Water flows at about 300 cubic feet per second from Wallowa Lake through the Wallowa Lake Dam into the Wallowa River on Monday, July 20. Dam caretaker Blayne Hayes said the rate of outflow is approximately the same as that which is flowing into the lake from the south end.

WALLOWA LAKE — Stakeholders in the rehabilitation of the Wallowa Lake Dam are disappointed but not giving up hope since $273 million in state bonds were killed as a result of the COVID-19 crisis.

The steep drop in lottery funds was announced Tuesday, July 7, by state officials, according to a report by the Capital Bureau. It means that 37 projects authorized by the Legislature at the end of the 2019 session that included $14 million for the dam, and $2.5 million for the Wallowa Valley Center for Wellness and others across the state cannot count on the promised funds.

“Initially, it felt like a gut punch, but we’ve come too far to fail,” said Jim Harbeck, field office supervisor of Nez Perce Tribe’s Department of Fisheries Resources Management in Joseph. “I still highly anticipate a good future for Wallowa Valley agriculture and natural resources. Nobody’s giving up.”

In order to sell bonds, the state has to show a 4-to-1 ratio between forecast Lottery Fund revenue and the amount of debt in the bonds. That has not been a problem in previous budget cycles since the lottery was established in 1984, the Capital Bureau reported.

“We’re 100 years into this (the dam) and about 20 years into trying to aggressively fix the dam,” said Dan Butterfield, president of the Wallowa Lake Irrigation District.

With the COVID-19 pandemic, businesses where lottery tickets were sold were closed this spring and revenues plummeted. The revenue forecasts are released quarterly.

“It’s disappointing, but we remain proud of the work we’ve done over the past six months and we’re at a great jumping-off point if funds become available again,” said Jeff Yanke, a watershed manager with the Oregon Department of Fish and Wildlife.

State Sen. Bill Hansell, R-Athena, said that the June forecast showed lottery sales of only 3.1 to 1.

“It just cratered. We don’t have enough revenue to sell bonds as authorized,” he said. “We’ve never had this happen before. It’s totally uncharted waters.”

Hansell said he was informed by another legislator that there are three principal options. The first, Hansell said, is to keep the entire package of projects scheduled for funding and fund them when lottery bonding rallies.

“But who knows how long that’ll take,” he said.

Hansell said another forecast is due in September. If revenues are back up, the Legislature could fund those projects that are ready to go. However, Hansell said, the criteria for which projects to fund has yet to be determined.

The third option, Hansell said, is to cancel all the projects and start over the next legislative session.

Hansell is counting on a better forecast come September. However, according to current laws, state officials can’t just pick and choose which to fund. He said the Legislature could hold a special session to allow just that.

“All is not lost yet,” he said. “We still have options out there and we’re waiting to see what the September forecast will be. It’s not a rosy picture and the coronavirus impacts are likely to be significant.”

The senator urged stakeholders in the various projects to be patient.

“I would be cautious about spending significant amounts of money at this point,” he said. “We’ve got to see where we are.”

In addition to the Nez Perce Tribe, the WLID and the state through the ODFW, the stakeholders in the dam work include the Confederated Tribes of the Umatilla Indian Reservation.

All four groups either have or are about to sign a memorandum of agreement on the basics of the dam rehabilitation. They’re all equally enthusiastic that the dam work will be done.

“As I understand it, that same level of commitment is shared by all four parties,” Harbeck said. “I’m a fish person, so I have a certain agenda, but this is an important project for the entire county.”

“I’m pretty optimistic something good will come from this,” Butterfield said.

Still, all four groups have put a lot of work into the MOA, which is required before the dam work can be funded.

“In case the forecasts do change, we want to show the Legislature we’re shovel-ready if funds become available,” Butterfield said.

All agreed there is still much uncertainty and they don’t expect answers quickly.

“We’re absolutely disappointed but we understand the position of the Legislature,” Yanke said.

Hansell said he hopes the state and the stakeholders don’t have to go back to square one.

“If we do nothing and the bonding levels remain where they are now, that whole package needs be reevaluated in the next legislative session,” he said. “It’s not overly encouraging at this point. We’ll know when the September forecast comes out.”