Storage capacity is obviously an important aspect of any municipal or domestic water supplier’s system. Increased storage capacity does any number of things for a water provider, including reducing the strain on equipment during summer peak demand times, increasing a water provider’s day-to-day flexibility, and providing for water during times of emergency.

We recently attended the ground breaking ceremony for South Fork Water Board’s new 2 million gallon reservoir. The excavation equipment was truly impressive, and the project should be fun to watch as it progresses over the summer. Present at the ceremony were South Fork Water Board Chair and West Linn Mayor Norm King, South Fork Water Board Vice-Chair and Oregon City Mayor Alice Norris, South Fork Water Board General Manager John Collins and staff, and the engineers, consultants and contractors overseeing and constructing the project.

Guest post by James Carver

I’ve worked for over thirty years in the field of water law in the office of the State Engineer and the Water Resources Department.  During those years I served as head of the Water Rights Division and later as Deputy State Engineer under Chris Wheeler.  I also presided over administrative hearings pertaining to water law for the State Engineer and his successor, the Director of the Water Resources Department.

Around the turn of the 19th century, Oregon saw a need for a system to document water use.  Recognizing that an orderly system for recording and prioritizing water rights would be necessary as water uses grew, the legislature, in 1909 adopted Oregon’s first comprehensive water code.  The code held priority and beneficial use as the standard for distributing water to growing agricultural and domestic needs.

Over the years, the Oregon legal system has fleshed out the scope of water rights and defined them as property rights akin to land.  The Oregon Supreme Court concluded that a perfected water right is a property right and an appurtenance to the real property on which it is used.  The legislature has also recognized new practices that satisfy beneficial use.  These include leaving water instream to ensure minimum stream flows exist to support various fish species.

Unfortunately, there is now a growing movement to distribute water based on a public benefit analysis without regard to priority.  Believers in this new distribution system argue that water rights holders have been given access to public water without a requirement for payment in return.  Therefore, they should be subject to losing the water if it is needs for the public good.  Since users never “owned” the water, it can be taken from them without compensation.  However, there are major drawbacks to such as system.

A water distribution system constantly subject to alterations based on nebulous concepts, such as the public good, will likely result in a great devaluation of land with water rights attached.  For example, lending institutions will become more hesitant to finance projects involving water because the water on which the project is based may disappear without compensation if the state decides the public good is better served by taking it.

The doctrine of prior appropriation is well established in Oregon and any departure from the current system may carry with it economic consequences that far outweigh possible benefits gained from applying more water to uses in the public good.

While irrigation districts formed under ORS 545 have no specific authority to accept municipal storm water or to convey that water, many irrigation districts have allowed near by cities to use their irrigation ditches and agricultural drains for storm water runoff. As urbanization continues to increase, the demand on the districts’ canals has reached new heights. Increased demand coupled with more environmental concerns and regulatory oversight have caused many districts to re-evaluate allowing use of their irrigation canals or agricultural drains for accepting urban, suburban and municipal drainage. Recently, the Pioneer Irrigation District initiated a lawsuit against the City of Caldwell Idaho to prevent the City from dumping municipal storm water into its irrigation canals.

From a City’s perspective, utilizing the existing delivery and drainage infrastructure is an attractive prospect. From the district’s perspective, allowing a city to use its canals requires consideration of the legal, financial and political issues that may arise. First the district must consider whether it may even accept the storm water pursuant to its authorizing statute and pursuant to it’s organizational by-laws, rules and regulations. Second the district must consider the impact the storm water will have on its users and the quality and quantity of water in its canals. If the district determines it may accept the storm water, it is imperative the terms and conditions of the city’s use of its canals and drains be specifically detailed in a storm water contract or other intergovernmental agreement. Many times these agreements can be a benefit to the district by increasing the financial resources of the district. Schroeder Laws Offices, P.C. can help districts consider these factors and make these determinations and agreements that will protect the district’s interests.

The final topic of discussion on the OWRC conference call addressed changing start card fees for constructing wells.

Start card fees, fees paid along with the notification of new well construction, partially fund the OWRD staff payroll. The fee is currently $125.00. OWRD is concerned that the fee is no longer sufficient to sustain the well inspection program and would like to establish a schedule to raise the fees moderately and frequently (as opposed to large increases every 5 or more years).

Once again, this topic generated a number of comments. The WaterWatch representative suggested that OWRD’s current cost recovery of roughly 30% through fees was not high enough and that a goal of nearly 100% recovery would be preferable. She called attention to increasing fees for issuing limited licenses and adding an additional fee for water right permit applicants who protest an OWRD order.

The Committee members expressed some agreement with the idea that OWRD should move towards a more comprehensive fee based structure with a goal of 50% cost recovery. Other attendees believed that water users would support increased fees because added revenue could allow OWRD to augment staff and work through application backlogs.

The next topic in the OWRD legislative concepts discussion is the creation of a water development fund.

OWRD discussed updating statutory language found in ORS 541.700-541.855 addressing financial aid to communities constructing water supply projects. OWRC members expressed some concern with this item because it involved project funding. Director Ward suggested that discussion of monitory issues could be postponed until the OWRC meeting taking place in Burns, OR on May 29 and 30 because there will be a more defined draft budget in place at that time.

There should be more lengthy discussions on this topic in the near future.

Good morning! The third part in my series of posts addresses some proposed changes to irrigation district transfer rules.

