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~ . . ~. 3 (2) No compensation or mitigation acceptable to the Board has been proposed by applicant; or (3) The proposed inundation is inconsistent with the goals of the ISF Program. 71. Board may seek any administrative, legal or equitable remedy to resolve actual or proposed inundation of its ISF water rights. 7m. Only the Board may (1) seek to prevent interference with an ISF right by inundation and (2) seek compensation or mitigation for such interference. 7n. Board shall follow the public review process in Rules 11 a. - 11 c. prior to any Board decision on a request to inundate an ISF right. 2. The History and Backaround of ISF Rule 7 The CWCB adopted ISF Rule 7 as part of the original ISF Rules enacted to implement the ISF Program.3 Those Rules became effective on December 30, 1993. The process covered a period of nearly 7 years, and involved extensive public comment and testimony (both written and oral), legislative input, Board review and comment, Subcommittee review and comment, and Attorney General review, culminating in a formal rulemaking hearing, ISF Rule 7 was a compromise between the CWCB, environmental interests, and the water development community. No formal challenges were made to the adopted ISF Rules. ISF Rule 7 has not been revised since its original adoption. A chronology of events leading up to the Board's adoption of ISF Rule 7 is attached as Exhibit 2. A. Impetus for Addressina the Issue of Inundation In 1986, staff, on behalf of the Board, filed a Statement of Opposition ("SOP") to the St. Vrain and Left Hand Water Conservancy District's water court application for the proposed 287,000 acre-foot Smithy Reservoir, which would have inundated approximately 3.5 miles of the Board's ISF water right on St. Vrain Creek. When staff brought the SOP to the Board for ratification, the District's attorney argued that no injury would result because the reservoir would add water to the ISF water right rather than diminish the flow. After discussion, the Board concluded that inundation was not injury, and directed staff to withdraw the SOP. Subsequently, the Sierra Club filed a SOP in the case to protect the ISF water right. Later that year, the District withdrew its water right application. From 1987-1993, the Board filed SOPs in eight cases based in part on proposed inundations of ISF and natural lake level water rights. One of those cases, the application of the City of Aurora and Arapahoe County for Union Park Reservoir, which would have inundated the Board's ISF water right on Lottis Creek, was set for trial in June 1991. Questions were raised as to what the Board's policy on inundation should be, and in February 1990, CWCB Director Bill McDonald requested public input on the following questions: . 3 Current ISF Rule 7 was numbered "8" in the original 1993 ISF Rules and is referred to throughout this memo as "ISF Rule 7."