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MEMORANDUM <br />August 6, 2004 <br />TO: Respective Representatives of the Water Users and the Sand and Gravel <br />Mining Industry <br />FROM: Hal D. Simpson, State Engineer <br />SUBJECT: Gravel Pit SWSP issued pursuant to § 37 -90- 137(11), C.R.S <br />Background: <br />In the summer of 2003, a potential conflict arose on the South Platte River as to the <br />SE O's authority to issue gravel pit SWSPs pursuant to § 37- 90- 137(11), C.R.S., as <br />historically done. Jeff Kahn, representing Rural Ditch Company, asked the SEO to <br />revoke a SWSP issu�Varra Companies because he felt that the State Engineer <br />exceeded his authority in approving a "change of water right," even if it is temporary. <br />The SEO has historically processed gravel pit SWSPs along the following guidelines: <br />1. The gravel pit owner /operator has to replace depletions from evaporation, water <br />removed in product, dust suppression, and concrete batching. <br />2. The gravel pit owner /operator could utilize the consumptive use value of <br />irrigation water rights used on the same ( ?) land to offset the aforementioned <br />depletions. <br />3. Three years prior to the completion of the gravel pit operation, the gravel pit <br />owner /operator must apply to the water court for a permanent plan for <br />augmentation if the open water surface area is to remain. <br />Jeff Kahn and other water users have stated that § 37 -90- 137(11) is clear in that only <br />_evaporation may be offset under a 137111,E SWRP, and that the Santa Fe Ranches and <br />Empire Lodge Supreme Court decision made it clear that the SEO could not "change a <br />water right" except under §37 -92 -308 after the applicant had filed an application with the <br />water court for a change in water right. Mr. Kahn's position is that the SEO's historical <br />practice exceeds statutory authority and that he would be willing to challenge this <br />practice in the courts. <br />The water users indicated that they would work with the SEO and the gravel industry to <br />resolve these issues, which resolution may include statutory modification. The SEO met <br />with the gravel industry once separately, with Jeff and other representatives of South <br />