobs. I'massuming, from my perspective, there wasn't amajor problem. I was always glad to see himcome home. I was always either in bed or atschool when he left, so that was not a problem.

Storey: Now you went from McCook to college, is that

28


right?

Budd: Yes.

Storey: So that was when you began to lose contact withhim as a Reclamation employee.

Budd: Right, I came back and lived [at] home thesummer after I was a freshman in college. WhenI was in school I'd get home Christmas, ofcourse, and Thanksgiving and Easter vacations,and then maybe one or two other weekends. Itwas about 200 miles. It was a five-, six-hour trip,and I did have a car my junior and senior years,but it wasn't something you'd want to take on alot of trips across Nebraska. They would comedown and visit me more often than I would gethome. Then the summer after my sophomoreyear, I had a job there in Crete, Nebraska, drivinga truck there, and I stayed there.

Worked for Reclamation in Coalinga, California,after His Junior Year

The summer after my junior year, during thatyear my folks moved to California, and thatsummer I came out to Coalinga and lived withmy folks there, and I worked for Reclamationthere. He was the head of the office there and Igot on as a student aide, summer help, andworked on survey crew out of Coalinga on acanal. And then after I graduated, why, I movedto Chicago, and we got together maybe a coupleof times a year, maybe not that often.

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Storey: What was going on in Coalinga again, please?

Worked on a Survey Crew on the San Luis Canalin Coalinga in 1961

Budd: My dad opened an office down there forReclamation. He was field engineer, it was thestart-up of the San Luis Unit of the CentralValley Project, and the lower reaches, Reaches 3,4, and 5 of the San Luis Canal were under thepurview of the Coalinga Office–the location andpreconstruction surveying was being done out ofthat office. And I guess eventually he had four orfive survey crews working for him. The summerI was there, I worked on the first crew, and thenthere was another crew put together during thatsummer. So when I left, went back to school,why, there were two crews, I think, working onit, maybe three, working out of that office.

Storey: And how many people on a crew?

Budd: Usually four, occasionally five. But if you weredoing work in brush or something like that, youmight need a fifth guy to do your line-of-sightclearing and that sort of thing, but usually fourguys on a crew. You'd have a party chief, aninstrument man, and then either a head and rearchainman or two rodmen if you're running levels,something like that.

Storey: You're going to have to explain to me what achainman does, what a rodman does, and so on.

Budd: Well, the chainmen are the guys that measure thedistance. Your instrument man will give you a

30


line of sight and tell you where you need to be,but the guys that are running the chain are theguys that–it's just a sophisticated tape measure. It's operated, the rear chainman is the guy that isresponsible for the proper tension on the chain,given the temperature of the day and that sort ofthing. So if you're working in real hot or realcold conditions, why, your measurements can beoff, depending on the temperature. So given that,you have to have the right number of pounds ofpull on the chain. So those two guys areresponsible for that. The rodmen are the guysthat hold the surveying rods vertically so that theinstrument man can read elevations off of thoserods. They're also the guys that dig the holes,that pound the stakes, get the ice for the waterbucket, get the water for the water bucket, cleanthe truck–they do all the grunt work, or ninetypercent of the grunt work, on a survey crew.

Storey: And which position did you occupy?

Budd: The lowest.

Storey: Rodman?

Budd: Yeah. I had no training, a strong back, and aweak mind, I guess.

Storey: Well, with, say, four or five crews, it sounds tome then as if we're talking somewhere in thevicinity of twenty to twenty-five people. (Budd:Yes.) Did the makeup of the crews rotate, or wasit a pretty fixed crew? You went out every daywith the same group of people?

31


Budd: Yes, you did, unless there was a problem. Youknow, you get five guys locked up in a truck, orfour, you can have personality problems, and youmay rotate people amongst crews until you canfind a crew that fits. But once you do that, if youhave a crew that's working well together, theylike each other, or at least work well together,they'll stay fixed that way for as long as they'restill in that office. If you got a good crewworking together, you don't monkey with it. Youkeep it intact if you can.

Storey: And this was the summer between your juniorand senior year that you came out? (Budd:Right.) What year was that, then?

Budd: That would be 1961.

Storey: How many other folks were working for your dadat the Coalinga Office?

Budd: (sigh) There were, when I started there, therewere four of us, when I first arrived. There wasjust one survey crew, but by the end of thesummer there were three crews, so I would guessthere would be somebody in the office, a clerk ofsome kind to handle administrative duties,answer the phone, that sort of thing; possibly asecretary. If you were really busy, why, thenyou'd have a secretary and an administrativeperson who handled buying all your localsupplies and doing that sort of thing. You mayhave a geologist or two working there. I wouldguess there probably were twenty people in thatoffice at the end of the summer, and at the peakmaybe forty or fifty, something like that.

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Storey: Because it's seasonal work?

Budd: Well, no, because they were just on the upslope,cranking up for the project. They had just startedwhen he moved there in February of '61, theywere just getting things organized, and justgetting started. So they were just gearing up forthe main effort, and it takes a little while to getthat sort of thing cranked up.

Storey: And then that office evolved into a constructionoffice after the location and preconstruction hadbeen done?

Father Moved to Los Banos as Location andPreconstruction Wound Down at Coalinga

Budd: Yeah. And most of the survey crews wouldsimply roll over into the construction activity–they wouldn't relocate those people. But therewould be some of the people, like my father,whose job there, when it moved into aconstruction phase, would basically be over, andhe'd be looking for something else. And that'swhen he moved to Los Banos.

Storey: To start doing preconstruction at that location, orwhat?

Budd: Well, he was wrapping up the location andpreconstruction for the same facility, but fromLos Banos all the way down: Reaches 1, 2, 3, 4,and 5, instead of just Reaches 3, 4, and 5. He didthat and moved up there in '64.

33


Storey: Now am I correct in thinking these are prettyimpressive canals that we're talking about here?

San Luis Canal

Budd: San Luis Canal, to my knowledge, is the largestone that Reclamation's ever built. Reach 1 has acapacity of about 13,000 cubic feet per second,Reach 2 starts at that, and it winds down to . . .It's a joint project between the State of Californiaand the Bureau of Reclamation. Part of thecapacity in the facility belongs to the State ofCalifornia, and that capacity goes all the waythrough. The San Luis Canal is 110 miles long,and the state capacity, which is about 7,000 cubicfeet per second, goes all the way through. So theFederal capacity decreases as you go down thecanal from about 6,000 to zero at the end of thejoint facility. But I am unaware of any canal thathas that kind of capacity anyplace in the UnitedStates. I don't know about other countries, theremay be some in Russia or China or somethingthat are bigger than that, but it's the biggest onein [the U.S.] . . .

Storey: I was going to say, before I forget, your father'sname was Jess. (Budd: Uh-hmm.) Is that shortfor anything?

Budd: No, J-E-S-S-E, it was [pronounced] Jesse, but hewent by Jess.

Storey: Okay, he just pronounced it without the "E."

Budd: Right. If you pronounced it the way it wasspelled . . . I don't remember ever hearing anyone

34


call him Jesse–his mother or father, my mother–itwas always Jess, but it was always spelled withan "E."

Storey: The canal, as a joint project, there must havebeen some interesting relationships betweenReclamation and the State of California. Did youknow anything about that?

Region Was Responsible for Political Activitieswith the State and the Design—Field Constructed

the Project

Budd: Other than stuff that I have read, no. At the timethat I was involved in the construction effortsdown there, why, those relationships and anycontroversies that may have existed, took place ata far higher level than I. And even occasionally Iknow my dad got involved in some of the stuff,but primarily as the technical expert as opposedto the policy person. He was relied on to provideexpert opinion on why or what you should do. And the arrangements with the State ofCalifornia, the cost-sharing and all that, washandled out of this office, the regional office. Soby the time things got down to the Los Banos andCoalinga levels, the issues had been resolved. There was a difference in that the joint projectwas set up so that it was financed jointly, butconstruction was Federal, or Reclamation, and itwas turned over to the state for operation andmaintenance, so you didn't have two designers,two construction groups, working together. When our people were designing, why, the statefolks would be involved at that level in approvalof designs and specs and that sort of thing. But

35


once that was done and it came out to the field,why, it was a done deal, and you would proceedon that basis.

Storey: Well, that was my next question, so basically, ifI'm hearing you correctly, you didn't, as amember of the survey crew, have a Californiarepresentative out there looking over yourshoulder.

Budd: Not at all. In fact, when I was working on surveycrews, and even when I was in the office there inLos Banos for about a year, I never saw anyonethat I recognized as a representative of the state. I'm sure that they were there. They had to be outthere, just if for no other reason, the boondoggle,just to come out and check progress ofconstruction and that sort of thing, to see whatwas going on. But I wasn't aware of theirexistence, and didn't, at my level, didn't meananything.

Storey: And I take it your father was the same way, as faras you know.

Budd: I presume so. And again, it's just a presumption,because my contact with him after he came toCalifornia was pretty limited, that one summerwhen I worked on the survey crew, and all thatwould have been handled through Los Banos, notout of Coalinga. And after that, my contact withhim was letters and phone calls and that sort ofthing, and we did not have an opportunity to talkabout it.

Storey: Now, if I understand this canal correctly, we

36


have five reaches. In the first couple, threereaches there's Federal water and state water, andthen eventually we get to where we're just statewater. (Budd: Yeah.) And Reclamationdesigned and built the canal, and the state took itover for O&M [operation and maintenance]. (Budd: Correct.) What kind of issues are youaware of nowadays about the joint use of thecanal and those sorts of things? Are there anyproblems or issues that have arisen out of thatjoint venture?

How the State and Reclamation Manage the SanLuis Canal, a Jointly Owned Facility

Budd: There's a very general agreement that identifieshow costs will be split, and provides that therewill be a periodic review of the cost-sharingformulas that are used. And to my knowledge,the relationship with the state is very smooth. We object occasionally to the number of dollarsthey're spending on operation and maintenance,maybe the charges are excessive, but it's a verybusinesslike relationship, and there are nosignificant issues, there are no contentious issuesbetween us that I'm aware of. The contentiousissues between us and the state arise around theSacramento-San Joaquin Delta, and even therewe're more likely to be on the same side, if that'san appropriate word, than we are to beantagonists. We have very similar interests, ourissues in common are much–we have many moreissues in common than we do differences.

". . . Reclamation calls it San Luis Canal, the statecalls it the California Aqueduct . . ."

37


I think that the relationship as far as the San LuisUnit and the joint facilities, other than minorirritations in the state's operating and maintainingthe canal, Reclamation calls it San Luis Canal,the state calls it the California Aqueduct, andsince they're the ones doing the operation andmaintenance, they get to put up the signs, so thesigns say in big, bold letters, "CaliforniaAqueduct," and printed in little teeny fine printdown at the bottom it says, "San Luis Canal, ajoint venture," or something like that. That'spretty minor stuff when you get around to it. Ithink we're paying the state about seven or eightmillion dollars a year for our share of theoperation and maintenance of the facilities, inaddition to furnishing our own power for thepumping plants.

Storey: And that's reimbursable too, probably.

Budd: Yes, our water users are responsible for that.

END SIDE 2, TAPE 1. MARCH 16, 1994.BEGINNING SIDE 1, TAPE 2. MARCH 16, 1994.

This is Tape 2 of an interview by Brit Storey with John B.Budd on March the 16th, 1994.

Storey: One of the things I've run into on other projects,is that when the local water user group takes overO&M, they don't want to put the money into theproject to keep it, you know, in topnotchoperating condition, and sometimes there's a littletension between Reclamation and the water userdistrict over that. I get the sense from what you

38


said earlier that it might actually be the oppositein this particular instance, that they're reallykeeping it in good shape, and maybe evenspending maybe a little more than Reclamationmight think is appropriate?

Reclamation Sometimes Has Trouble Paying itsShare of O&M for the San Luis Canal

Budd: I think that's very true. I'm not directly involvedin that, so what I know is kind of hearsay. But Idon't think there's any question that the state hasa strong desire to maintain the facility intopnotch condition, and I do know that we haveproblems, from an appropriation standpoint,coming up with our share of the costs that fall outunder the sharing formulas. It's a matter ofobtaining appropriations, and there have been anumber of years in which our appropriationshortfall has been significant, in the multi-million-dollar range, and we simply haven't paidthe state, and they've had to finance the wholething themselves, and maybe next year when ourappropriation situation is a little bit better, why,we'll pay them what we owe them and get theaccount squared. But they are doing a fine job,as far as I know, keeping the facility in topnotchoperating condition.

Storey: The water in the canal: does Reclamation's watergenerally go for agricultural purposes?

Reclamation's Share of Water in the San LuisCanal Is Roughly Ninety Percent Agricultural and

Ten Percent M&I

39


Budd: Yes, the total quantity of water is roughly splitfifty-fifty. Reclamation's share, about . . . it'sprobably close to ninety percent for agricultureand ten percent for municipal and industrial.

Reclamation's Only Large M&I Customer off theSan Luis Canal Is the Santa Clara Valley Water

District

Our only large M&I [municipal and industrial]customer off of that facility is the Santa ClaraValley Water District. They get about 150,000acre feet a year, of which a little over 100,000,maybe 120,000 they use for M&I purposes. Youknow, we got three small communities, Avenal,Coalinga, and Huron, and the rest then goes forag [agriculture], and we move about amillion–well, if we ever have a normal yearagain, we don't have some kind of a problem withendangered species or drought–we would movearound 1,300,000-1,500,000 acre feet throughthere. So a little less than ten percent, probably,goes for municipal and industrial.

About Half of State Water in the San Luis CanalGoes to the Metropolitan Water District of

Southern California

State split is about fifty-fifty: their water, abouthalf of it goes to Metropolitan Water District [ofSouthern California] for municipal use.

Storey: That's Los Angeles?

About Half of the State Water Project Water in theSan Luis Canal Goes to Kern County for

40


Agricultural Use

Budd: Los Angeles, yeah. And the other half goesprimarily to Kern County for agricultural use.

Storey: When you say 1,200,000 acre feet, is that thetotal water for both Reclamation and the state(Budd: No.) or is that just Reclamation's share?

Budd: That's just Reclamation's share.

Storey: So that's about half of the water that actually goesthrough. And the source is the San Luis Damand Reservoir, is it?

How Pumping from the Delta and San LuisReservoir Supply Water to Users

Budd: The original supply comes from the Sacramento-San Joaquin Delta. It's pumped through a pre-existing canal, the Delta-Mendota Canal, intoSan Luis Reservoir in the wintertime. And partof the demand is met during the year by pumpingdirectly from the Delta. But once the Delta-Mendota Canal capacity is needed for theoriginal customers of that canal, then the SanLuis people rely on San Luis Reservoir releasesfor the remainder of their water. Our share ofstorage in San Luis is about a million acre feet. Again, in a normal year, we would deliver abouta million-and-a-half acre feet from San Luis, soabout 500,000 acre feet would be met from,maybe 600,000, from direct deliveries out of theDelta. The remainder would come from releasesof storage in San Luis.

41


How Electricity Generated on the Central ValleyProject Is Used on the Project

Storey: So the pumping from the Delta, where does theelectricity come from?

Budd: It's all what we call "project use energy." It'sgenerated by project facilities at Shasta,Trinity–the Trinity water imports come through afairly long, significant power drop–we generate itat, like I said, at Shasta–and there's an afterbaythere. We generate at Keswick, at Trinity, atWhiskeytown, at Lewiston, at Folsom. I guessthat's it. Then when we're making releases fromSan Luis Reservoir, why, the pumps can beturned into generators, so we generate electricitywhen we're releasing it from storage. So thatadds to the available supply–unfortunately, not ata time when we have our biggest pumping load,but it's still available to the project, and anysurplus power the project has is marketed by theWestern Area Power Administration [WAPA],and that contributes revenues to repayment of thecost of the project.

Storey: I'm a historian, and a lot of the people who mighthear this would be historians, so I'm going to askwhat might be dumb questions. I'm presumingthat we don't have a power line that goes directly,say, from Shasta to the pumping plant for thisproject.

Reclamation Delivers Power it Generates Directlyto Pumping Plants Through a Transmission

System Managed by the Western Area PowerAdministration

42


Budd: No, we do.

Storey: We do. (Budd: Yes.) So we're not putting thepower into the grid.

Budd: Some goes into the grid, and the details of howthat happens, there actually is a power line thatwas constructed, that comes from Washingtonand the Bonneville facilities. It comes all theway down and actually can deliver and doesdeliver power to our Tracy switchyard. Alongthe way we pick up the power from Trinity andShasta and Folsom. It all ties into a facility thatit is my understanding that WAPA is responsiblefor the transmission of the power now that we'renot doing the power business anymore.

Dos Amigos Pumping Plant

But at that switchyard and at San Luis, there's alarge pumping plant called Dos Amigos, which ison the joint state-Federal facilities, at each ofthose locations, why, it's possible to move powerin and out of P-G-&-E's facilities. Pacific Gasand Electric Company is a private utility, andWAPA has a contract with them for exchange ofpower–we can either buy from or supply to, orbank with them, power that they would laterreplace on our demand schedule. So yes, we dofeed into the grid, but we also have facilities thatdirectly transport project power from ourgenerating facilities to our pumping facilities.

Storey: Now, in a situation where we have the directtransmission lines, do we actually run and

43


maintain the transmission lines ourselves, ratherthan WAPA?

Budd: No, we don't, WAPA is . . . My understanding isa little bit fuzzy on this, but at some point in theswitchyard, the responsibility is transferred toWAPA. Prior to WAPA's coming on the scene,we were responsible for those transmission lines. We had crews that did that here, and I'm trying toremember back when that happened, but it was inthe mid-'70s [1977], I guess, that WAPA tookover the responsibility for transmission. But atsome point in the switchyard, on both ends,either the generating end or the pumping end,why, WAPA takes over responsibility fortransmission.

Storey: Does that mean that we're having to pay for thepower we use? I don't' understand this.

". . . we pay WAPA an operation and maintenancecost, but we do not pay them a capital cost for the

generating facilities . . ."

Budd: Well, we pay WAPA an operation andmaintenance cost, but we do not pay them acapital cost for the generating facilities. We'reresponsible for maintenance of the generationfacilities, and that cost is a part of the operatingcost of the project. We do pay WAPA, and theyhave the responsibility for amortization of thetransmission facilities. So we do pay WAPA afee for transmission. I guess that could beinterpreted as paying for power but that's a minorpart of the total cost of the power.

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Working as an Insurance Claims Adjustor forLiberty Mutual in Chicago

Storey: Well, we're wandering a little bit away fromwhere we were, but this is very interesting to me. Let's go back and discuss your Chicago InsuranceCompany. We sort of got from (laughs) Coalingato here. What company was it that you wereworking for?

Budd: I worked for Liberty Mutual, and I was in theirauto claims business. I was hired off campus bytheir recruiters and seemed like a great place tolive and the job would be interesting andexciting. And it was interesting, and it wasexciting. It just didn't turn out to be the kind ofjob that was of interest to me. I didn't do verywell at it, I didn't like it very well, and I think mydeparture was probably as much a relief to thecompany as it was to me.

Storey: What specifically did you do?

Budd: I was a claims adjustor, and one of our policy-holders would have an accident, they would callin to the company and say, "I had an accident,"and my responsibility then was to talk to them toget their side of the story, find out as much as Icould about what happened, talk to the otherparty, try to develop a relationship with them thatwould keep them out of an attorney's hands if atall possible, resolve any claims for medical orproperty damage that they had. I had checkbookauthority, carried a checkbook with me I couldsettle a claim up to $2,500 with–after I'd beenthere a while, I didn't have it initially–without

45


anyone's approval. Obviously, I would have tojustify the settlement, but if the thing went to anattorney, why, I would be the one that wouldnegotiate with the attorney to resolve it. And, inthat instance, why, things got a bit morecomplicated in terms of how you handled it, thekinds of documentation necessary to support aclaim, and those kind of claims would almostinvariably exceed my settlement authority, sothey would go to–the final settlement approvalwould go to a supervisor, either mine who had$25,000 authority, or if it was greater than that,would go to his boss. You interview, getstatements from any witnesses that you couldfind–you know, do the usual check-the-scene-of-the-accident kind of thing, take measurements,skid marks, pictures, that sort of thing.

Storey: And then you went to Atlas. (Budd: Um-hmm.) And what were you doing there?

Worked for Atlas, a Licensing Agent for theStandard Oil Companies

Budd: Atlas is a kind of a strange company. They, ineffect, are a licensing agent for the Standard OilCompanies at that time. I guess there were fiveof them: Indiana, Ohio, California, NewJersey–one more. Anyway, Atlas, if you were amanufacturer of tires or batteries or oil filters orwhatever it was, you could bid to furnish thoseunder the Atlas trademark to the Standard OilCompany. And Atlas was the one that did thetesting of what you proposed to furnish, theywere the ones that went in and inspected themanufacturing facilities, they tested product on a

46


random basis to make sure that it met specs[specifications]. They developed their ownspecifications for tires and batteries, then thecompanies had to build them to those specs. Thefield representatives, which was my job, wouldtravel with the Standard Oil Company's salesmenand talk to the dealers, answer any questions theyhad about the products. If you couldn't answer it,why, you needed to get an answer so you couldpass it back to the salesmen. If they were havingproblems, try to find out why they were havingproblems. And you would put on productinformation meetings for the dealers. Thesalesmen, maybe for a district for Standard Oilwould have an area that included, maybe, 200stations, and they'd have a meeting and a freelunch or whatever, and try to get as many of thedealers in as they could. So we'd put on meetingsexplaining to them how come our tires werebetter than anybody else's, or why our oil filterswere the best, and try to help them sell moreAtlas products to the dealers. There was noobligation on the part of the dealers to handleAtlas products–there was a lot of coercion, butthere was no legally enforceable contract orwhatever to make these guys do this, so it was amatter of persuasion.

The other part of the job was inspectingproducts that had been returned as defective andfilling out reports on that. And I'd walk into awarehouse in Memphis or Fort Lauderdale orsomething, and you'd have 300 tires in thiswarehouse that had been returned as defectiveand had been adjusted by the dealers. We had togo through all those tires and determine why it

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failed. So you carried a knife, a special littleknife with a blade about an inch-and-a-half long,and if you couldn't, in looking at the tire, see whyit failed, why, you had to dissect the damnedthing and do an autopsy on the tire to find outwhy it had failed. That was a, especially if youwere down in New Orleans and it was ninety-seven degrees, and you're in a warehouse with nofans or no air conditioner or anything, why, itwas . . .

Storey: All of tires, (Budd: Yeah.) that smelled like tires. (chuckles)

Budd: Yeah, oh yeah. It was a fun job–I enjoyed it,actually, the first time around the country. Wewere stationed in Chicago, and I had a room in alittle old lady's house in Winnetka, just abedroom. And I was there about one week out ofsix, and occasionally on a weekend in between,but not very often. And the rest of the time I wastraveling. The territory went from Newark,basically–the New England states were handledby somebody else–but Salt Lake City; NewOrleans; Memphis; Indianapolis; Silver Springs,Maryland; Fort Lauderdale–all over, basically,the eastern half of the country, with not a wholelot going on in the West for Standard of Indianaat that time. Salt Lake was a fairly active area,but basically the Missouri River east, and I wastraveling all the time. And that was great the firsttime around, but when you start coming back intothe same hotel, in the same town the second time,I started thinking, (dejectedly) "Eyah." Andwhen you're in town, you're involved inactivities, the Standard Oil folks were glad to see

48


you, gives them an excuse to get out and go outto dinner and go out drinking and raising hell. After a while it really began to drag, it got to be areal tough thing to do, and you look around atsome of the guys that had been around for fifteenor twenty years doing that, and they look likethey were road hardened, hung up wetoccasionally. It was a tough life. But it wasfascinating, I met a lot of really neat people, anda lot of them that I met were the service stationdealers that really were on top of what was goingon. They had a good go, and they were making alot of money. I was making $6,000 a year, orsomething like that. A dealer with a good servicestation was making $70,000 or $80,000–had tobe a good one, but in 1965 that was a lot ofmoney. That seemed to be the right thing to do.

Took on a Service Station in Birmingham,Alabama

Unfortunately, when I left Atlas and went intomy own station, I went into Birmingham in 1964,and there was an awful lot of stuff going on downthere that the kid from Nebraska wasn't reallyaware of, and when he was aware of it, didn't likeit. A brand new service station, had threebathrooms: men, women, and colored. I used thethird one as a storage room, and that created aproblem for me. Anyway, things didn't go wellfor the Nebraska kid in Birmingham. Thatparticular time was a real contentious time in thatarea. They kind of viewed the white boy fromthe north as a bit of an interloper, and businesssuffered as a result and I had a couple of theftsand couldn't make the business go.

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Storey: Where was the station located?

Budd: Across the street from the University of AlabamaMedical Center, downtown Birmingham. Shouldhave been one of the best . . .

Storey: South side?

Budd: Yeah, I guess. It should have been one of thebest service stations in Birmingham, andprobably is, but it wasn't under my ownership.

Storey: Why did you choose Birmingham?

Budd: Ignorance, I guess. It was a brand new station. The location, from the standpoint of the type ofclient that I wanted to have in the station wasright, because I wanted the service business fromthe medical center. And I really felt the potentialthere was outstanding, but never could make itwork.

Storey: So then you moved to Coalinga.

Moved to Los Banos and Took a Job on aReclamation Survey Crew

Budd: No, then I moved to Los Banos.

Storey: To Los Banos, after your father's death, and tooka temporary position. What were you doingthere?

Budd: Surveying–back in surveys.

Storey: Back in the field again. (Budd: Um-hmm.) What

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were you surveying?

". . . checking the grade behind the slope trimmeron the canal . . ."

Budd: At that time, they were in the middle ofconstruction of San Luis Canal. I surveyed forabout a year, and the first six months anotherfellow and I were responsible for checking thegrade behind the slope trimmer on the canal. And that's all we did, day after day, just followedthat slope trimmer and made sure that where theycut, they cut to grade, so when the pavingmachine came behind, why, the canal would bewide enough, or not too wide, and everythingwould fit. It was an interesting job. I was a GS-2, making $1.80 an hour or something like that,and it was impossible to survive on that, but onthat job we had all kinds of overtime. I wouldmake as much in overtime in a paycheck as Iwould make in regular time, and that was aboutthe only way to keep hand and mouth together,was to get the extra overtime. So we had a lot ofovertime, and that worked out real well from thatstandpoint.

". . . after about six months of that, why, I gotmoved onto a structure crew . . "

And after about six months of that, why, I gotmoved onto a structure crew–that is, a crew thatlaid out the control for structures–turnouts,primarily–before they were to be built. And thenafter the contractor's forces had constructed thefacilities, we went back in prior to the concretepours and made sure that they were in the right

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location, that the right height, right set-backs,everything was in the right place, the walls werethe right thickness and that sort of thing.

Storey: And how many were on this crew?

Budd: Well, there were four of us on the structurescrew. There were two of us on the grade crew,just an instrument man and me.

Storey: And how long were you on the structures crew?

Moved into the Reclamation Office in Los Banos

Budd: About six months. And a job opened up in theoffice, in the Programs Branch there, and Imoved into that.

Storey: And what would that involve?

Programs Branch Did All the Reports

Budd: The programs group did all the budgeting for theSan Luis Project, took care of all the fundbudgeting, and they also, which was my biggestjob, was they did all of the reports. They puttogether all of the construction progress reports,all the final completion reports, and assemblingthat information and actually assembling thereport. I think it's called a L-29 was theconstruction progress reports, and it includedpayments to all the contractors, a little narrativeon what they'd accomplished during the month,how much money they made, that sort of thing. Putting that together was the single biggest jobthat I had. Every once in a while you get

52


involved in laying out the budget for all thedifferent features. Then we did a finalcompletion report on contracts when theywrapped them up–I think it's called a DC-1–inwhich you'd go through the specifications, item-by-item, and lay out the total quantities of anitem, if it was steel, how many tons or pounds orwhatever, whatever the pay quantity was, howmuch had been installed, and how much thecontractor earned, and you'd go through eachcontract that way, and you may have 200-300different items that you'd have to cull theinformation out and develop that report. I don'tknow what they ever did with any of thosereports–I'm sure somebody must have had a usefor them someplace. We spent a lot of timeputting them together.

Storey: How many people in the Programs Office?

Budd: Five, I guess. Four or five. Yeah. Yeah, justfour or five, I don't remember just now.

Storey: Do you remember who supervised the group?

Budd: A guy by the name of Ted Peyton was thesupervisor. Joe Marquez was in there. Boy, Ican see the guy's face, but I sure can't rememberhis name.

