Report of the State Auditor 1993

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Report of The Colorado State Auditor 17 Project Planning Needs' To Consider the Prior Appropriation Doctrine The Board has generally relied on project sponsors coming forward and requesting assistance. Also, sufficient funds were available for these projects. Some Board members and staff have reported that the prior appropriation doctrine provides a system that controls how water is developed in the State. For these reasons, planning activities were limited or not perceived as needed for the Construction Fund. The prior appropriation doctrine, which is recognized in the State's constitution, is the system of water 'law under which (1) the right to water is acquired by diverting water and applying it to a beneficial use and (2) a right to water is superior to a right acquired later in time.' Water rights are regarded as property rights and can be bought and sold separately from the land. According to Board members, some holders of water rights perceive any attempt to plan for water development by a state agency as a potential interference with their ability to exercise use of those rights. This perception on the part of water rights holders is a major consideration for Board members. However, the need to plan for the best use of monies in the Construction Fund is important. The Board has limited staff and financial resources. The sources, of cash inflows to the' fund are beginning to decline in part due to decreases in interest income on the fund balance. At the same time, more of the fund is being used to finance studies and operating expenses which do not replenish the fund like loan repayments do. 'Also, meeting long-term water needs is more complex due to federal environmental and public health regulations. Finally, water development issues understandably continue to be impacted by, the values of diverse interests across the State. Planning is a tool that needs to consider all relevant factors, including the prior appropriation doctrine. The Board needs to coordinate an effort that helps identify how monies in the Construction Fund should be used. Further, the Board can use this prOcess to work with other interested parties to establish a framework for the development of water resources. Construction Fund Monies May Not Be Used in the Most Effective Manner All projects recommended by the Board to the General Assembly must meet Board requirements. These requirements include meeting priorities established by the Board's statute. These statutory priorities are broad. However, the Board