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AG Report2003-02-21.docATTORNEY GENERAL’S REPORT Cases involving the Colorado Ground Water Commission February 21, 2003 The listing below summarizes all matters in which the Office of the Attorney General currently represents the Colorado Ground Water Commission. EAGLE PEAK & PROSPECT VALLEY Case number: 96-GW-13, 99CV97 Designated Basin: Lost Creek Management District: Lost Creek Before: Adams County District Court Attorney: Pat Kowaleski Subject: Application for ten new well permits and changes for 39 existing wells, with a replacement plan and export out of the District. Status: At the November, 1998 meeting the Commission affirmed the Initial Decision of its Hearing Officer that it was not appropriate to hear Eagle Peak’s change applications because the Lost Creek District had not yet approved Eagle Peak’s export application. The Commission took the position that it could not approve an application involving export unless the export had been approved by the District. On January 14, 1999 Eagle Peak appealed this decision to the Adams County District Court and, among other things, has requested that the District Court rule on the substance of the change applications, even though the Commission has not reviewed the substance of the applications. The Complaint also seeks unspecified damages against the State for impairment of Eagle Peak’s water rights. This Office filed an Answer to the complaint on February 12, 1999 and the record was certified on June 15, 1999. A 3 week trial has been scheduled for October, 2003. Motions were filed in June, 2002 and the Commission argued that the applications should not be heard by the Judge without input from the Commission and, at most, this matter should be remanded to the Commission for further proceedings. Eagle Peak has subsequently sold its water rights to Sweetwater Development, which is proposing to use the rights without a change in well location. The Court proceedings are temporarily on hold. The parties have been meeting, but there has been no resolution of the matter. The District has filed a request with the Court to keep the matter on a trial track, in case the issues cannot be resolved by agreement of the parties. EAGLE PEAK FARMS LTD Case Number: 98CV1727 Designated Basin: Lost Creek Management District: Lost Creek Before: Adams County District Court Attorney: Pat Kowaleski Subject: Denial by the Lost Creek District of Eagle Peak’s application for export Status: The District denied Eagle Peak’s application for export and when Eagle Peak appealed the decision to District Court, the Court dismissed the challenge because all parties had not been properly served. The Court of Appeals overturned this procedural decision and remanded the case to the District Court for a determination on the merits. The District filed a Petition for Rehearing with the Court of Appeals and the Petition for Rehearing was denied on February 3, 2000. The Lost Creek District filed a Petition for Writ of Certiorari with the Colorado Supreme Court on March 3, 2000 and the petition was denied on August 20, 2000. Motions affecting how this matter will proceed are pending before the District Court. This case is related to the case above, but the Commission is not a party to the case, since it involves the District’s decision to deny export. town of bennett Case No. 02-GW-02 Designated Basin: Kiowa Bijou Management District: North Kiowa Bijou Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Objection by the Management District to two applications for changes of determination of water right to combine the allocations of two determinations of water right and to change the place of use and type of use in each determination. Status: In response to a request by the District, the Hearing Officer issued an order that the District Court’s Revised Order in the Bradbury case is relevant to this action, and the change sought in this action is merely a continuation of the determination that such water exists as stated in Judge Phelps order. A hearing before the Hearing Officer was held on November 7, 2002. After the hearing, the Hearing Officer issued the Initial Decision to approve the applications for changes of determination of water right. The District has appealed the Initial Decision of the Hearing Officer and this matter will be heard by the Commission at the May 2003 Commission meeting. CITY OF AURORA Case Nos. 02-GW-11 and 02-GW-12 Designated Basin: Lost Creek Management District: Lost Creek Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Objections by Thunderbird Estates Homeowners Association, Dove Hill Estates Home Owners Association, and Frances Penk to applications for determination of water rights to allow appropriation of designated ground water from the Laramie-Fox Hills, Lower Arapahoe, Upper Arapahoe and Denver aquifers underlying 161.25 acres in Case No. 02GW11 and underlying 132.092 acres in Case No. 02GW12. Status: A hearing was set for January 27 and 28, 2002. All three objectors in these cases withdrew their objections to the applications. Consequently, the Hearing Officer ordered that these matters were dismissed and remanded the applications back to the Staff for issuance. This case is closed. reinaldo gallegos Case No. 02-GW-13 Designated Basin: Upper Crow Creek Attorney: Matt Poznanovic Before: Jody Grantham, Hearing Officer Subject: Objections by Tennick Land & Cattle, Green Valley Ranch, Inc., and Nussbaum Ranch to an application for appropriation of designated