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					              NORTHERN COLORADO WATER CONSERVANCY DISTRICT
                    MINUTES OF BOARD MEETING HELD AT
                NORTHERN WATER HEADQUARTERS BOARD ROOM
                               April 10, 2009


I.     PRELIMINARY ITEMS

       A.      Call to Order

The Board of Directors of the Northern Colorado Water Conservancy District (Northern Water) met
pursuant to call. Present were President Mike Applegate, Vice President Kenton Brunner, and
Directors Bill Emslie, George Jenik, Hank Kugeler, Don Magnuson, John Rusch, Leslie J.
Williams, Jr., Jerry D. Winters, and Ruth Wright. Directors William H. Brown and William Condon
were absent.

The following staff members were present: General Manager Eric W. Wilkinson, Assistant General
Manager–Operations Division Don Carlson, Assistant General Manager–Engineering Division Alan
Berryman, and Legal Counsel Bob Trout and Peggy Montaño. See the attached list for additional
staff and guests in attendance.

       B.      Public Comment

President Applegate asked for public comment on non-agenda items. There were no public
comments.

Mr. Wilkinson introduced new employee Ms. Dana Strongin to the Board. Ms. Strongin is the new
Communications Specialist in the Communications and Records Department. She works closely
with Brian Werner and her responsibilities include internal and external communications, public
information programs, strategic media and public relations programs, and presentations.
Ms. Strongin holds a B.S. in mass communications from Kansas State University, and is pursuing
her M.S. in public communication and technology at Colorado State University. Previously she
worked for Experience Proven Systems in Fort Collins as a Quality Control Editor. Ms. Strongin
also previously held positions with Burns Marketing Communications, the Fort Collins Area
Chamber of Commerce, the Steamboat Pilot & Today, and the Wichita Eagle.

The Board joined staff, counsel, and President Applegate in welcoming Ms. Strongin to Northern
Water and the Municipal Subdistrict, Northern Colorado Water Conservancy District (Subdistrict).

       C.      Executive Session

President Applegate asked for a motion to convene in Executive Session to discuss matters that may
be the subject of negotiations as authorized by Colorado Revised Statutes, Section 24-6-402(4)(e).
Mr. Wilkinson stated the topic of discussion during the executive session would be negotiations
regarding the Windy Gap Firming Project (WGFP), including water quality and stream management
issues in Grand County and the upper Colorado River basin. Director Winters moved to convene in
Executive Session following the public portion of the meeting. Director Wright seconded the motion
and it passed unanimously.
Page 2                                                                      Northern Water Minutes
                                                                                     April 10, 2009

II.      DELIVERY QUOTA

         A.    Compliance with Repayment Contract

President Applegate requested a report on compliance with the Repayment Contract between
Northern Water and the U.S. Bureau of Reclamation (Reclamation). Mr. Wilkinson referred to an
April 7, 2009, letter from Mr. Michael P. Collins, Area Manager for Reclamation’s Eastern
Colorado Area Office, confirming Northern Water’s compliance with provisions of Article 16 of
the Colorado-Big Thompson (C-BT) Project Repayment Contract, Supplement 2. The letter
confirms that Reclamation and Northern Water representatives have met and have discussed the
coordinated use of C-BT Project water supplies for water supply and power purposes during the
2009 water year as required. As stated in the letter, Alva B. Adams Tunnel diversions are anticipated
to be approximately 110,000 acre feet for the balance of the water year. As also stated in the letter,
Reclamation understands that Northern Water anticipates the declaration of at least a 60 percent
quota (186,000 acre feet) with the potential for an additional 54,526 acre feet of delivery under
Northern Water’s carryover program. Although Reclamation’s April 7, 2009, letter mentioned an
estimated quota of 60 percent, Mr. Wilkinson reminded the Board that the letter in no way binds the
Board as it considers and determines a quota for the 2009 water year.

         B.    Operational Readiness

President Applegate then asked Mr. Carlson to report on the operational readiness of the C-BT
Project system. Mr. Carlson stated the Collections System and Distributions System departments
had performed all necessary maintenance and that the C-BT Project system was fully operational
and ready to meet Northern Water’s allottees’ water delivery demands.

         C.    Snowpack & Streamflow Forecast & Water Availability

Ms. Karen Rademacher, Senior Water Resources Engineer, continued with a review of snowpack
and streamflow comparisons and forecasts as of April 1, 2009. She referred Directors to a
PowerPoint presentation and reported that as of April 7, 2009, statewide snowpack stood at
105 percent of average; the Colorado River snowpack was 114 percent of average; and the South
Platte River basin snowpack was 93 percent of average.

