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830 P.2d 915, City of Thornton By and Through Utilities Bd. v. City of Fort Collins, (Colo. 1992) Page 10 <br />notice upon which depends the issue of relation <br />back. See Part II C. We hold that the water court <br />properly found that the 1988 amendments relate <br />back to the 1986 application. <br />*924 B <br />Thornton also disputes the appropriation date of <br />February 18, 1986, decreed by the water court for <br />the conditional water right at the Nature Dam. The <br />water court found that the adoption of the Plan by <br />the city council of Fort Collins at a public meeting <br />on February 18, 1986, was an act sufficiently overt <br />to place all interested parties on notice that Fort <br />Collins intended to appropriate the Poudre River <br />water claimed by the 1986 application. The water <br />court ruled that the Plan's adoption satisfied both <br />prongs of the so- called "first step" test for an <br />appropriation of a conditional water right. The <br />water court also found that the field trips by Fort <br />Collins staff to the proposed sites for the Nature <br />Center and power plant dams in February of 1986, <br />the publication of notice of Poudre River water <br />rights claims in a Fort Collins newspaper on <br />December 31, 1986, and the signs posted at certain <br />locations along the corridor on December 31, 1986, <br />satisfied the overt acts prong of the first step test. <br />Thornton argues that neither the adoption of the <br />Plan by the Fort Collins city council on February <br />18, 1986, nor the staff field trip in February, nor the <br />posting of signs along the Corridor in December of <br />1986, nor the notices published in the local <br />newspaper in December of 1986, whether taken <br />singly or cumulatively, could constitute evidence <br />sufficient to support an appropriation date of <br />February 18, 1986. According to Thornton, these <br />acts did not manifest a fixed intent to appropriate <br />water at the Nature Dam as of February 18, 1986, <br />nor did they constitute acts sufficiently overt to <br />qualify as the first step taken toward the <br />appropriation of water at the Nature Dam on <br />February 18, 1986. Rather, the earliest possible <br />appropriation date, according to Thornton, is June 1, <br />1988, the date on which the 1988 amendments were <br />filed with the water court. (FN2) <br />1. The First Step Test. <br />We review the principles governing the <br />adjudication of a conditional water right. In <br />particular, we review the principles of the "first <br />step" test and some of the sequential and evidentiary <br />problems encountered in applying the test. The <br />sequential problems are generated by the division of <br />the first step into an intent prong and an overt act(s) <br />prong. See Lionelle v. Southeastern Colorado <br />Conservancy Dist., 676 P.2d 1162, 1168 <br />(Colo. 1984). Such problems are further <br />complicated by the requirement that the overt act or <br />acts must perform at least three functions. See Bar <br />70 Enterprises, Inc. v. Tosco Corp., 703 P.2d 1297, <br />1307 (Colo. 1985). Evidentiary problems arise over <br />whether a relevant act can be deemed to have <br />performed one or more of the required functions. <br />[4] A conditional water right is deemed by the Act <br />as "a right to perfect a water right with a certain <br />priority upon the completion with reasonable <br />diligence of the appropriation upon which such <br />water right is to be based." § 37 -92- 103(6), 15 <br />C.R.S. (1990). A conditional water right <br />encourages] development of water resources by <br />allowing the applicant to complete financing, <br />engineering, and construction with the certainty that <br />if its development plan succeeds, it will be able to <br />obtain an absolute water right." Public Service Co. <br />v. Blue River Irrigation Co., 753 P.2d 737, 739 <br />(Colo. 1988). We have held that "[c]onditional <br />water rights decrees are designed to establish that <br />the 'first step' toward an appropriation of a certain <br />amount of water has been taken and to recognize the <br />relation back of the ultimate appropriation to the <br />date of that first step. " City of Aspen v. Colo. <br />River Water Conservation Dist., 696 P.2d 758, 761 <br />(Colo. 1985). See § 37 -92- 305(1), 15 C.R.S. <br />(1990). (FN3) To establish the date of the <br />appropriation, the applicant *925 must show the <br />"concurrence of the intent to appropriate water for <br />application to beneficial use with an overt <br />manifestation of that intent through physical acts <br />sufficient to constitute notice to third parties." City <br />of Aspen, 696 P.2d at 761. (FN4) The concurrence <br />of intent and overt acts qualifies as the first step <br />toward an appropriation of water, and the date on <br />which the first step is taken determines the date of <br />the appropriation. <br />The division of the first step into an intent prong <br />and an overt acts prong has generated disputes over <br />whether there is a necessary sequence of intent <br />formation followed by overt acts. In Bar 70, we <br />held that "[a]lthough the formation of the intent to <br />appropriate water will generally precede the <br />performance of the overt acts, the 'first step' in <br />some cases may be completed even though the overt <br />• <br />• <br />• <br />Copyright (c) West Group 1999 No claim to original U.S. Govt. works <br />