DWR_3348288

• Board or Commission: Colorado Ground Water Commission
• Document Type - Board and Commission Meetings: Meeting Document
• Document Date: 2/15/2008
• Subject: MEETING MATERIALS

2008-02-15-MINUTES.docMINUTES

FIRST QUARTERLY MEETING
COLORADO GROUND WATER COMMISSION
FEBRUARY 15, 2008

The First Quarterly Meeting of the Colorado Ground Water Commission took place on February 15, 2008, at the Parker Water and Sanitation District, 18100 E. Woodman Drive, Parker, Colorado.
Chairman Max Smith called the meeting to order at 10:00 a.m. Mr. Chris Grimes called the roll and determined that a quorum was present. Commission members present were Grant Bledsoe,
Dennis Coryell, Corey Huwa, Frank Jaeger, Robert Loose, Earnest Mikita, Doug Shriver, Max Smith, Dick Wolfe, and Jennifer Gimble.

Review and Approval of Agenda Items –Commissioner Mikita moved, and Commissioner Shriver seconded, approval of the agenda.

Approval of Minutes for Meeting of November 16, 2008 - Chairman Smith asked if there were any corrections or additions to the Minutes of the November 16, 2008 meeting. Commissioner
Coryell requested that line five of Stan Murphy’s report on the Republican River Conservation District read: “The deadline for signup for the ‘CREP’ program”, be corrected to “EQIP”.
Commissoner Huwa moved to accept the Minutes as amended; the motion was seconded by Commissioner Shriver and carried unanimously.

Report of the Executive Director by State Engineer Dick Wolfe – Mr. Wolfe reported on the following:

There has been some recent reorganization within the Denver office to accommodate the ongoing and future needs of Division of Water Resources. The Designated Basins group has been moved
under the supervision of Ken Knox as the Deputy State Engineer, and there is a decision item before Legislature to reallocate four additional staff members to the Designated Basins
team to deal with compact compliance and well measurement rules within the Republican River Basin. It was reported that Marta Ahrens will no longer be doing the meeting minutes and
other secretarial duties for the Ground Water Commission These duties will be taken over by the Designated Basins staff. Mr. Wolfe asked the Commission to consider formally recognizing
Marta for all her hard work and the years of service she has provided the Board.

Mr. Wolfe reported that the water supply conditions around the state are great right now. All of the Basins in the state are over 100 percent of average; the South Platte is at 112
percent of average, the Upper Rio Grande is at 172 percent, and the Arkansas is up 168 percent of normal. While snow pack and water availability are great, there are some flooding
concerns. We need to be prepared for this impact, and work closely with the CWCB for flood protection mitigation.

Republican River Basin

Mr. Wolfe reported that staff is moving forward with the promulgation of measurement rules. Dates have not been set yet, but we are looking at March to implement them. There has been
broad support to move forward with the measurement rules.
Mr. Wolfe reported that he continues to evaluate comments that have come in regarding the proposed Compact Rules. Ken Knox and Katie Radke have spent a significant amount of time speaking
with folks throughout the basin about the rules. There have been no decisions made on the proposed rules and no dates for promulgation have been set.

Dick Wolfe, Harris Sherman, Ken Knox, Jim Miller, and others met with Kansas on January 28th to discuss Compact compliance. It was a productive meeting. There is a follow-up meeting
scheduled for March 14th in Denver to continue the direct dialogue with representatives from Kansas on Compact Compliance.

Kansas has requested that Nebraska fast track arbitration, and tentative meetings have been scheduled for March 11th and 12th in Kansas City. There has been a request to do a presentation
on the Compact compliance pipeline at the Kansas City Meeting.

There will be upcoming meetings with the Pioneer Ditch and Bonnie Reservoir water users to address their concerns with the pipeline project.

Arkansas River Basin

There has been some resistance to the Water Efficiency Rules, and Mr. Wolfe has requested that the Division step back a bit to meet with some of the water user associations and districts
in smaller groups to discuss why we are trying to move forward with these rules. In April, Mr. Wolfe hopes to put together some broader meetings to educate the public and water users
a little more before adopting the rules.

