RESPONSE TO SUMMARY OF CONSULTATION OF FEBRUARY 27, 2012

DISTRICT COURT, WATER DIVISION 5 STATE OF COLORADO, GARFIELD COUNTY COURTHOUSE 109 8TH STREET, SUITE 104 GLENWOOD SPRINGS, CO 81601 Concerning the Application for Water Rights of: COLORADO WATER CONSERVATION BOARD, IN THE COLORADO RIVER, A NATURAL STREAM, IN THE COLORADO HEADWATERS WATERSHED (Confluence with Cabin Creek), IN GRAND & EAGLE COUNTIES, COLORADO. JOHN W. SUTHERS, Attorney General SUSAN J. SCHNEIDER, First Ass t Attorney General* 1525 Sherman Street, 7 th Floor Denver, CO 80203 303-866-5046 Registration Number: 19961 Email: susan.schneider@state.co.us *Counsel of Record COURT USE ONLY Case No.: 20011CW159 Div.: 5 RESPONSE TO SUMMARY OF CONSULTATION OF FEBRUARY 27, 2012 The Colorado Water Conservation Board ( Applicant or CWCB ), by and through undersigned counsel, hereby submits its Response to the Summary of Consultation filed by the Engineer on February 27, 2012. The Applicant responds as follows: Concerns Paragraph 11 in the Application contains a covenant that the Applicant will not file a statement of opposition under certain circumstances and reserves rights as well. The Applicant must explain, in detail, the effect of this covenant. Additionally, the Applicant must explain: (1) how this covenant would work in actuality; (2) enforcement of such covenant; and (3) whether or not it is appropriate for any ruling to contain such covenant. Response The Upper Colorado Wild and Scenic Stakeholder Group ( Stakeholder Group ) met over the course of many years to develop a Management Plan Alternative to potential federal determinations that certain Colorado River segments are suitable for designation under the Wild and Scenic River Act. The diverse Stakeholder Group, along with CWCB Staff, Colorado Parks and Wildlife (CPW), and the Attorney General s Office, developed and agreed to a

recommendation to the CWCB to appropriate an instream flow water right ( ISF ) on the Colorado River between Kremmling and Dotsero. The ISF is a key component of the Management Plan Alternative and will help to protect a number of Outstandingly Remarkable Values associated with the River. One of the many recommendations made to the CWCB was to include the language in Paragraph 11 in the Application, as referenced in the Engineer s Summary of Consultation (hereinafter referred to as Covenant ). Paragraph 11 states: The CWCB agrees not to file a statement of opposition to adjudications of water rights made after the date of this filing that: (1) result in depletions that do not exceed 100 acre feet; or (2) are for changes of water rights that do not seek to change more than 2500 acre feet, provided such changes of water rights do not involve an exchange through the subject ISF reaches; and (3) do not exceed a total 1% depletive effect on the instream flow right decreed herein in accordance with the de minimis Rule 8e of the Rules Concerning the Instream Flow and Natural Lake Level Program. This term and condition does not preclude the CWCB from enforcing this ISF appropriation in accordance with the priority system. The CWCB may also evaluate any water court applications made after the date of this filing to determine whether they are appropriate for application of the Injury with Mitigation Rule 8i.(3) of the Rules Concerning the Instream Flow and Natural Lake Level Program. (Emphasis added). This Covenant can be enforced and is appropriate for this ISF decree because it is a slight modification, but mostly a restatement of Rule 8e. (De Minimis Rule) of the Rules Concerning the Instream Flow and Natural Lake Level Program, 2 CCR 408-2. The operation and enforcement of the Covenant would be the same as that of Rule 8e. Rule 8e states: In the event that Staff determines a water court application would result in a 1 percent depletive effect or less on the stream reach or lake subject of the ISF right, and the stream reach or lake has not been excluded from this rule pursuant to Rules 8f. or 8h., Staff shall determine whether to file a Statement of Opposition. Staff s decision not to file a Statement of Opposition does not constitute: (1) acceptance by the Board of injury to any potentially affected ISF water right; or (2) a waiver of the Board s right to place an administrative call for any ISF water right. (1) If Staff does not file a Statement of Opposition, Staff shall notify the Engineer for the relevant water division that it has not filed a Statement of Opposition, but that it may place an administrative call for the potentially affected ISF water right(s). Such a call could be enforced against the water 2

