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Master then conducted a series of hearings to consider ad- ditional evidence to quantify the amount of depletions that had occurred to usable Stateline flows and to bring the evidence up -to -date, because the evidence in the first trial segment only went through 1985. The States stipulated to the depletions for the period 1950 -1985 and the Master determined the amount of the additional depletions through 1994; he also determined an appropriate remedy for the past depletions to usable State- line flows. In the Master's second and third reports, which came out in 1997 and 2000 respectively, he recommended that a suitable remedy for the past depletions was money damages, not repay- ment in water. He also determined that the damages should be based on the value of the water to Kansas. In other words, the dam- ages could be based, in part, on the losses suffered by Kansas water users as a result of the depletions to usable Stateline flows. He also ruled that prejudgment interest could be awarded on those dam- ages, but that prejudgment interest should not be awarded until 1969, the date he concluded that Colorado knew, or should have known, that post- Compact well pumping was depleting usable Stateline flows in violation of the Compact. damages and prejudgment damages was $53 million in 2002 dollars. The difference is simply based on a difference in the interpretation of the Supreme Court's decision. The Special Master agreed with Colorado's interpretation, so at least for now, the damages and prejudgment interest, in 2002 dollars, are $28.9 million. Another issue that had to be determined is whether the rules and regulations that had been adopted by the State Engineer, which became effective June 1, 1996, and the replacement plans implemented under those rules and regulations were sufficient to bring Colorado into compliance with the Com- pact. The Special Master determined that for the period 1997 through 1999, the implementation of the rules and regulations The Special Master accepted a new method to determine potential evapo- transpiration in the model that is being used to determine Compact Colorado filed exceptions to the Master's recommendations on damages and prejudgment interest. The exceptions were argued to the U.S. Supreme Court in 2001, and in June 2001 the Supreme Court issued an opinion in which it denied Colorado's exceptions, with the exception of the date for the commencement of prejudgment interest. The Court agreed with Colorado that the date for awarding prejudgment inter- est should be moved back from 1969 to 1985, the date Kan- sas filed the lawsuit. The Court pointed out that in previous rulings it had concluded that Kansas had not unreasonably delayed filing an action against Colorado until 1985 because no one really knew there were depletions to usable Stateline flows, and, in the early years nobody thought that wells were depleting usable Stateline flows in violation of the Compact. Even after it became clear that there was quite a bit of pump- ing in Colorado, trying to determine the impact of that pump- ing on Stateline flows was difficult. That was a very signifi- cant decision for Colorado, because it reduced the amount of Prejudgment interest by about $18 million. That set the stage for the final trial segment that began in June 2002. There were several issues that remained to be resolved after the remand, which included the amount of the damages and prejudgment interest. Colorado and Kansas agreed on the amount of the damages, which were about $7 million, but disagreed on how to calculate prejudgment interest on the damages in accordance with the Supreme Court's opinion. Colorado's calculation of damages and prejudgment inter- est was $28.9 million in 2002 dollars. Kansas' calculation of and the replacement plans were sufficient to bring Colorado into compliance with the Compact. That was an important finding, because it relieves Colorado from other remedies that might have been imposed if Colorado's plans had not been sufficient to prevent further depletions. Another issue was whether a River Master should be ap- pointed to continue to determine Compact compliance in the future. Colorado opposed the appointment of a River Master on the basis that it would continue the litigation into the future indefinitely. The Special Master rejected Kansas's request to appoint a River Master; however, as you heard yesterday, the period 1997 through 1999 was a wet period in Colorado. The Special Master found that although Colorado's plans were sufficient to prevent depletions in that period, it wasn't clear that the plans would be sufficient in a dry period. Therefore, he has recommended that the Court retain jurisdiction for a limited period of time, but he also recommended that before either state could invoke the jurisdiction of the Court, it should be required to first take the dispute to the Arkansas River Compact Administration. Another recommendation was that Compact compliance should be determined over a 10 -year period and that the results of the model would be used over that period to see whether there were depletions to usable Stateline flows. Colorado's position was that the model was not sufficiently accurate to use on a year -by -year basis. The Special Master agreed, which is a significant finding. Hydrologic models are commonly used today to determine many water resources issues, particularly those involving the use of ground water. These models can give very precise answers, but the question that must be asked is whether those answers are reasonable and reliable, particularly over a short time frame. The Special Master agreed with Colorado that the model was not reliable on a short-term basis, and that a 10 -year period was reasonable to look at Compact compliance. That is a significant finding for well owners in the Arkansas 21