Ms. Rademacher next referred Directors to Northern Water’s SnoWatch Reports and viewed and
compared various East Slope and West Slope SNOTEL sites. She also reviewed: (1) Northern
Water’s March 1, 2009, and April 1, 2009, West Slope and East Slope snowpack and streamflow
forecasts; (2) recent dust deposition on Colorado’s snowpack, particularly in the southwest portion
of the state; (3) C-BT Project system storage; (4) delivery obligations; (5) C-BT Project reserves on
March 1 and April 1 between 1958 and 2009; (6) an April 1 C-BT Project collection system
summary (yield and depletion tables); (7) April 1 native water supply report standard precipitation
indices; (8) climate outlook data, including the April 7, 2009, U.S. Drought Monitor map; (9) 1958
to 2008 November 1 C-BT Project reserves; and (10) a projection of November 1, 2009, C-BT
Project reserves under various quota and wet/dry year scenarios. A general discussion ensued
regarding carryover water and the November 1 projected C-BT Project reserves.
Page 3                                                                    Northern Water Minutes
                                                                                   April 10, 2009

         D.    Spring Water Users’ Meeting Comments Regarding Quota

President Applegate thanked Ms. Rademacher for her presentation and next asked for a report on
public comments received concerning quota determination during the April 8, 2009, Spring Water
Users’ Meeting. Mr. Wilkinson stated the Little Thompson Water District requested a minimum
70-percent quota. The City of Fort Collins and the Soldier Canyon Filter Plant participants
recommended a 70 percent quota under current hydrologic conditions, and an 80 percent quota if
the climate trend becomes drier. The Larimer and Weld Irrigation Company requested at least an
80 percent quota declaration. The Highland Ditch Company suggested a minimum 90-percent quota.
The City of Greeley recommended either a 60 percent or 70 percent quota, stating that an 80 percent
quota was too high given current conditions.

         E.    Public Comments & Board Discussion Regarding Quota

President Applegate next opened the public hearing on the quota declaration and asked if there were
any public comments. There were no public comments. President Applegate closed the public
hearing and opened the quota discussion for the Board. Vice President Brunner noted that it
appeared from previous comments that most municipalities would be satisfied with a 70 percent
quota, while most agricultural water users would appreciate a higher quota. Director Williams stated
the City of Longmont recommended a 70 percent quota under current hydrologic conditions, and
an 80 percent quota if the climate trend becomes drier. President Applegate reported the Town of
Frederick is currently short of water and asked for an 80 percent quota. Mr. Emslie noted that the
soils throughout Northern Water’s service area are drier than average and this fact, combined with
the previous testimonials, would likely call for an 80 percent quota.

Director Wright asked for staff feedback regarding an initial 70 percent quota now, and an
80 percent quota later if needed. Mr. Wilkinson cautioned that a supplemental quota declaration
would not likely be effective if declared in either the months or June or July, and that most water
users preferred assurance on the maximum Board quota declaration as soon as possible during the
growing season. Director Rusch reported that Morgan and Logan counties are quite dry and he stated
his preference for an 80 percent quota to encourage municipalities to put some C-BT Project water
on the rental market. Director Magnuson and Director Jenik voiced their support for an 80 percent
quota to benefit the entire Northern Water service area. Finally, President Applegate concurred that
an 80 percent quota made the most sense after weighing all of the relevant factors.

         F.    Motion to Modify Quota Setting

Following additional discussion and questions, Vice President Brunner moved that the Board declare
an 80 percent quota unless drastic hydrologic conditions necessitate additional water. Director
Emslie seconded the motion. During discussion of the motion Director Williams voiced his strong
preference for a 70 percent quota initially, followed by an 80 percent quota in May or early June if
dry conditions persist. He noted the C-BT Project’s lower than average storage levels and
encouraged Directors to consider a lower quota to help replenish water storage. There were no
further comments. President Applegate called for a voice vote and the motion carried.
Page 4                                                                     Northern Water Minutes
                                                                                    April 10, 2009

President Applegate then recessed the Northern Water Board of Directors meeting until the
conclusion of the Municipal Subdistrict, Northern Colorado Water Conservancy District
(Subdistrict) Board of Directors meeting. President Applegate then reconvened the Northern Water
Board of Directors meeting at approximately 10 a.m.

III.     ROUTINE ITEMS

         A.    Minutes of March 13, 2009, Board Meeting

President Applegate next asked for a review of the March 13, 2009, Board meeting minutes.
Director Jenik moved to approve the minutes as submitted. Director Kugeler seconded the motion
and it passed unanimously.

