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February 17, 2004 MEMORANDUM TO: Ground Water Commission Members FROM: Suzanne M. Sellers, Designated Basins Team SUBJECT: Request for a Variance to Designated Basin Rule 7.10.1 by Steve and Ronda Hayes to Expand the Acres for the Well with Permit No. 11744-FP Permit History Permit No. 11744-F was issued by the Ground Water Commission on April 11, 1967 for a well located in the NE1/4 of the SW1/4 of Section 11, Township 5 North, Range 43 West, 6th P.M. to use 320 acrefeet annually to irrigate 160 acres described as part of the E1/2 of the SW1/4 and the W1/2 of the SE1/4 of said Section 11. On August 13, 1976 the Commission granted a request by Vern Hayes to increase the irrigated acres by 160 acres so that the well may irrigate a total of 320 acres in the S1/2 of said Section 11. The applicant has claimed that 65 additional acres were initially irrigated on May 15, 1979. A Statement of Beneficial Use for the expanded acres was not received by the statutory deadline of December 31, 1979. Final Permit No. 11744-FP was issued on December 5, 2002 to irrigate the original 160 acres. The expanded acres were not included in the final permit because staff considers these expanded acres to be expired. The applicant appealed this decision and on November 21, 2003 the Commission remanded this issue back to the hearing officer. Variance Request for Permit No. 11744-FP On December 19, 2003 the applicant submitted an application pursuant to § 37-90-111(1)(g), C.R.S., to expand the acres irrigated by the well with Permit No. 11744-FP and requested a variance to Rule 7.10.1. Rule 7.10.1 reads as follows: It shall be the burden of the applicant to determine the average annual historic withdrawal and depletion by a well. The evidence required to determine historic withdrawal and depletion may include irrigation system and pump efficiency tests, information on pump and irrigation method(s), flow meter readings and water consumption records where available, power and crop data and such other data as is determined by the staff to be necessary. Ten or more most recent consecutive years of records shall be submitted unless the applicant can show good cause why the data cannot be supplied. Staff ‘s understanding of the variance request is that the applicant would like a variance on the requirement that the ten or more most recent consecutive years of records be used and that the average historic withdrawal be based on the pumping and irrigation practices that occurred in 1979. The application for the expanded acres and the variance request was published in Wray Gazette on December 31, and January 7, 2004. No objections were received by the statutory deadline of February 6, 2004. The applicant has paid all publication costs. Discussion on the Granting of Variance Requests by the Commission Rule 11.1.1 provides authority for the Commission to grant a variance from strict application of a Commission rule upon a determination of “unusual hardship.” Rule 11.1.1 reads as follows: When the strict application of any provisions of these rules would cause unusual hardship, the Commission may grant a variance for a specific instance provided a written request for the variance is made to the Commission and the Commission finds the request justifiable in accordance with the provisions of this rule. The term “unusual hardship” is not defined by Commission rules. Furthermore, the Commission has adopted its rules for specific purposes. In this case, the Commission adopted Rule 7.10.1 to ensure that an expanded acres request will not result in material injury through an expansion in the historic use of designated ground water. Consequently, this variance should only be granted upon a showing that circumstances or facts that exist will cause the applicant to be impacted by the restrictions imposed by the Commission rule that would not impact a typical applicant. Unless the Hayes satisfy a strict standard to distinguish the circumstances causing their “unusual hardship” from circumstances that may affect any typical applicant seeking expanded acres before a variance is granted, any applicant asserting similar facts could use a variance request to circumvent the requirements of a Commission rule and thereby cause material injury to other vested water rights. As noted on the following table, in the last five years the Commission has rarely granted a variance. History of Variance Requests brought before the Commission since May of 1998 Date Name Rule Request Well Use Ruling Aug. 1998 Brown 7.3 Replacement distance of 300 feet. Irrigation Denied Nov. 1998 City of Holyoke 7.3 Replacement distance of 300 feet. Municipal