26e

• Board Meeting Date: 11/19/2008
• Description: CF Section - New Project Loans - Republican River Water Conservation District - North Fork Water Rights Lease
• Board Meetings - Doc Type: Memo

Republican River Water Conservation District Agenda Item 26e
November 10 , 2008
Page 3 of 7

The three states agreed to settle the litigation on December 15, 2002 and the United States Supreme
Court adopted the final stipulation in 2003. As part of the settlement stipulation the states agreed to
use a commonly developed basin - wide groundwater model to quantify groundwater depletions to
river flows so groundwater use could be reflected in Compact A ccounting. Once the groundwater
depletions were considered in the accounting, Colorado's over all water use appeared to exceed its
compact entitlemen ts.

Ground water impacts from wells in Colorado included in the Compact Accounting averaged
approximately 25, 00 0 AF/yr over the period 2002 - 2006. These impacts are primarily due to ground
water diversions that occurred decades ago. Starting in 2003, Co lorado has exceeded its compact
allocations by an average of 11, 00 0 AF/yr . Some reduction in the amount that Colorado has
exceeded its compact allocations is expected in the future as the result of irrigated acreage
retirement programs. However, it is proj ected that the deficit will increase gradually to 15,000 AF
in 2039.

In January 2008, the Republican District received approval of a $60 million loan from the CWCB
to finance part of the proposed $71 million C ompact Compliance P ipeline Project to help add ress
th e situation . The expected yield of the Pipeline is 15,000 AF/yr , which should be adequate to
ensure compact compliance for the 2 0 - year period of repayment of the Compact Compliance
Pipeline l oan.

Pioneer/Laird Ditch Litigation

As early as the 19 of the Republican River surface water users believed that the
designated NHP Basin wells were causing injury to their senior surface rights, however they were
unsuccessful in their early legal efforts to remedy their perceived injury .

Base d on the 2003 C ompact settlement, the North Fork surface users asked the State Engineer to
curtail NHP Basin well pumping in order to protect their surface water rights. The State Engineer
forwarded the request to the Colorado Groundwater Commission and t he Commission dismissed
the case. O n July 1, 2005, the North Fork surface users filed a Petition for Hearing and Appeal of
State Engineer Action (Case No. 05 - GW - 14).

The petition sought among other things to re - draw the boundaries of the NHP Basin. If th e
settlement is not concluded and the surface owners prevail, the litigation could result in the
curtailment of 1,338 irrigation wells (plus commercial and municipal wells) in Yuma County. The
area impacted by the lawsuits new designated basin boundary is approx. 190,000 acres of highly
productive agriculture and several municipal wells. The curtailment of wells would have a severe
impact on the local economy as identified in an Economic Development Report prepared by James
Pritchett, Department of Agricult ural and Resource Economics at Colorado State University. The
study indicates an economic impact of $170 million in the first year of well curtailment. This will
B
loan for the Compact Compliance Pipeline, wh ich was approved by the CWCB in January 2008
(HB 1346).

Just prior to the June 2008 Petition H earing , the Yuma County Water Authority and the surface
right owners agreed to a settlement by which the Republican would lease the