2 tribes offer to pay $5.2M of Sardis Lake debt

By Murry Evans
Oklahoma City, Oklahoma (AP) June 2010

Two of the state’s largest American Indian tribes offered last week to pay $5.2 million of the state’s debt involving the Sardis Lake project in southeastern Oklahoma.

The Durant-based Choctaw Nation and the Ada-based Chickasaw Nation said they can make the debt payment, due by June 30, which the tribes said would give the state more time to resolve a dispute over the potential use of the lake’s water.

The state owes the federal government more than $22 million in connection with the lake’s construction, and the Oklahoma Water Resources Board has discussed selling the lake’s water storage rights to Oklahoma City to help pay off the debt.

The city’s Water Utilities Trust voted to approve a contract with the state, and the state water board had scheduled a special meeting for June 11, during which it will discuss the contract in executive session.

The plan has drawn criticism from lawmakers representing the area around the lake, who say that neither the value of the water nor the environmental impact to the lake has been determined and that they were left out of negotiations.

Choctaw spokeswoman Judy Allen said the tribes want “appropriate studies done before there are moves made to sell the water.” She said they want the water board to reject the contract.

“Using the debt owed by the state to the federal government as an excuse to make a deal that ignores the two tribes’ historic water rights and the environmental and economic interests of all of southeastern Oklahoma just doesn’t make sense,” Choctaw Chief Greg Pyle said.

Chickasaw Gov. Bill Anoatubby said the tribes believe “it is very important to take the necessary time to consider every available option and not take a rushed or reckless path.”

Paul Sund, a spokesman for Gov. Brad Henry, said Henry’s office had not seen any formal offer from the tribes. Sund said the governor was withholding comment on the proposal.

Brian Vance, a water board spokesman, confirmed the board received a letter from Pyle and Anoatubby on Tuesday that detailed the offer, but “there is some question about whether this would constitute a written agreement.”

Vance said he could not comment on the tribes’ proposal.

The U.S. Army Corps of Engineers, which built the lake, said in a letter to Henry and legislative leaders last month that it has not been asked for approval to transfer the storage rights. The agency believes the federal government would need to approve any such deal, corps spokesman Ross Adkins said.

The government entered a contract with the Oklahoma water board in 1974 for a dam and reservoir project about 45 miles southeast of McAlester to provide storage for municipal and industrial water supply. The contract stated the corps would include water supply storage space at its initial expense and the board would repay the corps’ costs plus interest in 50 annual payments.

In 1983, the corps notified the state that the project had been completed. The state made seven payments totaling about $4.5 million over the next 14 years – all of them late and totaling much less than the amount owed, according to the government. The last partial payment was received in 1997.

The government filed a federal breach of contract lawsuit against the state in 1998 seeking the past due amounts. The lawsuit was settled last year for $27 million, with the $5.2 million payment due by the end of June.