Granted May 2000 Kelling Emergency change of description and expansion of acres. Irrigation Denied Nov 2001 Lost Creek Land and Cattle 7.6.7 Commingling without administration. Irrigation Denied Feb. 2003 Booker 7.10.1 and 7.3.2 Ten or more most recent consecutive years in historic use calculation and saturated thickness reduction. Irrigation Denied As noted in the above table, the Commission granted a variance to the replacement well distance specified in the Rules for the City of Holyoke. This variance was granted because this well was a part of the city’s water supply and was contaminated with nitrate. Further, moving the well within 300 feet of the permitted location would not solve the nitrate problem. Therefore the Commission granted this variance to the replacement well distance, but stated that the original well’s permitted location would not change. As the nitrate contamination dissipates, the city can move its well back within 300 feet of the originally permitted location. As indicated above, the Commission rarely grants variances to their rules, and when they do it is under an extremely high unusual hardship standard. Memorandum Upcoming Commission Meeting Page 2 FRED A. HEFLEY, CHAIRMAN, Walsh; JON B. BROWNELL, VICE-CHAIRMAN, Hooper; EUGENE A. BAUERLE, Julesburg; ANNE J. CASTLE, Denver; DENNIS W. CORYELL, Burlington; MICHAEL GROSS, Silt; RICHARD F. HUWA, Keenesburg; F. W. (BILL) KERKSIEK, Strasburg; ERNEST L. MIKITA, Calhan EARNEST L. MIKITA, CHAIRMAN, Calhan; C. MAX SMITH, VICE-CHAIRMAN, Walsh; EUGENE A. BAUERLE, Julesburg; LARRY W. CLEVER, Grand Junction; DENNIS W. CORYELL, Burlington; RALPH G. CURTIS, Alamosa; RICHARD F. HUWA, Keenesburg; FRANK P. JAEGER, Elizabeth; ROBERT R. LOOSE, Wiggins Variance by Steve and Ronda Hayes Page 2 jones email of 1.26.04.doc VRANESH AND RAISCH, LLP ATTORNEYS AT LAW 1720 14th Street, Suite 200 P.O. Box 871 Boulder, Colorado 80306-0871 Telephone 303/443-6151 Telecopier 303/443-9586 Jerry W. Raisch John R. Henderson Michael D. Shimmin Eugene J. Riordan Paul J. Zilis Lisa Ledet Stuart B. Corbridge Amy F. Stengel George Vranesh (1926-1997) January 28, 2004 VIA E-MAIL ONLY e-mail: paj@llolaw.com Upper Black Squirrel Creek Ground Water Management District c/o P. Andrew Jones, Esq. Lind, Lawrence & Ottenhoff, LLP Re: Priority Call on Junior Water Rights by Schubert Ranches, Inc. Dear Andy: Please regard this letter as a formal request by Schubert Ranches, Inc. (“Schubert”) to have the Upper Black Squirrel Creek Ground Water Management District curtail pumping from certain upstream, junior wells. This request is made pursuant to C.R.S. § 37-90-111(1)(a), as interpreted and applied by the Colorado Supreme Court in the case of Upper Black Squirrel Creek Ground Water Management District v. Goss, 993 P.2d 1177 (Colo. 2000). Attached to this letter is a written report prepared by TZA Water Engineers that specifically identifies the wells and water rights owned by Schubert that this priority call is intended to benefit, the wells and water rights sought to be curtailed, and the factual bases for the curtailment request. This includes a ground water model analysis documenting the magnitude and timeframe within which both the impacts of continued pumping, and the benefits from curtailment, are likely to occur at the Schubert wells. The TZA report also documents why the curtailment is necessary, that continued operation of the upstream junior wells will cause unreasonable injury to the Schubert water rights, and that there are no reasonable alternatives available. Therefore, we believe that this curtailment request meets all of the factual and legal requirements set forth in both statute and case law. Likewise, although the District has not yet adopted a rule dealing with priority enforcement, we have tried to comply with all of the requirements set forth in the draft rule that you provided us. If you believe there are any factual or legal deficiencies in this curtailment request, we ask that you notify us immediately and specifically identify any such deficiencies. Please regard this as a request for the District to enter a summary order prohibiting any further withdrawal of water from the upstream, junior wells identified in the TZA report. We would like to attend the next District Board meeting to explain and summarize this work and answer questions. We understand that it may be February 10, 2004 at 7:00 p.m. in Calhan. We will plan to be there unless you tell us differently. In the event that the District declines to enter a summary curtailment order, please regard this as a written request for an adjudicatory hearing before the District pursuant to C.R.S. § 37-90-131(1)(c). The