Ted Peyton Headed the Program Office and WasVery Detail Oriented

Storey: What was Peyton like to work for?

Budd: Nice guy. He was a real nice guy, soft spoken.

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He was a fussbudget, I guess, is about the onlyway to describe him. He was very, veryconcerned about details, and he was always busy,just bouncing from one thing to another, "Gottado this, gotta do that, make sure this is right." The quality of work he turned out was excellent. Stuff that came out of that group probablybecause, at least in part, because of Ted'sinvolvement with the detail, was really good,turned out pretty good products.

Storey: Now, if I'm understanding correctly, thePrograms Office would prepare the reportssaying, "This is what the contractor's done thismonth, and this is what we owe himreimbursement for"? (Budd: Um-hmm.) Didyou actually do the reimbursement?

Budd: That was handled by somebody else, but it wasbased on the documents that came out of theprograms group.

Storey: Was the reimbursement done out of the LosBanos office, out of the regional office, theproject office?

Budd: My presumption is it was done out of Denver, butI don't know that. I think at that time all of thechecks that went out were cut in Denver, but Idon't know that–never was involved. Now,checks are cut out of San Francisco, and it's alldone electronically, but then, as far as I know,everything was hard paper and Denver issued thechecks.

Los Banos Was a Large Construction Office at the

54


Time

Storey: How many folks were there in the Los BanosOffice?

Budd: Total, counting the field people and folks up atthe dam, about 425. It was a big, big, office– bigoffice–probably 150 in Los Banos and the rest ofthem scattered from the dam all the way down toCoalinga.

Storey: And the reason it was so large was because it wasin a construction phase?

". . . it was a big project–total project approachedhalf a billion dollars . . ."

Budd: Yeah, and it was a big project–total projectapproached half a billion dollars, which was a lotof money–it's a lot of money today–but in the1960s, it was the largest dollar project thatReclamation had ever attempted. I mean, we hada earth-filled dam that was about 77 millionyards, 110 miles of canal that was a monstrouscanal, major structures, pumping-generatingplant at San Luis, a pumping plant at O'Neill,another big pumping plant at Dos Amigos with acapacity of about 12,000 cubic feet per second,180 foot of lift. It was just a large project. Itwas the largest, again, dollar volume, andprobably material volume piece of the CentralValley Project. The canal is not longer thanseveral of the other canals, but the volume far . . .

END OF SIDE 1, TAPE 2. MARCH 16, 1994.BEGINNING OF SIDE 2, TAPE 2. MARCH 16, 1994.

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Storey: So the capacity far exceeds any of the othercanals.

Budd: Yeah, and my recollection, Friant-Kern is about4,500 cubic feet per second; Delta-Mendota isabout 4,600. Tehama-Colusa is about 2,500, andSan Luis at 13,000 is just about equal to all therest of them combined. It's just a large project. Pictures of big pieces of equipment down in thebottom of the canal, well below the groundsurface, trucks, big trucks in and out of the canalthat you wouldn't see in most other canals.

Storey: Was Los Banos the project office?

Budd: Yes.

Storey: So it was called the Los Banos project office?

Budd: Don't know what it was called. The project wascalled San Luis. I guess it was called the LosBanos–I never paid any attention, I don't know.

Storey: Who was the Head of the Office and what washis title, or her title?

John Bucholtz, Project Construction Engineer atLos Banos

Budd: John Bucholtz was the project constructionengineer, and he was the head of the office there.

Storey: Did you have much contact with him?

Budd: Yes, he and my father worked together inWyoming, and again in Nebraska, in McCook–

56


well, in Indianola. I don't think Buck ever wentto McCook. I think when he left Indianola, hewent to another project there in Nebraska, atArapaho, about sixty miles away. But ourfamilies stayed close. He had a son that was myage, and we went through elementary schoolthere together in Indianola, and my dad and momand his folks were friends for a long, long time. Ithink Buck was a University of Wyominggraduate too, and in fact they may have been inschool together–I don't remember that. WhenBuck got the job as project construction engineerin Los Banos, why, he called my dad and asked ifhe was interested in coming out to Coalinga, andof course he was. It was a plum, it was a goodjob, given the size of the project and that sort ofthing, my dad was at the point where he wasready to wrap up his career, he would have beenfifty-four, I guess, when he moved to Coalinga. So he figured this would be his last project, andthen he'd retire, and he was excited about that,because it was at the time, and still is, a bigproject.

Storey: And it was a promotion for your father?

Budd: Yes.

Storey: What was Mr. Bucholtz like, as a person and as amanager?

Budd: I don't know that much about him as a manager. I presume . . . I didn't have any contact with himin that capacity, and his capacity was as a friendof my family's and the father of a friend of mine,and I liked him very much, and in fact we still

57


keep in touch with him. They still live in LosBanos. I liked him, we got along just fine.

Bucholtz Later Became Project ConstructionEngineer for the Tehachapi Crossing of the State

Water Project

We didn't have a lot of contact when I was livingdown there, but when San Luis began to winddown, why, he went to work for the State ofCalifornia as project construction engineer ontheir Tehachapi Crossing, and their part of theState Water Project, when they took the watersouth out of the joint use facilities. And thatinvolved the largest pumping plant in the world,if you combine lift and volume–forty or fiftymiles of canal and tunnel, crossing a number ofmajor faults. Given that responsibility, mypresumption is that he was very highly respectedas a manager, as an engineer–an ability to buildthings and to move projects from design throughconstruction. I can't imagine the state hiring himto do that, nor can I really imagine the Bureaugiving him the project construction engineerresponsibility on their big project of the early'60s . . .

Storey: But you were in the office while he was theproject construction engineer, I think you said? What kind of style or image did he project to thepeople around him?

Budd: (sigh) That's a tough question. I think he was avery competent, capable engineer, and he hiredpeople who were very much like him. But hewas not in the office a lot. The day-to-day office

58


routine was run by his office engineer, and by thegeologist and the personnel folks and theassistant project engineer. He spent a large partof his time in Sacramento, working out whateverhad to be worked out with Sacramento and withthe state people, and the coordination that wasnecessary with them as construction went on. Idon't imagine he was in the office more than halfthe time, probably less, and when he was, why,you very seldom ever saw him in the halls. Somebosses you'll see wandering around the halls,drop in and see what's going on. He wasn't thatkind of a boss. My impression of him, like Ialready said, is that he was just a real competent,capable guy who had a handle on what was goingon, but relied more on good people around himthan he did on himself to do things.

Storey: So, for instance, he didn't fly off the handleeasily, or anything like that?

Budd: I think in temperament, he was a real calm, mildkind of a guy. Running around with his kids, wedid some strange things, I'm sure, that kids do. Idon't remember him ever hollering at the kids, soI would presume that his demeanor in the officewould be the same thing, and I don't rememberanyone ever saying, "Oh yeah, he's a real son of abitch." Everybody that I'm aware of liked him. Ithink there were some . . . His wife was . . . Iguess you might characterize him maybe as in amilitary situation, the General's wife is kind of aforbidding personality, and Lois was very muchlike that, I think. She was a very social kind ofperson, and as the project construction engineer'swife, she kind of set things up in a military

59


fashion. She was the head hen of the peckingorder, and you didn't get in Lois' way or crossher, but she was, again, very much concernedabout people, and if somebody was having aproblem, Lois was there to help. She usuallyknew about them, but she was a very strongpersonality–still does–and fortunately forBuck . . . I don't know how you characterizeAlzheimer's disease, but it's in the early stages orit's mild or something like that. He has amemory problem occasionally, and Lois . . . He'seighty-two, eighty-three–Lois has got to beeighty. And she's taking care of him, and she'shad a double mastectomy in the last ten years. She's still able to keep Buck squared away, she'sstill driving. Every once in a while somebody inLos Banos will say, "Yeah, they found Buckwandering down the street." He'll go out, hegoes out for a walk every day–some days he justforgets where home is, or that that's where he'ssupposed to be going. But Los Banos is a smallenough town and they've been there for so longthat everybody around knows who he is and theyall speak to him, and if he seems a littledisoriented, why, they'll get on the phone and callLois and say, "Hey, I got Buck," and she'll pickhim up.

Storey: Did you have any other jobs while you were stillat Los Banos?

Budd: No.

Storey: Why did you choose to leave?

Moved to the Region in 1967 When the Los Banos

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Office Downsized

Budd: I left in '67 and the office was downsizing, thebulk of the construction was over, and they weregoing through a downsizing, which is a prettytypical swing in a construction office. I came toSacramento kind of by accident. As everybodywas, they'd had a number of employee meetings,telling folks, "Start looking, because you need tobail out, we're going to be going through RIFs"[reduction in force]. They had a pretty goodhandle on the staffing needs and that sort ofthing, and they could forecast with someaccuracy the number of people they'd need onstaff, and they were telling people, "If you findsomething, why, bail out, you need to move on,"which for a construction office was not terriblytraumatic, everybody was used to that sort ofthing in construction.

Applied for a Job as a Repayment Specialist inSacramento

And I'd seen a job in Sacramento, a vacancynotice. I was a five [GS-5] at the time, and thevacancy notice was for an 11-12, and thought itsounded like kind of an interesting job, it was arepayment specialist. But, you know, I couldn'tqualify for it, so why apply? And Mel Martin,who was the office engineer, called me into hisoffice a day or two later after I'd seen that, and heasked if I'd seen it and was I interested? I said,"Yeah, I was, it sounded like a fun job," andsomething that my background would lead me toeventually, but the grade was too high. And hesaid, "Well, if you think you're interested, I've

61


got an interview set up for you in Sacramentotomorrow. Why don't you drive on up and talk tothe folks." I never did find out what happened, Ipresume they simply withdrew the vacancynotice and transferred me laterally into the job,but I came up to Sacramento on a lateral transfer.

Storey: That was a repayment specialist you said?

Budd: Yeah.

Storey: Okay, now, when you moved, Reclamation paidmoving expenses and everything?

Budd: Yes.

Storey: At that time, were there like housing allowances? Any of that kind of thing?

Budd: When I was living in Los Banos, I was livingwith my mother, and I had accumulated nofurniture, so everything that I needed, all mypersonal possessions, would fit in my car, somoving for me was not a big deal. I think it costthem $200 or something like that to relocate me. It was not a big deal. You got paid, myrecollection was, just on the number of pounds. So I loaded my car and weighed it, and when Igot it unloaded I weighed it again and they paidme, I don't know, twenty cents a pound orsomething like that for moving up here, plusmileage. That was it, it was not a big deal.

Storey: So down there you had become a five. (Budd:Yeah.) Was that a promotion within theprograms office?

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Budd: Yeah, I started out in surveys as a two, and I gotmy three after six months in Surveys, and thengot the four when I went into the programsoffice, and after six months of that, I got the five. I was still a five when this thing in Sacramentocame open, and came up here laterally (Storey:As a five.) as a five. It was a mismatch, I wasprobably overqualified for where I was, since Ihad a degree–but on the other hand, I didn't knowbeans about surveying except what I picked upactually doing it, on-the-job training.

"When I came to Sacramento, I never spent morethan two weeks in the second step of any grade,

until I got my twelve. . . ."

When I came to Sacramento, I never spentmore than two weeks in the second step of anygrade, until I got my twelve. So I had my twelveby 1972, I guess, or something like that. It wentfairly quickly when I came into Sacramento. Thejob was a good fit, I liked the job, and mybackground and interests seemed to match prettywell.

Storey: Well, I hate to say it, but our two hours are up.

Budd: Yeah, and we just barely got started, huh?

Storey: (laughs) That's right. I'd like to ask you nowwhether or not you're willing to let Reclamationresearchers and researchers from outsideReclamation use these tapes and any resultingtranscripts for research purposes.

Budd: Certainly. There's no reason in the world that

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anyone can't use these.

Storey: Good, I appreciate it. Thank you.

END SIDE 2, TAPE 2. MARCH 16, 1994.BEGIN SIDE 1, TAPE 1. MAY 25, 1994.

This is Brit Allan Storey, senior historian of the Bureau ofReclamation, interviewing John B. Budd, of the PublicAffairs Office, of the Mid-Pacific Region of the Bureau ofReclamation, in the Mid-Pacific regional offices inSacramento, California, on May the 25th, 1994, at aboutnine o'clock in the morning, this is Tape 1.

Storey: Mr. Budd, the last time we talked, we had justgotten to the point where you had moved as arepayment specialist to Sacramento. Could youtell me when that was and what you did?

As a Repayment Specialist He Administered andNegotiated Contracts

Budd: I moved to Sacramento in the fall of 1967,around Thanksgiving, I guess. The job as arepayment specialist was primarily contractadministration, contract negotiation with theBureau's water user clients.

Worked on Developing Contracts with Diverterson the Sacramento River

And the first assignment that I had was in theSacramento River Service Area where the Bureauhad had a fairly intense program over theprevious five years–well, actually, it began in1944, but beginning in 1962-63, there had been a

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fairly intense negotiation with a number ofdiverters with water rights on the SacramentoRiver. Since Central Valley Project was to usethe Sacramento River as a conveyance feature ofthe project, we needed to ensure that weprotected Federal storage releases of the Federalwater supply, and we had to recognize the waterrights of the individuals who diverted. So therewas a negotiation that was headed up by then-Assistant Commissioner Stamm. He came outand negotiated contracts with . . . Well, the totalended up being around 140 diverters, but theoriginal negotiation was probably with aboutfifteen different representatives of districts andmajor individuals. And that culminated in agroup of contracts in 1964, and from that pointon it was just sort of a clean-up exercise. Therewere a few reticent districts and individuals whofelt they didn't need a contract, or they didn'thave to have one, and we couldn't make them. So it seemed that one of the first things that anynew person coming in the Repayment Branch didwas try to clean up the Sacramento Rivercontracts–there were three or four left that hadnot signed, and that assignment was given to thenew kid on the block, so that was the beginningof my career in Sacramento, was trying to cleanup those contracts.

Storey: These were people who had established waterrights on the river, but weren't Bureau ofReclamation projects, is that right?

Budd: That's correct, yes.

Storey: Well, let me ask you, Why would they have to

65


sign a contract if they had established waterrights?

Budd: There were two reasons, one was for ourprotection so that water we released from projectfacilities would get past their point of diversionin years that there was not enough natural flow totake care of their water rights. The secondreason was to provide for those people a supplyin those months of those years that their waterright was deficient. We agreed to sell them somewater, and in return, they agreed to limit theirdiversions during critically dry years. It was amutual endeavor, there were benefits flowingboth ways, although when G-A-O [GeneralAccounting Office] did a report on the contractnegotiations, they were fairly critical ofReclamation's negotiations from the standpointthat they viewed us as giving away the store–wewould agree to almost anything just to get acontract to avoid a dispute on a river. Our viewwas that if we had to be liberal in determinationof the entitlement, it in the long haul worked toour advantage, because failure to settle thosedisputes would lead to an adjudication of theriver system, which would be a monumental task,probably twenty or thirty years in court, trying toget a court order that identified each individual'sright to divert from the river. And it would havebeen extremely costly and time-consuming, andwe didn't feel that we had the time to do that–norcould we justify the expense of doing it either,what it would cost us, or what it would cost thewater users to adjudicate that system. So ourresponse to G-A-O was, "Thank you very much,we appreciate your review and your advice, we'll

66


try to do better in the future." But we didn'taccept their criticism very readily. Our viewwas, they didn't understand, I think is primarilywhere we came from on that issue. For the mostpart, it worked out very well. Most of thedistricts were satisfied with the contracts, theywere reasonable contracts, and our relationshipwith them over the years has been good. We'vehad a fairly successful relationship in terms ofhow we have managed those contracts. We'velearned, as time has gone on, that all of thecircumstances that we forecast– well, let me backup: we learned that we were simply unable toanticipate all of the future occurrences. StateWater Resources Control Board, Clean WaterAct, Delta Water Quality Standards, fisheriesproblems, things like that that were unknowns inthe 1950s and '60s when these contracts werebeing negotiated, are now major problems. Andwhat we've done with these contracts is basicallyinsulate these users from any responsibility forthose problems, and the contracts will be up forrenewal in about– well, they terminate in 2004,so in the next six to eight years we'll beginrenegotiation of those contracts and that's goingto be a major issue, and that renegotiation isWhat kind of responsibility do the users have andwhat should they assume with respect to waterquality in the Delta?–a number of issues that getreal tangled. In California, under Californiawater law, the area of origin, watershedprotection statutes raise their head. TheSacramento Valley, northern California interests,view raids by southern California with somehostility, and given the water supply being in thenorth and the demand being in the south, there is

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an imbalance that is inherent by nature, and thenorthern folks are . . . In some cases they havesort of a foxhole mentality– they've dug in,they've entrenched themselves, and their attitudeis rather contentious as opposed to cooperative. But I would imagine if I owned some land upthere, I'd want to protect the water right to it asbest I could.

Storey: I guess I'm like G-A-O, I don't understand either.

Budd: Yeah, it's a complicated issue, there isn't anyquestion about it.

Storey: These contracts, did they give up water rights? Did they, in effect, abandon anything?

The Alternative to Contracting on the SacramentoRiver Was Either Litigation or Adjudication of the

River

Budd: What they did in the contracts was, theyrecognized in the contract that their right wasdeficient, that it was not a right to divert all of thewater that they needed. So from that standpoint,yes, they gave up the claim that their rightallowed them to divert all the water they needed. The hydrology of the system I think, just from apractical standpoint, if you got down to litigation,you laid it out, why no, they didn't give upanything. They probably got more than theywould have gotten had they litigated the issue. But if you look at it from a dollars and centsstandpoint, we probably would have spent $40-,$50 million dollars, litigating this thing. It wouldhave been a twenty-year legal exercise with

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hundreds, thousands, of hydrology studies; agreat deal of data-gathering that probably wouldhave resulted in very little change in any of thebasic information available to the people. All ofthe water users would have been burdened withattorney and consultant fees. We would have hadsignificant staff and Justice Department costs. As a policy decision, while not privy to thatdecision, looking at the documents that I did getto see, my conclusion was basically they hadsaid, "Look, it's cheaper for us to give away alittle bit of water to get the settlement, than it isto litigate it." And from that standpoint, thedecision to provide . . . We would recognize thata right claimed by the user yields a little bit morethan we think it really would yield, just to get thesettlement. And from that standpoint, myjudgement over those years was that it wasprobably a good decision, that it cost us less inthe long run, in terms of dollars and cents, andprobably a little bit more in water, but certainlyless in dollars and cents, and I think probably hadwe adjudicated it, the relationship with thediverters in northern California, between thediverters and the Bureau, would have beenstrained, it would have been entirely differentthan it is now. There is now a fair sense ofcommunity, of cooperation, of willingness toapproach problems with the idea that you cansettle the issues, than there would have been hadwe litigated it. And just simply from thatstandpoint, not looking at the cost of thelitigation, I think from that standpoint weprobably saved money. So while we did, if youlooked strictly as a technician at the water rightsthat we recognized, we probably gave away some

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project water to get the settlement, but if youback away from being the technician and look atit from a broader perspective of total UnitedStates costs and the relationship that you need inas complex a hydrologic system as this is, tomake things work smoothly, I think the decisionwas the right one.

Storey: Yeah. Now, am I understanding correctly thatpotentially we could get to 2004 . . . So this was aforty-year contract, or series of contracts,basically. And if things fall apart, we might haveto adjudicate the river?

Budd: That's entirely possible. It depends on the abilityof the negotiators to work out a deal. And frommy standpoint–obviously the water users wouldfeel differently–my standpoint, it depends on thewater users recognizing what's going on in thereal world and agreeing that they have someresponsibility for fishery impacts that haveoccurred, environmental problems that exist now,that did not exist [then]. There are a number ofthose folks who basically contend if it weren't forsouthern California, everything would be okay;therefore, we have no responsibility. But if youdivide up the total pie, you probably shouldassign some of the responsibility to theSacramento River people. My view is, if they'rereasonable, this won't be a problem. It's going tocost them a little bit of water, it's going to costthem some money, but we will be able to arriveat an equitable contract that will resolve theissues and avoid an adjudication. I suspect thattheir view is just the reverse, that if the Bureau isreasonable and recognizes their water rights and

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their entitlement, why, then there won't be a needto adjudicate it either, but the Bureau has to bethe reasonable party. So I guess, given that,there's probably grounds for negotiation room togive and take on the thing. But if it does fallapart, and it's possible that it could, you have–Iuse the word–"fringe" elements, from thestandpoint that they're very vocal, very radical,with a "leave me alone" mentality, "You can'ttouch me, don't even consider taking any of mywater or charging me anything for it." If thatgroup moves into power, if they become themovers and shakers amongst the water users inthe Sacramento Valley, maybe you do adjudicateit, maybe you can't settle it. But again, I guessmy counsel on that one is, if there is any way tosettle it, do it, because an adjudication of it willbe a disaster for everyone involved. You'll haveanother twenty or thirty years of uncertainty. Uncertainty in the water community, in the watersupply situation, is an uncertainty in some reallybasic infrastructure for the state of California. It's one of the things that is now becomingapparent to southern California interests, is theuncertainty that has arisen out of the Miller-Bradley Bill, with respect to water supply from[the] Central Valley Project, has implications forcredit worthiness of southern California. Whenthat became apparent in the last year or two,those folks got real nervous, and rightly so. Well, if you compound it with an adjudication onthe main river system, which would also, bynecessity, I suspect, involve the State WaterProject and their Feather River system which istributary to the Sacramento, it simply wouldn't beeconomically healthy for the state. Southern

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California is finally recognizing that water is asimportant an input to the infrastructure astransportation and utilities of sewer andtelephone and power–electricity. I've beengetting calls from Moody's and Standard andPoore's for five-, six years: the bond ratingpeople asking me what the situation is withrespect to water, what kind of certainty is therefor water supply out five, ten, thirty years in thefuture? They're rating credit worthiness, bondedindebtedness, ability to pay, and they'reconcerned about that kind of stuff. While thebond rating folks have been interested, it hasn'treally been apparent to a lot of the businesscommunity that that, yeah, in fact [water] isimportant.

But anyway, if you adjudicate the river,you got a real problem, I couldn't even begin toimagine how much it would cost or how long itwould take.

Storey: Well, when you came in '67, about how manycontracts were left for you to negotiate, do youthink?

Budd: Oh, I guess there were five or six.

Storey: Do you remember any specifics about any ofthem?

Budd: Oh, there was a golf course up in Redding,Riverview Golf and Country Club. A couple ofsmall individual contractors. And one districtform contract, the Maxwell Irrigation Districtcontract I guess had not been executed–but it was

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pretty well wrapped up. And then there was one,the City of West Sacramento came in later with aclaim of right, and we took care of that one. Butthat was not really a hold-out on the originalnegotiations– that was a latecomer to the game. But I guess the Maxwell Irrigation District onewas probably the largest. I've forgotten thequantity of water, about 10,000 acre feet I guess,maybe 15,000. All of them, with the exceptionof the country club, were fairly easy to resolve. It was a matter of sitting down with theprincipals, whether it was a board of directors oran individual, and working out the details, justlistening to their concerns and explaining whatwe wanted and what we needed to do and why,and for the most part it pretty well came together. The golf course was a different matter, and Iguess that was just one individual who was onthe board of directors, who was of the view thatthey shouldn't have to pay a nickel for any waterthat they took. And that one took a while. Thatindividual director had to depart the board beforewe finally got–he had enough sway with the restof the directors– I think there were five on theboard–that they simply wouldn't agree. Andwhen he departed the board, why, we signed acontract and got payments back to 1964, and itworked out. But it was a matter of the playershaving to change before you could get asettlement.

Storey: Do you remember the name of that person?

Budd: I don't, no.

Storey: Do you remember how long it took you to get a

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settlement on the golf course?

Budd: About two years, from when I first started.

Storey: But if I'm understanding correctly, the majorityof the contracts had been completed in '64.

Budd: Yes, that's correct. There was a team puttogether by the commissioner that was made upof Assistant Commissioner Stamm and two otherfellows, and I don't remember offhand theirnames or titles, other than one was a fellow bythe name of Colter and another was a fellow bythe name of Ritter. And they produced a reportthat they had basically negotiated with the keywater user organizations. It was referred to asthe Stamm-Colter-Ritter Report. And it proposedto the secretary three different types of contractsto recognize the basically three different groups:one was the districts, there was a district formcontract; then two individual form contracts, onecalled long form, which contained excess landprovisions; one called short form which was forthose contractors with less than 160 acres. Andthere had been agreement reached with–and itwas a rather informal–well, it wasn't informal,but it was an organization without authority tobind, but it was an organization of water userswho sat down with the Bureau people and ironedout the language of these contracts and said,"Okay, this is acceptable to us as thisorganization. Now, you need to get it squaredaway in Washington to make sure this languageis okay with the secretary, and then you canproceed to sign these contracts." And thathappened, even though all the individual

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diverters were not involved in the negotiations,as far as I know they all signed the contract as theform was agreed to by the main negotiators. There were no changes in the language in thecontracts.

Storey: Was there anybody who just continued to refuseto participate?

Budd: No.

Storey: So everybody has a contract.

1976 and 1977 Were Dry Years

Budd: By 1969 we had wrapped up all of the diverters. And as it's turned out, even if there had been, in1977 the State Board would have stepped in andshut off their diversion. Seventy-seven [1977]was a critically-dry year, driest year of record,following 1976, which is the fourth-driest year ofrecord. And there was very little water in thesystem except that which had been stored in oursand State Water Project storage facilities. Andthe State Board would have shut off everyonewithout a contract. In fact, they even told theriparian diverters, who we did not contract with,that they needed to reduce their diversions. Sohad there been a holdout, when '77 came around,my suspicion is they would have, at that pointsigned. But by 1969 we had all the contractorsthat had reservations [about signing up], signedup. And I forgot, the City of West Sacramento,which at that time was East Yolo CommunityServices District, came along in 1972 or '73, I'veforgotten–maybe '74, I don't know. But anyway,

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there were no outstanding contracts left. I mean,everyone had agreed, we had signed upeverybody. And part of it was peer pressure. The districts knew who hadn't signed, and theindividuals all knew who hadn't signed, and theyknew they were paying, or they were having topay for part of their water, and there was somepressure by those folks on the others to get in lineand join their fellow diverters. It wasn't allBureau of Reclamation that forced it.

Storey: Could you explain to me what a riparian diverteris?

Riparian Water Diverters in California

Budd: Under California law there are several classes ofdiverters. And a riparian diverter is basically thesenior diverter. Their right arises from the factthat their land is adjacent to or riparian to thestream. That is, their property borders the streamand the riparian land is then the smallest parcel inthe chain of title that has remained adjacent to thestream. And under California law, they have theright to divert all the water that they need forreasonable and beneficial use. And the further upon a river system you are, why, the more senioryou are. And under California water rights law,the water goes first to the senior riparians, andthen to other riparians, based on their physicallocation on the stream, then to appropriators, andappropriators' rights are quantified based onseniority–that is, the oldest application forappropriation is the senior, so he's entitled to hiscut before anyone with a junior or more recentapplication is entitled to any water. It's old

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English common law that came over here withthe Gold Rush, came to California in the GoldRush, and has been the basis of California waterlaw ever since.

Storey: And if I'm understanding correctly, we hadcontracts with some of these groups of diverters,but not with others?

Budd: We contracted with all of the appropriators, wedid not contract with the riparians. We didn't feelthat . . .

Storey: Because they were so senior . . .

Budd: Yeah. Given the hydrology of the system and thefact that they were "first in time, first in line"–Imean, they had the senior right–that there was, inall cases, there would be water available for theriparian diverters.

Storey: Excuse me, so in a sense these contracts werewith people who were less senior. (Budd: Yes.) And they were then paying Reclamation for aportion of their water under certaincircumstances?

Budd: Correct.

Storey: Okay.

Pre-1914 California Water Rights

Budd: Now, in the ranking of priorities, underCalifornia law there's what they call pre-1914rights, and those are pretty much lumped in one

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group. The history and the records on those ispretty vague. All you had to do is do a posting,and that came about by planting a post on theedge of the river with a notice on it that said, "I,"or "we," or whoever–if it's an individual or adistrict–"intend to divert at a rate of such-and-such for this area." And that posting then was thegenesis of your right. And in 1914 the state setup the State Water Rights Board, and from thatpoint on you had to apply to the board to get apermit. You had to apply, then after you metcertain conditions you would get a permit todivert, and once you started diverting and youlived up to the terms and conditions of yourpermit, after a certain number of years it wouldgo to license. And all of those permits, theseniority is based on the date of application, andthey begin in 1914 and come forward, and thereare still people today who are applying. Butthose rights are very, very junior, and they mayyield water only in the winter months–you wouldget no water in May, June, July, August,September, and October. When it's flooding,why, you could divert water.

