2012 Annual Report Adding water to Upper French Creek Photo by Peter Thamer

2012 Annual Report Adding water to Upper French Creek Photo by Peter Thamer

Table of Contents Introduction Letter from the President 2 Water Year Type 3 Comparison of Water Years 5 Activities Water Leasing 6 Water Volumes 6 Water Pricing 6 Total Lease Cost 6 Summer & Fall Lease Tables 8 Map of all 2012 Leases 9 Map of 2012 Fall Leases 10 Six Year Summary 11 Monitoring Results: Summary 13 Isolated Pools: Kidder Creek Assessment 14 Instream Permitting: 1707 Case Study 15 Pasture Grass Demonstration 15 Outreach Efforts 15 Finances Profit & Loss Statement 16 Balance Sheet: Assets & Liabilities 16 Funders Sources 17 Expenditure of grant funds by source 17 Getting Things Done Board of Directors & Officers 18 Advisory Committee 18 Staff 18 Partners 18 Special Thanks 18 Contact Information 19 Disclaimer 19 1

~ Letter from the President ~ Welcome to the Scott River Water Trust's 2012 Annual Report. The Trust was formally established as a 501(c)(3) non-profit organization in 2009 and is the first and only water trust in California. The Trust has been carrying on its program since 2007 and during this period the activities of the Water Trust have provided for improved over-summering habitat for young coho salmon and steelhead in key tributary reaches and adult Chinook salmon spawning passage in the Scott River mainstem in the fall through our innovative water leasing program. By compensating active water rights holders for their loss of water to benefit salmon and steelhead, the Trust believes its efforts could constitute a long-term solution to conflicts between beneficial agricultural water use and beneficial water use for fish habitat and passage. As 2012 was a Dry Water Year type, the base price of $55 per acre-foot for this year type was used for summer water, while $25 per acre-foot was used for fall leases during the stockwater season. The summer leasing program leased a total of 349.5 acre-feet of water from 5 different sites on French Creek and 1 site on Shackleford Creek, creating an instream habitat benefit for at least 4.9 stream miles. The fall program leased 1,147.4 acrefeet at 3 sites, including a new one, on the mainstem to benefit 54 miles of the Scott River for spawning. A summary of the past 6 years of the Water Trust Program s leasing efforts is also included in this report. Monitoring was performed this year by two independent contractors, Peter Thamer and Sue Maurer. Instream and ditch flow measurements were supplemented with dive surveys to confirm fish presence and use of habitat below our lease sites. Sue s underwater photos provide a glimpse of a fish-eye s perspective of what the added water contributes. With new monitoring equipment purchased for the Trust, proposed protocols were tested on several lease sites as part of the NFWF-CIG project. As another new venture, we assessed the effects on Kidder Creek s isolated pools in a reach below a diversion. In 2012, the Trust was pleased to see that 87% of the large 9,352 Chinook salmon run were able to spawn in the valley. While a minimal count, the 201 coho adults returning to the Scott represented a 250% increase for this brood year (over the 2009 count). The Water Trust believes it is providing a valuable and viable solution to resolving issues between State water rights and State public trust fish resources and can provide a conceptual model for solutions in other areas of the State. We, again, thank all of the many people and organizations involved with the Trust for their on-going efforts and support. Best regards, Jim De Pree President, Scott River Water Trust 2

Water Year Type: Dry Following the wet 2011 season, this year returned to a dry weather pattern. Far below average was the precipitation for the months of October, November, December and February. While January was normal and March and April were above average, their precipitation amounts were not able to bring the year up to normal. This pattern of rainfall is reflected in Figure 1 below, where the daily mean discharge at the USGS gage below Scott Valley was consistently below the median value. In Fort Jones, only 16.42 inches of precipitation occurred, or 75% of average (table 1). Snowpack was half of normal in February and March. Despite a near normal April and May snowpack, the cumulative effect was not enough to sustain average runoff patterns into the summer once the snowmelt came off by June. However, as of May 1 st, a near normal water year was anticipated. Figure 1. Water Year 2012: Oct. 1, 2011 through Sept. 30, 2012 Surplus water rights were cut off by the Watermaster by July10th for French Creek and July 3 rd for Shackleford Creek. Lower Shackleford Creek became disconnected at the mouth a few days later. As is typical in all water years, the alluvial fan reaches of Kidder Creek, Patterson Creek, and Etna Creek became dry by early summer as well as the dredger tailings reach below Callahan. Scott River s flow dropped rapidly in July to 43 cfs by Aug.1. 3