At the last CWCB meeting, the Board approved $300,000 over a three year period for the lysimeter project going on in the Arkansas basin. We will continue to look for long term funding
sources if it is decided that the project should continue after that three year period.

Rio Grande Basin

Mr. Wolfe reported that there are efforts being made by subgroups within the Rio Grande Basin to possibly utilize CREP and EQIP programs to take irrigated agriculture out of production,
and try to bring the water use into balance. It’s important that we meet with folks in the Basin and get a dialogue going so that we can discuss how we will move forward. Mr. Wolfe
stressed the importance of getting the sub-districts up and running but well use rules for the Basin will be adopted.

South Platte River Basin

The South Platte Task Force continues to address some of the issues of wells in the basin. Some of the recommendations approved by the Task Force are moving forward through legislation.

The Chief Justice of the Colorado Supreme Court has established a committee, as recommended by the South Platte Task Force, to study methods to streamline the Water Court Process.
Commissioner Gimble and her agency, the CWCB, have been very supportive with funding for the committee. The report is expected out on August 1st but you may review the activities at
the State Court’s website.

La Plata River Basin

There is some concern regarding the outcome of the Vance Case concerning the coalbed methane issue in the Durango area and the potential adverse effect of the Supreme Court’s decision
on coalbed methane wells. Within the San Juan and Raton Basins, two primary basins where coalbed wells are operating, there are groups putting models together to determine non-tributary
areas in those basins. If they can prove larger areas of non-tributary water in those basins, the coalbed methane wells would not be subject to augmentation plans, and thus, they would
not be under the authority of the Division of Water Resources. The oil and gas well numbers continue to grow each year; we are expecting 7000 new wells of this type in the state this
year, and the prospect of potentially having oil and gas wells under the authority of the State Engineer is not an exciting one.
.
Mr. Wolfe reported that Senate Bill 53 has been pulled by Senator Brophy. Our modeling group applied the “100 Year Travel Time Test” from the Bill to the South Platte Basin, and it
resulted in 1300 of 8200 wells falling under a Designated Ground Water category. After seeing these results, the Senator killed the Bill.