END SIDE 1, TAPE 1. MAY 25, 1994.BEGIN SIDE 2, TAPE 1. MAY 25, 1994.

Storey: . . . dates to about October of '27?

Reclamation's Water Right for the Central ValleyProject Was Assigned in 1927

Budd: Nineteen twenty-seven [1927], which falls prettymuch in . . . It's relatively a junior right compared

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to the large districts that have applied. Some ofthe districts are pre-1914, most of them are in thelate teens, early '20s, so we're kind of a juniordiverter in the hierarchy, and certainly in terms ofthe total quantity of water. The right that we hadwas assigned to us by the State of California. The state had reserved unto itself a block ofwater with the 1927 priority. They hadanticipated construction of a project that woulddeliver water, and in fact they had attempted theCentral Valley Project and couldn't, financially[make it work]. They ended up having to ask theUnited States to step in in 1937, and part of thatagreement was that they would assign us therights with the 1927 priority. So that's where westand in the hierarchy of rights.

Storey: When you came in, were you doing anything inaddition to negotiating these contracts for wateron the Sacramento River?

Budd: [I] was involved in . . . Well, I guess basically,for the first year or two, that was about all I wasdoing. We had a person who was handling theSacramento Canals Unit negotiations whoactually lived up in the valley and worked upthere in Willows, and he was negotiatingcontracts with the districts along the proposedTehama-Colusa and Corning canals, and I wasdoing some of the grunt work for him, the basicresearch kinds of things, putting together landuse-, water requirement reports, and that sort ofthing. That went on for several years.

In 1970 He Was Assigned to Work on the San LuisUnit of the Central Valley Project

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Then in 1970, my assignment was changed and Istarted working on San Luis Unit negotiations,primarily with Westlands Water District. Theyhad entered into a contract in 1963 that neededamending, and my assignment changed to that atthat time.

Storey: Repayment, I need not tell you, is one of the verycontroversial things about the Central ValleyProject, I think–especially the acreage limitationsand so on. Could you, for me, put yourself backto that time and tell me what Reclamation'sthinking was to the best of your memory, aboutrepayments and acreage limitations and so on?

Subsidies and Repayment on the Central ValleyProject

Budd: There are a couple of things that always seem tobaffle, surprise, amaze, puzzle, people out here. One was the subsidy issue in terms ofReclamation repayment, project repayment. Ifyou looked at Missouri River Basin projects,Columbia River Basin projects–any of the largeprojects–the agricultural users were paying a far,far smaller percentage of total allocated coststhan Central Valley Project agricultural userswere. I've heard numbers in the five to tenpercent range in terms of repayment on Missouriand Columbia River Basin projects, Kansas RiverBasin Projects.

Storey: You mean total repayment, or . . .

Budd: Repayment by agricultural users of the costs

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allocated to agriculture. Total repayment, thepicture changes a little bit–well, not really,because in almost all cases total repaymentoccurs, the only thing that changes is who makesthe repayment–whether it's power users or waterusers. And in the case of Columbia and MissouriRiver Basins, the costs that aren't paid–and inCentral Valley Project–it's pretty typical acrossReclamation–the costs that aren't repaid by waterusers are repaid by power users. If there isn't apower function in the project, why then Congresswill address that issue when it authorizes theproject, and it'll write those costs off. But inthose areas where it did not choose to write thecosts off, that repayment was required, CentralValley Project is really kind of a star in that littleexercise, from the standpoint that the water usersare paying well over ninety percent of theirallocated costs. And I have not seen the studiesor the numbers, but I have talked to people whohave indicated that repayment of costs allocatedto agriculture ranges on the order of five to tenpercent in a number of other major projects. Soit always puzzled us why we got beat up for thesubsidy issue, when we were repaying basicallyall of the cost. The other part of it, the subsidything, came to surplus crops and production ofcotton. The critics of the project contended,"Well, using Federally-subsidized water toproduce more crops that are subsidized by theDepartment of Agriculture under their variousprograms." That always puzzled us, becausemost of the crops grown in Central Valley Projectare not on anybody's commodity list, they don'tparticipate in program payments. Lettuce,carrots, tomatoes, melons, onions–you know, the

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things that are grown in Central Valley Project,the tree crops, grapes, don't receive subsidypayments. Cotton is criticized, and we do grow alot of cotton out here, but essentially a hundredpercent of the cotton grown in the Central ValleyProject is exported, it does not go into thedomestic market, and it is not surplus on thedomestic market. It's a different type of cotton,it's what they call a long-staple cotton. It's Acalaor Pima cotton, it's considered a premium cottonin those countries who wear a lot of cotton. TheThird World countries, the Arab and southeastAsian countries, prize our cotton and it'spurchased, it's exported, it's a major componentof United States exports. Getting beat up on thatissue didn't make a whole lot of sense.

Excess Lands Issue on the Central Valley Project

On the issue of excess lands, again we'repuzzled, because if you looked specifically at therecord of enforcement, Central Valley Projectacreage limitation enforcement was outstanding,much better than basically any other region [ofReclamation]. The percentage of noncompliancewas smaller, the issue boiled down to an issue ofhuge land owners in primarily the San Luis Unitreceiving Federal water. But the terms andconditions under which they received the waterwere in complete compliance with the law, therewas never any question about that. Standard Oil,Union Pacific, Boston Ranch, Giffen and Sons,were all very large landowners. Southern Pacificowned about 100,000 acres in Westlands. Butbefore any water went on that land, they agreedto dispose of it, which is what the law required.

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They were entitled to water for a period of tenyears, some of the land was sold well within thatperiod, some sold after because of a lawsuit thatdelayed sales. But the criticism has always beena puzzlement because our record of enforcementwas better here than anyplace else in the Bureau.

"There were a number of congressmen andsenators who made their living beating up on

Reclamation . . ."

On those issues, they were a fact ofpolitical life. There were a number ofcongressmen and senators who made their livingbeating up on Reclamation, generally.

Congressman George Miller and the CentralValley Project

But if you were from California, why, you beatup on Reclamation in California if you were froman area outside the project service area, or eveninside, in the case of George Miller. Hisconstituents get a hundred percent of their waterfrom us. George chose to wage war on the SanLuis Unit.

Storey: Are his constituents rural or . . .

Budd: Urban. The project started out for Contra Costaas about sixty percent agriculture and fortypercent urban. It was the first Unit of the projectto go into operation in the early '40s. DuringWorld War II, that area bloomed and became amajor industrial area, and the result wasagricultural land was converted to industrial use.

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Port Chicago is a major military munitions depot,they ship tremendous quantities of navalammunition and other out of Port Chicago andthat area in the Martinez-Contra Costa-Concordarea, turned into an industrial area. Now it'sessentially a hundred percent municipal, noagriculture. The thing became political. SenatorGaylord Nelson from Wisconsin, a couple ofcongressmen from New York, a senator fromPennsylvania–I've forgotten their namesnow–were regular critics. Congressman[Samuel] Gejdenson from Connecticut–majorcritics of Reclamation and particularlyReclamation in California, which, again, was apuzzlement, to me anyway, because of the natureof the project. We weren't contributing to thecorn surplus or the wheat surplus or anything likethat. If you took away subsidies from irrigationprojects and from Reclamation, it would be kindof a bump in the road for California, but it wouldbe an absolute disaster for North and SouthDakota, Nebraska, Texas, Oklahoma, Kansas,Colorado, Wyoming. Oregon would be hurt, nottoo bad. Washington would probably get alongokay, after some major readjustment. ButCalifornia would do better than any other state ifyou eliminated subsidies. But we seem to be, forwhatever reason, the lightening rod for critics toReclamation. And I guess probably it wasbecause the large landowners were easy targets inthe Westlands District. You had a fellow by thename of Russell Giffen who owned about 70,000acres, Boston Ranch was about 25,000 acres,Standard Oil owned 10,000. A couple of fairlylarge individual landowners in the 7,000-10,000acre range, and of course then Southern Pacific

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with about 105,000 acres. And they, I guess,became the lightening rod for the criticism for theproject. But when you do the analysis of thecriticism, it just simply doesn't stand up.

Storey: Now when you say that, are you saying thatbecause they complied with the letter of the law?or did they comply with the spirit of the law indispossessing those?

Budd: Well, I guess it all depends on whoseinterpretation of the spirit you use. In the recentreauthorization of the acreage limitationprovisions, in a couple of instances,Congressman Miller testified as a witnessconcerning certain things that should be in thelaw. And he worked for those things asChairman of the subcommittee, but they didn'tshow up in the law. They were not in the finalact as it was passed, yet Mr. Miller contends thathis position was the spirit of the law. Well, thatreally seems kind of weak. It makes a goodargument for him, until you start going back andfind out that, yes, he argued, he debated, hepitched to Congress as a witness, he went over tothe Senate, he testified that these things should bein the law, the Senate said, "We don't think so,we don't think they ought to be in the law," yetnow Miller argues that that stuff was in fact theintent of the law. That's nonsense! But it makesa very convenient argument until somebody goesback and says, "Well, what's he talking about? What's the history? We've got the legislativehistory, we can look at it. Oh, well, that's hisopinion. That's Miller's intent, but that certainlyisn't what the law says or what the law does."

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Whose intent are we going to . . . And do youargue the intent of the law, or do you argue thelaw? The compliance with the law wascomplete. The law said that you can't get wateron land in excess of 160 acres unless you agreeto dispose of it within a period of ten years at aprice that does not reflect the benefit of theproject. And that's exactly what those people diddown there, they signed what are calledrecordable contracts agreeing that in return forwater on the land, pending the sale of it, that theywould in fact sell it at a price we would approveas not reflecting the benefit of the project. Andthat's exactly what happened, and they soldprobably 250,000 acres in Westland, underrecordable contract, land that the prices weapproved would range from $8 to maybe the topwas $1,100 an acre, when neighboring non-excess land was going for $2,000-$3,000 an acre. So the windfall benefit didn't come into there asit was contended. They didn't receive that. I getpersonally very frustrated arguing Mr. Miller'sintent of the law and what the law does in factsay. The issue of trusts was one that was argued,and Miller lost, yet his intent is now touted aswhat the law is intended to do. Bullshit! Thatjust simply isn't right. Sam Gejdenson fromConnecticut is the same way. The argumentsthey make are spurious. You sit down and do ananalysis of the situation, and you lay out thefacts, and their arguments simply don't hold up. You're arguing a political philosophy and youcan get buried in those arguments very easily. The comment somebody once made to me is,when there was an article in the paper that wason– I've forgotten the subject–but anyway it was

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anti-Reclamation–I said, "We ought to write backto this guy. We ought to get a letter to the editorin there or put out a news release or something." And the comment was, "Well, you don't usuallyargue with people who buy their ink by thebarrel." And George Miller buys his ink in theFederal Register by the barrel, and then he takesthat, something he put in the Federal Registerand promotes it as the intent of Congress or givesit a whole lot more weight than it deserves. Itgets a little frustrating.

Storey: Tell me about this trust issue. What's involvedthere?

Trusts and the Reclamation Reform Act

Budd: The issue . . . We're getting technically beyondmy expertise, but basically it has to do with whothe beneficiaries of the trust are. Trusts are usedas estate planning mechanisms by all kinds ofpeople for primarily tax purposes. You put landin trust for a minor child as an inheritance tool toavoid estate tax problems. And you don't do itbecause of water. But the way the law wasamended in '82, you could establish a trust–inone of the particular cases it was forgrandchildren–and they put 900 acres in trust forthree or four grandchildren.

Storey: The acreage limitation.

Budd: They put the maximum in there. They put 960acres for each grandchild in the trust, and thenoperated that total parcel as one farm. The trusts

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were clean, the proceeds of the trust went to thechild, the grandparent received payment formanagement of the land, did not participate inany of the risk or benefit, they simply were paid. And Miller now contends that that is a violationof the law. The law is pretty specific. He saidthat violates the spirit of the law.

Now, there was one that I think most folksagree–I don't think anybody really disagrees–theBoston Ranch situation. A large corporationowned about 25,000 acres, set up trusts for itsemployees and disposed of the land to thosetrusts. It was based on longevity andsalary–there was a formula that they used todispose of the land. Then the corporationoperated all the land in the trust as one unit, theyhad a 25,000-acre farm owned by the employees,but operated by the ranch. But the hook to thatone, and that really gave me some heartburn onit, was that they charged a lot more per acre tomanage it than if you went out for bids for anoperator–you could get a better deal by probablyfifty percent. They probably charged twice thegoing rate for farm management. I think mostpeople, Reclamation folks, the Solicitor's Officepeople, all agree, yeah, that probably wasn'tintended, but it's permitted under the law, that'swhat the language says. Therefore, we can't stopit. Well, Miller went nuts, probably rightly so inthat case.

But for the most part, ownership andoperatorship setups are done for tax purposes, notfor water purposes. People set up corporations tofarm because of the risk involved. They don't

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want all of their personal assets to go down thetubes when the price of tomatoes falls out thebottom. So they set up a corporation, lower taxrates, you got different investment laws, differenttax credits for investment and that sort of thing. So the criticism that California, the CentralValley Project is full of corporate farms, is abogus criticism from a Reclamation standpoint,but it's absolutely true, but it's done for taxpurposes, because the guy that farms 960 acres asa corporation, over the long haul, or even theshort haul, depending on what kind of a year it is,is going to make more money doing it that way,than the guy who farms it as an individual. Andit's strictly a tax law arrangement.

Storey: Back in 1970, you found yourself working withthe Westlands District in the San Luis Unit. Wasthe acreage limitation at that time this kind of anissue that it is today?

Senator Gaylord Nelson and Acreage Limitation inthe Central Valley Project

Budd: It was a major issue, in the Westlands situation,primarily because of one senator, I think:Gaylord Nelson from Wisconsin took on acreagelimitation as his cause.

Hearing Regarding the First Westlands Contract

There were hearings when the first Westlandscontract came up in the early '60s, 1960–the yearit [the Unit] was authorized, it required thatdistribution system contracts be submitted to theSenate for oversight. And there were hearings

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and there was a great deal of criticism ofWestlands and the San Luis Unit because of thesize of the farms. And there were somenegotiations amongst the water users, Interior–the Department, and the secretary, and theassistant secretary were very much involvedpersonally.

Ralph Brody, Manager of the Westlands District

The Manager of the District at the time was afellow by the name of Ralph Brody who wasvery well connected Democratically. His formerrole had been working for Governor Brown asthe principal political staff responsible forsuccess of the State Water Project bond issue. And having completed that in 1960, he movedover and became manager of the WestlandsDistrict. He spent an awful lot of time inWashington with the political folks, trying towork out an acceptable arrangement that wouldallow the San Luis Unit to proceed.

The Vietnam War meant "We were getting eight toten million dollars for distribution system

construction, when we needed twenty to thirty foran optimum construction schedule . . ."

One of the things that was going on wasexpenditures on Vietnam were still very, veryhigh. Money was tight, we weren't gettinganywhere near the appropriation we needed tomaintain a decent construction schedule–it wasjust being strung out with a token amount ofmoney available each year. We were gettingeight to ten million dollars for distribution system

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construction, when we needed twenty to thirtyfor an optimum construction schedule that wouldallow us to put the right number of people towork, and minimize the cost, maximize theinvestment. So there were lots of things goingon.

"NEPA was enacted in '69, and nobody envisionedthe impact that that was going to have. . . ."

NEPA [National Environmental Policy Act] wasenacted in '69, and nobody envisioned the impactthat that was going to have. But it was an issue,not to the extent that it is now, to the scope thatit's an issue now, to the number of people that areinterested at this point, I don't think. But it was asignificant issue. There were deals cut that werepublic, and I suspect some that were private. There was an awful lot of negotiation inWashington on terms, conditions of futurecontracts, that the region simply wasn't aware of,or certainly wasn't involved in. As you knew,when Brody was in Washington, he had a greatdeal of access to the Hill. Congressman Bernie[Bernice F.] Sisk and Bizz Johnson. Johnson ishead of the Appropriations Committee. Sisk, I'veforgotten what his role was and what committeeshe was on, but he was the congressman from theFresno area who was pushing very hard for thisthing. But Bizz Johnson was the congressmanfrom California with the control of theAppropriations Committee stuff, and he was akey player in Reclamation and San Luis Unit. Idon't recall on the Senate side who the key folkswere, other than Gaylord Nelson. I don't knowthat the California delegation was involved in

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any great extent–I just don't remember. But itwas a different world than I had been involved in,in the Sacramento Valley–their politics up therewere essentially nonexistent, but the Westlandsthing was a different animal. In hindsight, wehad a deal cut in the early '70s, and Brody (sigh)we'd in fact worked out the details of a contractthat was acceptable to Interior, and Brodywanted–and I don't remember the precise issue,but he wanted a change in the acreage limitationlanguage, and he felt he could get that change.

". . . in hindsight I think Brody made a significantmistake by not signing the contract when he had

the opportunity . . ."

The result was (sigh) the contract wasn'texecuted, and has never been executed sincethen. It just simply got rolled up in events,change in administrations, the NEPAenvironmental movement, Earth Day, all thatstuff, just rolled over Reclamation andparticularly San Luis Unit and issues relating tothe Sacramento-San Joaquin Delta. AndWestlands still does not have that amendatorycontract, and probably will never get it. And inhindsight I think Brody made a significantmistake by not signing the contract when he hadthe opportunity, and then working to change it.

Storey: He had a contract that was going to run out, say,around 2000 or so?

". . . one of the conditions that the Senateimposed . . . was that Westlands agreed to mergewith a neighboring district called the West Plains

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Water Storage District. . . ."

Budd: (pause) Yeah. The contract that he had . . . . He'd entered into a water service contract in1963, and then a distribution system constructioncontract in '65. But one of the conditions that theSenate imposed, and that the secretary agreed to,on the distribution system contract, was thatWestlands agreed to merge with a neighboringdistrict called the West Plains Water StorageDistrict. Westlands at that time was about400,000 acres. The West Plains District, whichwas immediately adjacent to Westlands, but onthe west side or the uphill side of the canal, wasabout 200 . . . .


This is Tape 2 of an interview by Brit Storey with John B.Budd on May the 25th, 1994.

Budd: West Plains Water Storage District wasimmediately adjacent to Westlands. Theboundaries were . . . (Storey: Contiguous?)contiguous. But what Gaylord Nelson andcompany and the critics of acreage limitationanticipated would happen, is that under the law atthe time, you were entitled to 160 acres in eachdistrict. They could envision this monstrousSouthern Pacific Company with 100,000 acres inthe two districts now having 320 acres of eligibleland instead of just 160. So they insisted thatWestlands and West Plains merge. In return, theUnited States agreed to negotiate an amendedcontract to provide water for the additional lands.

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And that contract has never been consummated,probably never will. Time and events have justovertaken that situation to the point thatadditional water from the project after thetermination of the current contract and the courtorder that arose out of subsequent litigation in2008, my guess is they will end up with theoriginal quantity of 900,000 acre feet in 2008. They will never get the contract for the additionalwater they need for the West Plains area.

Storey: Okay, now when you say they "don't have acontract," does it follow that they are not gettingany water?

Budd: No. When we, during the ReaganAdministration, advised Westlands that we wereno longer going to negotiate for the additionalwater supply, Westlands went to court and forwhatever reason–and I'm not that familiar withthe details of that because I, by '84, was nolonger working on Westlands–but the court foundthat we had an obligation to continue to providean additional block of water. And that courtorder runs through the term of the existingcontract. So from, actually, 1967 when we firststarted delivering water, '68, we have beenfurnishing water to Westlands, over and abovethe quantity identified in the original contract. (Storey: So some of it's going to West Side.) West Plains area, yes. (Storey: West Plains,excuse me. Okay.) Yeah, the whole area is kindof referred to as the West Side, the wholeWestlands . . .

Storey: Well, now, as a repayment specialist, were you

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working with Westlands on the revision of thecontract?

Budd: Yes. The negotiations were fairly intense anddrawn-out. It was a major effort on our part. There was a negotiating team set up that wasappointed by–well, I'm not sure how it wasactually appointed–but the team was composedof a representative of the Washington Officeand . . . (pause) I'm losing my memory! He wassubsequently regional director in Texas– what'sthe . . . (Storey: In Amarillo?) Amarillo. GeneHinds. Gene Hinds was the representative fromWashington, the regional director was a member. (Storey: That would have been Robert Paffordthen?) Well, this was after Pafford's time. Thiswas Billy Martin's time.

Storey: So that would have been after '73.

Budd: Yes. Well, there was a break in activity from '73until–there really was no significant progressmade on a contract between 1971 and 1977-78. There was activity but no progress. Andactually, I skipped, very conveniently, about fiveor six years, and it's just simply because therewasn't anything significant that occurred in thatperiod of time. There was no significantprogress, I should put it that way. There was alot of activity, a lot of things going on, Brodyspent a lot of time in Washington.

Westlands Offered to Provide the Money forConstruction If Reclamation Could Guarantee it

Would Be Paid Back

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We spent a number of years in there trying toarrange a deal that would permit Westlands,because of the appropriations situation withVietnam, we simply weren't getting the moneywe needed, Westlands said, "Well, we can go outand borrow the money, if you will, in effect,guarantee the loan." The deal was, Westlandswas paying us $7.50 an acre foot for water, andwhat Westlands proposed was they would borrowthe money to complete the distribution system sowe didn't have to rely on appropriations. Inreturn, we would agree to reduce the water rate toWestlands and they would use that cash flow toretire the bonds. That is, instead of paying us$7.50, they would pay us $2.00, and the $5.50would then be paid to the bondholders to retirethe bonds. And we hired financial consultantsand we had worked out an arrangement that wefelt was acceptable. It protected the interests ofthe United States, given the underlying premisethat irrigation pays no interest, because wewould, by virtue of reducing the water rate, bepaying the interest on the bonds. And there wassome concern in Congress about doing that. Ineffect we had a Federal guarantee of a privatebond issue, and that raised problems. Andpolitically, we never could quite get it pulled off. And in '76, Carter came in?

Storey: No, he was elected in '76, he would havebeen . . .

Establishment of the San Luis Task Force

Budd: Coming in, in '77. (Storey: Right.) Miller, atthat time, got an act passed that established the

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San Luis Task Force, and San Luis Task Forcetook off reviewing the Federal involvement inSan Luis Unit and the whole project. I'veforgotten the appointees to the Task Force, butthere were eight or ten: the assistant secretary,the comptroller general, the solicitor for Interior,a couple of people from California, one by thename of John Garamendi, who is now one of thecontenders for governor in this election. Westlands was on the Task Force, there were acouple of acreage limitation activist groupsinvolved. Anyway, that occupied about threeyears during which there was no progress on acontract amendment. Again, there wereopportunities to sign contracts that were nottaken, that in hindsight were mistakes. But forthe most part, the intention of the district waswell meaning, they had the best interests of thedistrict at heart, they felt they needed to do somethings that made sense, and never got them done,they just fell apart. We never did enter into anagreement with Westlands in which they wouldfinance the construction.

". . . there's still about 40,000 acres in Westlandsand the West Plains area that do not have

distribution system facilities. . . ."

And the result is, there's still about 40,000 acresin Westlands and the West Plains area that do nothave distribution system facilities.

". . . landowners . . . constructed pumping plantsand pipelines . . . temporary facilities . . . around

twenty years old . . ."

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The landowners themselves have constructedpumping plants and pipelines and are takingwater to their land, through temporary facilities. And temporary facilities now, for the most part,are around twenty years old–(chuckles) fairlylong-term temporary!

Storey: So if I'm getting this picture correctly, betweenabout 1970 and 1980 you were working mostlyon the San Luis Unit with Westlands?

Budd: Correct, yeah.

Storey: And it was a lot of negotiations which neverculminated.

Budd: Spent a tremendous amount of time working onthat thing to, my view, no progress. When theTask Force was appointed, I spent about twoyears as the regional coordinator. Any memberof the Task Force or anybody from Interior thatwanted information came through me, and Icoordinated the region's responses to requestsand went back to Washington a number of timesand met with the Task Force as key regionalstaff, I guess.

Storey: Briefing them?

Budd: Yeah, doing some briefing–primarily providingthe commissioner and his staff with information. They handled most of the briefing. Philosophically, there was an issue there: thecommissioner, I think, and his staff were prettymuch opposed to Westlands.

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Storey: This would have been . . .

During the Carter Administration There WereWestlands Issues with Reclamation Staff in

Washington

Budd: [R. Keith] Higginson. They philosophically helda similar view to Miller's, and the deputyassistant secretary at the time very definitely hadthe same view. Those were the folks that camein with the hit list under the Carteradministration, and they had some issues withReclamation that they wanted resolved. Deputyassistant secretary was a young fellow by thename of Dan Beard–personable guy, but verydefinitely a different philosophical view than alot of the people in Mid-Pacific Region. I thinkthe regional view was that this is a good project,that it's going to produce value to the nation, andthe ownership thing is a transient thing, it's goingto be resolved. We're in compliance with the lawand we intend to stay in compliance with the law. And that if the political folks would leave thedamned thing alone and we could get itconstructed, why, we would get the land in thehands of individuals that much faster. But itseemed to keep getting tangled up politically andnever has gotten straightened out. The San LuisTask Force effort was about a two-and-a-half-,three year effort.

Also Worked on Sacramento Valley Canals andthe San Felipe Unit Contracts

During the mid-'70s, from my standpoint,

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why, I also picked up a number of other . . . Iwent back to the Sacramento Valley Canalsservice area and negotiated a number of contractsup there and the San Felipe contracts became myresponsibility. I negotiated a couple over there,wrapped that up, so from my standpoint, why, itwas, as the political fighting took place, why, Ihad other things to do, so I wasn't terriblyconcerned about workload–I had enough goingon that it was not a problem.

Storey: So you weren't exclusively working on theWestlands project.

Budd: No, I negotiated a number of water service anddistribution system contracts in Tehama-ColusaCanal; and several loan contracts, Yolo CountyFlood Control small project loan. They built aproject called Indian Valley, and I negotiatedthat. And the San Felipe Unit contracts, MervDeHaas [phonetic spelling] had started thosenegotiations, and he went to Zaire on one of theforeign activities teams, and I took over the SantaClara Contract and finished that, and negotiatedthe San Benito Water Service and DistributionSystem loan contracts over there. There was alot of stuff going on. We were busy, plenty ofactivity, but Westlands was certainly the 800-pound gorilla–when Westlands needed attention,why, it got it. From the standpoint of a careerstaff guy, dealing with Westlands was a realplum. I got to know an awful lot of people that Iwouldn't have gotten to know otherwise, wasinvolved in a lot of issues that were things thatother folks would not be involved in.

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Worked as the Staff Guy for the San Luis TaskForce

As the staff guy to the Task Force, andsubsequently to the negotiating team, why, Imoved in a circle that was a little bit differentthan what you ordinarily would expect to beinvolved in as a GS-12. And that, I guess, iswhat probably kept me in Sacramento–I wasalways satisfied with the job that I had becausethere was something exciting going on most ofthe time. It wasn't "come to work and do thesame thing day after day." It was different, thepeople that were involved were different, theissues were different. So from that standpoint,why, there was a lot of job satisfaction that cameout of it.

Storey: You've raised the issue of grade, and I wanted toask you, what did you start out at Los Banos as?

Budd: GS-2.

Storey: That was in 1965. So by the late '70s you were atwelve.

Became a GS-12 in 1972

Budd: I was a twelve in '72.

Storey: Okay, so in seven years you became a twelve.

Budd: Yeah. Starting out as a GS-2 was kind of ananomaly anyway. I had a degree in economics, Istarted out in surveys, which is an engineeringthing, and it just took me a while to get over into

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a career area where my education would help me. I enjoyed what I was doing, I liked the Bureau,and the Bureau was good to me. From the time Istarted, until I got my twelve, why, I was nevermore than two weeks in the second step of anygrade. Promotions came very regularly.

Storey: Could you go through those for me? Do youremember them?

Budd: Well, I went [from a] two to a three in surveys inLos Banos. And when I went into the office inprograms I went to a four.

Storey: That was here in Sacramento?

Budd: No, that was in Los Banos, in programs. Andthen a five. And that happened in two years,from a two to a five. You could go six monthswas the [time required] per step, and once youstart going two grades, five-seven-nine, then youhave to be a full year in grade. And I came uphere laterally as a five, because I wasn't eligiblefor a seven–I hadn't been in grade for a year. And the job that I moved into here was bandedfrom a five to eleven, and I moved right up. Each year I got a promotion.

