DWR_3364075

• Board or Commission: Colorado Ground Water Commission
• Document Type - Board and Commission Meetings: Meeting Document
• Document Date: 2/16/2018
• Subject: MEETING MATERIALS

to connect with the Staff of the Divisions and to learn what their concerns are. Mr. Rein reported that with the trial set for January there remain one or two objectors to the proposed
rules in the Rio Grande Basin. The rulemaking procedures for the protection of agricultural water rights move along. Spurred by legislation, these changes allow an irrigator to quantify
his/her water right now for a future change. This allows municipalities to enter into a contract with an irrigator when the water is actually needed. If the water is not needed, it
may be used to grow crops. Mr. Rein advised that there may be legislation again this year to adjust the boundaries of the Republican River Basin Conservation District so that they
follow those used in the domain model. He closed his remarks by informing the Commission of staffing changes in the Denver Office, mainly that Ms. Tracy Kosloff is now the Assistant
State Engineer for water supply over Basins, essentially his old position. Ground Water Commission Meeting Minutes Page 2 November 3, 2017 In response to a question of Commissioner
Valdez, Mr. Rein said that the State had reached a stipulated settlement with 2-Way Ranch in the Rio Grande rule making. In reply to Commissioner Farmer, Mr. Rein said that the Office
of the State Engineer always wants more staff but that getting additional staff is not a reality. He reminded the Commission of the recent staffing changes in the office that were
designed to spread the work out more. Commissioner Farmer questioned if perhaps the Commission should approach the Legislature for more money for staff. Chairman Valdez called for
agenda item no. 5, Commissioners’ reports, there were none. Chairman Valdez called for agenda item no. 6. A hearing on a proposal to amend Rule 7.4 to prevent a well from increasing
depletions of designated ground water beyond the well’s historical depletions when changing the description of irrigated acres allowed to be irrigated by the well, Case no. 17-GW-04.
Mr. Pat Kowaleski briefed the Commission on the rule making procedures followed to-date, and the procedures to be followed during the hearing. Mr. Kowaleski also identifies those
who had acquired party status. Mr. Philip Lopez, on behalf of Staff, approached the Commission. He said that the proposed amendment to the Rules will require an historical consumptive
use analysis. This is to limit depletions to the aquifer caused by irrigating new lands over the historical lands. He then covered the statutory and legal authority for the Commission
to adopt or amend rules, (under 37-90-108). Mr. Lopez stated that it is Staff’s perspective, the amendments to the rules are reasonable from a policy and a factual perspective, as
demonstrated in the Basis and Purpose to be adopted at the same time as the Rule amendments. He said that the proposed changes are consistent with the state of law regarding change
of water rights. Mr. Lopez said that these amendments, if adopted, will make users in the Designated Basins subject to the same standards throughout the State. Commissioner Blake
questioned Mr. Lopez, asking if an appropriator applied to change his water right without asking for more acres, would he be subject to re-quantification. Mr. Lopez replied that he
would be if there was a potential for an increase in the historic consumptive use as quantified on the original irrigated acres. Commissioner Farmer asked Mr. Lopez if a well had historically
irrigated 125 acres under a sprinkle could the owner go to 250 acres under drip irrigation because there is no increase in water use. Mr. Lopez answered that to the extent that the
consumptive use is not increased you may. Commissioner Noble clarified that it would also be to the extent that the irrigated acres do not change from those that are permitted. Mr.
Lopez agreed. Responding to a question of Commissioner Tietmeyer, Mr. Lopez confirmed that an irrigator can change the method of application on those lands as currently permitted.
Ground Water Commission Meeting Minutes Page 3 November 3, 2017 Mr. Keith Vander Horst addressed the Commission. He said that a change in the description of irrigated acres is a
change of water right. Mr. Vander Horst said that this process is controlled by Rule 7.4, which does not apply to wells located in the Denver Basin. Mr. Vander Horst said that an
application to change the description of irrigated acres is approved on the standard of no material injury. He said that the current evaluation process does not include a historical
consumptive use analysis (HCU). Mr. Vander Horst noted that all other applications to change a water right, excluding an application to commingle water rights, require an HCU analysis.
