DWR_3364084

• Board or Commission: Colorado Ground Water Commission
• Document Type - Board and Commission Meetings: Meeting Document
• Document Date: 5/18/2017
• Subject: MEETING MATERIALS

2017051 letter to KVH re Rules (2).pdf
May 11, 2017 Keith Vander Horst Colorado Division of Water Resources 1313 Sherman Street, Room 821 Denver, CO 80203 [e-mail] Via Email Re: Request for
the Ground Water Commission to initiate Rule Making Process Dear Mr. Vander Horst: I am writing on behalf of North Kiowa, LLC (“North Kiowa”) to request that the Ground Water Commission
commence the stakeholder and rule making process for changes to portions of Designated Basin Rules. I have attached our letter of October 26, 2016, describing the rationale for the
proposed amendments and recommendations for Rules 4, 5, 7, and 11. The portions of the Rules that North Kiowa asks the Commission to address would resolve ambiguities that have increased
the administrative burden for the issuance of small capacity wells for not nontributary Denver Basin groundwater in the Designated Basins by the State Engineer. North Kiowa owns land
in the Kiowa‐Bijou Designated Basin and is the owner of several Commission‐issued determinations of water rights and well permits. In March 2016, North Kiowa filed an application for
a small capacity stock well in the not nontributary Dawson aquifer. The State Engineer’s Office initially denied the request, in part because the Ground Water Commission had previously
issued a Determination of the Dawson aquifer water underlying the property, and North Kiowa had not received approval from the Commission of a replacement plan. After meetings with
State Engineer’s Office staff, North Kiowa was eventually able to receive an amendment of Keith Vander Horst May 11, 2017 Page 2 the Determination to cancel a portion of the Dawson
aquifer Determination and a small capacity stock watering well permit in April 2017. Although North Kiowa appreciates the State Engineer’s Office staff’s completion of the stock well
request, ambiguities in the Designated Basin Rules greatly increased the time and expense required to obtain a small capacity stock watering well. This time and expense is worrisome
because North Kiowa and others need the ability to receive stock well permits to which they are entitled in a timely manner. For good range management practices, stock wells need to
be located optimally for proper movement of cattle between pastures. The operations of North Kiowa and other ranches could be harmed in the future by delays in issuing small capacity
wells. North Kiowa therefore requests consideration of its proposed amendments. In March of 2016, the Commission requested initial input from stakeholders identifying Rules that should
be considered for amendment, the type of change requested to be made, and the rationale for the changes. The Commission notice was in response to the Governor’s 2012 direction to regulatory
agencies to perform periodic reviews of their rules. The Commission’s notice stated that after receiving comments on recommended amendments to the Rules, the Commission staff would
prepare and distribute draft language to stakeholders, and that public meetings would occur to reach as much agreement as possible on amendments prior to initiation of any formal rulemaking
process. To date, draft language has not been prepared and stakeholder meetings have not been scheduled. North Kiowa is concerned that no schedule for staff preparation of draft proposals
or stakeholder discussion has yet been set. Keith Vander Horst May 11, 2017 Page 3 Therefore, North Kiowa requests that the Commission initiate changes to the Rules described in
North Kiowa’s comment letter of October 26, 2016. North Kiowa asks for the Commission to consider this request at its meeting on May 18. Please call or email me if you have any questions
or would like to discuss this request. Sincerely, VRANESH AND RAISCH, LLP Gabe Racz, Esq. Encl. cc: Rye Austin Irene Archibald Kevin Rein Jen Mele, Esq.       Sent Via Email
October 26, 2016     Keith Vander Horst  [e-mail]   Designated Basins Team Leader  Colorado Division of Water Resources  1313 Sherman Street, Suite 821  Denver, Colorado 80203
Re:  Rulemaking Concerning Designated Basin Rules    Dear Mr. Vander Horst:      We are writing on behalf of North Kiowa, LLC (“North Kiowa”), whose sole  member is the Malone Family Land Pre
servation Foundation. In this letter, North  Kiowa is providing comments concerning the Ground Water Commission’s  (“Commission”) review and potential amendments to the Rules and Regulations for the
Management and Control of Designated Ground Water, 2 CCR 410‐1 (“Rules”).     I. Stakeholder Process and Input from North Kiowa  In March of this year, the Commission requested initial input from st
akeholders  by April 29, 2016, identifying those Rules that should be considered for amendment, the  type of change requested to be made, and the rationale for the proposed change. A
summary of initial input from stakeholders was presented to the Commission at its  meeting on May 20, 2016. At the May 20, 2016 meeting, you advised the Commission  that Commission staff (“Staff”) w
ill be talking to stakeholders, and that the stakeholder  process is expected to continue into next year (2017). The Commission website states  that the stakeholder process is anticipated to involve
public meetings, with the desire  that such discussion result in as much agreement as possible on actual amendments  prior to initiation of any formal rulemaking process. However, there was no discus
