Water Conservancy board will consider request
The amount of water available for a proposed sale from a Winthrop ranch to a private company will be documented in a draft report that is expected to be presented to the Okanogan Water Conservancy Board at its meeting in December.
The report, called a “Record of Examination (ROE),” provides detailed information that is intended to prove how much water is available for purchase, said John Hubbard, chairman of the Water Conservancy Board.
The draft ROE is being prepared by a Wenatchee water attorney working for the Lundgren Limited Family Partnership on the East Chewuch Road. The Lundgrens have entered into an agreement to sell water rights to Crown Columbia Water Resources LLC, a subsidiary of a New York-based real estate investment firm.
The Lundgrens, who operate a cattle ranch and guest house near the end of East Chewuch Road, own surface water rights from the Chewuch River. Crown Columbia has proposed to purchase water rights from the Lundgrens and transfer up to 33 cubic feet per second (cfs) of water and up to 255.2 acre-feet per year (afy) into the state Trust Water Program. The Lundgrens would continue to use 184.8 afy for irrigation, according to the application submitted by Crown Columbia in June.
The water right placed in the Trust Water Program would be held for potential future use at any point downstream of the Chewuch River diversion, as far as the mouth of the Columbia River, according to the Crown Columbia application. Crown Columbia describes itself as a water banking operation that holds a portfolio of water rights to offset future use downstream.
The proposed sale of the Lundgren water has generated considerable interest, with 74 comments — nearly all in opposition to the application — submitted to the Water Conservancy Board by individuals and organizations during a July public comment period. Among the objectors is the Chewuch Canal Company, which takes up to 34 cfs from the Chewuch River to provide irrigation water to 183 shareholders.
Under a contract drafted in 1910 when the canal was built, the irrigation company provides water from its diversion for $1 per year to the property now owned by the Lundgrens. The irrigation company has argued that the proposed transfer of 33 cfs, of the total 34 cfs diverted from the river, “dramatically overstates” the amount of water available through the Lundgren water claim.
Marc Marquis, the attorney working for the Lundgrens, said in a previous Water Conservancy Board meeting that the amount of water that will be requested after the ROE is completed is likely to be less than the 33 cfs stated in the application. He said the application based the quantify of water available for sale on the water claim document, which he described as the landowner’s “best guess” of the amount of water available.
Natalie Kuehler, a Winthrop attorney representing the Chewuch Canal Company, submitted an objection to the water sale application last summer on the grounds that the quantity of water described in the application “is significantly smaller than the maximum amount the Lundgren’s water claim provides for.”
In the irrigation company’s objection, Kuehler also said allocating “a disproportionate proportion” of the water withdrawn from the Chewuch River would “directly and irrevocably impair the CCC’s own water right” and could leave the company’s 183 shareholders with virtually no water.
Kuehler brought up another potential issue in a letter sent in August to Marquis. One of the water claims proposed for transfer into the state Trust Water Program, based on the date it was registered with the state, cannot impair previously existing water rights, including regulatory instream flows for the Chewuch and Methow Rivers.
That means that when the Chewuch River drops below minimum instream flows during summer months, the water would not be available for use downstream, Kuehler said.
“If the water right is interruptible … it remains interruptible no matter where you divert the water. In other words, when minimum instream flows aren’t met in the Chewuch, even if you leave the water in the river all the way down the Columbia, you still can’t use it during those times when the river is below minimum levels at the water right’s original location,” Kuehler said.
“This means that you can’t make a right un-interruptible simply by transferring it out of the basin with insufficient water and into one with plenty of flow.”
If it is determined that the right is interruptible, it could make the value of that water, held in the state water banking program, less valuable, said Roger Rowatt, president of the Chewuch Canal Company. “An interruptible right is worth pennies on the dollar versus a non-interruptible right,” Rowatt said. “If you are selling it to a hops farmer in the Yakima Valley for big bucks, he can’t turn his irrigation off every time the Chewuch hits a certain level.”
Hubbard, conservancy board chairman, said whether the water right is interruptible “has no bearing … in terms of the decision we make” on the application.
As part of its evaluation of the application, the Water Conservancy Board conducted a site inspection of the Lundgren property and the irrigation diversion in September. The inspection included Marquis, representing the Lundgrens, Mark Miller, a conservancy board member, and property owner Don Lundgren.
The Chewuch Canal Company’s president, Roger Rowatt, requested verbally and in writing to be included, but was not informed when the site visit took place. “Obviously the Chewuch Canal Company has a vested interest,” Rowatt said in a recent interview.
In an email to Kuehler after the site visit, Marquis said that Lundgren “expressed that he is not interested in granting unauthorized persons access to his private property. Although the canal company does have an easement (on the property) for the canal, participating in the board’s site visit is beyond the scope of that easement.”
Kuehler said she was “unclear as to whether or not Roger’s exclusion from the site visit was appropriate.” The canal company is “a party with standing (that) has objected to the application and has specifically requested to be part of the site visit … It certainly doesn’t instill any trust in the process” since it allowed the applicants “to have a private one-on-one with one of the very people who will be deciding the outcome of the application,” she said.
No quick decision
Records of Examination typically rely on a variety of information to prove how much water is physically and legally available for sale or transfer, including photographs of irrigated lands, irrigation system pumping and electrical records, historical evidence and affidavits. Marquis said he is using power data for support the Lundgren’s current water use.
“Converting to power data to water use is a straightforward exercise,” Marquis said in an email to Kuehler. “The bigger challenge is quantifying the extent of his (Lundgren’s) historic use that has been perfected and remains valid. It is the difference between the perfected historic use and current use that should be available for trust.” A water right that is established by continuous beneficial use is considered “perfected,” as defined by the state Department of Ecology.
Hubbard said he expected the board to begin reviewing the draft Record of Examination if it is submitted at the board’s next monthly meeting on Dec. 5, but does not anticipate any decision on the application soon.
“We will review it and scrutinize it [the ROE]. It takes some time to study,” Hubbard said. The conservancy board can reject, accept or revise applications, he said. Applications that are accepted by the board are sent on to the Department of Ecology, which makes final decisions on applications. The local conservancy board is “an arm” of Ecology, Hubbard said.
Lisa de Vera, clerk of the board, said the board often asks for more detail in the examination, and when the board is ready to sign off, it issues a “Record of Decision” that is sent to Ecology. “It’s really just their blessing. The board has no authority.”
Because of the amount of water requested in the application by Crown Columbia Resources — 33 cfs — the application requires preparation of a State Environmental Protection Act (SEPA) checklist, de Vera said. The ROE and the SEPA checklist will be available to the public when they are submitted, and the SEPA process will include a public comment period, de Vera said.
De Vera said this is the first application large enough to require a SEPA during her five years of working for the Okanogan Water Conservancy Board. She said the Crown Columbia application has also generated more public interest than other applications she has seen during her time as clerk.
Crown Columbia Resources is a subsidiary of Petrus Partners Ltd., based in New York City, which invests in real estate and farmland. Crown Columbia controls 50,000 acre-feet of water in the Columbia-Snake River Basin, according to the Petrus website. About half of the firm’s investment capital comes from retired partners of Goldman, Sachs & Co., the website states.