He also noted that outside of a Designated Basin, a change in the description of irrigated acres does require an HCU analysis, therefore, the proposed rule change would bring the evaluation
standards of an application to change the description of irrigated acres inside a Designated Basin in line with those standards outside of the Basins and also bring the change application
process in line with other change applications inside of the Designated Basins. Mr. Vander Horst, using recent applications received by Staff to change the description of irrigated
acres described the common theme. He gave an example of where the final permit allows for the irrigation of 160 acres typically described as a quarter section. Now the well owner
wants to change the description and Staff discovers during the evaluation process that the well had been used to irrigate only 130 acres for decades. Now the well owner wants to maintain
the 130-acre circle and move the 30 acres of corners to a different quarter and install a small pivot. This is an effective increase in the number of acres historically irrigated and
an effective increase in depletions to the aquifer over the historical. Mr. Vander Horst said that the standard evaluation under the current Rule 7.4 adversely affects the vested water
rights of other appropriators. Mr. Vander Horst said that the proposed rule change will prevent an increase in depletions to the aquifer caused by a change in description of irrigated
acres, the proposed rule eliminates any adverse impact. The proposed change also includes administrative requirements, including metering, 3-year banking and third party administration.
He said that the proposed rule does allow for the correction in the description of irrigated acres so long as those acres are the originally irrigated acres, as requested by Mr. Dave
Taussig of Upper Big Sandy GWMD at the August meeting. Mr. Vander Host identified Marks Butte, Frenchmen, Sandhills and Central Yuma (the “Big 4”) GWMD’s and the Lost Creek GWMD as
agreeing with the proposed change. He said that the proposed rule will not affect any existing water right. The terms of the proposed amended rule will only apply to those permits
where a change is asked for. He advised the Commission that the Upper Black Squirrel Creek did submit a pre-hearing statement that included proposals to amend Rule 7.4. The first
proposal is to give consideration to the well owner that can demonstrate that the reduction in irrigated lands experienced by the well is due to declining water levels. Mr. Vander
Horst said that Staff does not agree with the proposal because all Basins have experienced a decline in water level and the belief that the majority of applicants to change the description
of irrigated acres would say that they had not irrigated all of the permitted lands because of a declining water table. Therefore the permits would remain and more lands would come
under irrigation as shown in his example. Mr. Vander Horst continued that Staff disagrees with another proposal from the August meeting, that the Rule be limited to those Basins that
want it, the Basins could opt out. He said that because most of the aquifers affected by this rule are determined to be over-appropriated and have experienced a water decline. He
said that Staff is of the opinion that the amendment should apply to all Basins to protect all water rights. Mr. Vander Horst closed saying that the best policy for the Commission
is to be consistent throughout the Basins. Ground Water Commission Meeting Minutes Page 4 November 3, 2017 Responding to a question of Commissioner Noble regarding the effect on compact
compliance, Mr. Vander Horst stated that the current standards of evaluation could have a negative impact on Colorado’s compact compliance because administration of the Republican River
Compact centers on the number of irrigated acres. Ms. Lisa Thompson, representing the Upper Black Squirrel Creek GWMD, addressed the Commission. She said that the Board generally
supports the proposed changes to Rule 7.4. Ms. Thompson noted that the Board does believe that there may be some unintended consequences for irrigators in their District that have
had their ability to irrigate reduced due to declining water levels. She said that based on these concerns she had submitted a pre-hearing statement that contained some proposed language
to address the matter. Ms. Thompson said that these are local concerns and that the Board would rather see the proposed Rule pass than be delayed by lengthy consideration of their
local concerns. Ms. Leila Behnampour, representing Marks Butte, Sandhills, Frenchman and Central Yuma GWMD’s, addressed the Commission. She said that the Districts are concerned
about declining water levels and vested water rights, therefore they support the proposed rule change. Ms. Behnampour said that in the Northern High Plains, CREP funds are being used