sion  at the Commission meeting about the details of the stakeholder process. Further, to our  Keith Vander Horst  October 26, 2016  Page 2        knowledge, Staff has not yet distributed draft langu
age of proposed amendments to the  Rules for presentation to and discussion with stakeholders.  North Kiowa owns land in the Kiowa‐Bijou Designated Basin and is the owner of  several Commission‐issue
d determinations of water rights and well permits. North  Kiowa recently identified certain big picture issues about the allocation of designated  groundwater within the Denver Basin through Commissi
on‐issued Denver Basin water  rights determinations and appropriations of groundwater through well permits. To that  end, North Kiowa is submitting this letter, which we think is timely given the sta
tus of  the stakeholder process.   On another note concerning procedure, a request was made at the August 19,  2016 Commission meeting to initiate a rulemaking to amend Rule 5.2.9 to determine
that the alluvial aquifer, and all of the Fan and White River aquifers, in the Upper Crow  Creek designated Basin are overappropriated. Based on the Division of Water  Resources website, it is our u
nderstanding that the stakeholder process has begun with  respect to an amendment to that specific rule outside of the general stakeholder process  for all of the Rules. It is our understanding that
the Rule 5.2.9 amendment process may  be expedited. At the same meeting, there was a request to expedite a rulemaking to  revise Rules 5.6 (concerning Replacement Plans) and Rule 5.8 (concerning Arti
ficial  Recharge). The Commission granted that request. We do not think that any specific  rules should be expedited only to create further delay in the general stakeholder and  rulemaking process. W
e think that all proposed changes to the Rules should be  considered comprehensively in the interest of fairness to all stakeholders and in the  interest of promulgating consistent amended Rules.
II. Input on Potential Amendments  A. Summary of Rationale for the Proposed Amendments  The authority to promulgate the Rules derives from Sections 37‐90‐107, 108, 109,  and 111 of the Colorado Grou
nd Water Management Act (the “Act”), codified at C.R.S.  § 37‐90‐101 et seq. See also Rule 2.1. The Act distinguishes between the appropriation of  groundwater through well permits and the allocation
of groundwater in the Denver  Basin within designated basins through Commission‐issued determinations of water  rights.   Keith Vander Horst  October 26, 2016  Page 3        C.R.S. § 37‐90‐107(1) go
verns applications to appropriate groundwater through  Commission‐issued large capacity well permits and provides, in part, that “[a]ny  person desiring to appropriate groundwater for a beneficial us
e in a designated  groundwater basin shall make application to the commission.” C.R.S. § 37‐90107(1)(emphasis added). Once an application is granted, “the state engineer shall issue a
conditional permit to the applicant.” C.R.S. § 37‐90‐107(3). There is a subsequent process  for the issuance of final well permits which is not applicable to our comments.   C.R.S. § 37‐90‐107(7) go
verns applications to obtain a determination of water  rights in the Denver Basin within designated basins, and provides, in part, that “[t]he  commission shall allocate, upon the basis of the owners
hip of the overlying land, any  designated groundwater contained in the Dawson, Denver, Arapahoe, or Laramie‐Fox  Hills aquifers.” C.R.S. § 37‐90‐107(7)(a)(emphasis added).1 In order to appropriate t
he  water allocated in a determination, the water user must obtain a well permit. C.R.S. §  37‐90‐107(1). A determination is a prerequisite to issuance of a large capacity well  permit. C.R.S. § 37‐9
0‐107(7)(d)(II). A landowner also has the option to request a  determination without requesting a large capacity well permit. C.R.S. § 37‐90107(7)(c)(I)(C).  As currently drafted, the Rules do not cl
early implement the distinction in the  Act between the appropriation of groundwater through well permits and allocations of  Denver Basin groundwater through determinations of water rights. The Rule
s as  drafted are ambiguous and we think this has resulted in interpretations that are  inconsistent with the Act. Specifically, staff have treated determinations of Denver Basin  groundwater as “app
ropriations” that “take” all available groundwater, even if no well  permits have been issued. This interpretation is inconsistent with the statutory  distinction between appropriations and determina
tions. It also incorrectly treats a  “determination” as an “appropriation.” This results in the improper denial of small  capacity well permits for Denver Basin groundwater to which the landowner is
entitled  under C.R.S. § 37‐90‐105.  We propose that Staff consider amendments to the Rules that address this  ambiguity. Because this would require revisions to several of the Rules, we are not
1 Section 107(7) also makes clear, and it is not disputed, that permits are required to withdraw water from  these aquifers, and that the Commission
“shall adopt the necessary rules to carry out the provisions of  this subsection (7).” C.R.S. § 37‐90‐107(7).   Keith Vander Horst  October 26, 2016  Page 4        providing suggested redlines at th
is time; but rather, propose the concepts and our  rationale. We would be happy to discuss specific language or provide redlines once we  have had a chance to discuss the concept with Staff.