right(s) subject of the application by the Engineer in his or her enforcement discretion. Staff also shall mail a letter to the applicant at the address provided on the application notifying the applicant: (a) of Staff s decision not to file a Statement of Opposition pursuant to this Rule; (b) that the CWCB may place a call for its ISF water rights to be administered within the prior appropriation system; and (c) that the Engineer s enforcement of the call could result in curtailment or other administration of the subject water right(s). (2) If Staff files a Statement of Opposition, Staff shall seek Board ratification by identifying and summarizing the Statement of Opposition on the Board meeting consent agenda pursuant to Rule 8c. Generally, the Covenant that the CWCB agrees not to file statements of opposition to certain applications for water rights, but is not precluded from enforcing this ISF appropriation is in accordance with Rule 8e. and the priority system. Under both the Covenant and Rule 8e., the CWCB agrees not to file a statement of opposition to certain applications for water rights, but does not agree to accept injury to an ISF or waive its right to place a call. It would be cost prohibitive for a water user to get into every water court case in order to prevent injury to his or her water right. Thus, a water user may choose not to enter into a case and instead may rely on the priority system to ensure that his or her water right is administered properly. Similarly, for water users, having multiple objectors in a case increases the costs of litigation. Under these provisions in the Covenant, the ISF would be administered in the same manner as it would be without these provisions. Specifically, the Covenant that the CWCB agrees not to file statements of opposition to water rights applications that would result in depletions that do not exceed 100 acre-feet or are for changes of water rights that do not seek to change more than 2500 acre-feet is only a slight revision from Rule 8e. because under the Covenant, even if these water rights do not exceed the above-stated amount, they also cannot exceed a total 1% depletive effect on the ISF water right. Further, the CWCB is still not agreeing to accept injury to an ISF or waive its right to place a call under the Covenant. The language in the Covenant that the CWCB may also evaluate any water court applications made after the date of this filing to determine whether they are appropriate for application of the Injury with Mitigation Rule 8i.(3) of the Rules Concerning the Instream Flow and Natural Lake Level Program can be enforced because it is merely a restatement of Rule 8i.(3), which this Court has ruled is a valid use of the CWCB s authority in Case No. 07CW210, Application for Water Rights for Vail Associates, Inc. The provisions in the Covenant are appropriate for this ISF decree because they restate the CWCB s rules for the benefit of those water users who may not be familiar with the Rules and because they are the result of long-term negotiations among the Stakeholder Group participants, who carefully crafted and agreed upon the specific language. 3

Respectfully submitted this 3 rd day of May, 2012. JOHN W. SUTHERS Attorney General E-filed pursuant to C.R.C.P. 121. Duly signed original on file at the Office of the Attorney General. /s/ Susan J. Schneider SUSAN J. SCHNEIDER #19961 First Assistant Attorney General Natural Resources and Environment Section Attorneys for Colorado Water Conservation Board Counsel of Record 4

CERTIFICATE OF SERVICE I hereby certify that on the 3 rd day of May, 2012, I caused a true and correct copy of the foregoing to be served electronically via LexisNexis File & Serve to each of the following: Party Name Party Type Attorney Firm Dingess, John Duncan Ostrander & Dingess AURORA, CITY OF M PC BOARD OF COMMISSIONERS FOR Other GRAND COUNTY BOARD OF COMMISSIONERS FOR Other GRAND COUNTY DENVER ACTING BY AND DENVER ACTING BY AND DENVER ACTING BY AND DENVER ACTING BY AND COLORADO SPRINGS, CITY OF COLORADO WATER Applicant CONSERVATION BOARD DIV. 5 ENGINEER Engineer HOMESTAKE PARTNERSHIP HOMESTAKE PARTNERSHIP MIDDLE PARK WATER CONSERVANCY DISTRICT Taussig, David C Pemberton, Mitra M Funk, Casey S Walker, Michael L Sibree, Anne E Arnold, Daniel J 5 White & Jankowski LLP White & Jankowski LLP Gustafson, Michael J Colorado Springs Utilities Schneider, Susan J CO Attorney General 5 5 Engineer Water Engineer Ohlsen, Karl D Carlson Hammond & Paddock LLC Hammond, Carlson Hammond & Mary Mead Paddock LLC Cazier, Stanley W Cazier McGowan & Walker

MIDDLE PARK WATER CONSERVANCY DISTRICT STATE ENGINEER State Engineer Walker, John D Cazier McGowan & Walker State Water Engineer, Colorado State Engineers Office Signed original on file with the Office of the Attorney General for the State of Colorado. /s/ Lou Leone 6