Hearing: Amendment to the Rules and Regulations for the Management and Control of Designated Ground Water, to authorize Republican River Compact Compliance Wells. Commissioner Bledsoe
recused himself from the rule making hearing due to a conflict of interest. Chairman Smith called the hearing to order. A motion was made by Commissioner Coryell to grant party status
to the Ground Water Management Districts and accept the written materials. The motion was seconded by Commissioner Mikita and carried unanimously. Mr. Pat Kowaleski, of the Attorney
General’s Office, was conflicts counsel. The proponents were allowed 30 minutes for testimony, staff was allowed 10 minutes, and the Commission reserved an unspecified amount of time
for public comment. The following persons provided testimony before the Commission:
Mr. Mike Shimmin, representing the Marks Butte, Frenchman, Sandhills, Central Yuma, W-Y, Arikaree, and Plains Ground Water Management Districts (GWMD’s), stated that at the February
4th pre-hearing conference staff requested some revisions to the rules, specifically to the proposed rule that would have dealt with new wells and the possibility of well owners within
three miles of Compact compliance wells having veto power over new Compact compliance permits. The Sandhills District and a few directors on some of the other district’s boards have
some concerns with staff’s amendments to the language, but these concerns should not be misinterpreted as a lack of support for rule amendments or the compact compliance pipeline project.
Mr. Shimmin stated that they are concerned that the proposal made by the staff to allow compact compliance permits to be issued after a hearing held by the Commission does not provide
any standards of protection and/or criteria for injury in one of those hearings. The districts are supportive of a rule and sensitive to the staff’s concern that, as originally published,
the rule may have given well owners veto power. However, they are concerned with the wording of the rule and how it will be implemented, so they request that the rule wording be worked
on before final approval. Mr. Shimmin stated the GWMD’s are still supportive of that part of rule amendments dealing with “changes of existing well permits”, and all seven of his GWMD’s
are supportive of having that part of these amendments adopted. Mr. Shimmin requested that the Commission adopt the amendments written in paragraphs 1 and 5 of the written material
titled “Potential GWC Rule Amendments To Authorize Compact Compliance Wells”, and table action on paragraphs 2, 3, and 4 and continue this process to the next Commission meeting so
that the language on those proposals can be worked on.
Mr. Keith Vander Horst, representing staff, stated that Staff does agree with the overall concept of the rules and allowing compact compliance wells to be drilled in otherwise overappropriated
areas to help Colorado meet Compact compliance. Mr. Vander Horst clarified the basis for staff’s re-write of item of 4 of the proposed rule amendments. Two main issues drove the re-write:
(1) item two of the initial proposed rule required meeting existing Commission rule 5.2.1 (dealing with ½ mile spacing) and (2) consent was required from well owners within three miles.
Staff felt these rules overlapped. Staff was concerned with well owners having veto power. Staff understands the GWMD’s concern that, as written in Staff’s revision, there are no standards
set out for which the Commission could grant a new well in a hearing. Mr. Vander Horst stated that the staff supports Mr. Shimmin’s request to adopt items 1 and 5 of the proposed
Rules, and table items 2, 3, and 4 for further discussion.
Mr. Bill Paddock, representing Bledsoe Cattle Company, stated that the Bledsoe Cattle Company supports the efforts of the Commission and Republican River Water Conservation District
to develop compact compliance wells and the compact compliance pipeline, but they are concerned about what the standards will be for the issuance of compact compliance wells, who will
be able to apply for those wells, and what standards will be applied when determining if permits will be issued. He was concerned that we may be opening up the Basin for entrepreneurs
to come in and create private pipelines and get into the business of selling water for compact compliance purposes. This implicates the law of speculation as it applies to Designated
Ground Water. The Commission needs to think carefully about compact compliance wells, and how they will manage and structure the development of those wells. The Commission should
limit the issuance of compact compliance wells to only governmental entities whose charge it is to assist the state of Colorado in meeting its Compact obligations. Mr. Paddock also
stated that there needs to be more consideration by the staff in the determination of the injury standards for compact compliance wells. The landowners in the Basin who will be asked
to consent to a new appropriation (that they themselves could not get if they applied for) are entitled to know what the impacts will be on them, and how much they are being asked to
give up for the benefit of the Basin. And finally, Mr. Paddock stated that if there is a recalcitrant landowner who would not be injured by a compact compliance well, but is trying
to hold up the Basin to get more money, the Commission should consider the use of condemnation.
Mr. Mike Adamson, representing Pioneer Irrigation Ditch, stated that he is opposed to the pipeline project, and because we are already over appropriated, drilling more wells seems like
more bad ideas. If the Commission allows new permits to assist with Compact compliance, something else should be set aside as well. He stated that we can’t keep putting more wells
in the Basin to pump water that has not been appropriated before. Mr. Adamson agrees with passing rule amendment items 1 and 5, and tabling 2, 3, and 4.

Mr. Pat Kowaleski, of the Attorney General’s Office, recommended a procedural change that the Commission move to adopt rule amendment items 1 and 5, and not table 2, 3 and 4, but rather
direct staff to set that up as a new rule making hearing at the next meeting.
Following deliberation by the Commission Members, Commissioner Coryell made a motion to adopt rules amendment items 1 and 5 and set 2, 3 and 4 for another rule making
hearing. The motion was seconded by Commissioner Huwa, and passed unanimously.