ground water from the White River aquifer for irrigation of 185 acres. Status: A hearing before the Hearing Officer was held on December 16, 2002. After the hearing, the Hearing Officer issued the Initial Decision to grant the application. This case is closed. KENNETH POTTORFF Case No. 02-GW-14 Designated Basin: Northern High Plains Management District: Plains Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Objection by the District to the issuance of amended final permits and the temporary change of use applications for 2 wells from irrigation to highway construction and irrigation. The amended final permits concern a claimed 320 additional approved acres put to use by both wells prior to August 5, 1977. The temporary change of use was approved by the Commission on May 2, 2002 and will expire on December 31, 2002. Status: At the prehearing conference for this matter, it was noted that Mr. Pottorff has filed for bankruptcy and an automatic stay had been granted by the Bankruptcy Court. The Hearing Officer made an inquiry with the Bankruptcy Court regarding the effect of the automatic stay on these proceedings. As a result, the Bankruptcy Court set a preliminary hearing on relief from stay for November 6, 2002. Consequently, the Judge granted the relief from stay, which allowed this matter to be set for hearing before the Hearing Officer. A hearing before the Hearing Officer is set for May 14 and 15, 2003. PEORIA CROSSING, LLC. Case No. 02-GW-18 Designated Basin: Kiowa-Bijou Management District: North Kiowa Bijou Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Peoria Crossing filed an application for determination of water right to allow appropriation of designated ground water from the Laramie-Fox Hills aquifer underlying its 241.36 acre property. Peoria Crossing filed an appeal challenging the Staff’s calculation of a cylinder of appropriation for an existing well owned by LaFarge West, Inc., and the resulting decrease in the amount of allocation determined for the aquifer underlying Peoria Crossing’s property. Status: A hearing for this matter was held on October, 22, 2002. Peoria Crossing, LaFarge West and the Staff participated in the hearing. At the conclusion of the hearing, the Hearing Officer requested the parties to brief several issues. After reviewing the briefs, on December 2, 2002, the Hearing Officer issued his initial decision and found: (1) a cylinder of appropriation is not a water right, but rather a measure of the beneficial use that is the actual water right for a pre-213 well; (2) although LaFarge’s well was permitted and completed prior to implementation of the 1965 Act, the 1965 Act and modified prior appropriation doctrine apply to the determination of the final extent of LaFarge’s water right; (3) Staff’s calculation of the cylinder of appropriation for LaFarge’s well is incorrect; and (4) LaFarge does not yet have a final permit, and in order to proceed with the proper determination of the amount of water available to the Applicant, Staff must proceed with final permitting and notice of LaFarge’s water right in a separate proceeding. The Hearing Officer ordered that this matter is held in abeyance until Staff completes final permitting for LaFarge’s well, and ordered Staff to initiate final permitting within a reasonable time frame. WAYNE E. and frances g. booker Case No. 02-GW-20 Designated Basin: Upper Black Squirrel Management District: Upper Black Squirrel Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Objections by the District, Cherokee Metropolitan District, and Schubert Ranches to applications to relocate the wells with Permit Nos. R-16265-FP, R-16271-FP, R-16272-FP, 27560-FP, and 27585-FP Status: The Applicants appealed the Staff’s evaluation of their application and have requested a hearing before the Commission to obtain a variance from the Commission Rules. The variance request hearing shall be held by the Commission on February 21, 2003. Consequently, the setting of a hearing before the Hearing Officer shall be postponed until after the variance request hearing. john l. harding Case No. 02-GW-21 Designated Basin: Upper Black Squirrel Management District: Upper Black Squirrel Before: Jody Grantham, Hearing Officer Attorney: Sean McAllister Subject: Objection by the District to applications for determinations of water right to allow appropriations from the Laramie-Fox Hills and Arapahoe aquifers underlying a 10 acre property. Status: A hearing before the Hearing Officer shall be scheduled. vernie houtchens and gary nanninga Case No. 02-GW-22 Designated Basin: Upper Black Squirrel Management District: Upper Black Squirrel Before: Jody Grantham, Hearing Officer Attorney: Sean McAllister Subject: Objection by the District to applications for determinations of water right to allow appropriations from the Laramie-Fox Hills, Arapahoe, and Denver aquifers underlying a 193.7 acre property. Status: A hearing before the Hearing Officer shall be scheduled. county line estates llc and case holdings llc Case No. 02-GW-23 Designated Basin: Upper Black Squirrel Management District: Upper Black Squirrel Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Objection by the District to an application to change the allowed beneficial uses for a determination of water right, Determination No. 4-BD. Status: A hearing before the Hearing Officer shall be scheduled. TODD WISDOM Case No. 03-GW-01 Designated Basin: Northern High Plains Management District: Frenchman Ground Water Management District Before: Jody Grantham, Hearing Officer