Paying past water debts while trying to keep up with current ones could be a make-or-break proposition for new water management sub-districts throughout the San Luis Valley. the Valley, members of the Rio Grande Water Conservation District (RGWCD) began developing an alternative several years ago that it hoped would allow Valley farmers to stay in business while complying with state regulations. The larger water district sponsored sub-districts for various geographical areas of the Valley, with the first lying in the closed basin area in the central part of the Valley. The sub-districts’ goals are to make up for depletions well users have caused in the past and are causing in the present , plus rebuild the Valley’s aquifers. One of their objectives is to take irrigated land out of production to reduce the draw on the aquifers.
The first sub-district is operational now with fees collected from farmers within the sub-district paying for water to offset the depletions and injuries to surface Background Knowing the state would soon be regulating the hundreds of irrigation wells in users caused by their well pumping. As the late RGWCD President Ray Wright described the effort, it was a “pay to play” proposition. For example, those who did not have surface water rights would pay more to continue operating their wells than those who had both surface and groundwater.
The first sub-district is also putting water in the river to replace injurious depletions its well users have caused to surface rights. One of the methods the sub-district has used to meet its goals is to purchase property. Another has been to support the Conservation Reserve Enhancement Program, which is included in the farm bill. That program pays folks to fallow land either permanently or for a specific time period, with cover crops planted for ground cover and erosion Sub-district #1 submitted its annual replacement plan to its board, its sponsoring district and the state engineer and court this week. The subdistrict board of managers and RGWCD board approved the plan, and RGWCD General Manager Steve Vandiver personally presented it to Colorado Division of Water Resources Division 3 Engineer Craig Cotten on Tuesday.
The 2012 annual replacement plan was challenged, with some of those legal challenges still pending in court. (The 2013 plan was not contested.) RGWCD Attorney David Robbins told the board on Tuesday the Colorado Supreme Court has not yet set the matter for arguments, and if it does not do so in the next week or two, it will probably not schedule the arguments until September or October. The local water court upheld the plan, but objectors appealed to the Supreme Court, which has received briefs from the parties in the case but has not yet set a time to hear arguments.
Robbins said there are three issues involved in the court case regarding the 2012 annual replacement plan: 1) use of Closed Basin Project water as replacement water, “that’s a good legal argument ;” 2) the way augmentation plans were accounted for in the 2012 replacement plan, “that’s a slap my hand argument;” and 3) when the annual replacement plan becomes effective, a procedural argument. Current activity
Now that the first subdistrict is operational and the state’s groundwater rules likely to be filed in the next month or two, the sponsoring water district is fervently assisting sub-district working groups from Saguache to Conejos and everywhere in between. One of the proposed sub-districts , for example, lies along the alluvium of the Rio Grande.
RGWCD Program Managers Rob Phillips and Cleave Simpson are working to get the new sub-districts formed.
Vandiver told the RGWCD board on Tuesday that Simpson is working hard with working groups for Subdistricts #2, 3, and 4 to get petitions ready to be signed by landowners in those subdistricts and to draft a plan of management and budget for each sub-district . Those will be presented to the water court when they are completed. Simpson told the RGWCD board on Tuesday all three of those sub-district working groups plan to present their completed petitions to the sponsoring water district board before the end of this calendar year.
Vandiver added that Subdistricts #5 and 6, Saguache Creek and San Luis Creek, are not as far along. The Saguache Creek group has held numerous meetings but is waiting on final numbers from the state’s groundwater model to know how much it will owe in depletions before it can proceed much further. The working group for the San Luis Creek sub-district fell apart, Vandiver said, but a few well owners in that area are getting back together and will meet next week for the first time in a long time.