         B.    Minutes of March 5, 2009, Planning and Action Session Meeting

President Applegate next asked for a review of the March 5, 2009, Planning and Action Session
meeting minutes. Director Kugeler moved to approve the minutes as submitted. Vice President
Brunner seconded the motion and it passed unanimously.

         C.    Financial Matters

President Applegate asked for a presentation of the Treasurer's Report. Mr. Don Carlson, Treasurer,
referred the Board to the prepared report that provided an overview of statements concerning cash
receipts and disbursements, transfers of funds, and total cash and reserves as of March 31, 2009, for
the Northern Water and Inter-District Service funds. He also briefly discussed cash flows, reserve
funds, cash balances, and medical insurance claims. Following a brief discussion and questions,
Director Winters moved to approve the Treasurer's Report as submitted. Director Wright seconded
the motion and it passed unanimously.

President Applegate next asked for a report of the Finance Committee. Vice President Brunner,
Chairman of the Finance Committee, referred to the list of disbursements for March 2009. Following
questions and discussion, Vice President Brunner moved to approve payment of the March
disbursements as submitted. Director Rusch seconded the motion and it passed unanimously.

         D.    Allotment Contract Change Applications

President Applegate next asked for a presentation of the allotment contract change applications.
Ms. Sherri Rasmussen, Allotment Contracts Specialist, referred to a list entitled "Applications for
Change of Water Allotment Contracts" dated April 10, 2009.
          Page 5                                                                         Northern Water Minutes
                                                                                                  April 10, 2009

                                           APPLICATIONS FOR CHANGE
                                        OF WATER ALLOTMENT CONTRACTS
                                                  April 10, 2009

                                                                                                           % of
                                                                                                            Total
                                                             Acre-                                         W ater      Acre
                                                             Foot                                          Supply      Foot
    Current Allottee           Co-Applicant        S.T.R.    Units New Allottees                S.T.R.    Base CBT     Units
         STANDARD APPLICATIONS
                    N am e Changes
 1. Hornung, Richard J.                            28-4-68    100 Hornung, Irene                28-4-68                 100
 2. Weber, Anna Mary                               27-5-67      30 A-W Land Company LLC         27-5-67                  30
                 Allotm ent Transfers

 3. Roth, Gerald et al.        Roth, Gerald        30-6-64     87 Roth, Gerald                  30-6-64                  87
 4. R & S Equipment Inc., et   McGraw, Jarrett     4-5-65        6 McGraw, Jarrett              16-6-64   98       2       3
    al.                        Richardson                          Richardson Companies Inc.    2-5-64    84      16       3
                               Companies Inc.
 5. WIPO LLC                   City of Greeley     4-6-67       30 WIPO LLC                     4-6-67                   14
                                                                   City of Greeley                TU                     16
 6. Double J Farms & Feeding Town of Pierce        17-7-65       2 Town of Pierce                 TU                       2
    Inc.
 7. Wacker Living Trust        North Carter Lake   7-5-69        3 North Carter Lake Water       Corp.                     3
                               Water District                      District
 8. Midwest Heritage Inn       Fort Collins-       34-3-68    134 Fort Collins-Loveland          Corp.                  134
                               Loveland Water                     Water District
                               District
 9. Valley 14, LLC             City of Dacono      9-7-68       24 Valley 14, LLC               9-7-68                   18
                               Town of Windsor                     City of Dacono                 TU                      5
                                                                   Town of Windsor                TU                      1
     INACTIVE ACCOUNT TRANSFERS
10. Merrick Properties, Inc.   City of Dacono                    5 City of Dacono                 TU                       5
11. Kaveny, Jill et al.        Town of                          23 Town of Platteville            TU                     23
                               Platteville
           SPECIAL APPLICATION
12. Rasmussen, Frank O.        Longs Peak Water    36-2-69       4 Longs Peak Water District     Corp.                     1
                               District                            Inactive Account                                        3
                               Inactive Account
                                                   TOTAL      448                               TOTAL                   448

                 60% going to Domestic
Page 6                                                                       Northern Water Minutes
                                                                                      April 10, 2009

Allotment Contract Change Applications Nos. 1-2 (Name Changes)

Ms. Rasmussen stated the two name change applications included a total of 130 acre-foot units being
transferred. She briefly discussed the applications. Director Magnuson moved to approve Name
Change Applications Nos. 1-2 as presented, contingent upon: (1) the applications meeting all
statutory requirements, rules, and criteria previously established by the Board, including the criteria
of the Interim Base Water Supply Policy; and (2) payment by applicants of all costs and charges due
Northern Water. Director Jenik seconded the motion and it passed unanimously.