basis for the hearing request is that, if the District does not enter a summary curtailment order against these junior wells, Schubert will suffer immediate and unreasonable injury to its senior water rights during the upcoming irrigation season and into the future. We request that the District Board consider this request at its next meeting, and immediately notify us about whether a summary curtailment order will be entered. If not, we need to begin the procedures necessary to schedule and conduct the hearing within 180 days, as required by C.R.S. § 37-90-131(1)(c). In order to facilitate the District’s review of this request, concurrently with my e-mailing you this letter and attachments, TZA is sending to the District’s consultant, Forrest Leaf, a copy of the TZA report, along with a copy of the model, including the input and output files on CD. I am also sending a copy of this letter and its attachment to the Ground Water Commission staff. If you have any questions at this time about either the process or the substance of this request, please let me know. Thank you for your consideration. Sincerely, VRANESH AND RAISCH, LLP By: Mike Shimmin Michael D. Shimmin E-mail: mds@vrlaw.com MDS:k Attachment cc: Hal D. Simpson, P.E., State Engineer (w/ attachment) (via e-mail) William H. Fronczak, P.E., Supervisor (w/ attachment) (via e-mail Suzanne M. Sellers, P.E. (w/ attachment) (via e-mail) George and Ted Schubert (w/ attachment) (via first class mail) Bruce E. Kroeker, P.E. (w/o attachment) (via e-mail) S:\Client\Schubert\jones email of 1.26.04.doc January 28, 2004 Page 2 CONFIDENTIALITY NOTICE This facsimile transmission contains information belonging to the sender which is confidential and legally privileged. This information is only for the use of the individual or entity to whom it was sent as indicated above. If you are not the intended recipient, you are hereby notified that any disclosure, copying or distribution of this transmission, or any action taken in reliance on the information within this transmission is strictly prohibited. If you have received this transmission in error, please call us collect to arrange for its return to us at our expense. Thank you. S:\Client\Schubert\jones email of 1.26.04.doc Minutes-4th '03.doc MINUTES FOURTH QUARTERLY MEETING COLORADO GROUND WATER COMMISSION NOVEMBER 21, 2003 The Fourth Quarterly Meeting of the Colorado Ground Water Commission took place on November 21, 2003, at 1313 Sherman Street, Room 318, Denver, Colorado. Chairman Earnest Mikita called the meeting to order at 10:00 a.m. Marta Ahrens called the roll and determined that a quorum was present. Commission members present were Eugene Bauerle, Larry Clever, Dennis Coryell, Ralph Curtis, Richard Huwa, Frank Jaeger, Robert Loose, Earnest Mikita, Max Smith, and Hal Simpson. Ex-Officio members Ted Kowalski and Frank McNulty were absent. Review and approval of agenda items - Under Old Business, Mr. Simpson stated that Ken Knox will report on the impact of wells in the Northern High Plains. Commissioner Coryell moved to approve the agenda with the additional item; the motion was seconded by Commissioner Smith and approved unanimously. Approval of Minutes for meeting of August 15, 2003 - Chairman Mikita asked if there were any corrections or additions to the Minutes of the August 15, 2003 meeting. Commissioner Curtis asked that his name be added to those who attended the meeting. Commissioner Bauerle moved to accept the Minutes with the correction; the motion was seconded by Commissioner Loose and carried unanimously. Report of the Executive Director by Hal Simpson – Mr. Simpson reported that Kent Holsinger, Ex-Officio Member of the Commission, resigned to go into private practice as an attorney. His replacement is Frank McNulty, who plans on being an active member of the Commission. Mr. Simpson stated that Suzanne Sellers was promoted to Team Leader of the Designated Basins Branch and will be the point source of contact for the Commissioners. In addition, Megan Sullivan transferred out of Designated Basins and into the Division 1 Team. This leaves two vacant positions in the Branch, which will be filled as quickly as possible. Mr. Simpson reported on the Core Mission Project, which is the study within the Department to look for ways to become more efficient and save money. The project is nearing completion with the final ideas narrowed down for savings and revenue generation. The Division will move forward with removing the requirement of filing a Statement of Beneficial use in areas outside of the Designated Basins, providing water commissioners with PDA’s to enter diversion data which can then be transferred into their