B. Rule 5 – Appropriation of Designated Ground Water  The bulk of the revisions to the Rules need to be made to Rule 5. Rule 5 is titled  “Appropriation of Designated Ground Water,” yet it arguably
covers Commissionissued determinations of water rights in Rule 5.3.2 We think the following revisions are  necessary at a minimum.   The title of Rule 5 should be amended to read “Allocation and Appr
opriation of  Designated Ground Water.” Rule 5.1, concerning “applicability,” should be amended to  clarify that Rule 5 covers both allocations and appropriations of designated  groundwater. A separa
te section should be created within the rule to address criteria for  allocation of designated groundwater as separate and distinct from appropriation  through well permits, possibly as a revised Rul
e 5.3. Rule 5.3.2.4 should be amended to  allow for both large and small capacity well permits to be issued when a determination  of water rights exists (by the Commission and State Engineer, respect
ively) so long as  the total annual amount permitted under any well permits does not exceed the annual  allocation. Rule 5.3.6 should be revised to make it clear that replacement water is only
required for Commission‐issued large capacity well permits as necessary based on the  aquifer. Rule 5.4 should be revised to read “Allocation of Designated Groundwater…”  rather than “Appropriation…
” Rule 5.4.2 should be revised to read “an application for a  determination of water rights from these aquifers…”   C. Rule 4  We suggest adding a definition for a “Determination of Water Right.” Oth
er  additions and revisions may be necessary based on the language of amendments to  other Rules.                                                      2 Rule 5.3.2 sets forth the criteria to determin
e the allowable rate of withdrawal and Rule 5.3.4 sets forth  the determination of saturated thickness. These findings are part of the determinations of water rights.   Keith Vander Horst
October 26, 2016  Page 5        D. Rule 7 – Change of Rights to Designated Ground Water  Rule 7 concerns changes of designated groundwater rights. It was promulgated  pursuant to the authority given
to the Commission in C.R.S. § 37‐90‐111(1)(h). C.R.S. §  37‐90‐111(1)(g) provides, in part, “[u]pon application therefor by any permit holder, to  authorize a change in acreage served, volume of app
ropriation, place, time, or type of  use of and by any water right, or of any well location, either conditional or final,  granted under the authority of the commission.” (emphasis added). By its ter
ms,  Section 111(1)(g) limits changes to permit holders.   Form GWS‐67 is a form that Commission Staff provide for water users to apply  to change a determination of water right. Arguably, Rule 7 enc
ompasses changes to  determinations of water rights based on the language in Rule 7.1.2, which provides, in  part, that “a change request may consist of but is not limited to the following.” The
Rules cannot exceed their statutory authority. We would like some explanation from  Staff as to the legal basis for Form GWS‐67, and any presumption that Rule 7 applies to  changes of determinations
of water rights. To be clear, North Kiowa is not opposed to  changes of determinations; however, any process set forth in the Rules, or Commissionapproved forms must have a legal basis. If there is
a legal basis for changes of  determinations of water rights, we think amendments need to be made to Rule 7 to  clearly set forth the process for changing a determination, including the application,
publication requirements, fees, hearings, and any other processes.  E. Rule 11 – Variances  As drafted, the current Rules do not allow variances for applications for  determinations of water rights.
