BOARD01008

• Board Meeting Date: 1/27/2004
• Description: CWCB Director's Report
• Board Meetings - Doc Type: Memo

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 Mastel' 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
f997 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 wordsl 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.

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damages a~ preju;gment damages :as $53 million in 2;:"'" .
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
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.

The Special Master accepted a new
method to determine potential evapo-
transpiration in the model that is
being used to determine Compact
compliance.

Colorado filed exceptions to the Master's recommendations
on damages .'and prejudgment mterest the excep'tions 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 bad 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 tha/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 oftbe 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 S.upreme Court's opinion.
Colorado's calculation of damages and prejudgment inter-
. est was $28.9 million in 2002 dollars. Kansas' calculation of

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 yestel:day. 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 recorrunended 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, 11 should
be required to first take the dispute to the Arkansas River
Compact Administration.

.

Another recommendation was that Compact compliance
should he detennined over a 1 O-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 detennine
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. ~he Special Master agreed with Colorado that
the model was not reliable on a short-term basis, and that a
IO-year period was reasonable to look at Compact compliance.
That is a significant finding fo~ well owners in the Arkansas

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