computers, and reducing the number of copies of well permits that are distributed. Mr. Simpson reported that there is a possibility that there will be new or increased fees to fund parts of the Division’s program that are not properly funded; i.e., increasing fees for inspection of dams, subdivision plan reviews, and review of substitute water supply plans. The Division of Water Resources and Colorado Water Conservation Board will not be consolidated since there will be very little savings. Still under scrutiny is the proposal to move 65 IT positions to the Department for a centralized IT program. Mr. Simpson reported on the meeting that was held with Senator Hillman and Representative Brophy regarding Colorado’s obligations under the settlement agreement on the Republican River Compact litigation. A public meeting will be held on December 10th at Wray High School to discuss the implementation of the settlement over the use of water within the Republican River Basin, addressing pumping depletions from the Ogallala aquifer, and methods to deal with shortages and dry years. This will be the first of several meetings. The Ogallala Aquifer Symposium will be held on February 23, 2004 at Wray High School. Mr. Simpson proposed holding the February Ground Water Commission meeting in conjunction with this Symposium. The Symposium will focus on the settlement agreement and some of the water issues in the basin with speakers from the federal government and other states. Mr. Simpson reported on the Arkansas River Compact litigation and stated that he received a report from the Special Master, which brings to closure the issues that they have been dealing with. The report will go to the U.S. Supreme Court and Kansas is expected to file exceptions to parts of the report. There will be a hearing sometime next spring with a decision by the Court late next summer or fall. The Special Master recommended that the 1996 rules regarding replacing well depletions are adequate, the 1994 measurement rules are acceptable, and there will be changes to the H-I model. Colorado’s obligation to Kansas is around $30 million, which is less than the $300 million originally requested by Kansas. Mr. Simpson reported that Mr. George Van Slyke is retiring the end of December after 30 years as geologist with the Division, and stated that his expertise will be greatly missed. Motion for reconsideration of May 16, 2003 Commission decision concerning the petition for reinstatement of a well permit regarding expanded acres of well permit no. 11744-FP, owned by Steve and Ronda Hayes, by Mike Shimmin, attorney for well owners – Mr. Pat Kowaleski, conflicts counsel with the Attorney General’s Office, updated the Commission on what occurred during the previous proceedings on this matter. Mr. Mike Shimmin stated that the Hayes didn’t attend the May meeting because they didn’t know there was a hearing scheduled for that meeting. The staff does not object to Mr. Shimmin’s motion to reconsider. Commissioner Smith moved to reconsider the Hayes’ request; the motion was seconded by Commissioner Coryell and approved unanimously. Mr. Shimmin asked that the Commission take a procedural step to rescind the action that was taken at the May meeting and send this case to the Hearing Officer on the merits that there was procedural confusion on what the request was. He stated that there are some legitimate issues that need to be resolved by the Hearing Officer, and that the Hayes have a statutory right to an administrative hearing to present all the facts and legal issues of this matter. Mr. Matt Poznanovic, attorney representing the staff, stated that the staff recommends that the Commission deny the request for the expanded acres issue, and that the Hayes need to go through the application process under the current statutes. The staff requests that the Commission uphold its decision from the May meeting. Following deliberation by the Commission members, Commissioner Bauerle recommended that this issue go before the Hearing Officer. Commissioner Jaeger agreed since a lot of time has passed. Commissioner Jaeger moved to send this matter back to the Hearing Officer; Commissioner Bauerle seconded the motion. Commissioner Clever added that it be remanded to the Hearing Officer, but to rescind the decision that was made at the May meeting. Commissioner Bauerle seconded the amended motion by Commissioner Clever and it was approved unanimously. Update on Eagle Peak Farms Ltd. v. Colorado Ground Water Commission (Case No. 99CV0097) and Eagle Peak Farms Ltd. v. Lost Creek GWMD (Case No. 98CV1727), both in Adams County District Court by Bill Fronczak -- Mr. Fronczak, from the staff, updated the