Flow on October 1 st was 18 cfs, with short sections of the Scott River disconnected above and below Fort Jones. However, the river was fully connected by October 20 th up to the tailings reach, allowing the Chinook salmon run to have full spawning access to river mile 52. Drought conditions persisted through October and part of November, until two storm events on Nov. 19-20 and Nov. 28-Dec. 5 created two runoff peaks that finally leveled off to the near average flow of 300 cfs by the end of December. These storms created flow connection through the tailings and through the alluvial fan reaches of the affected tributaries. Figure 2. Fall 2012 and start of Water Year 2013: Oct. 1, 2012 through Dec. 31, 2012 4

Comparison of Water Years Since the Water Trust began its operations in 2007, it has experienced the full range of hydrologic conditions based on annual rainfall and snowpack (Table 1). Determining the type of water year depends upon both factors. Drought has predominated this period: 4 of the past 6 years have been dry to critically dry. Table 1. Precipitation & Snowpack in Scott Valley, 2007-2012 Water Year Precipitation at Fort Jones inches % ave. Snowpack Water Content May 1 st % ave. Water Year Type 2007 17.02 78% 52% (Apr) DRY 2008 18.36 84% 138% DRY 2009 14.43 66% 42% CRITICALLY DRY 2010 13.70 63% 194% BELOW NORMAL 2011 23.19 106% 171% WET 2012 16.42 75% 91% DRY Source: California Data Exchange Center (CDEC) As can be seen in the graph below, low flows less than 20 cfs in the Scott River dominated the summer periods for four years, with 2009 the most prolonged. Lack of fall rains delayed tributary connections through alluvial fan reaches in most years. Figure 3. Comparison of Water Years, Oct. 1 2007 to Dec. 31, 2012 5

Activities Water Leasing Water Volume: The Water Trust leased a total of 349.5 acre-feet of water during 2012 from 5 different sites on French Creek and 1 on Shackleford Creek. Water Pricing: Lease costs are based on the Income Capitalization Approach developed by WestWater Research for the Water Trust in 2007 and updated, as needed. The base price can fluctuate, depending upon critical factors affecting agricultural return rates. Price varies by water year type, with supply-demand economics increasing the value as conditions get drier: Wet>Normal>Dry>Critically Dry. Incentive pricing was added for Early Sign-up and Extended Habitat: SUMMER = $55.00 per acre-foot base price, which assumed a Normal water year as of May. A $5 per acre-foot premium was available for each adjacent property that participated in the lease program, up to a maximum of $75.00 per acre-foot for five adjacent lease sites. This incentive is intended to allow water to remain instream for increasingly longer stretches, maximizing biological values. An Early Sign-up Bonus of 10% (not to exceed $250) was added if forbearance agreements were signed by July 1 st. FALL = $25.00 per acre-foot price (up from $21.00/ last year). Total Lease Cost: Summer = $ 20,848 Fall = $27,438 TOTAL = $48,286 Summary of Transactions: # Streams Leased (Summer): 2 (French Creek & Shackleford Creek) # leases: Summer =6; Fall = 3 # adjacent leases = 2 pairs (summer) # acre-feet: Summer = 349.5 ; Fall = 1,147.4 # cfs (range): Summer = cfs per reach; Fall = 20-24 cfs added # stream miles benefited: Summer = 25,650 feet or 4.9 miles; Fall = 54 miles # days leased: Summer = 17 to 86 days; Fall = 10-43 days 6

