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9) Pagosa Area Water and Sanitation District and San Juan River Conservancy <br />District v. Trout Unlimited, - -- P.3d - - -, 2007 WL 3053321 (Colo. 2007), <br />October 22, 2007 <br />The Colorado Supreme Court clarified issues relating to the application of the <br />anti - speculation doctrine to governmental water supply agencies. Applicants, the Pagosa <br />Area Water and Sanitation District and the San Juan River Water Conservancy District <br />(the "Districts "), sought a conditional storage water right for a 29,000 acre -feet of water, <br />the right to fill and refill the reservoir continuously to achieve a total annual amount of <br />stored water of 64,000 acre -feet. The Districts also sought an 80 cfs direct flow right <br />independent of the storage right, and the right to use and reuse all of of its water. <br />The Water Court granted the Districts' application. The Supreme Court reversed <br />the Water Court's judgment. The Supreme Court held that the Water Court had failed to <br />make sufficient findings of fact to establish that the District's proposed appropriation is <br />non - speculative or that it satisfies the "can and will" test, and remanded the matter back <br />to the Water Court to make such findings. In reaching its decision, the Supreme Court <br />held that a governmental agency must satisfy three elements to demonstrate an <br />appropriation is non - speculative. First, the governmental agency must demonstrate that it <br />has relied upon a reasonable water supply planning period. The Court noted that <br />"although [a] fifty year planning period ... is not a fixed upper limit ... the water court <br />should closely scrutinize a governmental agency's claim for a planning period that <br />exceeds fifty years." Opinion, at 27. <br />Second, the governmental agency must demonstrate that its claimed appropriation <br />is consistent with substantiated population projections based on a normal rate of growth <br />for that period. The Supreme Court emphasized that such projects cannot be based on <br />mere conjectural projections: "Municipalities must do more than represent to the water <br />court that if they had water, they would be able to grow." Opinion at 21, citing City of <br />Thornton v. B#ou Irrigation Co., 926 P.2d 1, 39 n.25 (Colo. 1996). <br />Third; the governmental agency must demonstrate that the appropriation claims <br />an amount of water reasonably necessary to serve the projected population for the <br />claimed planning period. In determining the amount of water necessary to meet <br />population needs, the Water Court should make findings concerning future land use <br />mixes and per capita water usage requirements, taking into account implementation of <br />water conservation measures. In addition, the Water Court must take into account the <br />effect of reuse rights. The Supreme Court noted that "the effect of decreeing reuse rights <br />is to greatly increase an entity's usable water supply." Opinion, at 31. The Court also <br />seemed to disfavor granting simple direct diversion rights without any volumetric <br />limitation, noting that it had previously approved the imposition of volumetric limitations <br />in Thornton v. Byou. <br />Finally, the governmental agency must demonstrate under the "can and will" test <br />that it has the ability to construct the facilities necessary for the appropriation and perfect <br />the use of the water claimed under the appropriation. <br />I <br />