to retire acres from irrigation for compact compliance but that changes like the example that Mr. Vander Horst provided hurts that effort. Chairman Valdez opened the hearing to public
comment. Mr. Nate Midcap, representing Marks Butte, Frenchman, Sandhills and Central Yuma GWMD’s, addressed the Commission. He said that the Districts support the rule change because
making these changes is consistent with the Districts goals in reducing ground water withdrawals and doing so helps support the Republican River Compact. Mr. John Buchanan, representing
the East Cheyenne GWMD, addressed the Commission. He said that the District would like to see the Commission deny the proposed change. Mr. Buchanan continued that the District agrees
with the Upper Black Squirrel Creek District about declining water table but also believes that the irrigators will be harmed if they have been conserving water or if the irrigation
of unpermitted lands began a few years after the permit was issued. He stated that an irrigator using surface water can change the description of acres irrigated without a consumptive
use analysis. Mr. Buchanan continued that if the Commission wants to amend the rule they should do so using the historical acreage rather than the historical consumptive use, a less
expensive analysis, and limit the change to those Districts that want it. Responding to a question of Commissioner Rein, Mr. Buchanan said that he was referring to a ditch scenario
where the irrigated lands are not specifically described. He added that the current rule allows farmers more flexibility in managing their operations. Mr. Dave Taussig, representing
the Upper Big Sandy GWMD, addressed the Commission. He thanked the Commission for their consideration of his comments at the August meeting regarding the original irrigated acres being
different from those permitted. Chairman Valdez closed the public comment portion of the hearing, opening it to Commission deliberation. Ground Water Commission Meeting Minutes
Page 5 November 3, 2017 Commissioner Farmer asked if he would be able to move 62 acres (the E1/2 of a circle) to the W1/2 of the section without being subject to the proposed changes.
Mr. Vander Horst said that if he remained within the currently permitted acres he could but if he went outside of the currently permitted acres he would be subject to the proposed
changes. Commissioner Farmer said that he felt that the change was a hindrance to farmers. Commissioner Fowler asked if the Commission approved rule 7.4.6.1.a, as proposed by Upper
Black Squirrel, would the compact be impacted. Mr. Vander Horst said that the compact would be affected because obligations of Colorado are calculated on actual irrigated acres, not
the permitted number of acres. Responding to a question of Commissioner Arnusch, Mr. Vander Horst said that the method of historical consumptive use was chosen after consideration
of a request of the Big 4 Management Districts. Commissioner Arnusch stated that in the eyes of a landowner, the process could be viewed as an attack on private property rights. He
asked Mr. Vander Horst to address that concern. Mr. Vander Horst said that the proposed rule change is not a taking. He added that the irrigator can continue to use his or her water
right as currently permitted, but that if a change is requested that right is placed at risk. Mr. Vander Horst stated that this concept is well established in Colorado law. Commissioner
Gourley asked why it was necessary to do a consumptive use analysis if the request is to only change the acres without increasing the number of acres. Mr. Vander Horst responded that
such a change should not result in a big change for the operator. He can continue to irrigate the same number of acres and crops using the same application method. Responding to a
description of the consumptive use analysis by Mr. Vander Horst, Mr. Gourley said that it appeared to be costly and time consuming and should not be for a change in description of acres
that does not include an increase in acres. Commissioner Noble commenting that the rules require no injury noted that growing 160 acres of alfalfa on one side of the line would have
the same consumptive use as growing 160 acres of alfalfa on the other side of the line. He asked Mr. Vander Horst if that scenario was considered. Mr. Vander Horst responded that
in that scenario, a consumptive use analysis should not result in a big change for the operator. He added that proposed rule 7.4.2 requires that the provisions of rule 7.4.10 apply
to determine the historical withdrawal. Commissioner Rein asked Mr. Kowaleski how the Commission could amend the proposed rule. Mr. Kowaleski said that this is a hearing on the proposed
rules and the Commission may change them as they see fit without the need for additional public comment. Commissioner Larson suggested that no HCU be required if there is no increase
in the number of acres but that one would be required if there is an increase in acres. Commissioner Arnusch requested that Mr. Midcap join the discussion to help explain matters.