Allotment Contract Change Applications Nos. 3-9 (Allotment Transfers)

Ms. Rasmussen stated the next seven standard applications included a total of 286 acre-foot units
being transferred. She reviewed the percentage of total water supply ratios for each application
requiring a field exam, which range from 98 percent base supply/2 percent C-BT Project supply, to
84 percent base supply/16 percent C-BT Project supply. Ms. Rasmussen discussed the applications
and answered several questions from the Board. Vice President Brunner moved to approve
Allotment Transfer Application Nos. 3-9 as presented, contingent upon: (1) the applications meeting
all statutory requirements, rules, and criteria previously established by the Board, including the
criteria of the Interim Base Water Supply Policy; (2) completion of all prescribed public record
checks; and (3) payment by applicants of all costs and charges due Northern Water. Director
Williams seconded the motion and it passed unanimously.

Allotment Contract Application Nos. 10-11 (Inactive Account)

Ms. Rasmussen stated the next two applications included a total of 28 acre-foot units for transfer
under Northern Water’s Inactive Contract Account Rule. Ms. Rasmussen noted these applications
seek to transfer water from the Inactive Account to qualified buyers. Following a brief discussion
and questions, Director Magnuson moved to approve the two applications for 28 acre-foot units for
transfer from Northern Water’s Inactive Contract Account under Northern Water’s Inactive Contract
Account Rule. Director Williams seconded the motion and it passed unanimously.

Allotment Contract Change Application No. 12 (Special)

Ms. Rasmussen next discussed Application No. 12, an allotment contract currently held under the
name of Mr. Frank O. Rasmussen. According to documentation submitted as part of the application
for the transfer of the allotment contract, the allotment contract may be actually owned by
Ms. Rowena Pasley. Ms. Rasmussen explained that Ms. Pasley and Mr. Rasmussen reached an
agreement on July 12, 2000, to park Ms. Pasley’s four units of C-BT Project water on
Mr. Rasmussen’s property. Northern Water staff previously informed Ms. Pasley by letter of both
Northern Water’s Inactive Contract Account Rule and the Storage and Parking Agreement Rule.
Ms. Pasley did not request that staff place her four units in the Inactive Account prior to the
February 13, 2009 deadline specified in the Storage and Parking Agreement Rule for the dissolution
of existing storage or parking agreements. Ms. Rasmussen explained that currently Ms. Pasley is
Page 7                                                                       Northern Water Minutes
                                                                                      April 10, 2009

seeking to transfer one of her four units to the Longs Peak Water District, and to place the remaining
three units into the Inactive Account.

Following a general discussion and questions, Mr. Wilkinson recommended: (1) the Board table and
take no action on Application No. 12; (2) the Board consider action on this application at its June 12,
2009, Board meeting; and (3) staff notify Ms. Pasley 45 days prior to the Board considering and
taking action on Application No. 12 during the June 12, 2009, Board meeting. In response to
questions from the Board, Mr. Trout, Ms. Montaño, and Mr. Wilkinson clarified the procedures
dictated by the Inactive Contract Account Rule. Following additional questions and discussion, Vice
President Brunner moved: (1) the Board table and take no action on Application No. 12; and (2) staff
notify Ms. Pasley 45 days prior to pending Board action on Application No. 12 during the June 12,
2009, Board meeting. Director Williams seconded the motion and it passed unanimously.

         E.    Legislative Update

A brief discussion ensued regarding Colorado legislative issues that may impact Northern Water or
the Subdistrict. A review of legislative matters occurred during the Subdistrict Board meeting. The
discussion is reflected in Agenda Item II-D, “Legislative Update,” in the April 10, 2009, Subdistrict
Board meeting minutes. It was the consensus of the Northern Water Board to take the same positions
on Colorado legislative issues as those taken by the Subdistrict Board earlier in the day.

IV.      CONSENT AGENDA

President Applegate next asked for consideration of the Consent Agenda.

         A.    GFOA Contract Amendment

Mr. John Budde, Accounting Manager, reminded Directors this item had been presented and
discussed during the Board’s April 2, 2009, Planning and Action Session meeting, and should be
considered by the Board as part of the Consent Agenda. This item is consideration of approval of
Amendment No. 1 to October 18, 2007, Consulting Services Agreement by and between Northern
Water and the Government Finance Officers Association (GFOA) for software systems needs
assessment and procurement assistance regarding Northern Water’s Enterprise Resource Planning
(ERP) Project. Mr. Budde reviewed details of the contract amendment, including: (1) background;
(2) contract justification; (3) description of tasks; (4) scope of work; (5) project schedule; and (6) a
not-to-exceed contract amendment amount of $135,900.