Figure 4. Scott River at confluence with French Creek Figure 5. Monitoring contractor measuring pool depths in Kidder Creek 7

Stream / Tributary / Diversion No. Date Began Table 2. 2012 Summer Leases Date Ended Flow Leased (cfs) Volume Leased (acre-feet) Distance of benefit (feet) French Creek #20 Aug. 31 Sept. 30 0.6 36.0 2,600 #33 Miners Ck* Aug. 17 Sept. 30 0.4-0.5 40.0 7,000 #36 Miners Ck* Aug. 9 Sept. 30 0.25 26.5 2,500 (+3,500 FC) #47A ** Sept. 13 Sept. 30 0.4 13.6 1,000 #48 ** July 18 Sept. 30 0.76 113.0 5,050 Shackleford Creek #14 Mill Ck Aug. 6 Oct. 31 0.7 120.4 4,000 TOTAL 17-86 days 3.1 cfs 349.5 acre-feet *, ** - adjacent diversions 25,650 ft (4.9 miles) Stream / Tributary / Diversion No. Scott River / 223-13-D2 (2 leases) Scott River / 196-13-D2 Scott River / Date Began Table 3. 2012 Fall Leases Date Ended Flow Leased (cfs) Volume Leased (acre-feet) Distance of benefit (miles) Oct. 1 Nov. 13 8-10 800.0 47 Sept. 25 Nov. 13 1.3 127.4 4 Nov. 13 Nov. 23 11.0 220.0 54 183-15-D1 TOTAL 10-43 days ~20-24 cfs 1,147.4 acre-feet 54 miles 8

Figure 6 Locations of all 2012 water lease sites 9

Figure 7 Locations of 2012 fall water lease sites 10

Six Year Summary Table 4. Scott River Water Trust Annual Lease Summary, 2007 through 2012. 2007 2008 2009 2010 2011 2012 TOTAL Water Year Type Dry Dry Critically Below Wet Dry 4 / 2 Dry Normal # leases 8 9 9 5 5 10 46 obtained Summer Amount 324 330.3 278.6 314.5 180.8 349.5 1,777.7 acre-feet Summer Habitat 3.7 miles 4.4 miles 6.1 miles 3.7 miles 3.3 miles 4.9 miles 26.1 miles Summer Lease $16,105 $16,525 $15,975 $17,852 $9,240 $20,848 $96,545 Cost Fall Amount 250 279.6 480.6 0 720.0 1,147.4 2,877.6 acre-feet Fall Lease Cost $3,900 $5,071 $10,093 0 $18,000 $27,438 $64,502 Winter Amount 50 0 0 0 0 0 50 Winter Cost $903 0 0 0 0 0 $903 Total Lease Costs $20,908 $21,596 $26,068 $17,852 $27,240 $48,286 $161,195 Figure 8. Volume of summer water leased for 2007-2012 (in acre-feet). Less water was available in critically dry 2009 while less water was needed in wet 2011. 11

Figure 9. Miles of stream habitat with added flow benefit for 2007-2012. Note that 2009 was Critically Dry while 2011 was a Wet water year. Figure 10. Volume of water leased in Fall, 2007-2012 (in acre-feet). No water was leased in 2010 due to sufficient flows in the Scott River, while in wet 2011, the lease was primarily needed to assess the CIG monitoring methods. 12