Storey: Five-seven-nine-eleven?

"I got my thirteen [GS-13] in '89 when I moved intothe job that I'm in now. . . ."

Budd: Five-seven-nine-eleven. And when I was eligiblefor a twelve, why, they advertised for the job, andsurprisingly, I got selected! So I got my twelve

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the year that I was eligible for that. And fromthat point on, things slowed down real quick. Igot my thirteen in '89 when I moved into the jobthat I'm in now. So I was seventeen years as atwelve.

Storey: What was the title of your job when you werefive-seven-nine-eleven?

Budd: Repayment assistant was the five-seven, the nine-eleven was repayment specialist.

Storey: And then when you became a twelve?

Budd: That was repayment specialist. (Storey: Also?) Yeah.

Storey: And did you remain a repayment specialist until'89? (Budd: Yeah.) Okay.

Budd: Yes, same classification, every once in a whileI'd get a within-grade [promotion], but other thanthat, why, things were pretty slow. That was partof the deal that my wife and I made. She had acareer and moving was not something she reallywanted to do. My mother was here and her folkswere here, and basically, the deal we made wasas long as I was happy with the job that I had,why, given her income and mine, why, wewouldn't worry about career advancement. If thejob got to the point I didn't like it, then we'd startlooking around, but I never was unhappy with it.

Storey: You mentioned that while you were working onWestlands, you were also working on San Felipe,Santa Clara I think you said. Do any of those

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stand out as particularly notable or as particularissues in your mind now?

Need for Negotiating Early Rate Adjustments inContracts

Budd: No, not really. I think one of the things thatstands out in the San Benito water servicecontract, we had negotiated some provisions forrate adjustment in the Santa Clara contract thatwere rather unique. Rate adjustments were notthings that were known in Reclamation waterservice contracts. We established a rate and itwas fixed for the term of the contract. Andrecognizing the inflation that took place in thelate '60s, early '70s, we said, "This is crazy, wegot to do something different, because O&Mcosts are now exceeding the water rate." So we'dmade some changes in the Santa Clara Contractthat provided for periodic adjustment of the rates. And we did the same thing, then, in the SanBonito contract, and that went back toWashington. We signed the Santa Clara contract,bundled it up, it was finished. San Bonitocontract went back to Washington and wentdown to the department for review and a fellowby the name of Beard got hold of it and decidedhe didn't like it, and he wanted the adjustmentperiod to be shortened. We adjusted every fiveyears, he wanted them adjusted annually. Andthe only thing that stands out is just simply that'swhen I first met Dan Beard. We went back toWashington to negotiate with the department onthe San Benito contract, and our goal was toattempt to convince Dan that the contract was agood contract, it provided protection for the

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United States and we shouldn't change it, becauseif we did, it's going to be different than SantaClara, then we got two water users on the samefacility with different terms in their contracts,and we were going to have a problem keeping thething sorted out. It complicated cost allocationsand we didn't want to do that. The only thingthat really stands out, I guess, is that was the firsttime that I had gone back on a contract. I'd beenback on the San Luis Task Force stuff. And ourmeeting with Dan, I guess it was about sixo'clock in the evening, and we got down there,and I was, number one, surprised how casual hewas, and number two, why, he opened the door toa closet, and all that was in the closet was arefrigerator. He opened the refrigerator door, andall that was in there was beer, and it was damned-near full. So we had a couple of . . . . (tapeturned off and on)

Storey: Beard's refrigerator.

Budd: Yeah, Beard opened the refrigerator and we allhad a couple of beers and we ended upconvincing him that it was a good contract, andso we didn't make any changes in it. Other thanthat, they were fairly routine. We were dealingwith a fairly expensive project, inflation waseating into the cost ceiling fairly quickly, butthere was nothing particularly notable about thecontracts. I suppose someone who hadnegotiated loan contracts or something like thatearlier, and was looking at costs of $100-$200 anacre would be very surprised at a loan contractwith a cost of $700 or $800 an acre. The dollaramounts were significant, but that had started

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because of the inflation in the '60s and '70s.

How Adjustable Rate Contracts Work

Storey: How did this work, if it was adjustable? Wouldthat be a negotiated rate, or would it be based oninflation, or how did that work?

Budd: Well, you'd negotiate the rate, but you wouldn'tnegotiate the dollars. What you would negotiateis the procedure or the process. You'd negotiatewhat went into the components, what went intothe computation of the rate, and once you agreedthat these costs were appropriate costs, theprocess then would be automatic. And youwould say, "We will adjust these rates every fiveyears," and our accounting folks would startcranking out numbers.

Storey: On the basis of a formula that you hadnegotiated. (Budd: Yeah.) And how long wasthe term of the contract?

Budd: Forty years.

Storey: Okay. Now, if we could, let's try and step backbefore you had decided that it was appropriate tonegotiate a rate that would keep increasing– orpossibly decreasing, I presume, based on a setformula.

". . . the first contract with an adjustable rate wasContra Costa in 1970, but prior to that time, the

rates were fixed: for ag water . . ."

Budd: Prior to the . . . actually, the first contract with an

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adjustable rate was Contra Costa in 1970, butprior to that time, the rates were fixed: for agwater it was $3.50; and for M&I water it was$10.00. That's what people paid, and that wasgood for the life of the project. What we werefinding was that inflation was driving up thecapital cost of the project, it was also driving upoperation and maintenance costs. And O&Mcosts were exceeding the revenues we werereceiving from the sale of water.

". . . it became evident to us that we had to fix thatsituation . . . if you projected 8-, 9-, 10-, 12 percent

inflation rates . . . the water rate, just to coverO&M would have to be $35.00 or $40.00 or the

deficit was going to be horrendous. . . ."

And it became evident to us that we had to fixthat situation, because keeping in mind, thisagain is the early '70s, we were looking to 1994and '95, another twenty to twenty-five yearsbefore we could have any significant effect onthe existing contracts, and if you projected 8-, 9-,10-, 12 percent inflation rates that we wereexperiencing at that time, the water rate, just tocover O&M would have to be $35.00 or $40.00or the deficit was going to be horrendous. Andwe did not believe that we could sign contracts in1970 or 1975 for another forty-year term at afixed rate. That would carry those contracts pastthe renewal date of '95, which really is whenmost of the contracts–not the majority of thewater, but the majority of the contracts–are up in'94 and '95 for renewal. But we didn't want toextend this situation out in 2008, 2010, further on

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out in the future. So we looked at a number ofalternative procedures for rate adjustments andconcluded that every five to ten years was anappropriate time to adjust the rate–partlybecause, keeping in mind that we didn't have thecomputer technology then that we have now tokeep costs. Hand calculation of the rates with thetremendous amount of data that has to go into it,was a very time-consuming exercise. Now, onceyou've got your database set up, hell, it's a pieceof cake. Still requires one person most of theyear to keep track of rates and calculate them. But we were back in the 1970s, computertechnology, why, you're thinking about five-, six-, seven people doing nothing but rate calculationsfor the project, and it just is not an acceptable . . .

Storey: When you say "the project," you mean theCentral Valley Project (Budd: Yeah.) with like120 districts, is that right?

Budd: Yeah, about 120 districts: 170 contracts, butabout forty of them or fifty, are individuals.

Reclamation's Long-term Contracting

Storey: Were you involved enough in repayment, usingthe old thinking, that you could sort of walk methrough the way Reclamation was thinking, whenit was doing long-term contracts at fixed rates?

Budd: Oh sure, yeah. I came to work at the end of thefixed-rate-thinking period of time, but didnegotiate some contracts that had fixed rates inthem. Those contracts didn't have forty-year

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terms, they terminated in 1995, so they weretwenty-, twenty-five-year-term contracts.

". . . construction cost indexes . . . [were] basicallyflat from 1950 . . ."

But if you went back and looked at constructioncost index, a curve, construction cost indexes,O&M cost indexes, the curve was basically flatfrom 1950, there really wasn't a whole lot ofchange in relative terms, from the 1940s. Andinflation . . .


". . . it took a while to adjust thinking to [inflationin the 1960s and 1970s] . . ."

Budd: It took folks by surprise, and it took a while toadjust thinking to that, "Well, maybe inflation inexcess of one or two percent or zero, is a fact oflife from now on, and we need to crank that intoour thinking.

". . . it became pretty evident that we needed toprovide [for inflation] in our contracts . . ."

So once that adjustment was made, it becamepretty evident that we needed to provide in ourcontracts, since they were forty-year contracts,and even a three percent inflation rate, you couldget a doubling in a period of time, or tripling.

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"So once the adjustment in thought was made . . .we started looking at . . . how do you do it . . ."

So once the adjustment in thought was made,why then we started looking at the mechanism,how do you do it, what costs go into the base, doyou use an average, do you pick a point everyfive years, or do you collect actual costs, or whatdo you forecast for future costs if you'readjusting the rate, do you simply look at the pastand collect the past stuff? Makes sense to lookout into the future and anticipate some level ofinflation. If you're setting rates for the next fiveyears, let's try to target the rates so that there isno unpaid balance at the end of five years, thatyou can come out at zero.

"And we spent a great deal of time trying todevelop the process, particularly for agricultural

rate setting. . . ."

And we spent a great deal of time trying todevelop the process, particularly for agriculturalrate setting. How do you charge the users? Ifdifferent contractors get different service, do youcharge them the same? That had been ourphilosophy in the past, is that if you're gettingwater for ag purposes, you pay $3.50. There wasa little deviation for that when Westlands cameon, recognizing that there was a significant pumplift involved in Westlands, why, we charged them$7.50. And that kind of led to the thinking that,"Well, gee, there are some ag users who don't getany pumping at all, some who get a lot, somewho get a little bit. There are some ag users who

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don't use any conveyance facilities. So how doyou establish the rates to provide equity?"

". . . State Water Project . . . charged based onnumber of miles you were away from the source .

. ."

And State Water Project would come along witha rate procedure that was even different–theycharged based on number of miles you wereaway from the source.

". . . they contend that there is no subsidyinvolved in the State Water Project, but . . . their

pricing structure was set up to accommodateagriculture in Kern County and have the

Metropolitan Water District users . . . pay a largershare of the total costs than they otherwise

would. . . ."

Which has always been kind of a kick to usbecause they contend that there is no subsidyinvolved in the State Water Project, but the factis that their pricing structure was set up toaccommodate agriculture in Kern County andhave the Metropolitan Water District users, whoare further down the line, pay a larger share ofthe total costs than they otherwise would.

"We base our rates on what we call a postagestamp rate: that is, the guy at the head of the

canal pays the same as the guy at the end of thecanal for the same service. . . ."

We base our rates on what we call a postage

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stamp rate: that is, the guy at the head of thecanal pays the same as the guy at the end of thecanal for the same service. The State Project, therates increase the further you get from the sourceof water.

". . . but that was the deal that was cut to make aState Project viable, was that Met would pick up

the lion's share of the costs, and they wouldstructure their rates in that manner. . ."

There is, in fact, a subsidy for state users, but thestate people deny that it exists or that that was thereason. But some of the oldtimers talked aboutthe negotiations on the state–and I can't evenremember who passed that on to me–but that wasthe deal that was cut to make a State Projectviable, was that Met would pick up the lion'sshare of the costs, and they would structure theirrates in that manner. Anyway, we broke the ratesout into different components–storage,conveyance, and pumping–and we used thepostage stamp concept within that arrangement.

". . . it took us a long time to walk through thatprocess, and to become comfortable with annual

adjustments. . . ."

That is, anybody using pumping that used thesame amount of energy would pay the same rate,regardless of where they were in the project. And if you used storage, you pay the same forstorage. If you used conveyance, you'd pay thesame for conveyance. So the head end of thecanal pays the same as the tail end, and you pay

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for your own pumping. If your needs are greaterthan your neighbor's, you're going to pay morethan your neighbor pays. But it took us a longtime to walk through that process, and to becomecomfortable with annual adjustments.

Storey: When did we become comfortable with annualadjustments?

". . . probably five years ago . . . we recognized wewould have the ability to, without hiring a wholebunch of people to do it, we'd have the ability to

be fairly timely. . . ."

Budd: Oh, probably five years ago (sigh), maybe asmuch as ten, we recognized we would have theability to, without hiring a whole bunch of peopleto do it, we'd have the ability to be fairly timely. And even if you did hire a big staff, calculatingthe stuff without computers simply takes time. So the districts, the water users, would say, "Wehave to know well in advance of the first deliveryof water each year what you're going to chargeus, because we have to develop our budgets, wehave to prepare our tax requests to the localcounties by November of each year, so we haveto know by September what you're going tocharge us for water the following year. Wehaven't even closed our books by September, sowe don't know whether we had a deficit O&M orwhether they paid all their costs that year. Wehadn't been able to do the accounting for thatparticular year. So just having those kinds ofproblems to address took some time. But I wouldguess–the specific question, I'm not sure we're

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really comfortable with it now, because it doescreate a workload.

Storey: Yeah, we started on a five-year schedule, say . . .Let's see, am I thinking correctly? fifteen, twentyyears ago.

The 1970 Contra Costa Contract Called forAdjustment after Twenty-two and Thirty-two Years

Budd: In 1970, in the Contra Costa contract, we hadprovision for an adjustment in 1992, which wastwelve years, and another adjustment ten yearslater. So basically we had two adjustmentprovisions.

Storey: You said '70 and '92. That's twenty-two years.

Budd: I'm sorry, twenty-two years, yeah. And that wasthe 1970 contract, twenty-two years and thirty-two years we adjusted the rates.

In 1975 the San Felipe Contracts Called forAdjustment Every Five Years

Then we started on the San Felipe contracts in'75, why, that had a provision for adjustment ofoperation and maintenance costs five years afterthe initial delivery of water, and each five yearsafter that, and there were two capital componentadjustment opportunities, based at years 20 and30. So it was sort of an evolving process. Wegot in one rate adjustment and then another, andthen some more, and now we're down to annualadjustments.

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Storey: And part of the ability to do that, actually istechnological, I'm hearing.

Part of the Ability to Adjust the ContractsRegularly Had to Do with Technological Advances

Which Made it Possible for Reclamation toRespond More Often

Budd: Oh absolutely, yeah, at least as far as we'reconcerned. We weren't geared up to submittingbills or calculating rates. We just simply didn'thave the staff capability to do it. While itwouldn't bother a utility, they produce rates,calculate rates, and produce bills for hundreds ofthousands of people on a monthly basis, that wassomething really new for us. We weren'tprepared to do it.

Storey: And when did this technology start to make animpact on the repayment program? Can youplace it? Do you happen to remember when youwent onto the mainframe, or when you went onto"X" or "Y"?

Received a Performance Award for Putting WordProcessing into the Repayment Branch

Budd: Oh, I suppose it really began in 1980, the late'70s, early '80s. One of the things I got aperformance award for was putting in a wordprocessing system in the Repayment Branch backin the late '70s, early '80s–I've forgottenprecisely–but that was what the RepaymentBranch staff did, they used words. And hell, myfirst job I learned how to dictate, and I retained

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that skill, and I would dictate stuff. But thepeople I was working with were writing thingsout longhand, doing it over and over and overagain, or they'd take a letter and they'd cut andpaste and pull things together. Boy, it was slow! And there was equipment out there very earlyon–the Vydec machines, if you remember theword processing under that, you know, a plasticdisk exercise. And I spent a lot of time trying toconvince our people that we needed, first, for oursecretary, this word processing capability, thatthe secretary should be able to not have to retypeall this crap. That if you took something and cutit out, she ought to be able to go–all you did wasmodify a letter that went to somebody else, sheought to be able to pull that letter up and makethose changes. And the response frommanagement was, "Nah, that machine is $7,000. You're going to have to keep it running twenty-four hours a day to make that adjustmentwarranted." Anyway, I beat on that for aboutfive years, and we finally got a word processingsystem set up in there, and that started about1980, and now everybody's got them. But theRepayment Branch was the envy of the officewhen we had that stuff, because it was great. Wecould produce stuff like you wouldn't believe. And compared to what we used to do, why, itwas marvelous.

Storey: Tell me more about management attitudes aboutthis.

Budd: Reclamation's attitude, management towardspeople things, is kind of drug along kicking and

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screaming, whenever there's a change intechnology. But the equipment was expensive,but they weren't terribly concerned aboutcomparing output, and saying, "Okay, you canget this much output for this many dollars. Andfor this many more dollars, you can get moreoutput." That didn't matter, it didn't count. Itwas the budget dollars available for theequipment, that was all that counted. "We don'thave that in the budget, we don't have that kindof money. We're not going to spend that kind ofmoney." Hell, we had problems when IBM cameout with electric typewriters! And we never didget a typewriter that had a memory in it, so thepoor secretary could take advantage of just thatlittle advancement. When we finally made thechange, why, it was a big-time change to an e-mail system. It was just a real local system, onlyhad about twelve, fifteen stations on it.

Storey: Just in the Repayment Branch?

Budd: Just in the Repayment Branch.

Storey: Did management have concerns aboutprofessional staff working at a typewriter or aterminal or whatever?

Budd: I don't know. I suppose there's some of that. Ireally don't know what the motivation wasbehind the resistance to doing that. Certainlybudget was part of it, but the analysis that youwould do in terms of dollars per product, the unitcost of your product didn't enter into it. From abusiness standpoint, it made no sense for us to

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continue to do stuff with cut and paste and penciland pen. When we made the change, we had asystem that was designed for word processing,for people writing stuff. In fact, parts of it are farbetter than the WordPerfect system that we usenow. It had– I've forgotten what it wascalled–but you could set up your own mini-programs, so that if you typed a "C" and that's allyou typed, what showed up on the screen or whatwas printed was "Commissioner," or if you put in"R," it was "Reclamation." or if you put in "D," itwas "District." You just had this shorthand. "DOI" was "Department of the Interior." Andyou could be as elaborate as you wanted to be,with that thing. Or "USBR" was "Bureau ofReclamation (Reclamation)." You had fourkeystrokes that put all this crap in. You couldwhack along there and maybe thirty keystrokesyou had six or seven paragraphs if you used theright set of stuff.

Storey: You could put in standard paragraphs, forexample.

Budd: Absolutely, and you could have one letter thatwould be a standard paragraph. Or you'd say,"S12," standard paragraph twelve that's stored inthis thing would appear. And it was really welldesigned from that standpoint. Anyway, it tookus a long time to get that, and within two years ofhaving it in, why, we were overtaken by the restof the region. That system wasn't compatiblewith the IBM system that we now have. So itwent the way of the wild goose.

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Adjusting to New Technology

Telephones, cellular phones. This wasthree years ago, two or three years ago. I wasgoing on a trip, a little tour with some visitors,congressional staff types, I needed a cellularphone to take along, to make sure thatarrangements were squared away, give themaccess to the outside world while we were on thislittle tour. I went down to 400 to borrow aphone–they had purchased some for theirappraisers. They had two or three of them, I'veforgotten. And checked out the phone, brought itdown to my desk, opened it up, and there's apiece of paper in there. It said, "This phone is tobe used in emergencies only." So if your carbreaks down or something like that, you can usethe telephone. But the people who had thesephones were appraisers who spent, when theyhad the phone with them, were out someplace inthe middle of some agricultural area, drivingfrom point "A" to point "B," and if you got a guyout in the middle of Westlands, who needsinformation from the county seat, he's got todrive into Fresno, which is forty-five or maybe asmuch as seventy miles, and get the information;or drive to the nearest phone and use a pay phonesomeplace to do it. (Storey: Three hours out ofhis day.) Or if he's driving from Fresno toSacramento, he can't use the phone to do businesswhile he's . . . It's silly, archaic kinds of thingsthat . . . You've got a guy, it's probably costingyou $30-$40 an hour, going down the road,driving a car when he could be doing somethingproductive that would cost you an extra twenty-

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four cents a minute–or I don't know what thegovernment rate is, it's probably ten cents aminute. Why not put him to work?! Why not getsomething out of him?

Storey: Well, this has been very informative today, butI'm afraid we're at the end of our time. So I'd liketo ask you again if you're willing for the tapesand any resulting transcripts from this interviewto be used by researchers from withinReclamation and from outside Reclamation.

Budd: Sure, no problem.

Storey: Good, thank you very much.


This is Tape 1 of an interview by Brit Allan Storey, seniorhistorian of the Bureau of Reclamation, with John B. Budd,of the Mid-Pacific regional office of the Bureau ofReclamation, in the offices of the Mid-Pacific Region inSacramento, California, on May the 27th, 1994.

San Luis Canal and California Aqueduct

Storey: Mr. Budd, one of the things I'm a little confusedabout is that whether or not the San Luis Canaland the California Aqueduct are the same canal,the same facility.

The San Luis Unit of the Central Valley ProjectWas Authorized as a Joint State-Federal Facility

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Budd: Okay, and the answer is yes and no. Theauthorizing legislation for the San Luis Unit ofthe Central Valley Project included a provisionfor joint state-Federal construction and operationof that Unit–that is, the San Luis Reservoir andthe San Luis Canal could be constructed largeenough to accommodate the needs of both theState Water Project and the Federal CentralValley Project. And at the time the San Luislegislation was being considered in Congress, theState Water Project had not been approved by thevoters of the State of California, so it was inlimbo to some extent, and the state peoplerecognizing that two parallel facilities didn'tmake a lot of sense, asked the Congress to makeprovision for addition of capacity toaccommodate state needs, and that was done.

California's California Aqueduct Travels 600 Milesfrom the Delta to San Diego

Reclamation Shares the San Luis Canal from theDelta to Kettleman City

So basically, what we have is a CaliforniaAqueduct that stretches from the Delta to SanDiego, I guess, some 600 miles, and a portion ofthat, about 110 miles, from San Luis Reservoir,and including San Luis Reservoir, to KettlemanCity is jointly owned and operated by the StateWater Project and Central Valley Project. Weconstructed the San Luis Reservoir, the O'NeillForebay and San Luis Canal; the stateconstructed the remaining portions which are allstate-only facilities.

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Reclamation Pays the State to Operate the JointFacilities in the San Luis Unit

The state actually does the operation andmaintenance of the joint facilities and we paythem for that service. The capacities are largeenough to accommodate both state and Federalprojects, and we share about forty-five percentFederal, fifty-five percent state is the split.

Storey: Are there any tensions between the state andReclamation over this joint usage facility?

State/Federal Communication over Operation ofthe San Luis Unit

Budd: I don't think there are any tensions. There'sconstant communication between the operators,whose water's being pumped at what time, andhow much energy is to be furnished by each, bythe project to pump water, and obviously if youpump water into a reservoir at a lower elevation,it costs you less in energy to get it in there, thanif you're stuck with pumping it in on the top. Butthe operators seem to work very well together,and, from an operational standpoint, there doesn'tseem to be any particular problem.

Periodically Reclamation Is Late Paying its Shareof Operating Costs for the San Luis Unit

I think if there is any tension, it arises primarilyfrom our budget problems–periodically we're latein our payment of our share of the operation andmaintenance costs, and the State Water Project

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folks have to underwrite our share. But thatdoesn't happen that often. Every three or fouryears, I guess, why we'll be late in a payment orwe'll only make a partial payment. And thatirritates the state, because it amounts to six-,eight million dollars and they have to pick up thefinancing costs on that, and that's an additionalburden to them. But that's about the only area oftension we have. The operation of that facility ispretty well insulated from the political activitiesand the politics of water in the [Sacramento-SanJoaquin rivers] Delta. It's strictly an operationalissue, and, from that standpoint, works prettywell.

Storey: So if I'm understanding this, then we have SanLuis and the O'Neill Forebay, which is a pump-storage project, is that right? (Budd: Correct,yes.) For hydrogeneration? (Budd: Correct.) Aswell as a water supply to the San LuisCanal/California Aqueduct. (Budd: Right.) Thenwe use the San Luis Canal to deliver water toWestlands, is that right?

Reclamation Contractors on the San Luis Canal

Budd: Westlands is a principal contractor, there arethree small cities and Lemoore Naval Air Station,and two other water districts that take water fromthe canal.

Storey: And then by the time we get out there 110-115miles to, what was the name of the city again? (Budd: Kettleman City.) To Kettleman City–ourwater has been taken out and then it's state water

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from that point on?

Budd: That's correct. And the capacities, as I recall, atMile 18 Pumping Plant, which is really thebeginning of the canal, is about 13,000 cubic feetper second, and by the time it arrives atKettleman City, why, it's down to about 7,000cubic feet per second. So we've got six-thirteenths of the capacity at Dos Amigos.

Storey: Dos Amigos is Mile 12?

Budd: It's Mile 18. The first eighteen miles of the canalare flat, there's no drop in that, and it acts simplyas an extension of the forebay–it providesadditional storage for operational flexibility. And, obviously, because there is no drop, why, itavoids increasing the pump lift at the pumpingplant.

Storey: Okay. So we operate San Luis and the forebayand generate the hydrofacility jointly with thestate?

Budd: Yes, it's actually their crews that do theoperation, but the costs and any generation areshared under a formula that we've agreed to in acontract.

Storey: Do we have any say at all in how those facilitiesare operated?

How Reclamation Reviews California's Operationof Joint Facilities in the San Luis Unit

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3. The San Luis Unit Study, an act for continuation ofconstruction of distributions systems and drains on the San Luis Unit ofthe Central Valley Project became law on June 15, 1977. P.L. 95-46,91 Stat. 225. Section 2.(a) specifies establishment of a task force "toreview the management, organization, and operations of the San Luis

(continued...)


Budd: Oh sure. We review their budgets from amaintenance standpoint, and the operation of theplant and the canal is dictated, to large extent, bythe operation of the pumping plants in the Delta,or the delivery schedules to the contractors thatboth the state and the Federal projects have tomeet.

Storey: The last time we talked, we had discussedrepayment and Westlands and the San FelipeUnit as major projects, and that got us into themid-1970s, I think. When did you becomeinvolved in that? Were there any major projects?

Drainage Became a Major Issue in the 1970s

Budd: No, there's nothing new that came on-line then. Some of the issues that were requiring attentionduring the early and mid-'70s died down, theybecame less newsworthy, I guess. Other issuescropped up as the '70s went on. Drainagebecame a major issue, and how we were going tomeet our obligations under the San Luis Act toprovide drainage to that unit. The Kestersonsituation blossomed and we began responding tothat situation. The San Luis Task Force wasestablished under P.L.-99546, I think. That's notthe right citation, I don't think,3 but in any event,

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3. (...continued)Unit . . ."4. The San Luis Unit Study of June 15, 1977. P.L. 95-46, 91Stat. 225.


the San Luis Task Force was established bystatute, and that activity proceeded during theCarter administration years, and that required afair amount of time. Most of the time was spenttrying to sort out the issues with Westlands andSan Luis Unit to satisfy the Congress and thepolitical appointees.

Storey: Tell me, as a repayment specialist–excuse me,that's not the right term.

Budd: Well, that's what I was at the time.

Storey: Is it?! Oh, I guess it is the right term then. Howwere you involved in the drainage issue at SanLuis, and what was that issue?

The San Luis Act Required Reclamation toProvide Drainage

Budd: San Luis Act4 required that we provide drainage. It was recognized when the unit was proposedthat drainage would be a problem, shallow salinegroundwater would need to be disposed of if youwere to continue the irrigation of the land on thewest side of the valley–just the nature of thegeology of the area led us to that conclusion.

Existing Water Users Feared WestlandsDevelopment Upslope Might Affect Their Land

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and Went to Court to Stop Development

And the act provided for it, there was even, infact, litigation early on by existing water users,districts down there that were concerned aboutthe impact of the application of additional waterupslope of their lands, and they went to court toask that the United States be enjoined fromconstruction of the San Luis Unit until we hadproceeded with construction of a drain. And weassured the court that we were in fact proceedingwith construction of drainage facilities and thelitigation was dismissed on that basis.

"We constructed about eighty miles of the SanLuis Drain from the Kesterson Reservoir site

upstream to about the southern third ofWestlands . . ."

We constructed about eighty miles of theSan Luis Drain from the Kesterson Reservoir siteupstream to about the southern third ofWestlands is about where the drain terminatesnow.

". . . the issue of discharge of the drainage waterto the Delta became quite controversial. . . ."

And the issue of discharge of the drainage waterto the Delta became quite controversial. Therewere a number of people concerned aboutcontamination by polluted water in the Delta.

Operation Plan for Kesterson Reservoir

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Our operation plan had anticipated constructionof a reservoir at the Kesterson site, which wouldbe a holding reservoir that would allow you tostore water during the summer months when theoutflow in the Delta, the fresh water flows, weresmall, and then release the water in "slugs" if youwill, during the wintertime when the fresh waterflows were very high, and on that basis youwould get a dilution of the drainage water.