Currently, when an individual transfers the place of use of a water right any supplemental rights must be transferred with it or canceled. However, the statutes controlling irrigation districts do not explicitly allow for transfer of supplemental rights when primary rights are transferred. OWRD would like to update the irrigation district statutes, specifically ORS 540.570 and 540.580 to bring them in line with other transfer statutes.

The attendees had few substantive comments and generally agreed that a change in statutory language would be appropriate.

The second topic addressed during the OWRC teleconference was modifying language pertaining to statewide mitigation banks.

OWRD wants to modify statutory language to give itself explicit authority to create statewide mitigation banks. These mitigation banks can be used to offset effects of new water supply projects.

This proposed statutory change drew a few comments from attendees. A representative from WaterWatch expressed her organization’s concern that new statutory language must be precise so as to avoid creating loopholes that allow users to access water without adhering to the monthly rate limitations placed on the source permits. However, a representative from Special Districts Association of Oregon expressed a need for greater flexibility across regions so as to allow different water needs to come together.

The Oregon Water Resources Commission (“OWRC”) had its monthly conference call on Monday. In attendance were a majority of the OWRC members including: Ray Williams, Jay Rasmussen, Susie L. Smith, Dan Thorndike and Charles Barlow. Oregon Water Resources Department (“OWRD”) Director, Phil Ward, and a handful of his staff members were in attendance. Those attending the call at the OWRD offices in Salem included Kimberley Priestley (WaterWatch), Anita Winkler (Oregon Water Resources Congress), Katie Fast (Oregon Farm Bureau Federation) and Amanda Rich (Special Districts Association of Oregon).

The agenda covered legislative concepts that OWRD will be developing during the 2009 and 2011 sessions. I will post short summaries on each concept over the course of the next week. Today I’m going to talk about the first topic that OWRC addressed: instream leasing.

Currently instream leasing is not an option for a holder of a water right claim involved in an adjudication. A final decree must be issued before instream leases can occur. OWRD would like to open instream leasing to claims in an adjudication as soon as a final order is issued so water right holders can lease water and show beneficial use during seasons when the user does not need the water.

There wasn’t significant discussion on this topic. Tomorrow I’ll be talking about statewide mitigation banks.

Our work in Armenia involves reviewing contracts between the State and a couple of the largest water purveying companies in the world, Veolia and Suez, which are headquartered in France.

Interestingly, we have found that these French companies, through their subsidiaries Veolia Water North America and United Water, also have contracts in Oregon, Washington, and Idaho. Examples include Operation and Maintenance contracts between Veolia and the cities of Wilsonville, OR and Vancouver, WA, and contracts between United Water and Boise, ID.

Links to these companies can be found at www.veoliawaterna.com and www.unitedwater.com.

Yesterday, I had the privilege of teaching a Water Law Bootcamp for Water for Life. Over forty people attended at the Baker County Fairgrounds in Baker City Oregon. Unlike previous presentations, attendees focused their questions primarily on due diligence water rights review in real estate transactions and valuations of water rights when lending on water righted properties. Apparently in these economic times, realtors and lenders are giving much more scrutiny to what water rights exist on the property subject to a transaction.

The Oregon Supreme Court will hear oral arguments and review the Oregon Court of Appeals decision in the case Fort Vannoy Irrigation District v. Water Resources Commission. The review arises from a 2002 dispute between the irrigation district and a district landowner. The landowner submitted an application to the Oregon Water Resources Department (“OWRD”) seeking to transfer the points of diversion of five water rights certificates to two new consolidated points of diversion. The proposed new points of diversion would be located out of the district facilities and would be beyond the control of the irrigation district. Two of the water right certificates made part of the transfer were issued in the name of the irrigation district.

The irrigation district protested transfer applications and initiated a contested case hearing in which it argued that the landowner could not request a transfer on the water rights issued in the name of the irrigation district without the district’s permission. The irrigation district argued it was a co-owner of the water rights and thus any transfer would require its involvement. OWRD participated in the contested case and argued against the irrigation district’s co-ownership position. The administrative law judge (“ALJ”) issued a final order rejecting the irrigation district’s position. The Water Resources Commission agreed with the ALJ decision and issued a final order dismissing the irrigation district’s protest and approving the land owners transfer application. In it’s final order, the Commission acknowledged that “the ownership of a water right certificate within an irrigation district is a recurring question” but ultimately determined it did not need to resolve the question of ownership because under the transfer rules (ORS 540.505 et. seq.) “the only permission that is required is that of the owner of the land to which the water right is appurtenant.”

The irrigation district filed a petition for judicial review of the Commission’s decision. Last summer, the Oregon Court of Appeals reversed the Commission’s order. The Court of Appeals held that an irrigation district holding a water rights certificate is the “holder of a water use subject to transfer” under ORS 540.510 and thus is the entity authorized to seek the change requested. A copy of the Court of Appeals decision can be found here: http://www.publications.ojd.state.or.us/A130508.htm.

The Supreme Court’s review of the case will be narrow. The issue on review before the Supreme Court is whether the property owner to whose land a water right certificate is appurtenant is a “holder of any water use subject to transfer” under ORS 540.510, such that the owner may apply to change the point at which the water is diverted from its source. The case will be heard on May 13, 2008 at 10:30 am, at the Enterprise High School in Enterprise Oregon.