Rule 11.1.2 provides, in part, that Rule 11 is application  to “variance requests for all applications for new appropriations and for change  applications for high capacity wells located in Designat
ed Ground Water Basins that  require Commission action pursuant to Rule 5 and Rule 7.” (emphasis added). This  Rule should be amended to allow variances for all applications for determinations of
water rights (new and changes, if permissible pursuant to the Act).   III. Conclusion  Thank you for considering our proposed amendments to the Rules and our  request that all proposed amendments be
considered comprehensively. We would be  Keith Vander Horst  October 26, 2016  Page 6        happy to discuss this letter with you further, and would appreciate any correspondence
from Staff answering the questions we have set forth. Please let us know if you have  any questions.  Sincerely,    VRANESH AND RAISCH, LLP       /s/ Gabe Racz     Gabe Racz, Esq.
/s/ Leila C. Behnampour      Leila C. Behnampour, Esq.    cc:  Kevin Rein    Jen Mele, Esq.  Irene Archibald    Rye Austin
AG Report2017-5-18.docxATTORNEY GENERAL’S REPORT

ATTORNEY GENERAL’S REPORT
Cases involving the Colorado Ground Water Commission
May 18, 2017
The listing below summarizes matters in which the Office of the Attorney General represents the Colorado Ground Water Commission as of May 3, 2017.
cherokee metropolitan district
Case No. 08-GW-71
13SA330</w:t></w:r></w
Designated Basin: Upper Black Squirrel Creek
Management District: Upper Black Squirrel Creek
Before: Jody Grantham, Hearing Officer
Attorney: Michael Toll
Subject: An application for approval of a replacement plan to make new appropriations from the alluvial aquifer within the basin. Objections were submitted by the District, along with
four other water users in the basin. A hearing was held for two weeks in Denver beginning on June 8, 2009 during which the applicants completed their initial presentation and the objectors
began their presentations. An additional week of hearing scheduled for August 3 through 7, 2009 was vacated following a ruling from the Division 2 Water Court regarding Cherokee’s
use of some of its wells, subject to further negotiations and amendment of the proposed replacement plan. This case was consolidated with change cases 08GW78 and 09GW15, and the trial
was set to continue in January 2010.
Status: In November of 2009, the Upper Black Squirrel Creek Ground Water Management District filed in district court, in Case No. 98CW80, for a declaratory judgment asking the court
to determine whether under a 1999 Stipulation Cherokee is required to use its waste water as recharge for the basin or if that waste water can be claimed as replacement credit under
a replacement plan. On June 17, 2013 the Court found that neither Cherokee nor Meridian is prohibited from claiming wastewater return credits for its replacement plan. UBS filed an
appeal on December 18, 2013. The Supreme Court has issued a decision in which they said they upheld the decision of the District Court under the 1999 Stipulation, but included in the
decision ambiguous language as to whether or not Cherokee can use effluent as a source of replacement water in a replacement plan. Staff has not heard from Cherokee as to how they
plan to proceed with the application still pending before the Hearing Officer.
cherokee metropolitan district
Case No. 08-GW-78 09-GW-15</w:t></w:r></w
Designated Basin: Upper Black Squirrel Creek
Management District: Upper Black Squirrel Creek
Before: Jody Grantham, Hearing Officer
Attorney: Michael Toll
Subject: Applications to change the type and place of use of wells. Objections were submitted by the District and other water users in the basin. Both cases were consolidated with
08GW71.
Status: See above.
meridian service metro district
Case No. 09-GW-11
Designated Basin: Upper Black Squirrel
Management District: Upper Black Squirrel
Before: Jody Grantham, Hearing Officer
Attorney: Michael Toll
Subject: Application for a change of water right. Two parties filed objections.
Status: The hearing set for February 25 and 26, 2010 has been stayed because the water rights to be changed were for use in the replacement plan in 08GW71. The matter is stayed pending</
resolution of the issues in Case No. 98CW80 as described above for Cherokee Metro District’s replacement plan.