2012 Monitoring Results: Summary [see Website for full report] Monitoring was performed this year by two independent contractors, Peter Thamer and Sue Maurer. In addition to our regular monitoring methods, the Water Trust also tested on two sites certain instream monitoring protocols proposed by the National Fish and Wildlife Foundation (NFWF) as part of their Conservation Incentive Grant from the Natural Resource Conservation Service. Monitoring equipment was obtained for the Trust. Results from the more intensive NFWF-CIG assessment are reported separately. Juvenile coho salmon and steelhead use was confirmed through snorkel surveys for the French Creek and Shackleford Creek summer lease sites. Adult coho spawners had also been observed in these streams last winter. The photo below shows a fish-eye view of one of the pools benefitting from added water to French Creek, providing home for numerous young coho and steelhead in late summer. Figure 11. Lower French Creek pool with juvenile coho and steelhead, 9-6-12 Upstream migration for Chinook and coho salmon spawners was likely improved by leasing all stockwater diversions. Streamflow was only 18 cfs at the USGS gage at river mile 21, with short disconnected sections above, but had increased to 50 cfs by Nov. 1. Significant rainfall did not occur until Nov. 20 th, after the Chinook spawning was done but during the coho run. The graph below indicates the relative numbers of Chinook that spawned in the canyon (below river mile 18, location of the CDFW weir) and in the valley above for the past 6 years. If flows were inadequate during their spawning run, one would expect the 13

# adult Coho SCOTT RIVER WATER TRUST majority of the numbers to be in the canyon. In 2012, 87% of the Chinook run reached above the canyon past the weir. For the 2012 salmon spawning season, the Scott River produced 9,352 Chinook salmon (quite above average) and a minimum of 201 coho salmon (a 250% increase for this brood year). Comparisons of annual coho populations in the Scott since the Water Trust began are depicted in the following graph, with weaker brood years increasing. 1800 1600 1400 1200 1000 800 600 400 200 0 Scott River COHO Salmon Spawners: 3 Brood Years 1622 911 344 201* 62 81 2007 2008 2009 2010 2011 2012 Isolated Pools: Kidder Creek Assessment An Isolated Pools strategy was adopted to see if added water can help reduce the risk of juvenile coho dying when stranded in isolated pools below diversions in chronically 14

dry reaches. Kidder Creek below Barker Ditch was the focus of a special assessment. Instream Permitting using State 1707 Process California water law provides for adding instream use as a benefit to an existing water right under State Water Code section 1707. The Water Trust, with the help of a grant from the Bella Vista Foundation, demonstrated the use of this process on French Creek to see if it can effectively and affordably be applied in Scott Valley. To help improve the 1707 process, the Executive Director is working with a loose coalition of organizations also seeking to expedite small, voluntary instream transfers in California. Pasture Grass Demonstration A grant from the Bella Vista Foundation is allowing the Trust to demonstrate the use of three drought tolerant pasture grass varieties as a tool to help conserve water instream. Two ranches have signed on for the demonstration. Several years will be needed to establish the new stand and then to assess how well these varieties succeed without irrigation in late summer. Outreach During 2012, the Executive Director conducted the following outreach efforts: Presentations to: NFWF-PacifiCorp workshop (Yreka), Western Water Transaction Workshop (Reno), Etna High s Natural Resource class, UCCE (Davis), CARCD conference (San Diego); Scott Valley Rotary Club Publicity: Press release on 2011 season with articles in Siskiyou Daily News Website: Updates made to the News Blog and webpages: www.scottwatertrust.org Figure 12. Site visit in June for NFWF-PacifiCorp grant. Exec. Director Sari Sommarstrom in hat. 15

Finances INCOME: PROFIT & LOSS STATEMENT 2012 1/1/12 through 12/31/12 National Fish & Wildlife Foundation - Coho Enhancement Fund (CEF) $46,050.22 National Fish & Wildlife Foundation - Conservation Incentive Grant (CIG) $21,588.40 U.S. Fish and Wildlife Service $ 2,000.72 Total Income: $69,638.62 EXPENSES: Office $ 453.22 Insurance $ 1,400.00 Tax Preparation $ 100.00 Travel $ 1,726.51 Professional Services $27,923.25 Monitoring Equipment: $ 5,630.41 Monitoring Supplies & Materials $ 560.57 Water Leases $ 21,336.00 Total Expenses: $ 59,129.96 Net Gain: $10,508.66 BALANCE SHEET 2012 1/1/12 through 12/31/12 ASSETS: Current Assets: Checking Account: $23,964.54 Monitoring Equipment: $ 5,630.41 Total Assets: $29,594.95 LIABILITY AND EQUITY: Equity: Opening balance 1/1/2012: $13,455.88 Net gain, 2012: $16,139.07 Total Equity: $29,594.95 Total Liability and Equity: $29,594.95 Two other grants administered by Siskiyou RCD are not reflected in the above financial statements. 16