Director Kugeler moved to approve the items on the Consent Agenda. Director Williams seconded
the motion and it passed unanimously.
Page 8                                                                      Northern Water Minutes
                                                                                     April 10, 2009

V.       DISCUSSION & ACTION ITEMS

         A.    Northern Integrated Supply Project

President Applegate next requested an update on the Northern Integrated Supply Project (NISP).
Mr. Carl Brouwer, Project Management Department Manager, and Mr. Brian Werner,
Communications and Records Department Manager, reported on the following: (1) the current status
of the draft supplemental Environmental Impact Statement (EIS); (2) a recent joint hydrology
meeting between the proponents of NISP, the Seaman Reservoir enlargement project, and the
Halligan Reservoir enlargement project; and (3) current NISP public affairs activities and strategy.

Mr. Brouwer next referred Directors to copies of Amendment No. 8 to June 19, 2004, Consulting
Services Agreement by and between Northern Water, acting by and through the NISP Water Activity
Enterprise, and ERO Resources Corporation (ERO), previously reviewed during the Board’s
April 2, 2009, Planning and Action Session. The contract amendment is for continued support for
the NISP draft EIS through December 2009. Mr. Brouwer briefly reviewed the agreement, which
includes a contract total of $160,636. Following a brief discussion and questions, Director Rusch
moved approval of Amendment No. 8 to June 19, 2004, Consulting Services Agreement by and
between Northern Water, acting by and through the NISP Water Activity Enterprise, and ERO, for
continued support for the NISP draft EIS through December 2009. Vice President Brunner seconded
the motion and it passed unanimously.

Mr. Brouwer next referred Directors to copies of a Consulting Services Agreement by and between
Northern Water, acting by and through the NISP Water Activity Enterprise, and MWH Americas,
Inc. (MWH), previously reviewed during the Board’s April 2, 2009, Planning and Action Session.
The contract amendment is for work on the NISP draft Environmental Impact Statement (EIS) No
Action Alternative (NAA). Mr. Brouwer briefly reviewed the agreement, which includes a contract
total of $104,721. Following a brief discussion and questions, Director Magnuson moved approval
of Consulting Services Agreement by and between Northern Water, acting by and through the NISP
Water Activity Enterprise, and MWH, for work on the NISP draft Environmental Impact Statement
(EIS) No Action Alternative (NAA). Director Williams seconded the motion and it passed
unanimously.

         B.    Recreational Use of C-BT Project Canal Facilities

Mr. Jim Struble, Real Estate Manager, next reported on a proposed recreational trail along portions
of the Boulder Feeder Canal (BFC) between the Town of Lyons and Boulder Reservoir. He
reminded Directors this matter was last discussed during the April 2, 2009, Planning and Action
Session. Mr. Struble referred Directors to a revised, draft copy entitled Policies and Use Guidelines
for the Use of C-BT Project Canal Easements and Fee Lands for Recreational and Trail Purposes.
He reviewed the revised policy noting newly included content, emphasizing that staff and counsel
would be discussing the draft policy and guidelines with the Board over the next several months,
but would not be requesting Board approval of that document until the Board has had time to fully
consider its content and its application to the canal facilities on the C-BT Project. Mr. Struble next
Page 9                                                                     Northern Water Minutes
                                                                                    April 10, 2009

reported that Boulder County representatives would be attending the April 30, 2009, Planning and
Action Session and would be making a recreational trail presentation. Boulder County is studying
a 2-mile wide corridor between Lyons and Boulder Reservoir for the location of a potential future
recreational trail alignment. A general discussion followed.

President Applegate asked if there was any public comment. Mr. Richard Carlson, a resident and
landowner along the BFC, requested a few moments to address the Board. Mr. Carlson stated he
owned 60 acres of land near Niwot Road, Left Hand Creek, and adjacent to the BFC. He explained
he was representing 63 landowners (including himself) requesting that Northern Water not allow
any public access to the BFC right-of-way (ROW). Mr. Carlson discussed Northern Water’s BFC
operations and the potential problems if the public were allowed access to the BFC ROW, including
safety, liability, and several other matters. He asked Directors to encourage Boulder County to place
the recreational trail on some of the 63,000 acres of land the county currently owns. President
Applegate thanked Mr. Carlson for his comments and asked if there was any additional public
comment. There was none.