Gallegos, Reinaldo, et al
Case No. 03-GW-06
03CV1335</w:t></w:r></w
15SA118</w:t></w:r></w
Designated Basin: Upper Crow Creek
Management District:
Before: Supreme Court
Attorney: Pat Kowaleski
Subject: Petition to de-designate portions of the Upper Crow Creek Designated Ground Water Basin.
Background: The petitioners originally sent letters to the State Engineer in 2002 and 2003 seeking curtailment of wells within the Basin. The State Engineer declined to curtail wells
and the petitioners appealed the issue of the Commission’s jurisdiction over surface water rights first to District Court and eventually to the Supreme Court. The Supreme Court held
that the Commission has jurisdiction over surface water rights only to the extent the holder of surface rights seeks to change a boundary of a designated basin, in which case the surface
rights owner must show, using information that was not before the Commission at the time of designation, that pumping of the designated ground water has more than a de minimis effect
on the surface rights and is causing injury to those rights. The matter was remanded to the Commission, and this petition to de-designation a portion of the designated basin was filed
with the Commission on August 11, 2010.
Status: A 7 ½ day trial was held in February 2014, and on March 9, 2015 the district court issued its decision denying the Gallegos Family’s petition to de-designate a portion of the
basin. On April 27, 2015 the Gallegos Family filed an appeal of that order to the Supreme Court. Oral Argument was held on December 6, 2016, and the parties await a ruling.
FRONT RANGE RESOURCESCase No. 13-GW-7
15CV30493</w:t></w:r></w:p><w:p w:rsidR="00567999" w:rsidRDefault="00567999" w:rsidP="00567999"><w:pPr><w:rPr><w:b/><w:sz w:val="24"/
Designated Basin: Lost Creek 16SA243</w:Management District: Lost CreekAttorney: Michael Toll & Pat Kowaleski
Subject: Front Range Resources filed for a replacement plan. Objections were filed by Equus Farms Inc., Lost Creek Land and Cattle Company, the Lost Creek Ground Water Management District
and Staff.
Status: The matter was dismissed by the Commission and appealed to the District Court where it was set for trial June 6-16, 2016. Defendants, including the Commission, filed a motion
dismiss the application on the grounds that it is speculative because there are no binding contracts with actual end users for the water. On May 26, 2016 the Court ruled that Front
Range Resources was seeking to appropriate and change water rights and that the anti-speculation doctrine does apply to the application. The Court further found that Front Range Resources’
existing contracts were not binding and do not constitute obligations to provide water, and that the proposed replacement plan did not detail how or if water would be used on land owned
by Front Range Resources. <Front Range Resources filed a notice of appeal with the Supreme Court on September 2, 2016, on the issue of speculation and whether the District Court erred
in determining the Designated Ground Water Rules require that water rights be legally available for use in replacement plans in order to be included in replacement plan application.
On September 19, 2016 Lost Creek Land and Cattle, Equus Farms and the Lost Creek Ground Water Management District filed a notice of cross appeal. Opening Briefs on the appeal were
due Friday, February 3, 2017. The Ground Water Commission decided to not file an Answer Brief. <
MERIDIAN SERVICE METRO. DIST.Case No. 14-GW-2
Designated Basin: Upper Black SquirrelManagement District: Upper Black SquirrelAttorney: Jen Mele
Subject: Applicants filed an application for six new wells, which are French drains that were discussed in Case No. 12-GW-10. Objections were filed by Staff, Farmers and Upper Black
Squirrel Ground Water Management Dist.
Status: The matter was dismissed by the Hearing Officer after the applicant presented its case at the hearing that began on January 14, 2015 because the applicant did not have a replacement
plan for its new appropriations. See below Case No. 15GW14.<
AXTON (Rocky Mountain Roosters) Case No. 15-GW-5
</w:Case No. 15-GW-6
Designated Basin: Kiowa BijouManagement District: North Kiowa Bijou Attorney: Jen Mele and Philip Lopez
Subject: Applicants filed an application for determination of water rights and a replacement plan. Objections were filed by the North Kiowa Bijou Ground Water Management District,
and Earnest Mikita, Robert Alexander, Joe Eurich, Vincent & Jacqueline Eurich, Harold Eurich, Alvin Eurich, Darrel & Carol Dutro, Bob Pemberton and E. Scott Mikita (collectively, “Individual
opposers”).