Attorney: Matt Poznanovic Subject: Objections by Vince Hoefler, John and Mary Wiebers, Bernard and Arlene Loos and James Bell to Mr. Wisdom’s application to drill a new well and appropriate designated ground water from the Ogallala aquifer for irrigation of a 154.8 acre property. Status: A hearing before the Hearing Officer shall be scheduled. Thomas H. Bradbury et al Case No. 02 SA 216 Designated Basin: Kiowa-Bijou Management District: North Kiowa Bijou Before: Colorado Supreme Court Attorney: Pat Kowaleski Subject: The Bradburys filed 14 applications for Determinations of Water Rights, pursuant 37-90-107(7)(c). The District filed objections claiming that the statute is unconstitutional in that it “attempts to separate the administration of groundwater contained in the Dawson, Denver, Arapahoe, or Laramie-Fox Hill Aquifers and that they be treated differently from all other groundwaters covered in the Act…” The District contends that a system which uses ownership of land to determine interests in water is violative of Article 16, Section 5 of the Constitution which declares that the water of the state is the property of the public and subject to appropriation. Status: After a hearing, the Hearing Officer issued his initial decision, determining that the applications were not speculative and should be granted. At its May, 2001 meeting, the Commission reviewed the initial decision and approved the applications. The District challenged this decision before the Designated Ground Water Judge in Adams County. A hearing was held by the Court on March 8, 2002 to determine, de novo, whether the applications should be granted. After issuing several amended orders, the Court ultimately determined that the anti-speculation doctrine applies to consideration of applications in the Denver Basin aquifers of the Designated Basins, but concluded that the doctrine should be considered at the time that well permit applications were sought rather than when the determinations were sought. The Commission has appealed the finding of the Court that a determination of water right is not a water right. The District has cross-appealed, raising all issues which it presented to the District Court. The Bradburys have not appealed any aspect of the Court’s decision. The Commission’s brief, asserting that a determination of water right is a water right, is attached. The District has filed its brief on the issues which it raised, and the Commission’s brief, responding to those issues, will be filed within the next 30 days. The briefing should be completed in the early spring, with a decision likely sometime this summer. P:NR\H2O\GWC\02-21 AG Report.doc 5 6 AgendaFeb03.doc NOTICE OF GENERAL MEETING OF THE COLORADO GROUND WATER COMMISSION 10:00 a.m. Friday February 21, 2003 1313 Sherman St. Rm. 318 Denver, CO 80203 A G E N D A Determine Quorum. Review and Approval of Agenda Items. Approval of Minutes for Meeting of November 15, 2002. Report of the Executive Director by Hal Simpson. Kansas v. Nebraska and Colorado litigation – Republican River Compact by Hal Simpson. Rulemaking Hearing to Require Historic Use Analysis and Administration for Rotational Acres by Suzanne Sellers. Hearing on a Request for a Variance to Designated Basin Rule 7 (Including Rules 7.3 and 7.10) Relating to Applications by Wayne E. and Francis G. Booker to Change the Locations of Five Wells by Peter Boddie, HRS Water Consultants, Inc. Proposed Amendments to the Rules of the Central Yuma County Ground Water Management District by Mike Shimmin, Attorney for the Central Yuma County Ground Water Management District. Staff Report by Suzanne Sellers and Megan Sullivan. Report of the Attorney General by Matthew Poznanovic. Management District Reports: a. Frenchman e. WY i. Southern High Plains b. Sand Hills f. Arikaree j. North KiowaBijou c. Marks Butte g. Plains k. Upper Black Squirrel d. Central Yuma h. East Cheyenne l. Upper Big Sandy Lost Creek Old Business. New Business. Adjournment. Final Permit Activity Nov 02- Jan03.docFinal Permit Activity For this last quarter, final permit activity continued within the Northern High Plains, Upper Crow Creek and Southern High Plains, and began with a select group of permits within Upper Big Sandy, Upper Black Squirrel Creek and Lost Creek basins. In the Northern High Plains, the last remaining permits files, over 250, have been reviewed. Of those, 173 have been clarified and published, and the final permits are ready to be issued. With the exception of a small percentage of permits, the final permit process in the Northern High Plains Designated Basin is, in effect, completed. In the Upper Crow Creek In the Southern High Plains, there is the on-going struggle to obtain the necessary information to clarify the use of well permits. Unfortunately, response to requests for information continues to be slow. And in the review of the information that has been received so far, the majority statements of use are proving to be incomplete. Second requests for information are being prepared to send to those initially unresponsive well owners, and letters are being prepared to address the incomplete statements of use. And finally, the clarification process has begun for a group of well permits located in the Upper Big Sandy, Upper Black Squirrel Creek and Lost Creek basins. These permits were issued prior to November 1973, where the appropriation is not based on over-lying land ownership. The permit files are in review and requests for additional information have been sent to the well owners. As