Reclamation was forbidden "to spend moneyacquiring land for the drain north of Kesterson,until the State of California had a agreed on a

point of discharge. . . ."

In our view, at the time, impacts would be minor,if any. But that assurance was not satisfactory toa number of people, and I guess about 1965–thedate I'm fuzzy on–a Congressman by the name ofBaldwin got an amendment put on anappropriation act that forbid us to spend moneyacquiring land for the drain north of Kesterson,until the State of California had a agreed on apoint of discharge. And from that point on,discussions with the state, the environmentalcommunity, other folks, drug on and on. Wenever did agree on a point of discharge, but theKesterson Reservoir was, the first stage of it, wascompleted.

Westlands Wanted to Hook Drains to the ExistingCollection Facility and Use Kesterson as

Evaporation Ponds

We had completed about eighty miles of

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conveyance facility, and we'd also completedinstallation of open-joint collector lines in about40,000 acres of Westlands. And the Westlandspeople proposed to us that we use the Kestersonfacility as an evaporation facility and allow themto hook up on-farm tile collectors to our collectorsystem, and evaporate the drainage water. Weagreed to that proposal, and allowed them todischarge a limited amount of the water into thedrain which was conveyed to Kesterson andevaporated.

Selenium in the Drain Water

One of the constituents of that drain water wasselenium, and in the years that we were studyingthe drain, we'd looked at the water quality, andwe knew that there were large quantities ofnitrates and salts of one kind or another in thedrain. We knew there were a number of traceelements, but the technology at the time was suchthat measuring the quantities of the traceelements was a very, very expensive task, and itusually wasn't done–they were simply lumped ina group and called trace elements. And it turnedout one of these trace elements was selenium,and in quantities that it occurred in the drainagewater, it would accumulate in the soil, be pickedup by the plants, and the resident birds that usedKesterson . . .

How Kesterson Became a Refuge

I need to back up a little bit and talk aboutKesterson as a refuge. When Fish and Wildlife

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Service found out that we were proposing areservoir in the middle of the San Joaquin Valley,they suggested that they operate it as a refuge,and that made sense to us, since there was goingto be water there periodically, and they werewilling accept the nature of the operation. Butthey felt that just simply the existence of waterprovided an opportunity to create a refuge thatwould provide habitat for all kinds of critters, butparticularly waterfowl. So we had signed anagreement with them in the early '70s underwhich they operated and maintained thecompleted portion of the Kesterson Reservoir asa refuge. And for the first five or six years ofthat operation, we furnished fresh water to therefuge from the Delta-Mendota Canal, and theyoperated it as they would any other refuge.

In 1979 we permitted Westlands to begindischarging drainage water, and the amount offresh water decreased as the amount of drainagewater increased. Since we had no outlet toKesterson, you couldn't put any more water inthere in a particular year than you couldevaporate. So you had to be very careful howyou managed the quantities of water.

Selenium Concentration Proved Toxic to Wildlife

Well, the evaporation of the water led to theconcentrations of selenium, which, when pickedup by the waterfowl, led to deformities and deathand reproductive failure in the waterfowl, andthat created quite a flap. And we spent a numberof years addressing that–in fact, we still are.

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Kesterson site is being very closely monitoredand managed to minimize the attractiveness tobirds.

"We've purchased additional land for Fish andWildlife to operate as a refuge, in a mitigation

measure for the reservoir. . . ."

We've purchased additional land for Fish andWildlife to operate as a refuge, in a mitigationmeasure for the reservoir.

". . . we directed Westlands to plug their drainsand quit discharging into the San Luis Drain . . ."

Westlands Sued over Closure of the San LuisDrain and Other Issues

The discovery in the early '80s, '82 as Irecall, led to the closure of the facility in '84, andwe directed Westlands to plug their drains andquit discharging into the San Luis Drain, whichof course led to a lawsuit on the part ofWestlands, which there were a number of otherissues that were involved, including our failure tokeep our promise to negotiate a new contract forthe land that had been added to the district in1965. But settlement of that litigation had anumber of terms and conditions to it, but themost important, I think, as far as Westlands wasconcerned, was we agreed to attempt to resolvethe drainage problem and provide drainage to theSan Luis Unit, and we also agreed to furnish anadditional quantity of water to Westlandsthroughout the term of their original contract. So

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they've got their water supply tied up under acourt order through the year 2008. After that,things will be pretty unresolved.

Storey: We agreed to provide additional water because ofwhat?

"Holum Memorandum" of 1964 Agreed to aMerger of Westlands with the West Plains Water

Storage District and Negotiation of a WaterContract for the Expanded Area

Budd: In 1964, Assistant Secretary [Kenneth] Holumsigned a memorandum that surprisingly wasreferred to as the "Holum Memorandum." Andin that memorandum, there were a number ofthings agreed to that were in some sense dictatedby the Senate during the hearings on theWestlands distribution system contract, but thetwo principal things in that memorandum werean agreement by Westlands to merge with theWest Plains Water Storage District, and anagreement by the United States to negotiate acontract for water supply for that annexed area. And Westlands was merged by statute of theLegislature of California, in 1965, with WestPlains, but we never did conclude negotiation ofa contract for that area.

Storey: So this was the water supply we talked about inthe last interview.

Budd: Yes.

Storey: Okay. I want to make sure that I understand

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what was going on. Because of environmentalconcerns, and the fact that Reclamation had tonegotiate with the state to release the waters outof Kesterson, and could never reach anagreement, it became a closed system with nooutlet, is that right?

Budd: That's correct. That's correct.

Storey: What did the irrigation district ultimately doabout disposing of their drainage?

Westlands Is Managing Drainage Water in Situ

Budd: They haven't done anything yet. Well, theyhaven't done anything about disposal. They havedone a number of things about management ofthe drainage water in situ, if you will. They haveinstituted irrigation management practices thatresult in very little water percolating below theroot zone, so that they're minimizing the amountof drainage water that is accumulating in the soilprofile, but that is continuing to occur.

"The depth to shallow groundwater is decreasingevery year, and it's a highly saline water . . ."

The depth to shallow groundwater is decreasingevery year, and it's a highly saline water, in manycases saltier than sea water, and is unusable in itsnatural form for any purpose that a farmer woulddo with it.

"The Westlands District itself has spent a greatdeal of money looking at alternative forms of

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treatment for drainage water to remove theundesirable constituents . . ."

The Westlands District itself has spent a greatdeal of money looking at alternative forms oftreatment for drainage water to remove theundesirable constituents, they've contacted all thebig salt companies, for example and asked if theywould be interested in taking the water free. They'd be more than happy to give them thewater, with the assumption that they would thenprocess the water for salts. But the presence ofpesticides, insecticides and other things in thesalt, (Storey: Selenium . . .) other trace elements,has led the salt companies to decline the offer. They spent a great deal of money oninvestigating deep well injection. That is, theywould drill a well to 8,000-, 10,000 feet and casethe well down to that depth, then inject the waterinto the rock formations at that depth, with thethought that at that depth, why, it would neverinterfere with any anticipated use of other water,that it wouldn't contaminate any other water. They've looked at a number of different treatmenttechnologies to remove specifically selenium, butother trace elements as well.

Selenium Is Toxic in Very Small Quantities

The trace element concept has always beenkind of interesting to me. Detection technologyin the '60s, '50s–if we could detect things innormal laboratory activities in the range of one totwo parts per million, we were doing pretty well. Some of those things were in very minute

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quantities and detection of them at that level waspretty good science. What we found out is thatselenium in the level of a few parts per billion istoxic. Fish and Wildlife contends that instanding water, the selenium content must be twoparts per billion or less, and in moving water itcan be as much as ten parts per billion. Butagain, you know, the detection technology, theability to measure that stuff, wasn't there in the'50s and '60s, and it wasn't until the '70s and '80sthat we could routinely detect things in thosequantities–in those dilutions.

Now I'm off track. Now I forgot where wewere headed!

Storey: We were talking about Westlands and what theydid with their drainage water.

Budd: Oh yeah. And they have deep well technology,they've looked at a number of different treatmenttechnologies, they've looked at solar ponds andevaporation and concentration. They havelooked at, and probably one of the better uses ofthe water will be for irrigation of eucalyptustrees. They will take the water out and leave thesalts. However you dispose of the brackishwater, in the [San Joaquin] valley, it will result inan accumulation of the solids–that is, the salt isgoing to continue to accumulate, and at somepoint is going to have to be disposed of.

". . . when the drain . . . reached its maximum rateof flow, it would export from the valley the

equivalent of one 100-railroad-car train a day in

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salts. . . ."

And I recall reading, and I think it was in one ofthe reports on the San Luis Drain that was writtenback in the '60s, that when the drain was in fulloperation, that is, it had reached its maximumrate of flow, it would export from the valley theequivalent of one 100-railroad-car train a day insalts. The number of tons of solids that would beremoved would be equivalent to that which onerailroad train of a hundred cars would take out. So the quantity of the solid is a problem, it'sgoing to continue to be a problem, andultimately, some kind of disposal of the solidmaterial is going to have to be found. Logically,the ocean appears to me to be the only place thatyou can dispose of that. And ultimately, if youdon't dispose of it, your alternative is to shutdown irrigation. The salt will accumulate to thepoint that irrigation will no longer be possibledown there–at least not under any technologythat we are aware of today, or to irrigate anycrops that are being irrigated down there today. You've got to dispose of the salts or you have toquit irrigating.

Storey: What is Reclamation doing about Kesterson?

"It's managed now basically as dry land . . ."

Budd: Kesterson, under an order by the State WaterResources Control Board was closed. (Storey:Closed to . . .) Everything. We fenced it, weleveled the area so that there was no area wherewater would stand, any precipitation that falls on

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that area, that which doesn't percolate into thesoil, will run off. There's no area that provides apool or an attraction for waterfowl or othercritters that inhabit the area. It's managed nowbasically as dry land habitat, but with anemphasis on dry land and a de-emphasis onhabitat. The presumption is that the seleniumthat is contained in the soil . . .

". . . we covered the reservoir site with dirt hauledin, several million yards of material, and covered

the reservoir site. . . ."

Oh, and we covered the reservoir site with dirthauled in, several million yards of material, andcovered the reservoir site. And the thought beingthat the selenium will, I guess the word is"volitize," but in any event, it will convert fromthe form that it's currently in to a differentform–that is a different form of selenium that iseither less or non-toxic, and less apt to be pickedup in the food chain. And that over a certainnumber of years, why, you'll be able to reclaimthe land and it can again be used for habitat. That's really the primary purpose of land in thatarea anyway. It's not good farmland, and habitatfor waterfowl is probably the best use for it.

Storey: The treatment that was applied at Kesterson, didReclamation do that unilaterally, or did wecooperate with other agencies and groups?

Budd: There are a number of agencies involved–individuals, environmental organizations–butprimarily the Fish and Wildlife Service and

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Reclamation were the lead agencies involved indetermining . . .


Budd: . . . The two agencies primarily involved indetermining what was happening at Kesterson,and what you could do to rectify the situation,and we spent a great deal of money, I think onthe order of $50 million on studies, trying toidentify a solution and management strategy forthe area. The State Water Resources ControlBoard, which is the regulatory agency withresponsibility for discharge of water and that sortof thing, and pollutants, into natural streamchannels, was the regulatory agency with thefinal say. And they were very much involved inthe ongoing activities. I don't think it'sappropriate to say they cooperated in the activity,since they are the regulator with theresponsibility, but we kept them very wellinformed about what we were doing, what thealternatives were, and what we believed theprospect of success was for what was ultimatelyadopted by the State Board as the solution to theproblem.

Storey: You mentioned the San Luis Task Force. Didn'twe discuss that the other day?

San Luis Task Force

Budd: We did, yes.

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". . . it was a political exercise, originated byCongressman [George] Miller, whose principalmotivation was to put Reclamation and the San

Luis Unit in a bad light, and they did a great job. . .."

Yeah, it was a political exercise, originated byCongressman [George] Miller, whose principalmotivation was to put Reclamation and the SanLuis Unit in a bad light, and they did a great job.

Storey: Did anything constructive come out of itsactivities, that you can recall?

Budd: Tough question, because there were a number ofthings that we were doing at the time that we hadstarted, or were embryonic–adjustable rates, forexample–more concern about impacts in theSacramento-San Joaquin Delta, moving the wateracross. The Task Force looked at those areas,criticized us for our policy/stance/ procedures atthe time, but gave us little or no credit for havingrecognized those on our own initiative and forhaving started modifying our policies,procedures, that sort of thing, to address thoseareas. They, I guess, "threw rocks and walkedaway," is kind of a way to put it.

Storey: Did their activities help accelerate changes thatReclamation was already in the process ofimplementing, by chance?

Budd: That's a real tough question to answer. I guess acouple of . . . You could probably make anargument that no, it didn't accelerate anything,

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5. Congressman Miller was elected in 1974 and assumed officeJanuary 3, 1975. He has been retained, uninterrupted, in office untilediting of these interviews in October/November 2008.


simply because we spent two or three yearsfooling around with them, and in many casesdefending where we were as opposed to havingtwo to three years to address issues and problemsand proceeded on a normal business footing. Sowe spun our wheels for a long time with them. Maybe they did. Maybe there was someacceleration of activities, but it's a tough, toughquestion to answer.

Storey: Now when we're saying–this is George Miller,right? (Budd: Yes.) Is this junior? (Budd: Yes.) Did you ever have any dealings with GeorgeMiller, Sr.?

Budd: Never did. In fact, I've only met Junior twice. I've only been in two meetings with him, but Inever did meet senior.

Storey: So from the time that we're talking about, youcame about '67, and Mr. Miller's name has comeup several times. This would have been GeorgeMiller, Jr.?

Budd: Yes. My recollection is he was elected in 1972.5 I'm not sure.

Storey: Now, if I'm recalling correctly, the San Luis TaskForce was during the Carter Administration? (Budd: Correct.) So this was going on, say, justbefore 1980. (Budd: Yes.) What were you doing

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after the San Luis Task Force? Well, excuse me,before I do that, how did you as a RepaymentSpecialist become specifically involved in thedrainage issue or the Kesterson issue, or did you?

Budd: My involvement arose from my role as arepayment specialist in the administration of thecontracts with Westlands, San Luis, and Panochewater districts, who were the contractors withright to the use of the drain under their contracts. They were the San Luis Unit contractors. As theissue became more a technical issue, more abiological issue, my role decreased significantlyand for the most part, I was an observer,beginning in 1981-82, as far as the drain andKesterson were concerned.

Storey: What specifically would you as a repaymentspecialist have been doing in dealing with thedrain and Kesterson?

Budd: There was a great deal of communicationinternally with Washington, Denver. There wasa lot of interest on the part of the public, thewater users and others, and my principal rolewould have been simply to respond to inquiries,either internal or external, prepare letters, aninformation-gathering kind of a person, kind of acoordinator, just doing the staff work on thoseissues, rather than being involved in the technicalaspect of what was going on.

Storey: What was the staff work? I'm not asking thisquestion so that you're understanding meproperly, I think.

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Budd: Nothing pops to mind. I guess I'd have to goback and look, but it was primarily just observingthe activity of the Task Force–and that's not theright word. But there was a Kesterson group setup that was looking at drainage issues in the SanJoaquin Valley, there were two or three of them:one internal; and one that included State WaterProject, State Board, fish and game people. Theywere studying the issue, and my role was simplyto stay informed of what they were doing, wherethey were headed, what kind of money were theyspending, what the prospects were of arriving at asolution, and communicating that to anyone onthe outside of the organization who wasinterested.

Storey: Let me try this from a different approach. Thedrain system and the Kesterson Reservoir wouldhave been part of the project, and thereforewould have been cost-reimbursable, I presume. And we developed those. Were you involved inthe negotiation of repayment contracts, oranything like that, or implementing charges forthose?

Repayment of the San Luis Drain Costs

Budd: The repayment for the drain had been negotiatedin the original contracts with Westlands,Panoche, and San Luis, and there was acomponent in those contracts, fifty cents an acrefoot, that was, when the contract was negotiated,estimated to be adequate to repay the capitalcosts of the facility over the life of the contract. That component, as time went on and the costs of

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the drain–and it actually amazed me, going backthrough the costs that we had, how we arrived atthe fifty-cent component. My, since I wasn't anengineer, estimate of the costs is pretty shaky,but it looked like when you took out majorfacilities and you left in just the drain itself, yourrepayment would amount to something on theorder of $2,000 a mile. And that simply, youcan't drag a plow for $2,000 a mile and dig aditch, and we were proposing a 450[,000]second-foot concrete-lined facility with utilitycrossings and stream course bridges, siphons,highway crossings.

". . . there was no need for negotiations with thewater users, and no opportunity to do that until

the contract came up for renewal, but it left amajor hole in that we were accumulating costs at

a far greater rate than we were getting anyrepayment. . . ."

In any event, the fifty cents was totallyinadequate, but that was what had been agreed toby the department in the Westlands negotiations,so there was no need for negotiations with thewater users, and no opportunity to do that untilthe contract came up for renewal, but it left amajor hole in that we were accumulating costs ata far greater rate than we were getting anyrepayment. We started collecting the repaymentcomponent in 1978-79. I guess the letter waswritten in '78 and we started collecting fifty centsan acre foot in '79. But that would just barelycover operation and maintenance costs. And thecapital cost issue was hanging out there to be

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resolved. The drain, since our normal practice isnot to put facility costs into repayment statusuntil the facility is in operation, the drain costswere held in the construction account and notsubject to repayment–and that's still the case. Wenever completed the drain, it's not in operation,and we have prepared a report to Congress, attheir request, recommending to them how wethink the costs should be handled, who shouldrepay what portions, and whether or not any ofthose costs should be considered non-reimbursable. So we're fifteen years down theroad, and still no resolution of that issue, it's stillhanging out there.

Storey: So they were paying the fifty-cent-an-acre footfor the time that they were actually hooked upand draining water into Kesterson?

Budd: Actually, they've been paying that ever since1979–they're still paying it, they have neverstopped paying it. But our operation andmaintenance costs at Kesterson approach amillion dollars a year, and that's about twice whatwe receive in revenues from the drainagecomponents, so they're still going in the hole.

Storey: Okay, good. What else did you become involvedin after 1980?

Served as Acting Chief of the Repayment Branchfrom 1980 into 1982

Budd: We had a bit of a burp or a bubble or whatever. We had a period of time after the departure of

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Billy Martin as regional director when we hadacting folks in place. And that period extendedfrom 1980 into 1982, and I was acting branchchief in the Repayment Branch for about twoyears, and it was a fill-in-behind-you kind of anexercise. Mike Catino, who was AssistantRegional Director for Operation andMaintenance was appointed acting regionaldirector, and he pulled in Neil Shield who wasthe 400 division chief as acting assistant regionaldirector. Neil took the 440 Branch Chief whowas Jim Moore and pulled him into 400 asacting, and Jim pulled me up behind him to act inthe 440 slot. So for about two years, I wasresponsible for Repayment Branch as the branchchief in a really, from my standpoint, a verydifficult situation, since Neil Shield'smanagement style dictated that he had to be veryintimately involved in the operation ofeverything below him; Jim Moore was basicallythe same way. So while I was the branch chief,why, I didn't have any authority to make anydecisions of any consequence. The decisionswere made by folks above, but consequences ofbad decisions didn't always stop with the peoplewho made the decision. But it was a difficulttime. We were busy, there was a lot of stuffgoing on. I don't remember the specifics. I wastrying to remember last night, thinking aboutwhat I was going to say today, what I had done,you know, the things I had specifically workedon, and I really don't remember, other than thenegotiation of the Coordinated OperationAgreement, beginning about 1984–I got involvedin that.

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In 1982 Had a Heart Attack and David HoustonArrived as Regional Director

I had a heart attack in '82 and Houston showedup and I had my heart attack in April, Houstonshowed up as regional director in October. I wasphilosophically kind of taking the attitude that "Iain't gonna work like I had been working in thepast." I wasn't going to spend the amount ofhours doing things that I had done. And myapproach towards business was going to change,because I discovered that it wasn't really thatimportant, there were some other things that weremore important than what was happening here. And the more I worried about what was going onhere, why, the more difficult things became forme personally, so I changed my philosophysome.

Work on the Coordinated Operations Agreementfor Operation and Accounting for Joint Facilities

of Reclamation and the State Water Project

The only significant thing I rememberworking on over the next five or six years wasthe Coordinated Operations Agreement.

Storey: Tell me about the Coordinated OperationsAgreement. What necessitated it, what was it?

Budd: When the State Water Project was authorized in1960, we entered into an agreement–well, in1961–that was basically an agreement to agree onhow we would coordinate the operation of thetwo projects. Since both of us would use the

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Sacramento River and the Sacramento-SanJoaquin Delta as conveyance features of ourprojects, it was necessary that we put in place anaccounting procedure that would allow us todetermine whose water was being pumped atwhat time, who was entitled to pump, who wasrequired to make more releases from storage–just simply an accounting procedure for the day-to-day operation of the two projects to keep uswhole.

". . . 1968 There Were Some Negotiations on anAgreement That Was Never Signed, but Provided

a Framework . . . for Daily Operations. . . ."

That was in 1961, and in 1968 there were somenegotiations on an agreement that was neversigned, but provided a framework–a basis fordaily operations. And the State Board stepped inwith the water quality decision in the Delta, D-1379, which I believe was 1972. [It] obligatedthe two projects to maintain water quality in theDelta. And the way you maintained the waterquality in the Delta was to provide a certainamount of outflow to the ocean to keep waterquality in the Delta at a specified level–at orbetter than. And that required more accounting,and we had to account for diversions of water onboth the Sacramento and the Feather Riversystems, and we had to agree on who was to beresponsible for providing the water for thosediversions. And so we annually signed a letterthat simply said, "We will operate in accordancewith the terms/conditions of the '69 DraftCoordinated Operations Agreement." We also

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needed to, before the Coordinated OperationsAgreement could be executed, we needed to doan environmental impact statement. And thestate passed their equivalent to NEPA, and theyhad to do an environmental impact report. Andall of these things were ongoing over the '70s.

Assumptions from the 1969 Draft CoordinatedOperations Agreement Did Not Prove Out

We began to recognize that a number of thethings that were assumed in the earlier agreementas basic project facilities, simply weren't going tohappen. For example, the state had assumed thata Peripheral Canal would be built, they hadassumed that they would build a reservoir atRound Valley, and they would have more waterto put into the system. It was assumed that 1,800cubic feet per second of Delta outflow wouldprovide a water quality of 1,000 parts chlorides atEmmaton and Jersey Point in the Delta. And allthese assumptions, which would lead you to acertain sharing formula, proved to be inaccurate. The Peripheral Canal was not built, Deltaoutflow, we found out in 1976 and 1977 duringthe drought at that time, had to be in the range of4,000 to 5,000 cubic feet per second to maintaina 1,000 part chlorides. A thousand part chlorideswas determined to be totally inadequate toprotect agriculture in the western Delta. So thatwas changing. And all of these things that werechanging led us to another round of negotiationswith the state in the late '70s.

Negotiators Arrived at Another Agreement in 1982

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We again arrived at a draft of an agreement in1982 that we felt was technically appropriate andwe could operate under it, and I don't know whythat agreement never was executed, but it neverwas.

Negotiations Resumed in 1983 and Resulted in aSigned Agreement in 1986

And we resumed negotiations in 1983 with thestate on another agreement that was finallyexecuted in 1986 after an act of Congressauthorized us to, and in fact directed the secretaryto execute the agreement. So that one is still inplace. Now with EPA stepping in under theClean Water Act and proposing new Deltastandards and a new basis for determining whatquality is acceptable, we will probably have to goback with the state and resume negotiations. Butthe first round, arriving at the first agreement,took approximately twenty-five years, and myguess is the second agreement will take close tothat long. It's an extremely complex agreement,and the stakes are very, very high for the twoprojects.

Storey: The California Water Project and the CentralValley Project?

Changes Between 1965 and the SignedAgreement in 1986

Budd: Yeah. And the character of the negotiationschanged some from 1965 through 1986. In the

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'60s, why, there was plenty of water foreverybody–there was more water than could bemanaged, said the studies, and we hadn't had anydroughts of any consequence with facilities inplace, so we had a real good handle on what theeffect of the drought would be.

Major Environmental Obligations Changed Things

We hadn't had major environmental obligationsto meet significant water quality standards thatrequired a great deal of water, so things werepretty congenial during the original negotiation. But as the environmental obligations piled on,and we discovered that a number of ourassumptions concerning the requirements ofoutflow to meet certain water quality standardswere no good, we discovered that water qualitystandards were changing and what wasacceptable before was no longer acceptable.

"It became evident we couldn't just continue toadd pieces to the project to increase the

capability of the project. . . ."

It became evident we couldn't just continue toadd pieces to the project to increase thecapability of the project.

"Wild and Scenic Rivers Act was used toforeclose any kind of development on the North

Coast of California, and about forty percent of thestate's water supply flows down North Coast

rivers . . "

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Wild and Scenic Rivers Act was used toforeclose any kind of development on the NorthCoast of California, and about forty percent ofthe state's water supply flows down North Coastrivers, unimpaired, to the ocean. And that hadbeen a source looked at by both the state andFederal projects as a future alternative. Nowthose sources are no longer available. And itbecame evident that every acre foot of water thatwas currently available was much more valuable. So during the '80s negotiation it was a muchdifferent atmosphere than it had been during the'60s.

Storey: You mentioned that the Congress directed thesecretary to execute the agreement. Does thatmean he was unwilling to execute the agreement?

San Francisco Bay Was Added to theResponsibilities of Reclamation

Budd: I don't think so. But that's the way the languagereads. It's difficult to tell. There was somefeeling that that agreement gave too much to thestate, that we were agreeing to more than weshould agree to, and the language of the actincluded the words "Bay Delta Estuary," andinclusion of the [San Francisco] Bay wassomething that we hadn't even addressed in thenegotiation of the agreement. And I guess ananalogy is kind of like if you assume that theDelta is like the solar system–that is, you know alot about it, but there's still lots of things youdon't know, and you don't understand, and it'lltake a long time before you do–adding the Bay

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was kind of like including the universe. There's atremendous number of things you don't knowabout what's necessary to insure sustainableenvironmental health in the Bay -- majorexpansion of the negotiation. And this is apresumption on my part, but I assume when thatBay language was put in there, Mr. Miller felt itwas necessary to guarantee that the secretarywould in fact execute the agreement. I've gotnothing other than just speculation to base thaton, but for me, I was concerned when I saw thebill, and it included the Bay. I thought, "Boy, wedidn't even address that issue!" There just isn'tvery much known about the Bay–biologically,hydrologically, it's [a] significant addition to thebody of knowledge or responsibility that we hadat that point.

Storey: Well, Reclamation was negotiating this with theState Water Agency, is that right?

Budd: Yeah, with the Department of Water Resources.

Reclamation's Team for Negotiating theCoordinated Operations Agreement Included Four

People

Storey: Okay. How many people were involved in thosenegotiations? Was there a team that did this? Orhow was this done?

Budd: Yeah, we had a team. There were four of us, Iguess: Harold Meyer [phonetic spelling], who isour Chief of the Water Rights Branch, Iguess–they had all the water rights issues, all the

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hydrologic modeling–Jim Moore; myself; andJim Turner from the regional solicitor's officewere the members of the Federal group. And wehad access to any of the technical staff that weneeded. The question about how many peoplewere involved is a very difficult one to answer. When we had a meeting, there would be ten totwelve, maybe fifteen people in the room,depending on what the specific subject was.


This is Tape 2 of an interview by Brit Allan Storey withJohn B. Budd on May the 27th, 1994.

Storey: . . . be twice as many state people as Federalfolks.

The State Used More and Higher Level Staff inNegotiating the Coordinated Operations

Agreement than Did Reclamation

Budd: Not only did they have more staff available to puton the issue, they apparently gave the issue moreweight than we did, if you look simply at thelevel of the folks involved in the negotiation. Their negotiating team was headed up by twoassistant directors of the department, and thenegotiating staff that sat at the table included aretired general counsel of the department whohad been brought back specifically to work onthat issue. That was the only thing he did, waswork on the Coordinated Operations Agreement.

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Storey: Do you remember any names?