Commission regarding activities on the Eagle Peak litigation since the August meeting. The staff, along with the applicant, proceeded with putting together information and finalizing the language in the Stipulation and it was signed on November 12, 2003. Furthermore, Mr. Fronczak indicated that the court accepted the stipulation by issuing an order on November 11, 2003. This means that the Commission is out of the litigation; however, per the conditions in the Stipulation, the Commission still has the ability to review briefs and file motions. Discussion on the whether the Ground Water Commission should seek the authority to levy fines for illegal uses of designated ground water by Bill Fronczak – Mr. Fronczak reported that the staff generated a draft document to enforce Ground Water Commission and State Engineer orders issued for illegal diversion or use of ground water so that cease and desist orders are taken seriously. The Plains and East Cheyenne District brought this forward upon frustration that orders issued needed to be taken seriously and prosecuted timely. The intent is to present this document to the Commission to see if they concur and, if it goes forward, to find a legislative sponsor. The proposal is to add provisions to and supplement Section 37-91-110, the powers of the State Engineer, and enact a new Section 37-90-111 to allow the Ground Water Commission to post orders on wells, the authority to seek energy records on diversions of water in the Designated Basins, and the ability to collect attorney fees and litigation costs. Mr. Simpson stated that through discussions with Stan Murphy on this issue and e-mails with Senator Hillman, that Senator Hillman may be a possible sponsor for this legislation. Commissioner Jaeger expressed his concerns about adding language to include areas outside of the Designated Basins. Commissioner Curtis stated that if this is proposed to go forward, it should be approved prior to the February Commission meeting to avoid having to request late-bill status. Commissioner Jaeger moved that the Commission support this concept and move forward with the language, but not include the outside the Designated Basins clause; Commissioner Coryell seconded the motion. Mr. Shimmin stated his concerns with the language that, before the motion was voted on, it be made clear whether this authority is given solely to the State Engineer or if it is shared with the Ground Water Management Districts. He stated that he polled the Ground Water Management Districts he represents and in attendance at the meeting, and they feel they have shared and equal authority to handle these enforcement activities. Chairman Mikita stated that the motion has been made and that the Commission is proceeding with the issue, and the wording will be clarified through the Ground Water Management Districts and the Ground Water Commission before it is finalized. Mr. Fronczak stated that he will remove the word “sole”, which will resolve the issue. The motion was approved unanimously. Commission in Executive Session concerning Reinaldo Gallegos, Marianne Gallegos, Harold l. Gallegos, Ellen Gallegos, and Gene J. Gallegos v. Colorado Ground Water Commission, an administrative agency of the State of Colorado, and Mr. Hal D. Simpson, The Colorado State Engineer, as Ex Officio Executive Director of the Colorado Ground Water Commission (Case No. 03CV1335) in Weld County District Court – Mr. Kowaleski stated that there is pending litigation on the Gallegos matter that the Commission proposed to discuss during Executive Session. Commissioner Clever moved to go into Executive Session, seconded by Commissioner Jaeger and approved unanimously. The sole subject of discussion was the litigation. Discussion and decision on the processing of changes of water rights in Designated Basins where ground water is available for appropriation by Bill Fronczak – Mr. Fronczak stated that this topic was per direction from the Commission at the last meeting. He provided the Commission with the following two proposals: Proposal No. 1 is an increase in appropriation and irrigated acres – The staff’s recommendation is that it applies to the Southern High Plains Designated Basin. The rule change would allow the Commission to issue new permits under Section 107 for existing wells that are multiple-completed. Proposal No. 2 enters into a resolution whereby allowing the State Engineer and staff to have flexibility in issuance of change of water right applications in basins that are open for appropriation; this includes publication, review analysis of injury, and issue a change of water right for the new use. The change would allow a new priority