To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Heather Justus, P.G., Water Resources Project Manager
Title
Update on Water Court Cases [Cases located in Douglas County, Weld County and other areas near the Lower South Platte River]
Body
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Executive Summary
Acquiring, changing, using and protecting the Town’s water rights is a key component of the Town’s long-term renewable water plan as well as an important aspect of managing our groundwater rights. This requires the Town to file applications in Water Court and file oppositions where an application by another entity has the potential to injure the Town’s water rights. The Town is continuing to contract with Lyons Gaddis as our water attorneys and W.W. Wheeler Associates for water resources consulting support. The purpose of this memorandum is to update Town Council on the Town’s current Water Court cases.
The Town currently has six active cases where we are the applicant. Three of the cases are part of our long-term renewable water plan. One of the cases is for a change in the point of quantification. One of the cases is diligence for water rights, and the other is to change tributary (renewable) underground water rights. There is one active case in which the Town is an intervenor and another that we are a plaintiff. There are seven cases that the Town is or was opposing that could injure our water rights. These cases are summarized in Attachment A with additional details in the following discussion.
To date in 2022, Castle Rock Water has spent just under $478,000 of our budgeted $800,000 on this work. In 2023, Castle Rock Water has budgeted $500,000 for legal and water resources consulting fees. We have one planned water court application in 2023, the due diligence for Chatfield Reservoir Case 2016CW3102 which is due on January 31, 2023.
Discussion
The Town has six active Water Court Cases in which the Town is the applicant. These cases are summarized below:
1. 19CW3231 - This case was filed December 13, 2019. This is an augmentation plan application for the Box Elder Creek Well Field, which will allow the Town to divert water at the Box Elder Creek Well Field for municipal use as well as a change of junior water rights and conditional water rights. This case is before the Water Referee and has multiple opposers. There are twelve opposers remaining in the case and nine opposers have stipulated. Trial is anticipated in the second half of 2023. If successful, this augmentation plan would allow for an additional 2,500 AF of supply to the Town on an annual basis from our Box Elder Creek property.
To date, the Town has spent $1,400,430 on this case and 19CW3232 (collectively known as the Box Elder Project) between legal fees and water resources consulting fees. Discussions with our Legal Counsel indicate that it may take an additional $300,000 of work in 2023.
2. 21CW3142 - This case was filed August 26, 2021. This is an application to change the tributary underground water rights decreed in Case No. 85CW480 on East Plum Creek. The water rights are associated with alluvial wells AL-1 through AL-20 for withdrawal from the East Plum Creek alluvium. The Town seeks an alternate point of diversion, alternate place of storage and a change of place of use of the remaining conditional amounts. The proposed alternate points of diversion and storage are the Plum Creek Diversion for direct use, and for storage in Castle Rock Reservoir Nos. 1 and 2, Plum Creek Reservoir and Rueter-Hess Reservoir. In addition, the Town would like to divert the conditional rights at the Plum Creek Diversion and discharge the conditional water rights before beneficial use for subsequent storage at Chatfield Reservoir. The case is before the Water Referee. The opposer comments were due 11/18/22 with a status conference scheduled for 11/30/22. There are 10 opposers and we have stipulated with one.
To date the Town has spent $24,438 on this case between legal and water resources consulting fees.
3. 21CW3185 - This case was filed on October 25, 2021. This is an application for a conditional storage right on the South Platte River at (a future) Fremont Butte Reservoir. The case is before the Water Referee. The Town’s case is trailing Parker and Lower South Platte’s Case No. 19CW3253. This is a project with Parker Water and Sanitation District that would divert water from the lower South Platte River and pipe it south and west to Rueter-Hess for delivery to Parker and the Town. A status conference is scheduled for 12/14/22. There are 36 opposers.
To date the Town has spent $13,834 on this case between legal and water resources consulting fees.
4. 22CW3064 - This case was filed on April 29, 2022. The purpose of this case is to determine diligence for exchanges on Plum Creek and its tributaries. This case originates from Case No. 2012CW296. There is one opposer and stipulation is expected to be filed on 12/5/2022.
To date the Town has spent $7,965 on this case between legal and water resources consulting fees.
5. 22CW3150 - This case was filed on October 26, 2022. The Town seeks to move the High Line Water Rights point of quantification on East Plum Creek to a new location. The change is necessary because beaver dams have made the existing location unsuitable for river administration. No other changes to the decreed water rights were requested. Statements of opposition are due on 12/31/22.
To date the Town has spent $3,547 on this case between legal and water resources consulting fees.
6. 22CW3155 - This case was filed on October 27, 2022. In this case, Applicant seeks conditional rights of appropriative right of exchange on Plum Creek and East Plum Creek to reuse and successively use to extinction the Fremont Butte Water Rights (21CW3185) for all decreed purposes after the first use in Applicant’s municipal system. Statements of opposition are due on 12/31/22.
