But if the federal government is willing to give up title to the water associations, while still committing some federal assistance, low-interest state and private water development loans could be directed at the problem.

Officials also point to a $5.9 billion balance in a Reclamation Fund first created in 1902 as a means to finance Western water projects through water and power sales.

"While receipts in the past were insufficient for construction of major federal projects, today it appears that the Reclamation Fund could serve as a revolving account that would pay for Reclamation and related-water resources programs and needs in the West," Willardson testified.

"Perhaps it is time to focus federal financial resources intended to aid in Western water development to help state and local agencies meet future challenges," he added.

John W. Keyes, commissioner of the Bureau of Reclamation, said the agency has focused its efforts on beefing up security around dam sites, repairing aging dams and improving how water is used in the arid West.

The agency has looked at the feasibility of new dams in California, but Keyes warned "we must be realistic about costs," noting that steel, fuel and concrete have all experienced dramatic cost spikes.

"In many Western river basins, the water needs of today are too great to simply await the development of new storage, which can take decades to complete," he said.

Keyes encouraged an expansion of cost-sharing partnerships, environmental innovations to find ways to conserve water and protect wildlife, and better legislation that helps rural water users.

"As with many other things in life, aging can have significant effects and impacts on not only the facilities themselves but on the need to dedicate an increasing amount of our resources into maintaining and upgrading our existing infrastructure," Keyes said.

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