Budd: Bob James was the general counsel's name, andhe was, I guess, a co-leader with a guy by thename of Larry Molnix [phonetic spelling] whowas Deputy Director of the Department. LarrySwensen was involved. And I've got a pictureover in my office of all the people who wereinvolved in the thing. I'd have to dig that out toget the names of the folks involved from thedepartment. The Federal team was headed by adivision chief, the state headed by an assistantdirector. The Federal legal was a staff attorney,the state legal was a former general counsel forthe department. And everywhere across theboard, it seemed that there was at least a one-stepdisparity in the level of the negotiators within theorganization. And there was at least that kind ofa disparity in terms of the number of peopleavailable. For the most part, it was not aproblem, because we were cooperativelyattempting to resolve our differences, and havingthem have twice the number of hydrologists wehad was not a problem because they could runthe studies. They could do the hydrology work,our people would be in a review mode and theywould check assumptions, check results, andfrom that standpoint it wasn't that big a problem. But every once in a while you'd want to sit backand catch your breath and say, "Whoa, this isfairly intense!" when you had six or seven peopleacross the table arguing one position, and one ortwo people on our side arguing for the Federalposition. And every once in a while you'd loseone simply by exhaustion. They would wear you

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out and you'd concede a point that you probablyshouldn't have, but you simply had spent all thearrows in your quiver and they were still comingat you. But it was an interesting process.

Storey: You mentioned that there were all of theseassumptions that had to be dealt with and so on. What were the major issues that you remembersitting in on meetings and doing negotiations of? And what were the state and Federal sides of theissue?

Issues Involved in Negotiation of the CoordinatedOperations Agreement

Budd: Major issues revolved around who wasresponsible for meeting the water demands in theDelta, and that broke into two parts–and alongthe Sacramento River, but for the most part thatwas not a big issue because we had agreed earlyon that we were responsible for [the] SacramentoRiver above the confluence of the Feather and theSacramento. That was the majority of theSacramento River. But once you got into theDelta, you had a significant water use in theDelta in terms of both the quantity of waterconsumptively used by agriculture and thequantity of water that evaporates and is lost in theDelta system. The Delta is 700,000 acres ofprime agricultural land, about 50,000 acres ofwater surface, and the water consumption in thatarea is very high. If you have so much watercoming into the Delta, so much goes for internalDelta use, so much goes for outflow, and you'vegot a certain amount left to export. And that

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amount exported then had to be split between thetwo projects. So we had to figure out anaccounting process that would allow us todetermine what that split was: number one, howmuch was there to export; and number two, howthat would be split between the two projects. And the state has a major reservoir on the FeatherRiver at Oroville. We have Folsom [Dam] on theAmerican River and Shasta [Dam] on theSacramento, and then we bring water into thesystem from the Trinity, and accounting for all ofthese operations was a fairly complicated issue. And determining how the split was to be madeand what the priority of the right to the use ofwater was, was an interesting process. We talkedearlier about state water rights law, and thepriority of the Federal water rights.

State Water Rights, in Reclamation's View, WereJunior to Reclamation's

The state water rights have the same date ofpriority, but their letter was signed after ours. Imean, the assignment of the priority was made tothe state people after the State Project, after theassignment was made to our project. So weargued that our rights were senior to theirs,therefore as a junior appropriator, they had amuch greater obligation for water quality in Deltause than we did. And they said, "Well, that'scrazy, because our rights are the same priority. Therefore, they should be the same." And I don'tremember the details very well any more, but weended up arriving at an agreement on splitting theDelta obligations and splitting the in-basin

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obligations at a certain level, and we separatedthe priority of the two project export–that is, theSan Luis export quantities, and the State Projectexports were given the same priority; and the in-basin stuff was given a different priority or asenior priority, and we arrived at an agreement. The details of how that worked out, I don't know. But the most difficult thing . . . Because if youdidn't . . . Every time you gave an acre foot ofwater, that's an acre foot of water that simplycame out of your contractors' hides. You neededto attempt to preserve and protect your project'sintegrity, and we spent a long time trying toagree on how that would be split.

And those negotiations were, in somerespects, the first negotiations that Reclamationopened to the public. We used to do our contractnegotiations as a two-party exercise. We wouldmeet with the other party and there would be nopublic involved in those discussions.

"In the Coordinated Operations Agreementnegotiations, we opened up the negotiations to

the public . . ."

In the Coordinated Operations Agreementnegotiations, we opened up the negotiations tothe public, we had observers there from both thestate and Federal contractors, the environmentalcommunity was there, the whole process was laidout so that the public could, to the extent theywere capable, understand what was going on. Itworked fairly well.

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Overview of the Central Valley Project

Storey: I think that perhaps I need a little clarification ofhow the Central Valley Project works. I'm sortof getting the impression that there's more waterin the north in the Sacramento system, than canbe used in the Sacramento system, so the water iscaptured, then allowed to flow to the Delta whereit's picked up and taken to San Luis and used inthe San Joaquin [Valley]. Is this an accurateimage of what's going on in the [Central Valley]Project?

Budd: Yeah, that's exactly the way the project works. The water's in the north, the demand's in thesouth, and the project was constructed to try totake care of that imbalance.

"Total project water use in the north is about2½ million acre feet, and in the south about

4 million acre feet . . . the majority of the water inthe south, comes from the north . . ."

Total project water use in the north is about2½ million acre feet, and in the south about4 million acre feet. Most of the water in thesouth, the majority of the water in the south,comes from the north– about 3 million acre feetthat's used in the south is exported at Tracy[Pumping Plant] from the northern reservoirs. The remainder in the south, about a million acrefeet in a typical year, maybe a little more is1½ million, is developed on the San JoaquinRiver at Friant by the Friant Unit. But yeah, theexact purpose of the project is the nature of the

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beast in California is that, one, the majority of thewater is available in the north, and the majorityof the prime agricultural land is–if you look atthe Central Valley as two valleys, the Sacramentoand San Joaquin valleys, the prime agriculturalland is in the San Joaquin Valley, the majority ofthe water is in the Sacramento Valley, and youneed to work around that logistics problem. Andyou also have the problem of a drought inCalifornia every summer. Every year there isbasically no rainfall from the first of June untilthe first of September. And very little in Mayand September. So you've got five months ofprime growing season in which no precipitationfalls at all, so you have no natural rainfall. That'sone of the things that's always puzzled me aboutfolks from the East who get up and say,"Subsidizing water in California is an unfairadvantage, because that allows them to competeon a higher level with people in New Jersey whoare growing the same crops." Well, that's kind ofhokey, because the cost of water at any level isnot included in the inputs to a crop in NewJersey–it rains! And irrigated agriculture fromIowa east is basically unknown. They wouldn'tknow what to do if they had to irrigate. Anyway,you deal with that little mini-drought every year,so that you meet your summertime demands withwater from storage. The storage basically is inthe north, and you need to move that water south. Some of that you can move south into storage inSan Luis Reservoir in the wintertime, but themajority of the storage in the Federal CentralValley Project is in the north. We've got about12 million acre feet total storage capacity, and it's

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about 2½ million at Trinity, 4½ million in Shasta,and a million at Folsom, and smaller quantitiesscattered in various smaller reservoirs. In theSouth, your major reservoirs are San Luis andour Federal share is a million; Friant, the Federalshare is about a half a million; and New Melones,the storage is about 2½ million, but the NewMelones storage is disproportionate to theamount of water that's available in that river in aparticular year, and that doesn't even contributeto water in the Delta, so you can't even countthat. So if you back that off to 9 million, about1½ million is in the south, 7½ million in thenorth, and again, you have the same demanddisparity.

Storey: Yeah, so the water comes down the Sacramentointo the Delta, and then the Tracy Pumping Plantpicks it up and puts it into the Delta-Mendota, isthis right? (Budd: Correct.) And then it flowsdown into the forebay at O'Neill?

Operation of the Delta-Mendota Canal

Budd: It depends. Delta-Mendota Pumping Plant runsyear-round, and during the irrigation season, it'sused for direct delivery to those contractors alongthe canal. During the nonirrigation season, thewater is then transported into O'Neill Forebayand stored in San Luis.

Storey: Pumped up into San Luis?

Budd: Pumped up into San Luis for storage. When thecapacity at Tracy is inadequate to meet the

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demands on the Delta-Mendota and San LuisCanals, we begin releasing water from San Luisto supplement the Tracy capacity. It's an unusualoperation for an irrigation canal, simply becauseit does run basically a hundred percent, year-round.

Because it Is Used So Heavily it Is Difficult toSchedule Maintenance on the Delta-Mendota

Canal

In fact, it's so close to capacity, or it has been inthe past, that the maintenance folks really had aproblem scheduling down time for routinemaintenance. It was a very difficult situation. When they had down time available to them,why, they would have to bring in crews to workround the clock–they couldn't do it on a regulareight-hour shift. So they would bring in crewsfrom other facilities who could provide the staffto go round the clock on maintenance downthere.

Storey: Because basically down time for the canal is lostwater, because of the way this particular canal isused. (Budd: That's correct.) Then you have, inaddition, a portion of the California Aqueductthat has a pumping plant on it that delivers waterdirectly into San Luis reservoir? (Budd:Correct.) What's the name of that pumpingplant?

Harvey O. Banks Pumping Plant, a State Facility

Budd: That's Harvey O. Banks Pumping Plant, named

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after one of the early Directors of the Departmentof Water Resources.

Storey: So then you can take the water that's been storedin San Luis, run it through the generators, you getelectricity, plus water to go into the San Luis orthe Delta-Mendota Canal?

Budd: Yes. You can back it into the Delta-Mendotaalso. And we do that, regularly. Whenever weback through pumping plants, why, we're able togenerate electricity with it. The capacity at Tracyin our pumping plant is about 4,600 cubic feetper second. The state has an installed capacity ofabout 10,000 cubic feet per second, which farexceeds the quantity of water available to them tomove, but it does allow them to operate in an "offpeak-on peak" mode and maximize their use ofoff-peak power. But it also resulted in asignificant block of capacity if they operated theway we do, that is, twenty-four hours round theclock, that would be available to move water forus.

During 1987-1988 Negotiated a Contract to Sellthe State Surplus Water and They would ProvideExtra Conveyance Capacity on the State Water

Project

And during 1987-88, why, I had theresponsibility, principal activity was negotiationof a contract with the state for that capacity. Andit was called a 10-H contract, because in theCoordinated Operations Agreement,Paragraph 10-H said that the Bureau and the state

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would negotiate a contract in which we wouldsell the state surplus water, and they wouldprovide surplus conveyance capacity to us. So Ispent about a year-and-a-half negotiating thatcontract. That was another one that nothing everhappened with it.

". . . new hydrology studies and new water qualityobligations eliminated any surplus water in our

system, and any surplus capacity in their system. So the contract was pointless. . . ."

We wrapped it up technically, agreed with thestate negotiators that this was a good contract,and then it was put on the shelf. Again, it wasthe environmental situation overtaking theactivities, and about the time we concluded thosenegotiations, why, new hydrology studies andnew water quality obligations eliminated anysurplus water in our system, and any surpluscapacity in their system. So the contract waspointless.

Storey: Did you give me the date for that, when you weredoing that?

Budd: That was 1987-1988.

Storey: So a year or two after the CoordinatedOperations Agreement.

Budd: Yeah, it was an offshoot of the CoordinatedOperations Agreement. We wanted to do that inthe Coordinated Operations Agreement andrecognized that simply was going to be too

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complicated to wrap into all the other stuff, so wejust set it aside to do later, but agreed that wewould do it later.

". . . it seems like I spent an awful lot of timenegotiating things that never came to fruition . . ."

I don't know, it seems like I spent an awfullot of time negotiating things that never came tofruition–that was another one, nothing everhappened with it, and probably never will. I justdon't see the prospect of us having any water tosell to the state, or of them having surpluscapacity to move water for us in any significantquantities.

Storey: Who were the recipients of the California projectwater in the California Aqueduct?

Contractors on the State Water Project

Budd: I don't remember precise quantities, butMetropolitan Water District, I think there aretwenty-four contractors for State Water Projectwater, and it includes Santa Clara, one of ourcontractors; and East Bay Municipal UtilityDistrict gets water out of what's called South BayAqueduct, which is a spur off of the CaliforniaAqueduct just downstream of the Banks PumpingPlant. Then they have no other contractors untilyou get south of Kettleman City. And KernCounty Water Agency is the principal contractordown there. City of Bakersfield is a majorcontractor.

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Storey: Kern County is rural or urban?

Budd: It's a mix, but predominantly agriculture. Andmy recollection is that they have a contract forabout a million acre feet of water, maybe1.1 million, something like that.

Metropolitan Water District of Southern CaliforniaIs Basically Urban but Does Provide Some Ag

Water to High-value Crops

Metropolitan Water District of SouthernCalifornia, which is basically all urban but thereis some agricultural use for very special crops–avocados and things that are very high cash-valueand can be grown down there–gets about2 million acre feet of water, or is entitled to about2 million acre feet of water. And the remainderof the contractors, which include Santa Barbaraand other contractors in that general area onwhat's called the "coastal stubb," a fewmiscellaneous contractors in the San JoaquinValley that are not within Kern County WaterAgency, and a number of contractors in thesouthern California area that did not contractthrough Met. take up the remainder.

"The state contracts' total obligation is about4.2 million acre feet. . . . But . . . they are not

capable of delivering that quantity. . . ."

The state contracts' total obligation is about4.2 million acre feet. That's what they'vecontracted for as an entitlement of all of theircontractors. But because they haven't been able

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to finish all of their facilities, they are notcapable of delivering that quantity.

"Their delivery capability is around 2½ to 3 millionacre feet a year. . . ."

Their delivery capability is around 2½ to3 million acre feet a year. A couple of things thatare saving the state on that issue is, one, theprojections that were used for growth in the late'50s and early '60s turned out to be a littleoptimistic, so the demand is not as high as wasprojected for the urban areas; and the agriculturaluse has declined significantly, or didn't developto the extent they anticipated it would, becausethe cost of water is now precluding using thatwater on row crops and that, so you can't growtomatoes and a lot of row crops with water asexpensive as State Water Project water is andmake money at it. So the demands are down. The other part of that is that they can't even meetthat demand because they can't, under theEndangered Species Act, pump all the water theyneed to pump. And we've had seven or eightyears of drought in the last ten that havecompounded that problem.

Storey: So I'm getting a picture that the State WaterProject does provide some irrigation water, butreally the majority of it is for urban uses?

Budd: Yeah, this is approximate, but it's about one-thirdagriculture, two-thirds urban. (Storey: Okay.) That's close.

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Peripheral Canal

Storey: When you were talking about the CoordinatedOperations Agreement, you mentioned that therewere a number of assumptions that had beenmade in, I believe it was 1969, that hadn't [been]borne out. And one of those was the PeripheralCanal. Could you explain to me what theconcept is for the Peripheral Canal and why itwas thought necessary and all those sorts ofthings? And when the idea came into being, ifyou know.

"The idea of a Peripheral Canal has been aroundat least fifty years . . ."

Budd: The idea of a Peripheral Canal has been aroundat least fifty years, because one of the folks inour Public Affairs Office brought in a PopularScience from 1944 that had a schematic of theCentral Valley Project and talked about irrigationof the land in the Central Valley, and one of thethings that was specifically mentioned in therewas Peripheral Canal.

". . . Peripheral Canal has been assumed. . . .[because] the internal Delta channels are not

adequate to move the quantities of water . . . thathave to be moved . . ."

From the inception of the planning–at least as faras the Central Valley Project is concerned–Peripheral Canal has been assumed. And thebasis for that assumption is that the internal Deltachannels are not adequate to move the quantities

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of water from the north end of the Delta to thesouth end of the Delta, that have to be moved tomeet the pump demands. Our pumping demandat Tracy is about 4,600 cubic feet per second. The State Project demand is over 10,000 cubicfeet per second, and the internal channel simplycan't handle that quantity of water. And we'verecognized that from "day one," and there were anumber of concerns that we had, related to justsimply moving the physical quantity of water, butalso related to the fishery issues.

"The Delta is a prolific fishery, in trouble now . . ."

The Delta is a prolific fishery, in trouble now, butthe anadromous fish that come into theSacramento and San Joaquin systems to spawnmove through the Delta and into the Bay or theother direction in migration, but particularly inout-migration they are simply going downstream.

State and Federal Pumping Plants Confuse theFish in Their Migrations and Movements

Downstream, to an anadromous fish, takes it tothe ocean. But if you have a tremendous pumpdraft to the south side of the Delta, downstream isat the pumps, and the fish get confused veryeasily about which way downstream is. And infact when both the state and Federal pumps arerunning at capacities limited by regulation rightnow, between the two of them at about 11,000second-feet–6,400 for the state and 4,600 forus–we actually reverse the flow of the Lower SanJoaquin River and it flows upstream. So

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upstream/downstream become real problematicthings for the fish. We recognized that early onand proposed that . . . Well, in addition to theanadromous fish, you've got resident fish in theDelta, and the quantities of water moving throughthere would eventually pull those fish, all ofthem, right out of there. Striped bass is a greatexample of fish that you could do a lot of damageto, since it spawns in fresh water and the eggs,the larva, or whatever it's called, simply floatsuntil it matures to the point that it turns into . . .


Budd: You simply move the eggs and larva to thepumps and pump them downstream. So we knewwe had to get those flows out of the Delta.

"We proposed Peripheral Canal, and in fact we dida feasibility report . . . that went on the shelf in1967. And basically . . . we had concluded that

the issue was too controversial . . ."

We proposed Peripheral Canal, and in fact we dida feasibility report on it that went on the shelf in1967. And basically at that time we hadconcluded that the issue was too controversial,and until the state figured out what it wanted todo, why, we weren't going to try to proceed withPeripheral Canal.

". . . it's one of these things that if you had done it. . . you may not have run into the environmental

problems that you have now. . . ."

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And again, I suppose it's one of these things thatif you had done it, if you'd gone ahead and builtPeripheral Canal, you may not have run into theenvironmental problems that you have now.

Storey: What is the Peripheral Canal? What was theconcept?

"The concept was very simple . . . build a canalthat took the majority of the water that was going

to be exported at the pumps out of theSacramento River . . . [run] it through a canal

around the periphery of the Delta to the pumps . . .each time that the canal would cross a natural

stream channel, you would . . . release water intothis channel and . . . create a constant . . .

downstream flow in all of the Delta channels . . ."

Budd: The concept was very simple, it was to build acanal that took the majority of the water that wasgoing to be exported at the pumps out of theSacramento River before it got into the Delta,and ran it through a canal around the periphery ofthe Delta to the pumps, so that you keep thoseflows out of the internal Delta channels. Andwhat you would have is each time that the canalwould cross a natural stream channel, you wouldhave a release structure in which you couldrelease water into this channel and by doing that,create a constant, positive, "natural"–in quotes–downstream flow in all of the Delta channels,that the flow in all of the Delta channels wouldbe towards the ocean, and you could maintain thequality of the water in those channels, you would

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not have high velocities in the channel, it wouldbe a natural fresh water flow.

The Peripheral Canal Became a Political Issue

But the north/south issue raised its head. Southern California, the monster down there withpeople sucking the water and the life out ofnorthern California, and Peripheral Canal becamea political issue. The environmental communitywas very much opposed to Peripheral Canal, andevery governor that's had anything to do with itsince Pat Brown, Sr. . . Anyway, he didn't have aproblem with it, since during his term asgovernor, the issue really wasn't ripe, and therewas no proposal to build it. But Reagan,Brown, Jr., [George] Deukmejian, [Pete] Wilson,have all had problems, politically, withPeripheral Canal. Each of them proposed it, andthe political backlash from it–it was like a tarbaby, they got stuff on them they couldn't get off.

". . . nobody has been able to promote the ideawith any kind of success. The California

Department of Fish and Game has consistentlyadvocated construction of an isolated facility . . ."

And nobody has been able to promote the ideawith any kind of success. The CaliforniaDepartment of Fish and Game has consistentlyadvocated construction of an isolatedfacility–they didn't always call it a PeripheralCanal.

"I think the scientific community is slowly but

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surely arriving at a consensus that somethingsimilar to a Peripheral Canal is absolutely

necessary to protect the environmental health ofthe Delta . . ."

I think the scientific community is slowly butsurely arriving at a consensus that somethingsimilar to a Peripheral Canal is absolutelynecessary to protect the environmental health ofthe Delta, given the assumption that you're goingto continue to export at least the quantities ofwater that have been exported historically. And Ithink as a political reality, that's probably goingto happen.

[U.S.] Fish and Wildlife Service, on theother hand, has been adamantly opposed to thePeripheral Canal, refusing to accept it as analternative, but to my knowledge offering noother alternative other than reduction indiversions, and I don't see that as a viablealternative.

Storey: So the Peripheral Canal would come out of theSacramento, travel along the east side of theCentral Valley, and around to connect to, ineffect, the Delta-Mendota and . . . (Budd: BanksPumping Plant, correct.) So Banks isdownstream from San Luis Reservoir?

Budd: No, it's upstream. Banks is about two miles fromour Tracy Plant, they're both in the Delta. (Storey: Oh, okay.) And Banks is the statepumping plant that furnishes water to O'NeillForebay.

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Storey: So, you know, when I have an image of aperiphery, my image goes clear around theCentral Valley, but that isn't a correct image?

Budd: Just the periphery of the Delta. (Storey: I see.) About seventy miles around the Delta.

Storey: It's a different periphery than I was thinking of.

Budd: We would still use the existing pumping plantsand the existing canals as the conveyancefacilities in the San Joaquin Valley, but thePeripheral Canal would take water out of theSacramento River north of the Delta, near thetown of Hood, and put it in this canal that wentaround the edge of the Delta and took it down tothe pumps.

Storey: And this would be a big canal?". . . as I recall, our proposal was for a facility that

had a capacity of about 18,000, maybe 20,000cubic feet per second. . . ."

Budd: It would be, depending on how you sized it, as Irecall, our proposal was for a facility that had acapacity of about 18,000, maybe 20,000 cubicfeet per second. It was earth-lined, it was flat,and the velocity was intended to be very low.

". . . intended also to provide a pretty good habitatfor resident fishery . . . but you needed the

capacity at that size so that you could make thereleases . . ."

It was intended also to provide a pretty good

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habitat for resident fishery and that sort of thing,but you needed the capacity at that size so thatyou could make the releases down the–everytime you crossed a river or a stream or a slough,you could release water into that slough toprovide the positive downstream flow in theDelta. And the Federal needs are 4,600, the stateneeds are about 10,000, so between the two of us,we needed about 15,000 cubic feet at the pumpsto pump at maximum, and in anticipation of arelease of 3,000-5,000 second-feet down thevarious channels in the Delta.

"It [Peripheral Canal] will get built . . . It's just theevent that triggers it has probably not happened

yet . . ."

Whether it ever gets built or not . . . It will getbuilt, there isn't any question about it. It's just theevent that triggers it has probably not happenedyet, and it may not happen in my lifetime, butthey'll build it.

Storey: Well, I hate to say it, but we have arrived atabout the end of our time again.

Budd: I can't believe we're spending this kind of time!

Storey: I'd like to ask you whether or not the tapes fromthis interview and any resulting transcripts can beused by researchers from inside and outsideReclamation.

Budd: Absolutely!

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Storey: I appreciate it. Thank you very much.

END SIDE 2, TAPE 2. MAY 27, 1994.BEGIN SIDE 1, TAPE 1. AUGUST 30, 1994.

This is Brit Allan Storey, senior historian of the Bureau ofReclamation, interviewing John B. Budd of the Mid-Pacific regional office of the Bureau of Reclamation, inthe regional office at about seven-thirty in the morning onAugust the 30th, 1994. This is Tape 1.

Storey: Last interview, you were talking about thePeripheral Canal, and you mentioned that ithad been an initial part of the project, and Isort of wanted to clarify in my mind whetherthat was designed for environmental reasons,or whether it was just simply a water supplyissue at that time, and now it's turned out thatthere are environmental issues that might behelped by implementing the Peripheral Canal. Could you address that for me please?

Peripheral Canal Was Part of the Original Plansfor the Project

Budd: Yeah, I can't state with any final authoritywhether or not the canal was an either/or–water quality or water supply facility–Peripheral Canal. I do know that the thingsthat I have read in the preamble to the 1967Feasibility Report indicated that water qualityand Fish and Wildlife reasons were a concernat that point. Now, the genesis of the canalgoes back a lot further than that. It was a partof the plan in the 1940s, but I can't say why it

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was a part of the plan then, other thangenerally it was recognized that the interiorDelta channels simply weren't adequate tomove the quantities of water that wereanticipated to be moved ultimately from thenorth end of the Delta to the south end, andsome kind of conveyance facility wasnecessary to accomplish that.

Current Thinking about the Peripheral Canal Is asan Environmental Feature

It, at this point, is looked at primarily as anenvironmental feature [in] that it's designed toprotect fisheries.

Peripheral Canal Would Allow Better Control ofWater in the Delta

It does generate some additional yield for the party orparties who construct it in that it allows you to managewater quality in the Delta in a more hands-on way–a moredirect way–because you can provide downstream flows inall of the channels rather than trying to move watersideways in some channels and downstream in others, soit gives you a more direct control. I think, certainly,support for it now is probably broader than it has been atany point in the past, but there are still fairly significantgroups who are not willing to say, "Yes, this is the facilitythat should be constructed." And we're one of thoseorganizations now under the direction of our currentcommissioner. Peripheral Canal is not something that hewants us espousing. The biologist for the State ofCalifornia Department of Fish and Game, and some of thefolks working for the Fish and Wildlife Service, and

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almost all of the biologists independently consulting forwater user community interests promote Peripheral Canal. They believe that it is the solution.

Storey: Who were the opponents, and why did theyoppose?

Irrigators in the Delta Were among the OriginalOpponents of the Peripheral Canal

Budd: I think originally the opponents were thelandowners within the Delta who divertedwater from the Delta channels, [which] werereceiving very high quality water because theoperation of the Central Valley Project movedwater through the Delta channels, so there wereno Delta channels that had dead ends orstagnant water sitting in them. And their viewwas that as long as the projects had to operatein the Delta, why, they would always have highquality water for irrigation purposes. Thatwould be in the '50s and '60s. I know that wasthe case in the late '60s and early '70s.

In the 1970s Delta Farmers Were Replaced byEnvironmentalists at Water Quality Meetings

And their activities were pretty much takenover by the environmental communities, theenvironmental movement, the NationalEnvironmental Policy Act [NEPA], activitiesthat came on in the early '70s, mid-'70s–yousaw at meetings in which you discussed Deltawater quality and Delta water issues–you sawfewer and fewer Delta farmers and more and

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more environmental organizationrepresentatives. In the early '70s, late '60s, whywe dealt directly with representatives of theDelta landowners, and that by the mid-'70s,those folks had pretty much disappeared fromthe picture with the exception of AlexHildebrand of the South Delta Water Agency,and his activities. Alex has been around forthirty years. His father was a professoremeritus in chemistry at the University ofCalifornia Berkeley 'til he was like ninety-twoyears old, and he was active on campus. Isuspect Alex is going to do the same thing inwater issues in the Delta, and he's well into hisseventies now, and I assume that he will stayfor quite awhile. But I think, you know,motivation for the opposition is always difficultto assess. It's fairly clear, to me anyway, thatmotivation for the landowners' opposition wastwofold.

Delta Irrigators Wanted to Assure High QualityWater and Maintenance of Levees in the Delta

The first and foremost was to ensure that theyalways had high quality water in the Deltachannels, and second, that the projects weredependent on the integrity of the interior Deltalevees. Those levees are all maintainedprivately, and if those landowners could dumpsome of the cost of that maintenance on theprojects, that would be to their benefit. So, Isuspect those two things were the motives fortheir activity. Who knows what the motive isfor the environmental community?

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Storey: And the cost for levee maintenance would bebecause we had to make sure that the watermoved through properly, is that it?

Effects of Levee Failure in the Delta

Budd: That's correct. You have to keep the levees ingood shape. If you lose a levee, why, an islandfloods, and that creates, usually, a significantinflow of saltwater that has to be managed inthe Delta, and we just don't have enough freshwater to–if the Delta levees were all to fail,there's not enough fresh water to manage theDelta, to protect the water quality for the exportpumps.

Reclamation Has Avoided Spending Money onLevee Maintenance in the Delta

So we were hooked and while we'veavoided–the Federal government, anyway–hasavoided spending any money directly on–withthe exception of the Corps of Engineers, andI'm not sure what they've spent, but they spent alot of money down there–but Reclamation hasavoided spending money on Delta levees. TheState Water Project and the Department ofWater Resources has spent a significantamount of money, as has the Corps ofEngineers, in levee integrity.