Staff Report by Keith Vander Horst - Mr. Vander Horst presented the Staff Activity Report for the last quarter, the written report of which was included in the Commissioners’ packets.
He reported on the small capacity and large capacity well permit applications, change applications, final permitting activities, objections/hearings, and enforcement actions. Under
miscellaneous items, Mr. Vander Horst reported that the Pioneer Irrigation District is scheduled for a three week hearing in June, and the Richard Uhrick and Craig Kroskob petition
to amend the boundaries of the Kiowa Bijou Basin is scheduled for four day hearing at the end of March. Also, the Hearing Officer has vacated and stayed action on the hearing concerning
the Cherokee Metropolitan District’s applications for determination of water rights because some of the landowners and lessees filed an action in the El Paso County Court for a District
Court determination of what their leases meant on their property. He also reported that staff has received statements of opposition from the Kiowa Bijou Ground Water Management District
to many of the final permits that have recently been published in the Kiowa Bijou Basin. Mr. Vander Horst further reported that tests have been given to seven applicants for the vacant
staff position previously held by Eric Thoman. Staff hopes to have the position filled soon.

Report of the Attorney General by Devin Odell – Mr. Odell stated that the report that provides a summary of the matters that the Attorney General’s Office was involved in is included
in the packets. To highlight parts of this report, Mr. Odell reported that the Box Elder Basin Designation has been stayed to wait the final decree in the Central Water Conservancy
case. He also reported that in the Cure Case, a contempt hearing was scheduled to enforce our default judgment against Mr. Cure. Prior to the contempt hearing, there was an advisement
where the judge held a hearing to advise Mr. Cure of his rights. During this advisement Mr. Cure was told that if he found an attorney, the contempt hearing could be continued to a
later date. Mr. Cure hired an attorney, and the court granted their motion to continue the hearing to a later date. Mr. Odell also reported on the Pioneer litigation, stating that
the involved parties have submitted their opening disclosures, and the case will continue to be developed for hearing.

Management District and Conservation District Reports - Chairman Smith called for the Management District reports.

Mr. Nate Midcap, manager from the Frenchman, Sandhills, Marks Butte and Central Yuma Ground Water Management Districts, reported that most of the snow pack in his districts is gone.
Static water level measurments were performed on 223 wells, and the wells were down an average of 1.33 feet. Mr. Midcap also reported that there is widespread support from his District
boards to put measurement rules into effect, and keep power coefficient calculations. Mr. Midcap encouraged Mr. Wolfe to adopt measurement rules as soon as possible.

Mr. Jack Dowell, from the W-Y Ground Water Management District, reported that he measured the static water levels on 71 wells: 37 wells were up 7.6 feet, 32 wells were down 9.1 feet
and two wells were the same. He also reported that Yuma Ethanol is up and running.

Mr. Roger Brenner, from the Arikaree Ground Water Management District, reported that he has completed static water level measurements on 121 wells, some of which were found to be dry.
He also reported that he and the Arikaree district are happy to see the measurement rules and meter requirements. Mr. Brenner commented on the poor public appearance of one state
agency suing another state agency, both of which are monitored by a third state agency. Mr. Brenner had a conversation with Keith Vander Horst on Change of Use applications and the
classification of Municipal Use. Mr. Brenner asked Mr. Wolfe if the upcoming meetings between the Division of Water Resources and the Division of Wildlife (D.O.W), Pioneer Ditch,
and Bonnie Reservoir would be open to the public. Mr. Wolfe clarified that there is no public meeting with the D.O.W, but rather he and D.O.W personnel will be visiting Bonnie Reservoir
to get a layout of the area. Mr. Wolfe further explained that it was his belief that the meeting scheduled with the Pioneer Ditch folks in the next week would be open to the public,
but he wanted to confirm that with them.

Mr. Max Smith reported for the Southern High Plains Ground Water Management District and stated that they are working on water level measuring. Because of the lack of fall moisture,
most folks couldn’t get their winter wheat in, and it will probably result in a very dusty spring.

Commissioner Loose reported for the North Kiowa-Bijou Ground Water Management District. He expressed his appreciation for staff’s continued hard work.