Mr. Midcap said that if 130 acres are irrigated and moved then there is also a need to reduce the annual appropriation to correspond to the 130 acres. He said that the state has a
form for that and that it can and has been done. Mr. Midcap said the Districts decided to go for the HCU analysis because that is the norm for all other changes except commingling.
Ground Water Commission Meeting Minutes Page 6 November 3, 2017 Commissioner Arnusch said that in his District the farmers started with 160 acres and went down to 130 acres. He said
that this proposed rule could potentially hurt the farmers in future changes to their practice. Mr. Arnusch continued that he does not think that the solution for the Northern High
Plains is a one-size-fits-all scenario. Commissioner Farmer said that he does not think that the compact should have an impact on the deliberations of the Commission. He went on to
say that the historical irrigated acreage should be used not the HCU and that each District should be able to opt out of the rule, to allow for more local control. Commissioner Gourley
said that he too would prefer evaluation under historical acres and not HCU. Commissioner Tietmeyer asked Mr. Lopez if they could change the proposed rule and meet statute. Mr. Lopez
referred the question to Mr. Kowaleski who said that the Commission could change what was presented to them. Commissioner Gourley moved to have Staff consider the historical acres
and not the historical consumptive use. Commissioner Farmer seconded the motion which failed. Commissioner Noble moved to amend rule 7.4.1 to read …a change of description of irrigated
acres shall not result in an increase over the historical acreage irrigated by the well. The future average irrigated acreage from a well under this rule shall not exceed the average
annual legal irrigated acres by the well and be less than this amount to ensure no increased depletions to the aquifer… There was no second. Commissioner Noble moved to amend rule
7.4.1 to read …a change of description of irrigated acres shall not result in an increase over the historical average irrigated acreage by the well. The future average irrigated acreage
from a well under this rule shall not exceed the average annual legal, historical average irrigated acres by the well and be less than this amount to ensure no increased depletions
to the aquifer by a need to compensate for any reduction in the return flows back to the aquifer, and Rule 7.4.2 is amended to read … it shall be the burden of the applicant to demonstrate
the historical average irrigated acreage by the well… Commissioner Farmer seconded the motion which failed. Commissioner Arnusch moved that Staff review the rule making, considering
adopting historical irrigated acres rather than historical consumptive use. Commissioner Kramer seconded the motion which passed unanimously. Commissioner Arnusch moved to continue
the hearing until the next scheduled meeting. Commissioner Larson seconded the motion which passed unanimously. Ground Water Commission Meeting Minutes Page 7 November 3, 2017 Chairman
Valdez called for agenda item no. 7. A hearing of consolidated cases, nos. 16-GW-01 and 16-GW-02. 16-GW-01, an appeal by the Strasburg Sanitation and Water District to the Initial
Decision of the Hearing Officer concerning issuance of a Final Permit, permit no. 2642-F. 16-GW-02, an appeal by Kiowa Water and Wastewater Authority to the Initial Decision of the
Hearing Officer concerning issuance of a Final Permit, permit no. 2794-F. Mr. Pat Kowaleski briefed the Commission on the procedures followed to-date, and the procedures to be followed
during the hearing. He briefed the Commission with his understanding of the issues for each case, citing statutes and arguments of both parties. Mr. Kowaleski reminded the commission
that they can accept the Hearing Officers decisions or reject his decisions in part or in whole. He noted that though they will be hearing the cases at the same time they will be acting
on them individually. Mr. Matt Poznanovic, representing the Strasburg Sanitation and Water District and the Kiowa Water and Wastewater Authority, approached the Commission. He opened
his comments asking the Commission to confirm that the permits, issued in 1960, over 50 years ago, under the 1957 law, were final permits at the time of issuance. Mr. Poznanovic stated
that the wells had perfected their water right by pumping at the permitted flow rate of 60 GPM (Strasburg) and 360 GPM (Kiowa). He said that at these flow rates and pumped 24 hours-a-day