Status: This matter has been set for a five day hearing scheduled to begin on June 5, 2017. Applicant recently entered into a stipulation with Individual opposers. Settlement discussions
are continuing with the North Kiowa Bijou Ground Water Management District. Staff did not file a statement of opposition in these cases.
MERIDIAN METRO DISTRICT Case No. 15-GW-14
Designated Basin: Upper Black Squirrel
Management District: Upper Black Squirrel
Attorney: Jen Mele
Subject: Application for replacement plan to replace depletions of underdrains that were the subject of 14GW02. Objections were filed by Pain Brush Hills Metro District, Upper Black
Squirrel Creek Ground Water Management District, Woodmen Hills Metro District, the Wayne E. Booker Revocable Living Trust and the Frances G. Booker Revocable Living Trust, Dan Farmer,
Joe Farmer, Jr., Jerry Farmer, Teresa Farmer, Edna Farmer and the Farmer Pipeline Company, LLC, and Staff of the Ground Water Commission.
Status: A five day hearing was held in February 2017 and parties are now negotiating the manner in which to calculate evapotranspiration arising from use of the recharge structures.

CHEROKEE METRO DIST v. GROUND Case No. 15CW3028</w:t></w:r><w:r><w:rPr><w:b/>WATER COMMISSION and UPPER BLACK 15GW15SQUIRREL CREEK GROUND WATER MANAGEMENT DIST
Designated Basin: Upper Black Squirrel CreekManagement District: Upper Black Squirrel CreekAttorney: Jen Mele
Subject: Cherokee Metropolitan District originally filed a Complaint for Declaratory Judgment in district court seeking a determination as to the legal uses of Cherokee Well Nos. 1-8,
specifically a finding that those wells can legally be used both inside and outside the designated basin and that irrigation use is not limited to the acreage that was specified in
the statement of claim filed with the original application. Defendants filed a Motion to Dismiss, arguing that the Ground Water Commission has jurisdiction over this determination
since the subject rights are designated ground water. The motion was granted and Cherokee has submitted the Complaint for Declaratory Judgment to the Hearing Officer.
Status: The matter was set for a 5 day hearing scheduled to begin on March 30, 2017. On January 9, 2017, both Cherokee and the Upper Black Squirrel Creek Ground Water Management District
filed motions for summary judgment asking the Hearing Officer to decide the main controversy in the case, the proper place of use of Cherokee Well Nos. 1-8. The parties requested and
received a stay in the proceedings to allow time to negotiate a resolution. Settlement negotiations between the parties are ongoing. </w:t

WOODMEN HILLS METRO DIST. Case No. 03-GW-20
Designated Basin: Upper Black Squirrel
Management District: Upper Black Squirrel
Attorney: Philip Lopez
Subject: Application for a replacement plan for depletions resulting from the pumping of 16 wells. Objections were filed by the Upper Black Squirrel Creek Ground Water Management District,
Wayne E. Booker Revocable Living Trust and the Frances G. Booker Revocable Living Trust, Dan Farmer, Joe Farmer, Jr., Jerry Farmer, Teresa Farmer, Edna Farmer and the Farmer Family
Pipeline Company and Staff. This application is technically a republication required by the hearing officer in 2005 to include additional structures to the replacement plan filed in
2003 and therefore the original case number was used.
Status: The applicant filed a motion to postpone the hearing that was set for October 31, 2016 in order to include additional structures causing depletions and the concept of using
recharge facilities in its replacement plan. A <five day hearing is set for December 4, 2017. <Applicant’s 26(a)(2) expert disclosures are due May 17, 2017, and opposers 26(a)(2) expert
disclosures are due August 14, 2017.
STRASBURG SANITATION & WATER DISTRICT Case No. 16-GW-1
Designated Basin: Kiowa Bijou
Management District: North Kiowa Bijou
Attorney: Michael Toll
Subject: Objection by the applicant to the requirement that the well be subject to final permitting requirements and to the reduction of the annual appropriation upon issuance of the
final permit for the well with permit no. 2642-F. < <
Status: This matter in conjunction with the Kiowa Water & Wastewater Authority, case no. 16GW2, is set for a four day hearing scheduled to begin on May 22 – 25, 2017. The hearings
are set back-to-back so that the hearing in 16GW2 will begin when the hearing in this case ends. < <The applicant filed a motion for summary judgment on August 23, 2016, seeking a determination