experienced in other basins, response to these requests has been slow. As indicated before, there is the problem of lack of current ownership information within many of the permit files, which delays the clarifying process. In order to facilitate correspondence with well owners, the staff asks District Managers to encourage land owners to complete and submit change of ownership/address forms to the Commission Staff, if they have acquired wells or moved in the last 10 years. Minutes-4th '02.doc MINUTES FOURTH QUARTERLY MEETING COLORADO GROUND WATER COMMISSION NOVEMBER 15, 2002 The Fourth Quarterly Meeting of the Colorado Ground Water Commission took place on November 15, 2002, at 1313 Sherman Street, Room 318, Denver, Colorado. In Chairman Earnest Mikita’s absence, Vice-Chairman Max Smith 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, Dennis Coryell, Ralph Curtis, Richard Huwa, Robert Loose, Max Smith, Ted Kowalski and Hal Simpson. Commissioners Larry Clever, Frank Jaeger, Earnest Mikita and Ex-Officio Member Kent Holsinger were absent. Review and Approval of Agenda Items - There were no additions or changes to the agenda. Approval of Minutes for Meeting of August 16, 2002 – Vice-Chairman Smith asked if there were any corrections or additions to the Minutes of the August 16, 2002 meeting. Commissioner Curtis noted that “Rio Grande Water Conservancy District” should be changed to “Rio Grande Water Conservation District” in the first paragraph of the Report of the Executive Director. Commissioner Bauerle moved to accept the Minutes with the correction noted. The motion was seconded by Commissioner Huwa and carried unanimously. Mr. Simpson read a resolution and presented a plaque to former Commissioner Anne Castle who served two terms as Commissioner and Vice-Chairman for the Ground Water Commission. Ms. Castle accepted the resolution and plaque and expressed her appreciation for the experience and the opportunity to serve on the Commission. Report of the Executive Director by Hal Simpson – Mr. Simpson reported that the drought continues to be serious throughout the state and appears to be the driest year of record. Many streams will be 25% of average and most major reservoirs in the state that are used for irrigation are empty or nearly empty. Absence any significant and above average snowpack this season, many reservoirs in the state will not be able to fill because they will not be in priority as the senior reservoirs will fill first. With regard to the Arkansas River litigation between Kansas and Colorado, Mr. Simpson reported that two weeks in December and one week in January, 2003, have been set aside to complete the litigation. The remaining issue before the court is whether Colorado is in compliance with the compact through the steps taken to regulate wells in the Arkansas River Basin. The Special Master will make a decision based on technical testimony using the results of computer modeling, and written briefs on damages including prejudgment interest, and will make a recommendation to the Supreme Court some time next year. Mr. Simpson reported that the state budget continues to be a concern. The Department of Natural Resources will have to take a 6% cut in the General Fund, and the Division of Water Resources is the biggest part of the Department’s General Fund. The Division has already taken a 4% cut this fiscal year and has 20 vacant positions that cannot be filled. The Division is currently awaiting for guidance on how to move forward. Status of the Kansas v. Nebraska and Colorado litigation - Republican River Compact by Hal Simpson – Mr. Simpson reported that attempts are being made to resolve this interstate lawsuit on the Republican River Basin. This is a very important issue to the Ground Water Commission because it consists of the entire Northern High Plains Basin and the Commission has been the policy maker on the use of ground water in the basin since 1965. Mr. Simpson stated that progress on the negotiations is continuing. The Colorado team has been meeting with Kansas and Nebraska almost continuously during the past two weeks. This litigation will be discussed further during the Executive Session. A team of attorneys and engineers will present a detailed status report so the Ground Water Commission has an idea of the potential ramifications and the impacts of the settlement. Proposed Language for Rulemaking to Require Historic Use Analysis and Administration for Rotational Acres by Suzanne Sellers – Ms. Sellers reported that, at the August meeting, the Commission decided to consider a rulemaking change to require third party administration and additional meter requirements for the practice of rotational acres. On September 26, 2002, the proposed language for this rule change was mailed to the Commissioners and the Ground Water Management Districts. The changes consist of deleting paragraph 7.4.2 from the change of description of acres rule, and removes reference to rotational acres from that rule; rule 7.5 will include rotational acres language in the increase in permitting irrigated acres rule; and rule 8 changes the reference that requires flow meters for rotational acres. Mr. Mike Shimmin, attorney, representing Central Yuma County, Frenchman, Sand Hills, and Marks Butte Ground Water Management Districts, provided an explanation for the language that he wrote. He stated that after staff the proposal came out at the last meeting, the Central Yuma District felt strongly that the districts should have local options instead of a