for the full year, Strasburg would pump 96 acre-feet and Kiowa would pump 575 acre-feet. Mr. Poznanovic said that now Staff wants to change the rules and issue new final permits which
would reduce the annual acre-feet from 96 to 15.4 for Strasburg and from 575 to 132.5 for Kiowa. Mr. Poznanovic said that Strasburg and Kiowa want the Commission to set aside the Hearing
Officers initial decision, to confirm that the “65” act does not apply retroactively, that Strasburg and Kiowa perfected their water right in 1960 at a rate of 60 GPM for Strasburg
and 360 GPM for Kiowa and that the Strasburg and Kiowa permits be found to be final when they were issued. He went on to say that a water right is based on appropriation which means
that water is diverted and applied to beneficial use. Mr. Poznanovic said that there was no dispute that Strasburg and Kiowa constructed their wells, diverted the water and placed
it to beneficial use, all according to their permits, therefore by the definition of appropriation they have a water right. He continued that a vested water right exists when the permit
holder takes steps to rely on it. Mr. Poznanovic said that what is at question is if applying the final permit statute retroactively was intended or even constitutional. He then
went on to say that statutes are normally prospective, meaning they concern only in the future but that occasionally a retroactive law is approved but normally does not allow retrospective
administration. He said that there is no legislative intent to apply the “65 Act” to rights that existed before the effective date of the “Act”, there is nothing in the “65 Act” that
imposes the two step conditional permitting process on pre-law permits. Mr. Poznanovic went to say that 37-90-107 (“107”) deals with future actions, proposed uses and proposed wells
with no reference to existing wells. He went on saying that 37-90-108 (“108”) deals with final permitting, construction and beneficial use of the wells. However, it only concerns
conditional permits issued after May 17, 1965. He said that neither 107 nor 108 mention existing wells or existing permits. If it had been the legislative intent to include existing
permits to the final permit procedure, it would have explicitly said so. Mr. Poznanovic next discussed 37-90-109 (“109”). He said that paragraphs 1 – 3 concern setting the priority
date for pre-65 wells. He then said that priority lists and final permitting are separate processes. Continuing, Mr. Poznanovic stated that paragraph 4 says final permits are issued
pursuant to 108 but Ground Water Commission Meeting Minutes Page 8 November 3, 2017 108 requirements only apply to conditional permits. He said that it was unfair to allow people
to rely on their permits for 55 years then change the rules. Mr. Poznanovic advised the Commission that if they believed a final permit was necessary, they could invoke 108(3)(b) and,
by invoking the Staff, issue final permits for future demand to meet future growth, future growth like Kiowa’s four (4) approved annexations. He continued saying that the towns relied
on their water rights for 55 years, almost a lifetime, before Staff decided to issue final permits. Mr. Poznanovic said that Strasburg and Kiowa should not be punished for Staff waiting
55 years to act. Responding to questions of Commissioner Tietmeyer, Mr. Poznanovic said that the Basin was created after the 65-Act and the cities thought they were obeying the rules
when they became a part of the Basins. Commissioner Fowler asked about what occurred in 2005. Mr. Poznanovic advised the Commission that the replacement permit approved by Staff was
a part of the five million dollars spent by Kiowa to refurbish the water system. Responding to Commissioner Noble, Mr. Poznanovic said that the 2005 replacement permit provided for
an annual appropriation of 575 acre-feet of water. In another question, Commissioner Noble asked for an opinion on the apparent contradictory handling of the great and growing cities
doctrine in an early ruling of the Hearing Officer and the latest initial decision. In response, Mr. Poznanovic said that he thought the Hearing Officer read the statute, 108, too
narrowly when he issued his latest Findings and Order and Initial Decision. Responding to a question of Commissioner Arnusch, Mr. Poznanovic said that he thought the Strasburg and