VI.      MONTHLY REPORTS

         A.    Operations and Maintenance Reports

O&M Activities

President Applegate next asked for a presentation on water operations. Mr. Don Carlson reported
briefly on the following operation and maintenance (O&M) activities: (1) the Willow Creek
Pumping Plant began pumping operations on Tuesday, April 7, 2009; (2) ongoing work on the
Lyons trash rack on the St. Vrain Supply Canal; (3) completion of Sika Flex sealing work along
concrete-lined portions of the Hansen Feeder Canal (HFC); and (4) completion of several pipe
crossings over the BFC.

         B.    Legal Matters

President Applegate next asked for a discussion of legal matters.

Water Court Cases

Mr. Trout reported staff and counsel recommend filing a statement of opposition in Case
No. 09CW29, an application by High Plains Energy Associates (HPEA) to add wells to an existing
augmentation plan decreed for the Riverside Irrigation District. Mr. Trout explained the wells in
question are the subject of a conditional water rights application filed by HPEA in Case
No. 07CW333. According to the application, HPEA’s wells will be used to supply a new HPEA
power station to be located near Union, Colorado. Staff and counsel believe the HPEA power station
will be located outside Northern Water boundaries, but will use replacement sources that may
contain C-BT Project return flows. Mr. Trout noted Northern Water previously filed a statement of
opposition to the application in Case No. 07CW333. He requested Board authorization to file a
Page 10                                                                    Northern Water Minutes
                                                                                    April 10, 2009

statement of opposition in the case to protect C-BT Project return flows from use outside Northern
Water boundaries. Following a brief discussion and questions, Director Magnuson moved to
authorize filing a statement of opposition in Case No. 09CW29. Director Jenik seconded the motion
and it passed unanimously.

Mr. Trout next reported staff and counsel recommend filing a statement of opposition in Case
No. 06CW288, an amended application by the City and County of Broomfield (Broomfield) for
storage and exchange rights. Mr. Trout stated the storage right is for Heit Pit, filled by the South
Platte River at various diversion points, including the Meadow Island Ditch. He noted the Meadow
Island Ditch may receive C-BT Project return flows from Fort Lupton and other sources. Mr. Trout
requested Board authorization to file a statement of opposition in the case to protect C-BT Project
return flows from use outside Northern Water boundaries. Following a brief discussion and
questions, Director Wright moved to authorize filing a statement of opposition in Case
No. 06CW288. Director Kugeler seconded the motion and it passed unanimously.

Colorado-Big Thompson Project Return Flows Case

Mr. Trout next reported that counsel and staff continue to review the Water Division No. 1 Water
Court resume for applications for changes of water rights that would result in water being diverted
from within Northern Water boundaries to beneficial uses outside Northern Water boundaries. Staff
and counsel are determining whether the applications’ contemplated water rights changes would
result in the use of C-BT Project water, or C-BT Project return flows, outside Northern Water
boundaries either directly, indirectly, or by exchange. In certain cases, Northern Water has filed
Board-authorized statements of opposition to protect return flows. Staff members are developing
consistent methods to quantify the return flows so they can be protected for use as required under
the Repayment Contract. Case No. 06CW104, an application of the City of Aurora (Aurora), seeks
to utilize C-BT Project water and return flows to facilitate the exchange of water outside Northern
Water boundaries.

Aurora is proposing an exchange on the South Platte River near Brighton. The upstream point of the
exchange is south of, and located outside of, Northern Water boundaries. Aurora proposes to divert
water at that location for its Prairie Waters Project. The downstream point of the exchange is within
Northern Water boundaries. At times, the exchange reach may contain either or both C-BT Project
water being delivered for beneficial use within Northern Water boundaries and C-BT Project return
flows. The issue is whether Aurora can use the existence of this C-BT Project water in the exchange
reach to increase the amount of exchange potential available and thereby increase the amount of
water Aurora can or will remove from Northern Water boundaries by exchange. To date, Aurora has
been unwilling to stipulate it cannot exchange on C-BT Project water in the stream once Northern
Water is able to quantify and determine the timing, location, and amount of the water in the stream.
The parties have agreed to submit this issue to the court on briefs without an evidentiary hearing.
Northern Water filed its initial brief on March 20, 2009. Aurora, Public Service Company, and
Centennial Water and Sanitation District (CWSD) filed responsive briefs on April 7 and 8, 2009.
Northern Water will file a reply brief on or before April 20, 2009.
Page 11                                                                      Northern Water Minutes
                                                                                      April 10, 2009

Base Water Supply Protection

Mr. Trout next reported that Northern Water is an objector to numerous water right applications that
have been or will be filed by East Cherry Creek Water and Sanitation District (ECCWSD), United
Water and Sanitation District (UWSD), Parker Water and Sanitation District (PWSD), Aurora,
Farmers Reservoir and Irrigation Company (FRICO), and perhaps others. These entities propose to
either appropriate new water rights or change existing water rights within Northern Water
boundaries for beneficial uses outside of Northern Water boundaries. Staff and counsel are
evaluating the cases to determine the most cost effective method of preserving Northern Water’s
base water supplies.