uniform statewide approach. The proposed language to 7.4.1 and 7.4.2 was distributed to the Commissioners. The Central Yuma District feels that if only the rotational acres rule is changed, and the description of acres rule is not, that it will leave a loophole that people will use to get around the historic use limits on rotational acres by coming in each year and asking for a change in description of acres. The Central Yuma District is considering a local rule that would put additional limits on the change of acres. This would require the staff to honor the district rule within each district. Mr. Shimmin stated that the Frenchman District does not want strict limits on rotation of acres and they feel that there is no need to change the current policy. Mr. Aaron Nein, Manager, of the Frenchman, Sand Hills, Marks Butte, and Central Yuma County Ground Water Management Districts, reported that rotational acres have been a controversial issue among his four districts. The majority of the districts have voted that if there will be a rule change, they want to keep it a local option. Mr. Nein stated that in the Central Yuma District, a rulemaking process has been started where the districts wants to make a local rule and limit rotational acres to historic use and they also proposed a rule to limit a change of the description of acres so it can be done only once every four years. Mr. Stan Murphy, District Manager from the Plains and East Cheyenne Districts, reported that the East Cheyenne District recommended meter administration, but did not want the historic use. The Plains District feels that the historic use limitation should be required to assure that there is no material injury. Mr. Jack Adams, Manager of the W-Y District, reported that his district does not allow rotational acres. He stated that if they want rotational acres, they should go through the process and request expanded acres. Ms. Sellers reviewed the three options for the Commission: (1) to propose rule change to universally require historic use for rotational acres; (2) to require all areas to be limited to historical use unless the district opts out of the option; and (3) to not require historical use limitations unless the districts opts into the requirement. Ms. Sellers requested the Commission to direct the staff on how to proceed with the rule change. Mr. Pat Kowaleski, conflicts counsel from the Attorney General’s Office, clarified that the Commission is not adopting any rule change at this time but deciding whether the Commission wants a rule change, or whether there will be an alternate proposal, and what will be published for public comments. Mr. Shimmin reported that there are concerns among some districts that rotational acres pose a threat of material injury. He suggested striking 7.4.2, add the local option, and include the suggested change for 7.4.1 on the change in description of acres. Mr. Shimmin stated that the proposals can be combined so that the uniform state rule is historic use subject to the existing Commission approach on expanded acres unless the local districts do something different. Mr. Simpson suggested that staff meet with Mr. Shimmin to draft compromise language and circulate it at the February meeting. Discussion took place among the Commissioners regarding whether historical use should or should not apply. The recommendation by the Commission was that the compromise language be published and that rule change take place at the next meeting in February and be effective by the next irrigation season. Discussion of the Recently Adopted Farm Bill with Respect to Ogallala Conservation by Allen Green of the NRCS and Max Smith of the Southern High Plains Ground Water Management District – Mr. Allen Green distributed material related to the Farm Bill and reported that every five to six years a Farm Bill gets enacted nationally which is in place for the next six years. The Farm Bill includes a conservation title which outlines the conservation programs, rules, procedures and regulations, along with authorized dollar amounts, that will be available to farmers and ranchers. Mr. Green discussed the EQIP program, which is a base cost-share program which provides financial assistance to private land owners to help them with conservation. This program was authorized for the first time in Colorado this year. Mr. Green reviewed what the NRCS did last fiscal year and the changes that are anticipated for 2003. The intent of the program is to conserve water, improve irrigation efficiencies, conversion to dry-land farming, mitigate the effects of drought, and institute measures to reduce the amount of water that is being pumped out of the Ogallala aquifer. In 2002, Colorado received and allocated over three million dollars that was distributed to counties irrigated with Ogallala aquifer water. The NRCS is in the process of how to implement this program for 2003. The goal of the program is to show the net savings of water on a particular farm. Also, there cannot be any more land brought into production or put into irrigation on that farm, i.e., they cannot expand their operation. There is a cost share incentive for irrigation water management and caps will be placed on dollars and acres, an incentive for well abandonment, 50% cost share will be provided for conversion of new systems, and a 75% cost share rate for retrofitting existing systems. If the program receives $45 million next year, they will try to ensure that the eight states in High Plains aquifer get at least what they got last