Kiowa wells were the last in this position of being evaluated for final permit. He continued that he did not know how municipal wells in a similar position were dealt with. Mr. Michael
Toll, representing Staff, addressed the Commission. He first responded to a couple of earlier questions, noting that the Basin was designated in 1965 and that it was due to the structure
of the final permit process (processing permits township by township for each Basin), that it took so long to get to the permits that are the subject of the hearing. Mr. Toll then
advised the Commission that Staff wants the Commission to affirm the Hearing Officers initial decision and issue a final permit to Strasburg in the amount of 15.4 acre-feet and to Kiowa
in the amount of 132.5 acre-feet, being the volume of water that Strasburg and Kiowa were able to demonstrate that they diverted and placed to beneficial use. He went on that none
of the facts of the cases, the yield, the priority date or even the volume of water that was placed to use, and for Kiowa, the future demand, are disputed. Mr. Toll informed the Commission
that according to several Supreme Court cases, a final permit is equal to an absolute water right and that an appropriation is made by pumping the water and placing it to beneficial
use, a water right is not perfected by merely pumping the water. He went on to say that the actual text of the 1957 law says that the issuance of a permit under the 1957 law shall
not have the effect of granting or conferring a ground water right on the user but shall be prima fascia evidenced of that water right. Therefore, the Strasburg and Kiowa permits cannot
be a final permit because a final permit is equal to an absolute water right and permits issued under the 1957 law do not confer a water right. Mr. Toll continued that after the 65-Act,
all permits, including those issued Ground Water Commission Meeting Minutes Page 9 November 3, 2017 before the Act could only establish a confirmed, vested water right through the
final permit process which specifies the priority and the amount of water diverted. Mr. Toll went over 37-90-109 by paragraph to help explain the connection between pre-65 permits,
108 and 109. He said that 37-90-109(3) addresses the quantity of water placed to beneficial use by requiring the Commission to establish the water right by using the information required
for a final permit as shown under 108(5), which includes the maximum volume of water placed to beneficial use which is determined under 108(3)(b). He also advised that 109(4) requires
that the Commission issue final permits for all wells to appropriate ground water pursuant to the standards of 108. Mr. Toll summarized his arguments from the beginning, concluding
by noting that the delay in asking for information to issue a final permit actually was to the benefit of Kiowa whose maximum annual beneficial use occurred in 2012. Mr. Toll next
spoke to the claim of Kiowa that 37-90-108(3)(b) gives the Commission the authority to issue a water right for water that has not been placed to beneficial use, being the difference
between what they have used, 132.5 acre-feet and the volume the well could divert if pumped 24-7-365 at 360 GPM. He noted that the very statute qualifies the ability of the Commission
to increase or decrease the volume of water is limited by the actual extent of beneficial use, therefore, the Commission does not have statutory authority to increase the quantity of
water on a final permit beyond the extent of actual beneficial use. Though sympathetic to Kiowa’s projected demands, it is a fact that they have not placed 575 acre-feet of water to
beneficial use so the Commission, bound by law, cannot approve a final permit in an amount greater than 132.5 care-feet. In conclusion, Mr. Toll said that the Supreme Court has held
that the great and growing cities doctrine applies only to conditional water rights, and does not allow for a city to get an absolute water right or a final permit for a projected amount
of water. In response to a question of Commissioner Noble, Mr. Toll said that he is unaware of the Supreme Court discussing the great and growing cities doctrine in relation to 37-90-108(3)(b).
He went on to say that it is not necessary as the Supreme Court has found that the doctrine applies only to conditional water rights and that 108(3)(b) applies to water that has been
placed to beneficial use. Commissioner Noble then asked that in light of 108(5), what is the need for 108(3)(b). Mr. Toll replied that 108(3)(b) allows the user or Staff to present