date. Mr. Fronczak stated that proposal number one would be easiest for staff because 95% of the wells were constructed prior to 1987, but they should be able to pass both proposals. Commissioner Clever made a motion that the staff take both proposals and run it by the Ground Water Management Districts that are affected and report back to the Commission. The motion was seconded by Commissioner Smith and passed unanimously. Staff Report by Suzanne Sellers - Ms. Suzanne Sellers presented the Staff Activity Report for the last quarter that was included in the packets. She reported on small capacity well permits, large capacity permits, changes of water rights, final permitting activities, objections and hearings (Eagle Peak Farms was settled and the Gallegos matter is in Weld County District Court), appeals (the Booker matter is being appealed back to the Commission), enforcement actions (complaints included small capacity wells for unpermitted uses, Upper Black Squirrel irrigation wells, Kiowa Bijou District livestock wells, Camp Creek District wells, and a Southern High Plains large capacity well). With the help of Stan Murphy, the staff is close to resolving an ongoing issue with Kenneth Potteroff in the Plains District. Report of the Attorney General by Matthew Poznanovic - Mr. Matt Poznanovic stated that the report that provides a summary of the matters that the Attorney General’s Office is involved in was included in the packets. In addition to the two appeals to the Commission in February, the next hearing with the Hearing Officer is scheduled for January 23, 2004 regarding an objection to RMBG’s application for determination of water right. Management District Reports - Chairman Mikita called for the Management District reports. Mr. Aaron Nein reported from the Frenchman, Sandhills, Marks Butte and Central Yuma Ground Water Management Districts. Mr. Nein reported on the enforcement activities and stated that his districts are being proactive with regard to well permit enforcement. Within the past three years, they have adopted mandatory well administration rules; all four districts have adopted rules for paying back water that is over-pumped; and three out of the four districts will have a 2 to1 payback policy in place. Mr. Jack Adams, from the W-Y Ground Water Management District, stated that it is a good idea to get Senator Hillman to carry the bill. There was no report from the Arikaree Ground Water Management District. Mr. Stan Murphy, from the Plains and East Cheyenne Management Districts, reported on the enforcement issue regarding Mr. Potteroff. He reported on the joint meeting with the Plains and East Cheyenne Districts and Senator Hillman to discuss the proposed language and stated that the Senator expressed interest in carrying the bill. Mr. Murphy discussed the proposed bill by Kansas which will pay farmers to not irrigate. Commissioner Max Smith, reporting for the Southern High Plains Ground Water Management District, stated that it is still dry in his districts. There were no reports from the North Kiowa-Bijou Ground Water Management District, the Upper Black Squirrel Creek Ground Water Management District, or from the Upper Big Sandy Ground Water Management District. Ms. Cheryl Wailes, from the Lost Creek Ground Water Management District, reported on the litigation with Sweetwater and expressed her displeasure with the state regarding the lack of support to the district in the litigation process. Old Business – Impact of wells in the Northern High Plains by Ken Knox – Mr. Knox reported on the potential for new appropriations in the Republican River basins and how that might prevail into litigation and compliance efforts. The ground water model was used to look at what each appropriation sought in terms of their impact to the streams. Mr. Knox stated that the thrust of the argument is the tenure (the recommendation is to look at 100 years), the amount for long-term depletions, and the aquifer levels. Commissioner Clever recommended that staff proceed, using the recommended 100 years, and come back to the next meeting with a report. New Business – Selection of Meeting Dates for 2004 – Marta Ahrens reported that the meeting dates scheduled for 2004 are as follows: February 24, Tuesday, in Wray, held in conjunction with the Ogallala Symposium on Monday, February 23; May 21 in Denver; August 19-20 (location to be determined) – a recommendation was made to hold the meeting at the new Northern Water Conservancy District building in Berthoud and tour their project on the Front Range; November 19 in Denver. Commissioner Bauerle moved to set these meetings dates; seconded by Commissioner Jaeger and approved unanimously.