Mr. Dave Taussig, from the Upper Big Sandy Ground Water Management District reported that Ernie Mikita decided not to seek re-election in the District, and he will be replaced by Larry
Mott. Mr. Taussig reported that the Upper Big Sandy District has extended its moratorium on exports for another year. However, there was a need to use water to develop a wind farm,
so the Upper Big Sandy District created an exemption to the moratorium for the wind farm’s temporary construction purposes. The applicant intends to export 35 acre feet in one year
for the temporary use in the construction of the roads and towers for the wind farm. A hearing is set for March 12th on the export application. Mr. Taussig reported that the Upper
Big Sandy District continues its water study of the area, and their goal is to create a sustainable aquifer, and understand what is there and what can be used. Mr. Taussig conveyed
his disappointment in the way legislators have failed to come before the Ground Water Commission to discuss proposed bills that would directly affect Designated Basins. He stressed
the importance of Commission involvement in this type of legislation. Mr. Taussig would like to see the Commission put together some legislation to limit the de-designation and creation
of Designated Ground Water Basins.

Mr. Stan Murphy, from the Republican River Water Conservation District (RRWCD), provided a summary of the plans for the Republican River Pipeline Project. Mr. Murphy provided the Ground
Water Commission with maps identifying which wells would be involved in the project, and he stated that the project will cost roughly $71 million. The RRWCD is currently under contract
to purchase a block of water rights (15,000 acre-feet in historic use) for $50 million. The purchase of the water rights will dry up approximately 10,000 acres of irrigated land. 6-10
wells will then be used to pump water through a pipeline 12.7 miles to the Nebraska state line on the North Fork of the Republican River. This pipeline will cost roughly $21 million
to construct. The Colorado Water Conservation Board has approved a $60 million dollar loan for the RRWCD, and pending the Legislature’s and Governor’s approval, the RRWCD hopes to
receive the funds in July. The RRWCD will make up the remaining $11 million. Water use fees throughout the district will increase from $5.50 to $14.50 per irrigated acre, which will
generate roughly $6.9 million/year. Mr. Murphy reported that an application for a change of use will be submitted for each well that has been purchased for the Pipeline project. The
water rights will be limited to the average historic use, and each well will be required to be metered and read by a third party administrator. Mr. Murphy reported that the RRWCD
has been told that they will get 100% credit for every acre-foot delivered to the gauge on the North Fork of the Republican River. The RRWCD will need to apply for variances to combine
the water rights, and they plan to have variance requests to move the wells greater than 300 feet, and for alternate points of diversion before the Ground Water Commission at the May
meeting. The Sand Hills Ground Water Management District, where the purchased wells are located, will need to approve the export of the water outside of their district, and a hearing
will be held within the Sand Hills District to hear/approve this request. And finally, the RRWCD will need Compact Committee approval of the plan to get 100% credit. The RRWCD hopes
to start construction in September of this year, deliver water by summer or fall of 2009, and meet Compact Compliance in 2009.

There were no reports from the Plains, East Cheyenne, Upper Black Squirrel Creek and Lost Creek Management Districts.

Old Business – The Ground Water Commission officially adopted, through signature by Mr. Wolfe and Chairman Smith, the resolution that was proposed by Commissioner Kowalski at the last
meeting and adopted by the Commission, endorsing and supporting the Track Residential Well Ownership Records Bill.

New Business – The Board would like to move forward with formally recognizing Marta Ahrens for her service at the next meeting.

Public Comments – Mike Adamson wanted the Commission to understand how strongly he is opposed to the Republican River Pipeline Project, and he believes that there are others that are
also opposed but aren’t sure how to voice their opposition. Mr. Adamson believes we need to stop consuming as much water as we are throughout the Northern High Plains, and in the case
of the pipeline, he believes we are not addressing that problem, but rather making it worse. Commissioner Coryell responded to Mr. Adamson, stating that when you start looking at the
whole issue and break down what is being done with the pipeline, there is no other way for the Basin to get into Compact compliance. Commissioner Coryell stated that he understood
that we do need to address issues of water conservation throughout the Basin, but not supporting the pipeline is not the way to go about that. Commissioner Coryell also stated that
there has been ample opportunity for folks to have their voices heard, and the vast majority of people that have made comments in public, are in support of the pipeline.

Next Meeting – May 16, 2008, at Parker Water & Sanitation District.

The meeting adjourned at 12:04 p.m.