Counsel and other objectors are filing briefs on various summary judgment motions pending in the
cases. On September 5, 2008, the water judge issued a 154-page decision in Case No. 02CW403,
regarding the FRICO application and others for a system-wide change of water rights of the FRICO
Barr Lake division. The decision severely limited the amount of water that FRICO will be able to
realize from the change. FRICO has stated publicly that it will appeal the trial court decision.
Another aspect of the case (a dispute between Denver and Englewood over contract issues) has been
appealed to the Supreme Court. Counsel will enter the case for monitoring purposes. It is not clear
at this time whether the appeal will address issues of importance to Northern Water.

Article 22 Repayment Contract Case

Mr. Trout next reported on the status of the pending lawsuit in the U.S. Court of Federal Claims
against Reclamation seeking enforcement of Article 22 of the Repayment Contract. In the course
of negotiating the Loveland Carriage Contract, Reclamation took the position that Article 22 of
Northern Water’s Repayment Contract, which provides that Northern Water and the United States
share revenues from the use of C-BT Project facilities by third parties, is contrary to Reclamation
law and is unenforceable. The U.S. 10th Circuit Court of Appeals decided a case from New Mexico
which largely rejects the legal analysis of the Interior Department’s Solicitors that supports Northern
Water’s position. The Berthoud Carriage Contract, the temporary Water Supply and Storage
Company Carriage Contract, and the amendment to the Loveland Carriage Contract, all raised the
Article 22 issue.

Using the same reservation of rights language agreed to in the Loveland Carriage Contract, the
parties agreed to disagree about the validity of Article 22. Pursuant to Board authorization, counsel
filed a complaint on behalf of Northern Water in the U.S. Court of Federal Claims on August 28,
2007, against the United States and Interior Department officials. Northern Water is seeking a
judgment that Article 22 is enforceable as written, and an award of damages in the amount of lost
revenues under the existing carriage contracts. The United States filed its answer on December 21,
2007. The answer denied liability for the legal reasons that counsel anticipated. The United States
did not file any counterclaims or motions to dismiss. The parties have agreed that the case will be
decided on motions for summary judgment. The United State’s filed its final reply brief on April 1,
2009. Because of new statutes and case law referenced in the reply, counsel sought and obtained the
Page 12                                                                     Northern Water Minutes
                                                                                     April 10, 2009

right to file a sur-reply brief in the case on or before April 21, 2009. Oral argument in
Washington, D.C., is now scheduled for May 5, 2009, at 10 a.m.

EPA Transfer Rule Cases

Mr. Trout reported that in June 2006, the U.S. Environmental Protection Agency (EPA) proposed
a formal rule exempting those making water transfers from obtaining a permit. The EPA concluded
that Congress did not generally intend to subject water transfers to the NPDES program, but to leave
water transfer oversight to water resource management agencies and the individual states. The rule
that the EPA formally issued on June 9, 2008, exempts water transfers from NPDES permitting
requirements. The EPA’s legal analysis is similar to some arguments counsel made on behalf of
western water users and western attorneys general in Miccosukee Tribe v. South Fla. Water Mgmt.
Dist., 541 U.S. 95 (2004), and Catskill Mtns. Chap. of Trout Unltd. v. NYC, 451 F.3d 77 (2nd Cir.
2006) (“Catskill II”).

Environmental groups, New York State, Pennsylvania, and others filed 10 separate petitions
challenging the rule in five different circuits before the deadline. A judicial panel consolidated the
challenges in the 11th Circuit (Atlanta), which has denied all motions by western states and water
users to intervene in the cases. Only parties located in Florida have been allowed to intervene.
Western interests are concerned that under the Obama administration, the EPA may be unwilling
to vigorously defend the rule or appeal an adverse ruling to the U.S. Supreme Court.
Environmentalists have indicated they will challenge the court of appeals jurisdiction before the
issue is briefed for decision.