The Peripheral Canal Would Mean less Incentiveto Keep the Delta Levees in Good Condition

So, it's a thing that–the hook is set, and I think

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that the landowners down there would like notto see the projects off the hook for thatresponsibility, and if a peripheral canal werebuilt, or some alternative to that, that movedwater through or around the Delta, then there'sless incentive for the projects to be concernedabout the integrity of those levees, and some ofthem are in pretty bad shape. They wereconstructed a hundred years ago with dredgematerial, and in some cases the material'sorganic, and there's a great deal of concernabout whether those levees would withstand asignificant earthquake with an epicenteranywhere near the Delta. Anyway, that's anissue that's out there.

Storey: And with all these interests out there, interestedin the Peripheral Canal, either in terms ofopposition or support, how does that play outpolitically? You mentioned yesterday in ourconversation that it's never been built. What'sgoing on there that's keeping it from beingbuilt?

Why Peripheral Canal Has Not Been Built

Budd: If you talk to the Department of WaterResources staff folks, they contend that in theoriginal legislation authorizing the State WaterProject there was authority to constructPeripheral Canal, and it's their view that thatauthority currently exists and could beexercised to construct a peripheral canal.

Peripheral Canal Faces Strong Political

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Opposition

The problem, apparently, that they run into is apolitical one in that, as in Interior, the toppositions are appointed by the president, the toppositions in the state are appointed by thegovernor. So you have a political influence onthe decisions that are made by the Departmentof Water Resources, and under variousadministrations, different approaches weretaken towards Peripheral Canal, but inevitably,in the last four governors' administrations, Iguess, starting with Reagan, the issue ofPeripheral Canal has been a political "tarbaby." It has been one that the engineers,biologists, recommend the Peripheral Canal asthe solution to the environmental issues that aresurfacing in the Delta. The politicians react indifferent ways to it. Reagan wanted to build itand was not successful; he ran into someopposition; he didn't push very hard; therewasn't a lot of need for it while he wasgovernor. When Jerry Brown [Edmund G.Brown, Jr.] was elected Governor, herecognized the Delta was the problem thatCalifornia water had to resolve, and he had theDepartment of Water Resources spending atremendous amount of money looking atalternative ways to move water through oraround the Delta, and the basic conclusion wasthat there really is not an alternative that's asacceptable as the Peripheral Canal. None ofthe alternatives that he looked at accomplishedthe same thing. Deukmejian, early in his termas governor, had a ballot proposition

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concerning Peripheral Canal put on the ballot,and it went down to defeat–about fifty-fivepercent "no," forty-five percent "yes"–but thesplit was about–in southern California, it wasabout a fifty-fifty "yes" and "no"; in northernCalifornia, it was ninety percent "no." Andthe northern California folks were quite upsetwith the governor for even thinking aboutdoing something like the Peripheral Canal. And our current governor, recognizing theproblems that his predecessors had, didn'twant to do the study in-house. That is, hedidn't want state people doing the study, andhe didn't want to put it up to the voters, so heappointed what he called a Bay-DeltaOversight Council whose mission/goal was totake a look at the Delta and arrive at arecommended solution . . . Theirrecommendation would include anenvironmental impact report–impactstatement–that would allow implementation ofthe solution as soon as the document hit thestreets. Unfortunately . . . really before theprocess got well off the ground, he irritatedthe environmental community who had beenappointed to this council–members who hadbeen appointed–and it represented about athird of this Bay-Delta Oversight Council–andthey took a walk. So he didn't handle thething well politically, and when theenvironmental community walked, why, thecouncil basically came to a grinding halt. I'mnot sure that they could have been successfulanyway, because there were no Federalrepresentatives on that Council, and resolution

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of the Delta issues simply requires Federalparticipation. You've got to have EPA, Fishand Wildlife Service, National Marine FisheryService, and Reclamation involved in anysolution that they've got to be supportiveof–not just involved in–but they've got to besupportive of any solution that is proposed forthe Delta. So that kind of came apart. Sothere have been no . . . I don't think there's anengineering or a biological concern about whatneeds to be done, at least in general terms, butthere is a real political problem withgenerating the will–the political will–to get itdone. I think the money is out there to do it. It's an expensive project, but I think southernCalifornia, primarily, and San Joaquin Valleyinterests, secondarily, would financeconstruction of the facility, but politically it'sstill a bummer.

Storey: And am I hearing that it's the north that doesn'twant it done?

Northern California Opposes Sending Water toSouthern California

Budd: Right. The north is very much opposed tosending northern water to southern California. And that's an interesting concept. And I'vetried to figure out what the basic motivation is,and, to me, the only rational motivationinvolves a conspiracy that really . . . is almostbeyond my ability to believe, but it doesn'tmake sense any other way. And I have notbeen a real advocate of this thing, but I've

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thought about it some, and I'm convinced thatthere are managers of large, I mean huge,funds–money, cash, dollars, investments of onekind or another, either domestic or foreign–thattake a longer view of investment than I caneven contemplate. You know, I'm worriedabout making the rent payment or getting thekid to college or something like that, or maybemy retirement. But if you looked at the longview of fifty to seventy-five years, northernCalifornia real estate, at some point, will beginto escalate–the values–will begin to escalatesimply because there's not enough water tosupport continued growth in southernCalifornia. And if there are people– and I don'tthink you could find those folks owning landnow because I don't think it's quite the righttime–but by withholding water from southernCalifornia, you ultimately, I think, are forcingcompanies in southern California or elsewherewho are making plant location decisions, andthat sort of thing, that do have a long horizon,that look out thirty-, forty-, fifty years. They'remaking those decisions against southernCalifornia, and one of the major items in theequation is water– there is not an adequatewater supply. If you've got an industry thatrelies on water, that simply is out of thequestion in southern California. But in termsof maintenance of lifestyle, with anothertwenty million people in southern California,you're not going to have enough water tomaintain the lifestyle that they currently have. So those kinds of decisions, ground into theplant location type things, result in either not

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coming to California, or if the decision is madeto come to California anyway, the decision hasto be made to come to northern California. Soit's a weird conspiracy theory that goes beyondanything that I can–not beyond what I canimagine, obviously–but certainly beyondanything that's really believable. But it's theonly thing that makes a lot of sense. I mean,why would you want more people to come tonorthern California which is the end result of adecision not to provide more water to southernCalifornia–unless you had a financial stake inthat outcome? Certainly the quality of life willdeteriorate with more people here. You're notgoing to enjoy the ambiance that you have withrelatively easy freeway access: commutes arenot too long, freeways aren't plugged up at fouro'clock on Sunday afternoon. It's still arelatively comfortable, pleasant place to live, asopposed to southern California. But if youdeny southern California water, you're makinga move toward moving those people up here,and it's got to be a long-term call not a short-term one.

Storey: Do you think it's coincidence that the interestsof the Delta water users coincide with theinterests of northern California in not wantingthe Peripheral Canal and export water tosouthern California?

Budd: Well, it's coincidence only in the fact thatthey're geographically located basically in thesame area. I think it's just a fact of life thatgeographically the Delta water users and the

185


others in northern California dependent on theBay-Delta system are simply that. You know, Idon't know whether you'd call it coincidence ornot. It's just a fact of life.

Storey: You had mentioned last time when we weretalking that the pumps carried the fish larvae upinto the canal system, I believe. Could youexpand on the environmental and other issuesinvolved in the Delta that affect the wayReclamation has to deal with it?

Fisheries in the Delta

Budd: Yeah. The Delta, of course, is the hub of allwater operations, and it's also the focal point ofall the problems [and] issues. All theanadromous fish that use the Central Valleysystem have to come through the Delta twice:once in their out-migration, and again comingupstream to spawn. There are a lot of localresident fish in the Delta that either are goodsport fish, such as striped bass; or are part ofthe food chain, such as the delta smelt. And thehabitat for those fish is affected directly by theoperation of the two projects. Given thecurrent configuration of the Delta channels andthe location of fish screens–fish screens beingat the export pumps on the south side of theDelta–and the need to move the water all theway through the Delta before you get to thefish screens–generates the situation where out-migrating juvenile salmon or steelhead or anyother anadromous fish–sturgeon or Americanshad–in the south can end up, and a large

186


percentage of them do end up in the south endof the Delta, when they should have gone outthe western end of the Delta into the PacificOcean. And it simply is the result of the factthat the inflow to the Delta, minus the exports,results in the outflow–and in many cases theexports at the pumps exceeds the outflow, andit becomes extremely difficult for an out-migrating fish to figure out whichdownstream–either downstream to the pumpsor downstream to the Pacific Ocean–is in factthe downstream they want to take. Now, theyare not smart enough to figure it out; they don'thave maps; Triple A [AAA] doesn't help them. So they just simply ride with the currents, andif they are unlucky enough to get into thecurrent that takes them into the interior Deltaover towards the pumps, why, the losses of out-migrating salmon, for example, are significant,and the estimates have ranged from thirty tosixty percent of the fish that get into the interiorDelta never make it out to the Pacific Ocean. So you need to avoid that circumstance.

Striped Bass

Striped bass is a different critterbecause [of] the nature of their spawninghabits– they spawn in the water, the eggs floatfreely, and it's basically impossible to screenfor that, for the eggs. There's no way you cando it. At least under today's technology, itsimply is not possible. So you've got tomanage striped bass by moving them out intothe western Delta. When the eggs begin to

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come into the Delta why you've got to reducepumping and increase your outflow so thedownstream does in fact become the PacificOcean. You got to get those larvae out intoSuisun Bay and away from the influence of thepumps. So it's a different managementproblem. Peripheral Canal, for example, with ascreen, wouldn't help you very much in thecase of striped bass.

Winter Run Chinook Salmon

But we now have two species listed–the winterrun chinook salmon and the striped bass [deltasmelt]–one's anadromous that migrates throughthe Delta and the other is a resident fish. Andoperation of the state and Federal projectsunder the biological opinions for those isbasically in the hands of the fisheryagencies–National Marine Fishery Service inthe case of the salmon, and Fish and WildlifeService in the case of the delta smelt. We doour best to influence the opinions, but theyhave the ultimate responsibility formanagement of those species, so . . .

Delta Smelt

Storey: Is the delta smelt the same as striped bass?

Budd: No. Delta smelt is a very small, two- to three-inch . . . minnow, I guess. I'm not a biologist,so I'm reluctant to characterize it, but it's asmall fish that has about a one-year life cycle,and populations vary significantly. And there's

188


not a lot known about it because it has such ashort life cycle. The biology on that one iscertainly subject to question. Nobody knowsreally where it will survive best. The numbersare here–some reports this year–we haven't gotthe final count in, but this year is the fourth-highest year. The population is the fourth-highest in any year since we've been counting. Other people say, "We don't have any idea howmany fish there are out there." They've gotseveral different methods of sampling, and theycan't agree on which one gives them the bestnumber, but it's kind of a food chain fish.

Striped Bass

The striped bass is a resident fish introducedinto the Delta. It's not a native, but it has afairly long life cycle. I don't know how long itis, but I do know that fish in the sixty-poundrange are caught occasionally. And it's animportant sport–used to be an importantcommercial fishery in the '20s and '30s. Populations have diminished since then, sothere really is no commercial fishing of anyconsequence going on. But it is an importantsport fish, and populations there are downabout sixty percent from ten or fifteen yearsago. So it's a problem, management knows it'sa problem. And you have the anomaly of:Well, if you bring the striped bass populationup, they eat winter run chinook salmon.

Salmon Smolts Fall Prey to Striped Bass

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The little salmon migrating downstream runinto a big striped bass and it's all over. And sothe program we had going with the Departmentof Water Resources and the CaliforniaDepartment of Fish and Game to raise andstock striped bass has been suspended, becauseby doing that, you're probably in violation ofthe Endangered Species Act, since they arepredators of the endangered winter run. So it'sa screwy situation.

Storey: You mentioned two endangered species–winter run chinook: that's one of four races, Iguess, of salmon that use the Delta? (Budd:That's correct.) And the stripped bass.

Budd: No, the delta smelt is the endangered species. Population of the striped bass is down, but ithas not been proposed for listing yet.

Storey: Okay. I misunderstood what you said earlier.

Budd: The smelt is the listed species.

Storey: And are there water quality issues in the Deltaalso?

Water Quality Issues in the Delta

Budd: There are a bunch of them–some relate directlyto fishery issues. You need certain waterqualities in certain places to produce the correcthabitat for fish of all kinds. Others relate towater uses in the Delta.

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Water Quality in the Delta Is Geared to the Needsof Corn

The most significant, I guess, from anagricultural standpoint, is water quality forcorn. The Delta produces a lot of corn, and thatseems to be about as sensitive to salt as any ofthe other crops that are grown there, so theygear the operation of the projects to maintaingood quality for corn.

The other issue, of course, is there are asignificant number of people who depend onDelta water for their industrial and domesticsupplies, and you need . . .

END SIDE 1, TAPE 1. AUGUST 30, 1994.BEGIN SIDE 2, TAPE 1. AUGUST 30, 1994.

Budd: . . . for those purposes. So that gives theEnvironmental Protection Agency and theClean Water Act a whole bunch of parametersto look at when they're establishing waterquality standards for the Delta.

Storey: From my notes from our last interview, wetalked about the Coordinated OperationsAgreement [COA]. Could you talk furtherabout that?

Coordinated Operations Agreement for the StateWater Project and Central Valley Project

Budd: I don't remember what I said the last time, butbasically it's the underpinning of our

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relationship with the Department of WaterResources and their operation of the StateWater Project and our operation of the CentralValley Project.

The Projects Share Facilities and the CoordinatedOperations Agreement Details How the Water

Accounting Is Taken Care of

The two projects both pump water from thesouthern Delta. Both use the Sacramento Riveras a conveyance to bring water from storagefacilities into the Delta, and it provides avehicle under which the accounting, thepaperwork, the daily division of "the spoils," ifyou will, takes place so that we know–"we"being the state and the Bureau–know exactlyhow much water, both is available, and howmuch belongs to which project and how theresponsibility for Delta water quality is split. And that agreement spells out how you makethose determinations. And from that, thenthere's been a fairly complex, detailed plandeveloped for [the] accounting process, Iguess–developed that the operators use on anhourly basis, probably. Certainly daily there'san accounting of quantities of water that areavailable to each project. I suspect thisoperation is probably unique. I'm not aware of,at least, any Reclamation situation were you'reright in the middle of a major system like thiswith five or six reservoirs operated by twomajor water projects with water supplies co-mingled the way they are. And having anability to get along, I think and I guess, is a fair

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statement, because we do on a daily basis getalong pretty well with the Department of WaterResources–no major disputes. And anydisagreements that arise are pretty wellresolved at staff level under the agreement, butit was a long drawn-out process.

Coordinated Operations Agreement NegotiationsBegan in 1960 and the Parties Signed an

Agreement in 1986

The negotiations on that thing were anticipatedin an agreement signed in 1960. We signed anagreement with the state that said, "Well, we'vegot to enter into an agreement." But we agreedto enter into an agreement, and negotiationsbegan about 1970 . . . excuse me, about 1968,and we agreed on a draft and never finalizedthe agreement. There were a number of starts. When the State Project began operating, weexchanged letters for a number of years andsaid, "Well, we'll operate as though the draftagreement reached in . . . I'll say 1971, hadbeen final." So we operated under thatagreement even though we didn't have it final. It wasn't final because we didn't have an EIS[environmental impact statement], EIR[environmental impact report] completed on it,and in the middle of that process the StateWater Resources Control Board came downwith water quality decisions that basicallyinvalidated the agreement and required us to goback to the drawing boards and do a newagreement. So we started doing that in 1978. That was suspended, I think, in '80 . . . the dates

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are getting fuzzy. When Dave Houston arrivedas regional director, we took another look atour position on the thing and told the state wewanted to renegotiate some of the provisionsthat had been agreed to earlier, and negotiationsstarted over again. In 1986 we finally arrivedat an agreement that was blessed by theCongress. In fact, the Congress passed a pieceof legislation that had directed the secretary toenter into the agreement as had beennegotiated. So the process was about a twenty-year process, and it looks like we will reopenthat process, depending on how the State Boardimplements the EPA's proposed water qualitystandards in the Delta. We're not sure how theBoard is going to implement those standards,and it may require that we open theCoordinated Operations Agreement andrenegotiate it– which, I suppose given priorexperience, shouldn't be a twenty-year process. This one may only be ten years, but it's goingto be complicated.

Storey: And so the reason for the OperationsAgreement is because we have reservoirs in thenorthern Central Valley: Shasta, Trinity,Folsom, anything else?

Budd: Those are the major reservoirs.

Storey: And because California has Oroville? (Budd:Correct.) And we all use the Sacramento Riverdrainage to move our water down to be taken tothe southern end of the Central Valley?

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Coordinated Operations Agreement Also DetailsHow Surplus Flows in the Delta Are Split Between

the Two Projects

Budd: Right. One other piece to that is that duringcertain times of the year there are surplus flowsavailable in the Delta, and the agreement withthe state determines how those are splitbetween the state and the Bureau. We bothpump. Surplus flows–we rely on those flowsfor a part of our project supplies. And if theflows are not adequate to meet all or both ofour demands, then they have to be split, andthat agreement spells out how that split takesplace.

Storey: So Reclamation and the state are taking theirwater and mixing it together in one system tomove it around?

Budd: It mixes together in the Sacramento River inthe Delta, yeah. And there has to be anaccounting–you couldn't operate without it.

Storey: And I imagine it's fairly complex?

Budd: The daily accounting is . . . well, to me, as anoutsider in the operations, it's impossible tounderstand. The operators, because that's partof their daily life, don't seem to have that kindof problem with it. They deal with it on a dailybasis, and they understand how it works, andthey say, "Yeah, it works real well. We don'thave a problem here." For me, it gets fairlycomplex because you're taking into account

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instream obligations, both the state and theFeds on the Feather and the Sacramento, in-basin demands in the Delta, who's responsiblefor those; our evaporation system losses in SanLuis; who's responsible for Delta outflow; howmuch inflow is coming into the system fromtributary streams . . . It's just a tremendousbalance with all kinds of inputs, and it doesn'tseem to bother the operators. They say, "Yup,works good." I don't even want to know. That's far beyond me.

Storey: Now, last time when we did an interview, youmentioned a process where you were involvedin negotiation of a water contract with the state,I believe, that never reached completion. Could you go into more detail on that please?

In the Early 1980s Reclamation and the StateThought There Would Be Surplus Water in theCentral Valley Project and Surplus Pumping

Capacity in the State Project

Budd: At the time in the early '80s when we werenegotiating the Coordinated OperationsAgreement with the state, it appeared that theCentral Valley Project would have somesurplus water available to it for a number ofyears. The State Project was constructed insuch a way that it has surplus pumping capacityavailable to it. We wanted to move more waterinto the San Joaquin Valley, and the statewanted more water to meet its obligations insouthern California.

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Paragraph 10-H of the Coordinated OperationsAgreement Arranged for Negotiation of an

Agreement for Reclamation to Trade Water forState Conveyance Capability

So the Coordinated Operations Agreementcontained a paragraph–paragraph 10-H–whichbasically said we would sit down andnegotiated an exchange–Central Valley ProjectWater for state conveyance. And thenegotiators of COA, recognizing how complexthat contract would be, elected to put it off bysimply agreeing to agree, rather than trying towork out the details of that within the confinesof the Coordinated Operations Agreement. Soimmediately upon execution of the COA in '87-'88 there was a negotiating team established byInterior and one by the state that worked on thisagreement. And over the whole period of timefrom the early '80s to late '80s, it was becomingmore and more evident that underlyingassumptions concerning available water in thesystem were erroneous. There were problemsin terms of assuming groundwaterconditions–for example, assuming return-flowlevels that were an integral part of the watersupply. In the Sacramento Valley, for example,it was assumed that thirty-, thirty-five percentof the water diverted would come back into thesystem as return flow and could be reused. And as time went on, it became evident thatthat wasn't going to happen–particularly as wemoved into the drought in the late '80s.

". . . there was an ethic that was developed

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towards the water conservation in the SacramentoValley that basically eliminated that return flow. . .

."

The water conservation . . . I'm not sure whatthe word is, but there was an ethic that wasdeveloped towards the water conservation inthe Sacramento Valley that basically eliminatedthat return flow.

". . . it's evident to everyone involved that thequantities of water that were assumed to be

available in the '80s, simply are not available . . ."

So the water supplies available to CentralValley Project and to the state had to bereevaluated, and that reevaluation is stillunderway. Nobody has come up with anydefinitive statements of water supply, even tothis day. But it's evident to everyone involvedthat the quantities of water that were assumedto be available in the '80s, simply are notavailable; they are not there. And that basicallyled to . . . well, we had agreed with the statenegotiators on the terms [and] conditions ofthis sale of Central Valley Project water and thepurchase of State Water Project capacity. Theagreement was simply shelved, because it wasassumed that even (sigh) were we to do anEnvironmental ImpactStatement/Environmental Impact Report, wewould never be able to execute the agreement,simply because the water supply wasn't there toimplement it, and acquisition of statecapacity–pumping capacity by the Feds–was

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dependent on us selling them water.

"They weren't going to make pumping capacityavailable to us unless we sold them some water. So the whole package just sort of fell apart . . ."

They weren't going to make pumping capacityavailable to us unless we sold them somewater. So the whole package just sort of fellapart as we began to learn more and more aboutwhat the water situation really is.

Storey: And do you remember when that was? Ibelieve you worked on that water [contract?].

Budd: Yeah, that would be 1987-1988. I think wewrapped it up and put it off to the side in '89.

Storey: And what was your job at that time, yourposition?

Budd: I was a Repayment Specialist. I worked in theRepayment Branch of the Water PowerResources Management Division. It's the jobthat I moved into when I came up from LosBanos twenty years earlier.

Promotions after Moving to Sacramento

Storey: But at a different grade level? (Budd: Yeah,yeah.) You had moved up from what to what?

Budd: When I came to Sacramento, I came in as afive, and I was a twelve at that time.

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Storey: And how much longer did you stay in thatposition after you finished these contractnegotiations?

In 1989 Became Regional Liaison Officer

Budd: Well, wrapping up that negotiation with thestate occurred just about the time that I movedinto the position that I'm in right now–1989.

Storey: And that position is?

Budd: It's called Regional Liaison Officer–kind of afunny position in that I report to the PublicAffairs Director.

"Most of my assignments come from . . . theregional director. . . ."

Most of my assignments come from–other thanthe routine, day-to-day stuff–come from Roger. (Storey: Roger Patterson?) Yeah, from theregional director. The position was firstestablished by Dave Houston when he broughtJason Peltier out from Senator [Samuel I.]Hayakawa's staff when Hayakawa was defeatedfor reelection. Houston established position asa special assistant to him, and he used thatposition in that capacity. Jason traveled withDave and handled all the routine administrativeassistant responsibilities that you would expectmaybe like an aide-de-camp to a militaryestablishment. When Washington personnelfolks came out and did an audit of the PublicAffairs Office, why they indicated that the

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public affairs director couldn't retain his gradeof a fourteen unless he had a thirteen workingfor him, so they reassigned Jason to work underthe Public Affairs Office. So that's were myposition is now. About half of what Ido–maybe forty percent, I guess–is fairlyroutine congressional correspondence.

The Regional Liaison Officer Prepares Responsesto Congressional Inquiries and Prepares

Comments or Testimony on Legislation Affectingthe Mid-Pacific Region

I'm responsible for preparing responses to allcongressional inquiries that come into theregion and for reviewing and preparingcomments on, or testimony on, any legislationthat affects Mid-Pacific Region.

"The other part of my job is doing just aboutanything that needs doing and that fits with my

background. . . ."

The other part of my job is doing justabout anything that needs doing and that fitswith my background.

Often Serves as Tour Guide for Visitors

I've been around a long time and know a lot ofpeople and I know where most of the thingsare, so I'm probably the region's "senior tourguide." If we have a VIP in the region thatneeds touring, I usually get that responsibility. Last week, for example–week before last–I

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spent the week with our new OMB [Office ofManagement and Budget] Budget Examinertouring him around the project. Anybody elsethat needs to go someplace or wants to go orwhatever, we'll tour them.

Storey: And you've been doing that since '89, then?

Good Working Relationships with Members ofCongress and Staffers

Budd: Uh-huh, yeah. I've tried to–I haven't spent asmuch time doing it, probably, as would bedesirable, but I've got a fairly good workingrelationship with most of the congressionalstaffers at committee level and then individualmembers. At least, when they needinformation they don't think they need to talk toRoger to get, why most of them will call. Theobjective, I guess, of setting up thoserelationships is to try to head off letters. Anytime you get a letter in, it's going to costyou $200-$300 to answer it and take you aweek to do it, and if you can do it on a phonecall, that's a desirable thing to do.

Storey: Who are those key people, and where do theystand on water issues? How do they relate tous?

Congressional Staff

Budd: I suppose the key Congressional staffers,probably Steve Lanik [phonetic spelling] onMiller's staff–on the committee staff–and Dana

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Cooper on Bradley's staff are (Storey:Bradley?)–Senator Bill Bradley who'sChairman of the Water Power Subcommittee–are probably the key staffers on the majorityside . . . I'm losing my mind now . . . There'stwo fellows on the Senate side that are fairlykey on the minority side of the NaturalResources Committee . . . I don't have mybooks with me. I'm losing my memory. I can'tremember their names. But those are probablythe key committee staff people–subcommitteedoesn't matter, I guess. The Senate side is asubcommittee. On the House side, thesubcommittee and the full committee arebasically the same thing; Miller's Chairman ofboth, and the majority staff folks are the samepeople. So it's the same business. Individualstaff members . . . We just lost a couple of realkey staffers who have gone into consulting,obviously felt that they had done their bit fortheir country, and now it was time to do theirbit for them. Roger Guinn, who was[Congressman Victor H.] Fazio's fellow andCal Dooley's . . . I'm losing it again . . . CalDooley's staff guy. Maybe I'll think of it later. Anyway, Joe Raider [phonetic spelling] wasCal Dooley's guy. They have departed, andthey were probably the most knowledgeableand the most influential of the staff people forindividual members. They unfortunately wereat odds with Mr. Miller and Senator Bradley, soit was a major fight. Lynelle [phoneticspelling] Johnson in Congressman Miller'soffice out here is a fairly key staff person. Wetry to keep her informed. We don't want to

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surprise Miller if we can avoid it. Gray Staples[phonetic spelling] is on Rick Lehman'sstaff–the subcommittee staff inWashington–and he's been around for a numberof years, so he's fairly well informed aboutissues and what's going on. Jeff Harris isFazio's new person in Washington. He was outhere in the District for a number of years, so heis familiar with issues locally here, and hasweighed-in on a number of things inWashington.

One of the problems we have is thatFazio's–even though he is one of the mostpowerful House members–his power is inappropriations as opposed to the authorizingcommittees–doesn't mean you're withoutpower, obviously, because appropriations are avery key part–but he doesn't have the time toinvest in issues that Mr. Miller appears to have. And he's got a tremendous amount ofresponsibility on other House activities, andMr. Miller seems to be able to spend a lot oftime on Central Valley Project issues. Priorkey staff people involved in a number of issues:Dan Beard when he was staff director forInterior and Insular Affairs, now NaturalResources, was very key in development oflegislation affecting Reclamation.

Storey: How would you characterize congressionalcontacts, both from members and from staff, toReclamation in this region?

". . . I think [members and staff are] fairly open.

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6. Referring to the Reclamation Projects Authorization andAdjustments Act of 1992, P.L. 102-575, signed October 30, 1992. TitleXXXIV is the Central Valley Project Improvement Act.


The major exception, of course, being Miller andBradley's staff. Their agenda is definitely hidden.

. . ."

Budd: I really can't characterize the members'contacts, because I've only talked to two orthree of them. I've only had two or threeconversations with members. My contacts arewith staff. For the most, part I think they'refairly open. The major exception, of course,being Miller and Bradley's staff. Their agendais definitely hidden. They don't want us toknow what they're doing. They're obviouslyconcerned that if we're aware of their plans,why we will do what we can to frustrate them,which is probably true to some extent.

P.L. 102-575, of Which Title XXXIV is the CentralValley Project Improvement Act (CVPIA)

On the other hand, it could be that if we weremore aware of what they were trying toaccomplish, what they do accomplish would bemore effective–could be done in a morerational way. And I think that was very clear,to me anyway, in P.L.-575.6 Reclamation staffwere directed not to participate in developmentof language for Title 34 of 575, and theconsequence is a very, very poorly-writtenpiece of legislation. It's internallycontradictory; it's ambiguous; it's incomplete in

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some areas; it's just a bad piece of legislation.

Storey: Title 34 is?