Vandiver also told the RGWCD board on Tuesday that a group of federal and state agencies that own wells in the Valley are meeting to discuss their options. They will also have to comply with the groundwater regulations, as will municipalities with wells. Vandiver said state, federal and local agencies/ municipalities will have to join/form a sub-district or create augmentation plans to comply with the pending state rules. Many of the agencies are interested in joining subdistricts , he added. In doing so, they would either have to pay with cash or water, and many of them have water they could contribute, which would be helpful for the subdistricts . Water debt challenges RGWCD Director Cory Off brought up the issue of the district having to provide a guaranty to the state for lag depletions from past pumping , which was determined in the case of Sub-district #1 to be 19 years. Off said District Judge O. John Kuenhold in 2008 ruled the sub-district had to pay lag depletions to the river but did not say the sub-district had to provide a guaranty. The first plan of water management, which the state engineer approved, required the sub-district to have two years of wet water in storage, Off added.
The state engineer did not say anything about a guaranty in 2011, but in 2012 the state required the district to sign a letter of guaranty, which it did, Off added. He said he believed the water district board needed to rethink this matter because he did not believe the district had an obligation to file a guaranty, particularly for Sub-district #1 since it had already been approved by the court, or any future sub-districts. By signing the letter of guaranty for Subdistrict #1 the district was putting future sub-districts in a precarious position, he said, because subsequent sub-districts do not have the economic ability to cover lag depletions like Sub-district #1 does. Off said the first sub-district is comprised of a large number of farmers, but some of the other sub-districts have a fraction of the populace but even greater depletions to make up.
RGWCD Director Lawrence Gallegos said that was true of the two sub-districts in Conejos County, and if those sub-districts had to provide a guaranty for lag depletions, their fees would be astronomical.
“I think it could be make-it or break-it especially for the two sub-districts that are in the county I represent,” he said. “I think we need to have the sub-districts working ” We don’t want to set anybody up to fail.”
He said the RGWCD board needs to ask its legal counsel to talk to the state engineer about other arrangements that wouldn’t break the subdistricts .
RGWCD Director Dwight Martin said Sub-district #4, with which he has been involved, has been trying to determine what its obligation will be. It does not have firm numbers yet. Martin said if the depletions are 22,000 acre feet, it is going to be extremely difficult if not impossible to meet that obligation. If the depletion repayment is 8,000 acre feet, the sub-district can put together a workable budget with the approximately 400 wells involved in that sub-district .
Robbins said Sub-district #1 is close to having enough water or cash to pay its lag depletions if it went out of business today, and each area of the Valley where depletions have occurred must make up for its depletions either cooperatively through sub-districts or individually through augmentation plans. He said the district does not yet know what the lag depletions will be for the rest of the sub-districts because they are hydrologically different than Sub-district # 1. For example, Sub-district #2 is right along the river.
“The state engineer cannot approve a plan of management unless he’s given assurance the depletions that are caused by the pumping will be replaced so that there is no injury to senior water rights,” Robbins said.
Cotten agreed. He said it is like getting a 20-year loan. If someone told the bank he would pay the first year but provided no guaranty he would pay the next 19 years, he would probably not get the loan. He added that this is not the only basin where the state engineer has required this type of thing.
Off said he was not saying the depletions should not be replaced.
“Paying depletions to the river obviously has to happen ,” he said.
His problem was with the guaranty for lag depletions, he said.
Robbins said there might be several ways those lag depletions could be covered . It could be through a permanent forbearance, for example, he said.
“There are a lots of ways to solve the problem other than simply putting money in escrow,” Robbins said.
RGWCD President Greg Higel said as a senior water owner he wanted to see lag depletions paid back and wanted to see some sort of guaranty in place that they would be.
Vandiver said the state engineer’s responsibility is to protect the surface water users that the sub-district plan was designed to protect. He said the senior/surface water users drove the point home to the court and the state that replacement of depletions was a critical issue that must be addressed. “The objectors from the very beginning have said it wasn’t enough, it just wasn’t enough.”
Vandiver said he was not opposed to going back to the state engineer to talk about lag depletions, but he believed the district must present some options.
Robbins said, “If the board wants me to talk to the state engineer, we can come up with the options.”
He added he was not opposed to having a preliminary discussion with State Engineer Dick Wolfe to see how much flexibility he might be willing to provide.
The RGWCD board unanimously voted to have Robbins speak with the state engineer about the lag depletion guaranties and alternatives.