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
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