To date the Town has spent $1,746 on this case between legal and water resources consulting fees.
The Town has one pending case in which we are an intervenor. The case is known as Parker v. Rein Case No. 21CW3046. The question is related to whether or not nontributary groundwater is subject to a total allowed withdrawal. This question concerns the Town’s deep Denver Basin groundwater and the legal ability to continue to withdraw water in the legislatively defined “average annual amount” in perpetuity or until the supply has been exhausted. Judge Taylor entered a partial judgment and an additional motion for ruling is pending before the Judge. The trial is set for June 26, 2023 and expected to last for five days. To date the Town has spent $95,068 on this case and previous work opposing the proposed nontributary rules leading up to this case for legal fees. In addition, the Town filed Castle Rock V. Rein Case No. 22CW3145. The case is currently under a Motion to stay pending the outcome of 21CW3046. The decision is due back on 11/8/2022. To date the Town has spent $6,225 on this case.
The Town has seven current active cases where the Town is an opposer. Costs for opposition to date in 2022 have been $32,000. Costs are typically on the order of $55,000 annually. These cases are summarized below:
1. 19CW3211 - The Town was an opposer in the Parker Water & Sanitation District’s (PWSD) expansion of nontributary well fields. The Town was opposing this case because it may have caused injury to the Town’s water rights adjacent to Parker’s groundwater and well fields. The Town wanted to make sure that the application contained the appropriate protective terms and conditions. Time on the docket has expired, and the Town stipulated with Parker successfully ensuring the appropriate protective terms and conditions. The trial is set for October 2023.
2. 19CW3253 - The Town is currently an opposer in the PWSD and Lower South Platte Water Conservancy District’s storage rights, appropriative rights of exchange and change of water rights on the South Platte near Box Elder Creek. This case is before the Water Judge. The trial is set for January 2024. The Town is opposing this case because it may cause injury to the Town’s water rights on the South Platte River and Box Elder Creek, and this case has a competing appropriation date with the Town’s case (19CW3231). It is also important to note that Castle Rock may partner with PWSD on the project which is related to this water court case, the Logan Farms Project.
3. 20CW3214 - The Town is currently an opposer in the State Land Board, Rangeview Metropolitan District and Pure Cycle application to change conditional water rights and amend their augmentation plan. The case is currently before the Water Judge. The trial is set for January 2024 with a status conference on 12/14/23. Town is opposing this case because it may cause injury to the Town’s water rights on Box Elder Creek in Case No. 19CW3231.
4. 21CW3022 - The Town is currently an opposer in the Lloyd Land application for change of water rights and approval of an augmentation plan. This case is before the Water Referee. The Town is opposing this case due to potential injury to the Town’s water rights in Case No. 19CW3231.
5. 21CW3193 - The Town is currently an opposer in the Central Colorado Water Conservancy District’s application for appropriative rights of exchange and approval of augmentation plan including exchanges. The case is before the Water Referee The status conference is scheduled for December 14, 2022. Castle Rock’s comments are due back 12/2/22. The Town is opposing this case due to potential injury to Castle Rock’s water rights in Case No. 19CW3231.
6. 22CW13 (21CW3216) - The Town is protesting the State and Division Engineers including the Young Wells to the abandonment list. This could cause injury to the High Line Ditch water rights.
7. 22CW3032 - The Town is currently an opposer to the Dakan Ranch II application for conditional water storage right. The case is currently before the Water Referee. Castle Rock’s comments were due November 18, 2022. A status conference is scheduled for 12/13/22. There is a potential for injury to Castle Rock’s senior water rights on West Plum Creek.
Budget Impact
In the annual budgeting process, Castle Rock Water budgets money for Legal Services related to Water Court cases, other water resource legal matters, and Intergovernmental Agreement negotiations. Castle Rock Water also budgets money for water resources consulting services related to support of Water Court cases and the Town’s water rights, water resources planning and evaluation, preparation of technical memos and engineering reports, water rights accounting, and other as-directed matters. In total, the Town budgeted $800,000 for Water Court cases in 2022. The Town has spent a total of $477,788 on legal services and water resources consulting services in 2022, of which $253,137 was spent on our Box Elder case. In 2021, a total of $436,788 was spent on services related to Water Court cases.
Staff Recommendation
Staff recommends continuing to file and work water court cases as the applicant, which will provide maximum benefit for use of our water rights, and file cases as an opposer where our water rights could be impacted. Where we are the applicant, the goal is to obtain stipulations from opposers as quickly as possible while being protective of the Town’s water rights. On cases we oppose, we want to stipulate as early as possible but we must make sure we can do this while protecting our rights. Staff will continue to keep Council updated regarding active Water Court cases on an annual basis.
Attachments
Attachment A: Summary of Cases