How a Water District that Wasn’t Needed Had a Board that Wasn’t Legal & Tried to Take Half of a River for Technology that Doesn’t Exist

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Update: I added an article from the Grand Junction Daily Sentinel. Scroll down to the bottom.

Here’s the release from Western Resource Advocates (Jason Bane):

The Colorado Supreme Court heard oral arguments today [November 7] in a case that has significant implications for the entire State of Colorado. The Yellow Jacket Water Conservancy District (YJWCD) of Rio Blanco County is appealing a Water Court ruling that strips the district of massive amounts of water rights intended to be leased for oil shale production.

Today’s hearing comes just weeks after local residents filed a separate lawsuit alleging that the YJWCD is unlawfully taking budget action that has left the district hundreds of thousands of dollars in debt.

“This is an odd situation to say the least,” said Rob Harris, Staff Attorney for Western Resource Advocates. “We’re talking about a water district that isn’t needed, run by a board that wasn’t legal, trying to gather water rights equal to half of the White River—all to meet the theoretical demands of an oil shale technology that doesn’t exist.”

In 2009, the board of the YJWCD filed water court applications equal to almost half of the White River—with the expressed intent to lease that water for potential oil shale production. In 2011, Western Resource Advocates and a coalition of local residents, business owners, ranchers, and others (the Coalition) challenged the legality of these water rights applications. The YJWCD board voluntarily abandoned half of the contested water rights in the face of opposition, and the Coalition filed a legal challenge in regards to the other half.

“The timeline is clear, and so is the law in this case,” said Mike Sawyer, one of the attorneys representing the Coalition group. “The Yellow Jacket board didn’t have a valid board to approve new office supplies, let alone a water rights application.”

In July 2011, the Colorado Water Court stripped the YJWCD of the remaining contested water rights. Because only four of the nine seats on the YJWCD board were legally occupied in Sept. 2009, the board had no legal quorum when it filed for the contested water rights. After the Water Court denied a “Motion for Reconsideration” in Sept. 2011, the YJWCD filed an appeal to the Colorado Supreme Court.

The Colorado Supreme Court did not render a decision following today’s oral arguments, but is expected to issue a written opinion within the next several months.

On Oct. 18, two local residents and landowners filed a lawsuit against the YJWCD. Joe Livingston and Ted Edmonds are plaintiffs, which alleges (among other things) that the board has violated Colorado Budget Laws and TABOR requirements in running a debt that had reached ($142,257) by the end of 2011.

“I take great offense that the board isn’t following the law yet continues to spend my tax dollars to no end,” said Livingston, whose family has owned and operated Big Beaver Ranch near Meeker since 1941. “It’s absolutely ridiculous.”

ABOUT THE YELLOW JACKET WATER CONSERVANCY DISTRICT

The YJWCD was created in 1959 with the intent of acquiring water rights that could be leased for future oil and gas production. Most of the district’s income is from a Rio Blanco County mill levy. The YJWCD does not own or operate any water facilities—it exists solely for the purpose of acquiring water rights. Since its inception, the district has spent hundreds of thousands of taxpayer dollars trying to adjudicate water rights for the oil shale industry.

TIMELINE OF EVENTS

- Oct. 2008: Terms of office expire for four of the nine YJWCD board members.
- Sept. 2009: YJWCD submits diligence filings for certain water rights, despite the fact that only four of the nine YJWCD could authorize the filings (a fifth member of the board had resigned in Spring 2009).
- April 2011: Western Resource Advocates joins a local coalition to file a Motion for Summary Judgment, arguing that the YJWCD board did not have a legal quorum to approve a water rights application.
- July 2011: Colorado Water Court grants the Coalition’s “Motion for Summary Judgment,” and cancels the contested water rights application.
- July 2011: Yellow Jacket files “Motion for Reconsideration” with Water Court.
- Sept. 2011: Water Court denies “Motion for Reconsideration”
- March 2012: YJWCD submits appeal for hearing by Colorado Supreme Court
- Nov. 7, 2012: Colorado Supreme Court hears oral arguments from appeal.

More coverage from Bruce Finley writing for The Denver Post. Here’s an excerpt:

Colorado’s Supreme Court on Wednesday heard oral arguments by the Yellow Jacket Water Conservancy District, which is challenging a state water court’s decision rejecting its rights to 140,000 acre-feet of water from the river — water that otherwise would flow into the Green and Colorado rivers.

Yellow Jacket has proposed to build reservoirs east of Meeker to store the water and make it available to oil and gas companies. The district also is talking with towns and irrigators, Yellow Jacket attorney Sarah Klahn said after the hearing.

“There’s plenty of water in the White River,” Klahn said. “There ought to be an effort to keep water in this state, rather than letting it flow downstream to California.”

A coalition of residents whose taxes fund Yellow Jacket, a governmental district, opposes the project…

Justice Greg Hobbs questioned whether holdover status of board members could be a basis for forfeiting water property rights. Hobbs also asked why board members failed to fill positions…

The court is expected to issue a written decision in a couple months.

More coverage from Gary Harmon writing for The Grand Junction Daily Sentinel:

Colorado’s highest court is considering a challenge to the water rights held by a Meeker-area water conservancy district for eventual use in energy development.

Yellow Jacket Water Conservancy District is appealing a water court finding that canceled its right to about 140,000 acre-feet water in the upper White River Basin.

The trial court had agreed with Western Resource Advocates in a lawsuit that when Yellow Jacket filed an application to maintain its rights, the action was invalid because some members of the Yellow Jacket board of directors had yet to be reappointed.

Oral arguments were conducted on Wednesday in Denver.

The district appropriated the industrial rights in the 1960s with an eye to using them in the event oil shale development took off.

While there was always an understanding that the district, which collects $30,000 a year from property taxes, would partner with private industry to develop reservoirs.

No such arrangement, however, exists, Glenwood Springs water attorney Scott Grosscup said., adding that the district’s efforts are aimed at “establishing resources to protect the White River Basin when there is demand” for water by oil shale development.

While attorneys for the district said the suit amounted to an argument over a technicality, Western Resource Advocates attorney Rob Harris said there is more to it.

“We’re talking about a water district that isn’t needed, running a board that wasn’t legal trying to gather water rights equal to half of the White River,” Harris said, “all to meet the theoretical demands of an oil shale technology that doesn’t yet exist.”

Yellow Jacket’s attorney, Sarah Klahn, said Western Resource Advocates was “whipsawed” by precedent that allows Yellow Jacket to proceed with showing due diligence.

Companies not registered with the Secretary of State’s Office have been found to have filed valid reports with the water court, Klahn said.

“Where in Colorado water law does it say you have to have a fully appointed board as a precondition of a water- rights application?” Klahn said.

The problem of having board members sitting on the board past the end of their terms has been rectified with their reappointment by district court, Klahn said.

Appeals of water court rulings go directly to the state Supreme Court and no schedule for a ruling was set.

More water law coverage here and here.

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