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Dry Gulch case: back to water court

And the legal battle over Dry Gulch water rights rages on.

On Monday (Nov. 2), the Colorado Supreme Court rendered a second decision on appeal in the case, Pagosa Area Water and Sanitation District and San Juan Water Conservancy District v. Trout Unlimited, and for the second time, both sides have claimed partial victory.

In this most recent ruling, the high court upheld the districts’ 50-year planning horizon decreed by Judge Gregory G. Lyman of District Court, Water Division 7 in a September 2008 ruling, and endorsed the districts’ planning approach to maintain a one-year water safety supply margin in its storage reservoirs.

For a second time, however, the Supreme Court also remanded the case back to the District 7 Water Court for additional evidence regarding specified decree provisions and determination of “water amounts reasonably necessary to serve the districts’ reasonably anticipated needs in the 2055 period, above its current water supply.”

An Advance Sheet Headnote preceding the Nov. 2 decree states, “On remand from the Supreme Court’s decision in Pagosa I, the District Court for Water Division No. 7 entered a conditional decree for the Pagosa Area Water and Sanitation District and the San Juan Water Conservancy District based upon a planning period extending to the year 2055. In this appeal, Trout Unlimited contends that the planning period should extend only to the year 2040. The Supreme Court upholds the Water Court’s finding that the 2055 planning period is reasonable, but agrees with Trout Unlimited that current evidence in the record does not support the conditionally-decreed amounts of water.”

In a press release issued Tuesday, a districts representative stated, “In its opinion, the Supreme Court endorsed statewide water rights planning efforts recently coordinated by the Colorado Water Conservation Board. The Supreme Court opinion also linked land use planning requirements recently enacted by the Colorado General Assembly to water court determinations of conditional water rights. In doing so, the Court introduced unprecedented legal elements into future water court determinations.

“Additional trial before the Water Court will enable the Districts to extend their evidence of long-term growth patterns within Archuleta County in support of their 50-year water rights planning horizon and to demonstrate the actual reliability of water rights upon which the Districts currently depend.”

Based on last year’s remand process and the added requirements for additional evidence and testimony, the districts believe a final settlement could take at least another year and cost taxpayers thousands more in ongoing legal expenses.

Meanwhile, due to the inherent length of time required to plan and permit a complex reservoir project, and the fact that the first phase of the project — an expanded and upgraded Snowball treatment plant — will be necessary in the next four to six years, the districts will continue planning based on regular annual review of water demand projections and the need to improve aging infrastructure.

From TU’s point of view, however, the Supreme Court decision reinforced the principle that Colorado municipalities must base water projects on clearly demonstrated and credible projections of future need.

“The Supreme Court reaffirmed today that it will not tolerate public utilities speculating in water,” said Drew Peternell, director of TU’s Colorado Water Project, who argued the case before the state’s highest court. “This is a victory for reality-based water planning.”

A TU press release touted the latest decision as, “ ... the second time Trout Unlimited has challenged the district water court’s decrees in the so-called Dry Gulch case — and the second time it has won.”

In September 2008, Judge Lyman decreed water and storage rights to the districts, sufficient to accommodate a future Dry Gulch Reservoir up to 25,300 acre feet in size. The decree included maximum fill and refill diversions from the San Juan River of 150 cubic feet per second (cfs).

In effect, the decree reduced the judge’s earlier ruling that would have allowed a maximum impoundment of 35,300 acre feet, with fill and refill diversions from the San Juan River totaling 180 cfs. In late 2006, TU appealed that decision to the state Supreme Court, which reversed Lyman’s findings and remanded the case back to him for reevaluation of the districts’ future water needs.

In its most recent appeal, TU argued that the districts’ revised figures were still not in line with credible future water use projections and amounted to speculation. In Monday’s decision, the high court unanimously agreed, finding insufficient evidence to support the quantities of water Lyman awarded, either in direct flow rights or storage.

In its decree, the Supreme Court ruled that the 23,500-acre-foot size approved by the water court is based on “speculative claims, at least in part.”

In response, TU insists that, “Unless the Pagosa districts can now demonstrate a ‘substantial probability’ that a reservoir of that size is needed to meet future needs, the water court must reduce the amount of their claimed water.”

TU went on to say, “We’re ready to talk with the Pagosa Springs stakeholders and craft a solution that meets a range of valid needs, including municipal growth, agriculture and recreation and wildlife. But any solution has to be based on credible, substantiated numbers about future water supply and needs.”