Respectfully submitted,

Richard Nielsen
Secretary to the Ground Water Commission

Minutes - Ground Water Commission Meeting Page 2
February 15, 2008

AG ReportFeb08.docATTORNEY GENERAL’S REPORT

Cases involving the Colorado Ground Water Commission
February 15, 2007

The listing below summarizes matters in which the Office of the Attorney General represents the Colorado Ground Water Commission as of February 4, 2007.

appeal of rules adopted by the upper black squirrel creek ground water management district Case No. 04-CV-4457 Designated Basin: Upper Black Squirrel Management District: Upper Black
Squirrel Before: Hon. Larry Schwartz, El Paso County District Court Attorney: Pat Kowaleski
Subject: Cherokee, Meridian Ranch, Meridian Service, Paint Brush Hills and Woodmen
Hills Metropolitan Districts filed an appeal to the adoption of Rule Nos. 3, 17, 18, and 19 by the Upper Black Squirrel Creek Ground Water Management District. The Upper Black Squirrel
Creek District issued rules limiting withdrawals from large capacity wells, and, pursuant to statute, the Commission was required to approve the rules. On October 29, 2004, Cherokee
et al filed an appeal with the District Court in El Paso County. The Commission filed a Motion to Dismiss the District Court action on the grounds that the Commission had not yet completed
its review, and the matter was therefore not ripe for an appeal to District Court. The District Court put the matter on hold until the Hearing Officer and the Commission acted on the
remand to the Hearing Officer.

Status: After a status conference, the parties concluded that the matter should be decided by motions, without the necessity for a trial. A briefing schedule has been set to allow the
parties to do so over the next six months.

Moser v. Ground Water Commission Case No. 07-CV-487 Designated Basin: Proposed Box Elder Creek Management District: Before: Hon. Roger Klein, Weld County District Court Attorney:
Pat Kowaleski

Subject: The Commission denied the request of John Moser, et al, to create the Box Elder Creek Designated Basin, and Moser appealed the Commission’s decision to District Court. Pursuant
to statute, the matter will be tried de novo by the Court.

Status: The Court ordered the setting of the trial to be stayed until July, 2008 so as to allow the parties to brief disputed legal issues, including the preclusive effect of the court’s
final decree (to be issued this spring) in Central Colorado Water Conservancy District’s Well Augmentation Subdistrict case, which included findings by the court regarding the Box Elder
Creek drainage.

pioneer irrigation district Case No. 05-GW-14 Designated Basin: Northern High Plains Attorney: Devin Odell Before: Jody Grantham, Hearing Officer
Subject: The Pioneer Irrigation District, Colorado Board, certain owners of the Laird Ditch, and the Division of Wildlife (“Petitioners”) are prosecuting (after remand from the district
court) a Petition to redraw the current boundaries of the Northern High Plains Designated Ground Water Basin (“Basin”) for the purpose of excluding water that is allegedly tributary.
The Petition is opposed by the seven ground water management districts, certain well users and the Commission Staff (“Objectors”). The hearing officer has issued an order scheduling
a hearing in Wray during the first three weeks in June and setting various pre-hearing deadlines to allow for discovery and pre-hearing motions.

Status: Both Petitioners and Objectors have filed their opening disclosures and discovery, including expert depositions, will begin shortly.

CHEROKEE METROPOLITAN DISTRICT Case No. 05-GW-15, 16, 17 Designated Basin: Upper Black Squirrel Management District: Upper Black Squirrel Before: Jody Grantham, Hearing Officer Attorney:
Devin Odell
Subject: These cases involve nine applications for the withdrawal of groundwater from the Upper Black Squirrel Designated Ground Water Basin on land leased by the applicant. In its
November 2006 meeting, the Commission directed Staff to proceed with evaluation and publication of the applications and notify the legal land owners of the applications. Following publication,
the Commission received some 400 objections. However, the hearing officer ruled that only those objections—totaling about 80—that had been filed by the deadline and with the statutory
$10 fee would be considered in the proceeding. The hearing officer issued an order setting a hearing in the matter for April 8, 9 and 11 in Colorado Springs and establishing a schedule