Budd: It's Central Valley Project Improvement Act[CVPIA]. That was Mr. Miller's, Mr. Bradley'sbaby. But it's a very difficult piece oflegislation to implement. It's a major change inthe way Reclamation's authority is structured. Iwon't go so far to say it's a major change inwhat we've been doing over the past six oreight years. I think Mid-Pacific Region'sdirection changed slowly, but over the past sixor eight years, certainly, and maybe evenstarted longer than that, where we began torecognize and attempt to accommodate orcorrect environmental problems that werebecoming evident that we had someresponsibility for or when we had the ability torectify, even though maybe they weren't all ourproblem. But the legislation certainlymemorialized that change and accelerated it,provided some authority to do things we didn'thave in the past, and provides about$700 million dollars for–somewhere in thatorder–activities for Fish and Wildlife Serviceand Reclamation over the next twenty years. It's a big-time project.

Storey: Can you tell me how Reclamation has changedin response to the Central Valley ImprovementAct . . . from your perspective?

Some Staff Are Having Trouble Adjusting toChanges at Reclamation

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Budd: Yeah, I guess my perspective . . . We still havea group of staff managers who . . . [briefinterruption] We still have some old-timebureaucrats, if you will–guys that aren't terriblyconcerned about environmental issues, and arehaving a tough time accepting the fact thatsome of the things that we've done over thepast forty or fifty years didn't turn out allroses–there were a bunch of thorns amongst theactivities. And if you have somebody with athirty-year career that has spent his timedesigning canals and dams and building thingslike that and somebody comes along and says,"Man, what you did is really garbage. You didsome horrible things." You're going to get thatreaction from an awful lot of people.

We also, on the other hand, have a lot ofpeople who say, "Yeah, there's a lot of thingsout there that need fixing, and we can do that,and we need to get about doing it"–andrecognize the problems, recognize that thereare things that need to be done that are ourresponsibility, things that need to be correctedand fixed–and other folks who don't care oneway or another about responsibility. They justsimply view the potential–there as somethingthey can do: "There's a job. It's something thatneeds doing, and I can do that and let's get ondoing it." So we've had this mix that there'sbeen a change going on over the past eight orten years. I think if you talk to Mr. Miller, he'sgoing to say, "Oh, Yeah! We really changedReclamation–major change!" And probably

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Beard is going to make the same comment asfar as Mid-Pacific Region. And I think, youhear more and more from the water userssaying, "God, you guys are killing us. You'regoing over embracing the environmentalcommunity, and it's just absolutely destroyingus. You got to come back into the fold."

CVPIA Accelerated Change at Reclamation

And I think there has been, probably, anacceleration of the direction, but I don't thinkthere's been a major change in attitude. I thinkwe would have been at the same place downthe road another five or ten years–maybe notthat long. I think we would have come to thesame place. It just would have taken us longerwithout CVPIA because it does provide a . . .


This Tape 2 of an interview by Brit Storey with John B.Budd on August the 30th, 1994.

Budd: The act provides an awful lot of funding–asource of funds with the Restoration funds–sowe have funds in authority we wouldn'totherwise have had as quickly. So that's been abig help.

Storey: But part of the act, I believe, diverted waterfrom the project to environmental uses. Is thatcorrect?

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CVPIA Made Three Water Allocations

Budd: Yeah, there were three allocations under theact, actually. One was an allocation of water toCentral Valley refuges, both state andFederal–not a significant quantity of waterunder that. I don't recall the exact numbers, butthe increased water deliveries to the refugesover what we had been providing in the pastfrom project sources would be less than100,000 acre feet–not a big block of water. Onthe Trinity River, the act increased minimumflows to 340,000 acre feet a year, to bemanaged by Fish and Wildlife Service–aschedule that they would submit to us–and setthat as a minimum in all years. And thatbasically memorialized a decision the secretaryhad made prior to enactment of the act, so thatdidn't make any change in what we were doingat that time either. The secretary's decisionearlier had changed basically dry year andcritical year operations. In critical years weoperated to a minimum of–120,000 acre feet ina critical year; in a dry year, 240,000 acre feet;in normal and above normal, it was 340,000. Now it's 340,000 in all years. So there was achange there, but that change, again, hadalready been implemented by the secretary, sothere was no impact on project operations fromthat.

Reclamation and the Fish and Wildlife ServiceDisagree on Interpretation of CVPIA

The act also allocated 800,000 acre feet of

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water for use by [the U.S.] Fish and WildlifeService, and it identified three purposes. Onewas implementation of the provisions of theact. The second purpose was meetingendangered species obligations. The thirdpurpose was meeting new water qualitystandards established by the State Board. Weare still arguing with Fish and Wildlife overthat provision and how it's to be interpreted andimplemented. It's their view that this is a–thisis my word, but I think it's appropriate–is thatthis is punitive in that they can use this 800,000acre feet in any year. And if they don't need itas an instream flow in any system–say you'vegot a really wet year, and the instream flowminimums are all met–then they can reduce thedeliveries to the contractors by 800,000 acrefeet, and we really have a problem with thatinterpretation. It's our interpretation that theact never contemplated punishing anyone, andthat in a wet year there is absolutely no reasonin the world to reduce deliveries to the waterusers, because all of the fishery purposes of theact are being met. But we're still arguing withFish and Wildlife over that, and ultimately it'llbe settled, certainly well above staff level. Hopefully at the director's level, it won't haveto be escalated to Washington, that we'll beable to do it between Portland and Sacramento. But that allocation issue has not been resolved,but that's the most significant block of water:800,000 acre feet in normal years, in criticalyears it's reduced by twenty-five percent to600,000. But the impact of that falls on theagricultural users on the west side of the San

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Joaquin Valley. I think this is a situation wherehad Reclamation staff been involved indevelopment of the language, we could havespread the pain a little bit in terms of how thisworks. But the way our contracts are set up,this burden comes out of the hide of the westside of the San Joaquin Valley. And while800,000 acre feet is maybe fifteen percent oftotal project supplies, it's on the order of thirtypercent of the supplies on the west side of theSan Joaquin Valley. Now you can rationalizethat "

Cutting Back 10- or 15 Percent Can Be Done, but30- to 40 Percent Is Much Harder

Oh, anybody can cut back 10- or 15 percent, nobig deal; water conservation will take care ofthat." When you get into the 30- to 40 percentrange, water conservation is not going to takecare of that, and there are significant financialimpacts associated with that kind of a cut. Butthat one's still unresolved, and it's one of thesethings where the staff attitudes are probablygoing to move the resolution well up in thechain of command. It's not going to be onewe're going to resolve locally, and it's onethat'll probably have some fallout. These kindsof things get fairly personal with Fish andWildlife folks. They've got a view that they'redoing God's work, and anybody that interfereswith them, obviously then has to be againstGod and the right and motherhood and that sortof thing, and it's real tough to establish apersonal relationship if there's any adversity.

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You can't be an adversary and be an okayperson. And that's unfortunate, but I thinkthat's kind of the way it is with them.

"There was a lawsuit filed by Westlands [askingthat we comply] . . . with the National

Environmental Policy Act. And just the thoughtthat Fish and Wildlife Service had to comply with

NEPA, drove those people nuts. . . . ."

There was a lawsuit filed by Westlandsthat in effect said we couldn't implementcertain provisions of this act until we compliedwith the National Environmental Policy Act. And just the thought that Fish and WildlifeService had to comply with NEPA, drove thosepeople nuts. I mean, their view is they're doingGod's work, and they should not have to do anyNEPA because it's obvious what they're doingis good for the environment. And the thoughtthat anybody wanted them to comply withNEPA was strange, and when the Federal Courtagreed that they had to do NEPA, they wentnuts. It was weird watching the reaction ofthese folks around here on the thought that theyhad–the Fish and Wildlife folks–on the thoughtthat they had to do an environmental impactstatement on God's work. I mean, they had areal difficult time with that–are still having adifficult time with it. And there is a vendetta, Iguess. I don't know whether that's anappropriate word or not, but there is an attitudeamongst Fish and Wildlife staff that we will doeverything we can to frustrate Westlands in itsacquisition of water supplies for any purpose.

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And it's really sad to see that kind of a reaction,but it's very definitely there.

Storey: So implementation of that 800,000 acre footprovision is being held in abeyance?

Budd: Well, we did something in '93. We had 150percent water-year, and we had water available,and the minimum stream flows that wereestablished by Fish and Wildlife Service weremet. [In] 1994, we have used the 600,000 acrefeet, which is available in a critical year, forendangered species purposes. Up to this pointthat's been okay with Fish and Wildlife. Theyhaven't agreed that they don't get some waterback later this year. They've not agreed thatthe whole year's allocation has been used forendangered species purposes, but our view atthis point is that the fishery restoration goals ofthe Central Valley Project Improvement Actand the obligations under the EndangeredSpecies Act overlap. And to the extent thatthey overlap, the water is being used for thosepurposes in accordance with the act. Now, likeI said, Fish and Wildlife hasn't agreed thatthat's where it's going to come out at the end ofthe year, but that's where we're headed. Andthis is one of those issues that probably willhave to be resolved at the director's level. (Storey: The regional director, you're talkingabout?) Yeah, yeah. I don't think this is anissue that will escalate to the Washington level. If it does, it will go informally to Washington,and my suspicion is that the assistant secretaryfor water and power will be the one who makes

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the decision, as opposed to any of the otherassistant secretaries. And in that instance, Isuspect the decision will come down, if notright at our position, it will be close. And theconversations that have gone on over the pastyear with the Washington people–basically,Reclamation has established a credibility withthe assistant secretary that Fish and Wildlifehas been unable to do. Our activities out hereare viewed as rational, well-thought-out, well-planned, well-implemented, with the bestinterests of the department and theadministration in mind, and Fish and Wildlife[Service] hasn't established that credibility yet. And if the staff out here is turned loose, [it]never will. They are certainly not interested inpolitical problems that are created by theiractivities.

Storey: There's a perception in some interest groupsthat Reclamation is quote-unquote, "in bed"with the water users. How would you respondto that perception?

Reclamation's Interaction with Water Users

Budd: I don't think there's any question that that was,in fact, the case. And it doesn't requiredefending, I don't think. I think it's just simplya fact of life. Federal, state, any kind ofgovernmental agency that has a singleconstituency cooperates with that constituency. Water users, or want-to-be water users, werethe folks who generated legislation thatauthorized Reclamation's activities. Water

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users are the ones that are dependent on ouractivities. They were our constituencies. Thepolitical reality was– twenty-five years ago,anyway–that the Commissioner of Reclamationwas the most powerful man in the Departmentof the Interior. He was on a first-name basiswith probably a third of the senators, andtwenty percent of the congressmen or therepresentatives up on the Hill, and what hewanted he got–out of appropriations, out ofauthorizing committees. The political clout ofDominy was incredible, and I don't know muchabout his predecessors, but my understanding,it was the same. You know, the congressmenwanted . . . Reclamation projects were good forcongressmen's districts. They generatedincome; they generated jobs; money flowedinto the districts. It was part of the pork thatwas inevitable in our system of government,and the commissioner was the guy that couldmake it all happen, and if he went over on theHill and testified that he needed appropriationsfor X-Y-Z project, the representative and thesenator from that state knew that it wassomething that was going to be good for them. Therefore, they supported it. So there was ahell of a "old boy" network at the political leveland . . . Everything's political, I mean, you godown to the district level to the individualwater user level and they're the ones that aremaking contributions to the politicalcampaigns. They're the ones that are doing theget-out-the-vote fundraisers. It all channelsback up, and it's a fairly small community. It'snot a huge group there. There are a limited

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number of people who are actively involved inwater development, and the movers and shakersall knew each other and did business together. It was simply a fact of life. The otherissues–either there weren't any other issues, ornobody cared, or we simply weren't able toidentity part of them.

As Technology and Knowledge Expanded WeBegan to Identify Problems We Didn't Know about

Previously

A number of the problems until the last fifteenor twenty years [Reclamation and others] hadno idea they were even problems. Selenium indrainage water in the San Joaquin Valley upuntil the early 1980s, fell under a category thatwas identified in all the reports as traceelements. There were a whole bunch of thingsthat you simply did not have the technology toanalyze. You couldn't detect or measure theseconstituents in a meaningful way. We'retalking about two, three, four parts per billion,and the technology simply didn't exist tomeasure it, and nobody knew what level,whether it was two parts per billion or twentyparts per billion, created a toxic situation withrespect to waterfowl. It simply wasn'trecognized. Temperature and watertemperatures–we'd never build Shasta Damtoday without the ability to manipulate releasesthrough the power plant from variouselevations in the reservoir because we know thecold water is down on the bottom, warm wateris on the top, and salmon need water fifty-six

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degrees or below to provide ideal spawninghabitat. And we built Shasta without atemperature control device. I mean, we neverwould do it now.

Red Bluff Diversion Dam on the Sacramento River

Red Bluff Diversion Dam, we went toFish and Wildlife Service and asked them howwe mitigate it for the fishery impacts of thedam: "This here's what we're going to build." And they said, "Okay, we'll put a couple of fishladders over here, and then we're going to buildthis spawning channel down here. We'll justsimply raise the fish over here in thesechannels." And it didn't work because therewasn't enough cold water to operate thatfacility, and nobody knew that. Cold watertemperature modeling in the '50s was a fairlyarchaic [arcane], undeveloped science, and theproblem wasn't one that really hit the streetsuntil we started operating the thing in the '80s,and it didn't work. Fish and Wildlife couldn'traise any fish up there, and they finally figuredout it was because the water was too warm. And so we spent twenty-eight million bucksthat the water users are repaying for a facilitythat's not being operated. Fish and Wildlifeshut it down and walked away from it.

So, as those problems became evident–as we recognized the problem, recognized thesource, we know what the fix is. In a lot ofcases the fixes are structural, but the suspicionor whatever, is that if you build something that

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you're doing it for the water users rather thanfor the environment, so there's a lot ofopposition to any kind of a structural fix tothings that need doing. But yeah, hell, theywere our clients; they were our constituents;that's who we did business with. It's like themilitary and Aerojet or Rockwell or whoeverbuilds weapons for them. I mean, yeah, they're"in bed" with them, I mean, they have to be. They have to talk to each other; they have toknow what their needs are; they have to knowwhat's possible, what can be done, what'scapable. I think we responded out here as webegan to recognize the environmentalproblems, not as quickly as Fish and Wildlifeor the environmental community would want,but I think we did respond faster than youmight have expected us to respond, andcertainly faster than some of the water userswanted us to respond. And I think if there is afault, it would be in the speed of the response,and I don't think we can be faulted for that. Ithink we did respond to those needs as anagency in a very timely manner. You got to atsome point part company, and we did. Theenvironmental issues became a bigger concern,and we started responding to those.

Storey: You say "we parted company." With whom?

Recent Events Have Alienated Water Users

Budd: With the water users. I think there's definitelya feeling on the part of the water users thatwe're no longer their friends. We've, over the

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last five years, particularly during the last yearwith contract negotiations . . . [they believe]we're doing dirt to them. They think that thesituation has changed much to theirdisadvantage, and they're now "tail-endCharlie." The tail is wagging the dog, andthey're not happy with it.

Storey: I'd like to discuss the regional directors and thecommissioners you named. Were you herewhen Pat Dugan was here?

Bob Pafford as Regional Director

Budd: No, I arrived when [Bob] Pafford was regionaldirector.

Storey: How was Pafford received? He was from theCorps of Engineers with no Reclamationbackground.

Budd: I think . . . Really tough for me assess Paffordand his relationship with other folks. Myreaction to him as a staff person–I was waydown on the ladder when I knew him–was thathe knew what he was doing. Coming from theCorps, he played the political game very well. The Corps did the political thing even betterthan Reclamation–or does it now much betterthan Reclamation. So he knew that thepolitical game was important; he knew who theright players were; and he knew how tofunction in that environment. And he also hadthe background that was "right," in quotes, forReclamation: he was a builder, a doer; he

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wasn't a politician or an economist or someother strange background. My exposure tohim, my impressions of him, were alwaysfavorable. I don't have any bad impressions of,nor do I remember anyone saying, "Boy! thatPafford's really off on this one." And maybe,it's hard to tell, but we were doing a lot of stuff. Our construction budget was enormous. Wehad San Luis underway; we had just finishedTrinity; we had a couple of other things thatwere going on; we were building things. It wasa real boom time for Central Valley Project. And given that, there were no environmentalissues, no political issues of any consequencethat were hanging out there, so things . . . Idon't know whether Pafford could function intoday's environment or not. I have no idea. Ijust don't know.

Storey: But for his time he seemed . . .

Ed Horton, Acting Regional Director

Budd: For his time, everything seemed to be cookingalong. After his departure there was a period oftime in which we had acting folks in: EdHorton was acting regional director, it seemslike for almost a year. And he was, in myexperience, a real gentleman: knowledgeable,sharp, concerned about people, a constructionguy that came into the administrative end andtook over the assistant regional director's jobwith responsibility for design and constructionand planning, and just a real nice guy to workfor. I was always kind of disappointed that he

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didn't get the regional director's job.

Billy Martin, Regional Director

Billy Martin: I still like Billy. He'sretired and back out here, and he's got a job as amanager in one of the local water userassociations–and keeps small change, I guess. It's a part-time job, but it keeps him involved inissues. A pretty capable guy–the first regionaldirector I really got to know very well. I was astaff guy on a negotiating team that wasappointed by Washington to wrap upnegotiations with Westlands. Our negotiatingteam started out with Gene Hinds who was the400 Chief in Washington at the time and Billyand Dick Dauber [phonetic spelling], who wasthe assistant regional solicitor, and I did all thegrunt work for them. And we spent a lot oftime trying to work out a strategy fornegotiations with Westlands–actuallynegotiating with the district. And, again, it wasone of things that never came to fruition, itnever got completed, but I spent a hell of a lotof time doing it.

Perception of Billy? I don't really havemuch of a perception of him other than I likedhim, personally.

Storey: How did he relate to the staff?

Budd: I've heard conflicting comments, and myperception is he related fine, because he and Igot along fine. But I've heard other people say,

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"Oh, Gees! That guy was really cold. Youcouldn't get to know him." And one of theproblems you have, I guess, doesn't–and I'veheard this comment about every regionaldirector we've ever had, I guess, with theexception of Pafford, and that could be becauseI never paid any attention–is that they're notconsistent. You know, they say one thing oneday, and six months later they're sayingsomething else. And you hear that a lot, andmy reaction usually is: "Well, yeah, becausethings have changed, so what you said sixmonths ago ain't going to fit today. You've gotto adjust." So you hear that about Billy,Catino, more about Houston than either of theother two. And that, I suspect, isunderstandable because Houston was more of apolitical animal than the other two. He wasstraight-out political–different critter.

Mike Catino, Regional Director

Catino, after Billy's departure–that was one ofthese things where the guy was just in the rightplace at the right time, did his politics right, gotthe right promotions, and ended up filling thegap, I think, that everybody recognized you hadto have a regional director out here, andnobody could agree on who in the hell it shouldbe, and they figured that Catino was acaretaker. At least that's my perception now ofwhy Catino was regional director. It was,"Well, there's nothing really significant goingon; we don't have to put a guy in there; he'lltake care of things for the next two or three

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years; and that'll work just fine." And probablyliked Mike better than most of the otherregional directors–than any of them. He wasjust a real personable guy, and it was part of hischarisma, I guess, is he remembered your kids'names and your wife's name, birthdays, andwhether your kids were in school or what theywere doing–and still does. And he made a realeffort to get to know people and their families. It's always difficult to tell how serious he wasabout that: did he really care? or did he justfigure, "Well, if I can remember their kid'sname, why, they'll like me better." I don'tknow, but I did like Mike. I thought he wasjust a real personable guy. I don't think he'scapable of functioning in today's environmentas a regional director. I think what's going onwould be well beyond him.

David Houston, Regional Director

Houston can function okay as regionaldirector now because he is a political creature. He would be taking marching orders fromWashington and he would do what needs to bedone to implement those orders. And of all theregional directors that I have known, he wasprobably the smartest and worked the hardest. Houston's day would probably averageeighteen hours.


Storey: He worked long days and maybe sleep three

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hours a night or something?

Budd: Yeah, he would take piles of reading materialhome. His average night's sleep was three orfour hours. If he got five, he was sleeping inand wasn't dedicating his time to the job. Heremembered almost everything that he was evertold or read–just a real bright, bright guy. I hadsome problems with him because I didn't agreewith a number of the policies that he wasimplementing, and as a Repayment Specialist, Iwas involved in a number of policy issues thatwere controversial. And when he wouldpropose doing something, I would very calmlyexplain to him why it really wasn't a very goodidea, and he would continue to propose to dothat, and I would think, "well, maybe he didn'tunderstand what I told him." And it took meabout three or four months to realize that heunderstood everything that I told him. Heprobably knew it before I told him, and hedidn't care. It was in my best interest . . . I felt Ihad an obligation, if what was being proposedwould have some consequences, to lay outthose consequences, say, "If you do that, this iswhat's going to happen," or "These things haveto be done first," or something like that. I feltthat I had a professional responsibility to makesure he understood all of that, or to make surehe was told that. And it took me three or fourmonths to recognize that I should only say thatonce, because after he'd heard it the second orthird time, why he began to get a little bit testyabout being told by this staff person that whathe was proposing to do had some

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consequences. And hell, he already knew that. He didn't want to hear that stuff. Anyway,aggressive, capable, political–very, verypolitical.

Storey: I guess, in a sense, you would say he was thefirst regional director who was a politicalappointee. (Budd: Yes.) How did the staffreact to that?

Budd: Oh, I think there was a lot of real negativereaction to it. The career people really didn'tlike it. He had been appointed deputy assistantsecretary, which a Schedule C position as Irecall, and he was a special assistant toBroadbent who was Commissioner, thenmoved down to the deputy assistant secretary'sslot, and then converted from a Schedule C to acareer employee through some process thatOPM [Office of Personnel Management] wasinvolved in, and then came out here as regionaldirector. And there was a lot of opposition tohim coming out here. His arrival wasn't verywell received. And he made friends with someof the staff; others of the staff just–boy, therewas no way that they were ever going to getalong. Part of it was he was a thirty-two yearold kid. I think that was his age, but he wasvery, very young. He looked young–faircomplected. He even grew a beard after hearrived, to try look a little bit older. And thensome of the old fellows around here simplydidn't want anything to do with working for akid who couldn't possibly understand howcomplex this project is. Well, he didn't have

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the background that certainly some of themhad, but it didn't take him too long to developenough so that he understood most of what washappening–different kind of a guy. But therewas a lot of opposition to a political typecoming out as a regional director.

Storey: Would you characterize him as capableregional director, or how would youcharacterize him?

Budd: Yeah, it's difficult. Traditionally you measure"capable" with accomplishment and what wasdone during the term, and it wasn't a hell of alot done that was progress. We did completeCoordinated Operations Agreement with theState of California, but we shut down San LuisDrain and had major problems there, and wedidn't resolve any of the issues that were facingus at the time. I don't know that you canattribute the responsibility for that to Dave. Ithink the times were more than anybody couldhandle. I think he's a capable administrator. And given how . . . hell, he's worth twopeople–he simple puts in that many hours. Theamount of stuff that he read, the backgroundthat he picked up while he was here–yeah, Iwould think certainly he would be a capableadministrator, a good regional director. Andyou got to qualify the good, I guess, with–well,do you agree with the political direction inwhich he was headed, because the job was . . . Ithink during his tenure is the first time that wesplit things up between water users and others,and then we subdivided those two groups into

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Republicans and Democrats.

". . . there wasn't any question that the stuff wewere doing out here was being done to assistelection of Republican members of Congress,

governors, senators, state assembly. . . ."

And there wasn't any question that the stuff wewere doing out here was being done to assistelection of Republican members of Congress,governors, senators, state assembly. Youknow, if you're a Republican if we could helpyou . . . We didn't make announcements thatwere bad news at a time that it would hurt aRepublican. It became a political exercise, andthat point you had to have a program to tellwho the players were. It got real complicated.

Storey: Do you have any insight on why he left?–Ibelieve in '89.

Budd: I really don't know. I do know that he's makingprobably six to eight times the money that hewas making then. Whether or not it wasstrictly a personal decision motivated byincome potential, or whether there was otherstuff behind it, I don't know. I suspect that itwas strictly: "Well okay, guys, looks like Bushwon't be a two-term president, that theDemocrats are going to be in–time for me toget out of here because I ain't going to survive achange in administrations." And his mentor,assistant secretary . . . (Storey: Was thatBroadbent?) No, he was commissioner. I can'tremember the guy's name.

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David Houston and Jim Ziglar

Anyway, the assistant secretary, went to workon Wall Street . . . . (Storey: Oh, Mr. Ziglar.) Ziglar, yeah. (Storey: Jim Ziglar.) Went towork . . . Hell, I can't even remember the nameof the Wall Street firm now that went down thetubes with the scandal. But Dave went to workout here as that firm's representative. Hereported to Ziglar, municipal bond field, and asthat firm went down the tubes, he shifted overto Smith, Barney and is still there. And myunderstanding–it's hard to tell what the factsare, but the rumors are that he's making eighthundred [$800,000] to a million and a half[$1.5 million] a year, and it wouldn't be toughfor me, I don't think, given that kind of anopportunity to say, "Well, working for $80,000doesn't really make a lot of sense, when I canmake ten times that and not work any harderthan I'm working now." Because he wasworking; he was working hard; no questionabout it.

Storey: And his successor was Larry Hancock. (Budd:Right.) What are your perceptions of Larry?

Larry Hancock, Regional Director

Budd: Larry and I were friends. I liked Larry a wholebunch. I don't think Larry was cut out to be thepolitician that it takes to be the regionaldirector in here. I think any other region thatLarry would be a great regional director. Andundoubtedly, there's a problem in Reclamation

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states–there are not a lot of blacks inReclamation states, particularly not in jobs likeregional director's jobs. And I think Larryhandled that well. He did well getting past theissue of color. There's always a suspicion thathe got the job because he was black, and thatmay be, but it wasn't because he wasn't as wellqualified as any of the other candidates. I thinkhe probably was as well qualified as anyonethat I heard of being discussed at the time. Idon't think there were any candidates that werecapable of functioning at the level that this jobrequires.

Roger Patterson, Regional Director

I don't know how in the hell we managed to getsomebody that's as good as Patterson. I don'tknow why Patterson's still working for thegovernment. He's a good regional director. He's developed relationships that go far, farbeyond what you would expect from a regionaldirector–at least in a fellow as young as he is. That's always been a puzzlement to me, is howwe can keep anybody, any good people. I feelvery inadequate about my own abilities, but Ifigure I'm about as good as the government has,but I'm not nearly as good as what's on theoutside: and the reason is the outside folks areout there because they're willing or desire totake the risk on the outside to make a lot moremoney. And I don't understand why Pattersonisn't out there someplace doing something likethat.

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Storey: What do you see as his strengths?

Budd: I think it's . . . He's kind of like a chess player, Iguess. He's able to look five, six, seven movesdown [the road], with permutations on each ofthose and remember them. I think Houston hada lot of that same ability, but I don't think hecould . . . The problem Houston had is that hismotivation was basically political, and I don'tthink Patterson cares one way or the otherabout politics. He simply recognizes that thisis the Democrats, and we do things in a certainway with the Democrats, and when theRepublicans come in, we'll do those things in adifferent way with the Republicans. Houstonwas strictly driven politically. He had aRepublican agenda that he wantedimplemented. Patterson doesn't. He's got awater-environment type agenda that he simplyaccommodates the politics in. That's the onlything I can think of that really . . . He's bright,he's a personable guy, people like him–acombination of all that stuff. Lots of people arebright that people really like but simplycouldn't function in the job that he's got. Something I can really see is that I know–and Isit around and spend some time thinking about,"Okay, well, if we do this here's what happens." And when I get involved in conversations withRoger about some of those things, why he'susually been there, thought about that, andgone on to the next step or two. And at thatpoint it gets so complicated for me that I justcan't take all this information and make senseout of it, and he seems to be able to do that.

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That seems to me to be the reason that he's ascapable as he is. Now you can put somebodyin there that everybody likes–yeah, he's a goodguy; you'll get along fine with him, but he's notgoing to be nearly as effective as my perceptionof Roger's effectiveness.

Storey: Well, I hate to say it, but we've arrived at theend of another two hours.

Budd: Well, I think we're all done, too.

Storey: Well, I appreciate your spending the time withme, and I'd like to ask if it's alright forReclamation researchers and researchers fromoutside Reclamation to use the tapes andtranscripts from this interview.

Budd: Yep. That's fine.

Storey: Good. Thank you very much.

END SIDE 2, TAPE 2. AUGUST 30, 1994.END OF INTERVIEWS

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