Funders The Scott River Water Trust received its 501(c)(3) tax exempt status from the IRS on August 6, 2009 (EIN # 01-0924657) and an exempt acknowledgement letter from the California Franchise Tax Board on October 15, 2009. Until that time, the Water Trust Program had need for fiscal agents to administer its grants, some of which continue. A total of $100,983.53 in grants supported the Water Trust s activities in 2012 when the Siskiyou RCD, acting as fiscal agent for several older grants, sources are included. Funding was gratefully continued or received from the following sources: Bella Vista Foundation National Fish and Wildlife Foundation (NFWF) PacifiCorp Coho Enhancement Fund (CEF) NRCS Conservation Incentive Grant (CIG) U.S. Fish and Wildlife Service (USFWS) Siskiyou Resource Conservation District (as fiscal agent) California Department of Water Resources (DWR) Prop. 50 NOAA National Marine Fisheries Service -- Restoration Center In-Kind Volunteer Donations Scott River Water Trust Board of Directors Scott River Water Trust Advisory Committee Scott River Water Trust Executive Director Figure 13. Expenditure of grant funds by source, 2012. Total = $100,983.53 17

Getting Things Done Board of Directors & Officers Jim De Pree, President, retired Siskiyou Co. Natural Resource Policy Advisor Marilyn Seward, Secretary and Chief Financial Officer, Etna City Council Brad Erickson, Scott Valley farmer Dave Krell, Engineer and Etna Brewery owner Peter Yolles, CEO of WaterSmart, San Francisco Advisory Committee Rick Barnes, Rancher, Siskiyou RCD board Mike Bryan, Rancher, Scott River Watershed Council Greg Farnam, Rancher, Siskiyou RCD board Steve Orloff, Irrigated Crops Specialist, U.C. Cooperative Extension Mark Pisano (until 3/12) and Jennifer Bull, Fishery Biologists, California Dept. of Fish and Game John Spencer, Rancher, Siskiyou RCD board Staff Sari Sommarstrom, Ph.D., Executive Director (as contractor) Peter Thamer, monitoring contractor Sue Maurer, monitoring contractor Partners California Department of Fish and Game (CDFG) National Fish & Wildlife Foundation (NFWF) Natural Resource Conservation Service (NRCS) NOAA-Fisheries /National Marine Fisheries Service (NOAA) PacifiCorp Siskiyou Resource Conservation District (RCD) University of California Cooperative Extension (UCCE) U.S. Fish and Wildlife Service (USFWS) Special Thanks to: Danielle Yokel, Siskiyou Resource Conservation District Joe Scott, California Dept. of Water Resources John Clements, Scott & Shasta Valleys Watermaster District (GEI Consultants) Matts Jopson, Webmaster Morgan Knechtle, California Dept. of Fish and Game Mary Olswang, California Dept. of Fish and Game Rankin Holmes, Ecosystem Economics, consultant to NFWF-CIG All of the landowner participants in our water lease program! 18

Contact Information Executive Director: Sari Sommarstrom (until 6/20/13) Mailing Address: P.O. Box 219, Etna, CA 96027 Street Address: 311 Collier Way #3, Etna, CA 96027 Phone: (530) 467-5783 Fax: (530) 467-3908 E-mail: sari@sisqtel.net Website: www.scottwatertrust.org Disclaimer The views and conclusions contained in this document are those of the authors and should not be interpreted as representing the opinions or policies of any entity that provides funds to the Contractor through this Contract, including the National Fish and Wildlife Foundation. Mention of trade names or commercial products does not constitute their endorsement by the National Fish and Wildlife Foundation. 19