Additional Horsetooth Reservoir Outlet

Mr. Trout next reported that Northern Water has requested that Reclamation cooperate with
Northern Water to construct an additional outlet works at Horsetooth Reservoir similar to the second
outlet constructed at Carter Lake. In response, Reclamation staff and solicitors have questioned
whether an additional Horsetooth outlet is within the authorization for the C-BT Project, or whether
it can be treated as an operation and maintenance activity within inherent Reclamation authority.
Counsel will research the issue and provide staff and Directors with a written analysis.

Carter Lake Outlet Small Hydroelectric Power Plant

Finally, Mr. Trout reported efforts to construct a small hydroelectric power plant at the new Carter
Lake Outlet. Counsel and staff are working to obtain a lease-of-power privilege from Reclamation
to construct and operate a Carter Lake hydropower plant. Under federal law, Reclamation has the
legal authority to permit construction of hydroelectric power facilities on the C-BT Project and
charge appropriate fees for the use of the facilities. In response to Northern Water’s expression of
interest, Reclamation will go through an open bidding process to lease the power privilege rights.
Reclamation will soon advertise for project proposals and Northern Water will submit a completed
proposal.
Page 13                                                                    Northern Water Minutes
                                                                                    April 10, 2009

Mr. Trout stated counsel had nothing further to report unless the Board had specific questions. There
were no questions for counsel from the Board.

VII.   INFORMATIONAL ITEMS

       A.      Directors Reports

There were no Director reports.

       B.      Other Matters

President Applegate asked for a discussion of other matters.

Mr. Wilkinson provided a brief recap of the Spring Water Users’ Meeting, held the morning of
Wednesday, April 8, 2009, at the Drake Center in Fort Collins.

Mr. Wilkinson reported that the Colorado Water Congress (CWC) 2009 Summer Convention is
scheduled for August 19-21, 2009, at the Sheraton Steamboat Resort and Conference Center in
Steamboat Springs. A brief discussion ensued. Mr. Wilkinson asked any Directors interested in
attending the convention to notify staff.

Mr. Wilkinson reported briefly on a legislative proposal to liquidate the Colorado Water
Conservation Board (CWCB) loan portfolio due to the state budget crisis. A general discussion
followed.

Finally, Mr. Jeff Drager, Deputy Manager–Engineering Division, reported briefly on a recent
proposal to provide a portion of the 10,825 acre feet of water for the 15-Mile Reach of the Colorado
River near Grand Junction, from Lake Granby. The proposal is in partial fulfillment of a requirement
under the Upper Colorado River Endangered Fish Recovery Program.

VIII. EXECUTIVE SESSION

President Applegate convened in Executive Session to discuss matters subject to negotiations as
described in Section I of these minutes.

Following the conclusion of the Executive Session, President Applegate reconvened the Northern
Water Board meeting.

There being no further business to come before the Board, President Applegate adjourned the
meeting.



                                                                             President

             Secretary
Page 14                                                       Northern Water Minutes
                                                                       April 10, 2009

ADDITIONAL STAFF AND GUESTS IN ATTENDANCE APRIL 10, 2009

STAFF

Carl Brouwer         Project Management Department Manager
John Budde           Accounting Manager
Deirdre Cochran      Records Scanning Clerk
Marilyn Conley       Allotment Contracts Manager
Jeff Drager          Deputy Manager, Engineering Division
Mark Dowling         Web Content Specialist
Minerva Lee          Human Resources & Administrative Services Department Manager
Katie Melander       Water Resources Engineer
Dale Mitchell        Financial Services Department Manager
Shawn Overgaard      Network Operations & Backup Administrator
Chris Pigg           Records Management Clerk
Karen Rademacher     Senior Water Resources Engineer
Sherri Rasmussen     Allotment Contracts Specialist
Greg Silkensen       Communications and Records Department Assistant Manager
Jim Struble          Real Estate Manager
Brian Werner         Communications and Records Department Manager
Brad Wind            Deputy Manager, Operations Division

GUESTS

Don Ament            Brown & Caldwell
Richard Carlson      Self
Floyd Ciruli         Ciruli Associates
John Gierard         Western Area Power Administration
Jaci Gould           U.S. Bureau of Reclamation
Jim Hibbard          Little Thompson Water District
Diane Hoppe          Montgomery, Watson, Harza
Anne Larson          Self
Julie McKenna        Brandeberry & McKenna, Public Affairs
Chip Paulson         Montgomery, Watson, Harza
Mike Smith           Longs Peak Water District
Richard Wolniewicz   Self

				
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Description: NORTHERN COLORADO WATER CONSERVANCY DISTRICT Dist water