Meeting Summary - Klamath Basin Alternative Dispute Resolution

February 13, 2001



Welcome

Reed Marbut summarized the meeting agenda. He noted that the Negotiation Session was tentatively scheduled for the week of April 23 - 27, to be conducted at OIT in Klamath Falls. The April Negotiation Session would be a follow-up to the June Dividing-the-Waters workshop. The same Dividing-the-Waters facilitators would be available for the April Negotiation Session.

Reed introduced Steve Snyder, one of the Dividing the Waters facilitators, to lead the discussion on whether the conditions were right to proceed with the Negotiation Session as scheduled or should the Session be rescheduled.

Current Status of the ADR and Future ADR Meetings - Steve Snyder

Steve Snyder gave his perspective of what he, as an outsider, sees regarding the ADR process. He noted that he is not affiliated with any party involved in the ADR process. He is a lawyer and mediator. His work is paid for by Dividing the Waters.

He explained his perspective of the Adjudication and ADR, as an outsider. The following items seem to summarize the conditions in the Klamath Basin:

1. There is a chronic shortage of water.

2. The ADR Process appears to be unique and has not been attempted anywhere else in the country. Working relationships have been established between the various interests in the Basin, which is a major achievement. This creates a base that will allow negotiations to proceed.

3. There is a degree of ambivalence among some regarding the state's role in the ADR.

  1. In addition to the adjudication, there are many issues to be addressed in the ADR (ESA, tribal water rights, dam operations, water quality, water shortages in the wildlife refuge, etc.).


Steve said that it appears that the future of the Klamath Basin will be determined by the way these issues are resolved

Steve identified the following factors that could be considered disruptions in the ADR process:

1. The reopening of the U.S. v. Adair suit;

2. The transition from the Clinton to the Bush administration;

3. Contested case hearing schedule;

4. Resolution of water rights claims and contests seem to be approaching critical stages;

5. Linking of the tribal water rights to tribal land restoration;

6. Recent federal action relating to the irrigation season water allocation; and

7. The current ADR process - why are we here, what are we trying to accomplish.

Steve explained that this is what an outsider sees.

Steve described some of the fundamental principles that he feels are applicable to the ADR process.

FACTORS TO CONSIDER IN STRUCTURING NEGOTIATIONS

The ADR serves as a forum for promoting communications, establishing working relationships

The ADR can not force people to negotiate

To obtain something they want that someone else has

To settle a dispute before a court "settles" the dispute for them

To influence the content of a statute or regulation

Water rights issues, which are legal issues

Water management issues, which are policy issues

Creates more opportunities for "win-win" solutions

Significantly complicates the negotiation process

May inhibit water management initiatives

Endangered Species Act negotiations.

Dam operations negotiations.

Settlement of contests independently of water management issues

Can not be discovered without hard work of negotiations

Are sometimes more apparent to an outsider

Are not always possible















OPTIONS

What is necessary to support the Tribe/project irrigators negotiations?

What is necessary to support the Tribe/Williamson irrigators negotiations?

What is necessary to facilitate settlements of upcoming Contests?

What is necessary to convene a negotiation on other issues?

PROMINENT FEATURES

OF THE KLAMATH ADJUDICATION LANDSCAPE

"Neutral" leader of the ADR

Evaluator of water rights

Adjudicator of water rights

Initiator of water management policies

Endangered Species Act

Tribal water rights

Dam operations

Water quality issues

Water shortages in wildlife refuges



Steve then reminded the participants that these thoughts are his perspective as an outsider.

Steve's presentation was interrupted so that Karl Wirkus, U.S. Bureau of Reclamation, could give a report on the 2001 Project operation forecast and endangered species consultations.

Karl reported that the 2001 water supply is not looking good. The most recent NRCS Inflow Forecast is below 50% of average for the year. Statistical indications say that there is less than 5% chance of recovering to average by April 1. They are in the process of doing consultations with the U.S. Fish & Wildlife Service and NMFS. A final biological assessment has been passed on to NMFS. There are commitments from both Fish & Wildlife and NMFS to work through consultations in a timely way so that endangered species are fairly considered in the project operation planning for the year.

The biological data that has been analyzed shows that there are needs for the listed species that must be considered.

Karl said that it is going to be a difficult year. A pilot water acquisition program is being implemented in conjunction with the Water Supply Enhancement Act 2000 (P.L. 106-498).

He said they hope to have the final biological opinions by April 1. They hope to get drafts out in early March and work with the principle interest groups to get some agreements on operations for 2001.

Reed asked Steve Snyder to continue on with the status of the ADR.

Steve asked three questions of the group and recorded meeting participant comments for each question.

Question One: What conditions must be satisfied for April Negotiations to proceed?

1. Stall the Adair case

2. Each party have "position papers" before April Negotiations

3. Define and manage process

4. Rescind last administrative positions

5. All parties be financed

6. Slow adjudication

7. Federal commitment to negotiation in good faith and with authority

8. Balanced expressions from congressional delegation

9. Clarification of confidentiality requirements

10. Guarantees of water deliveries



Question Two: How to address impact of Adair case on April Negotiation?

1. Restore trust

2. Parties meet with tribes on Adair case before April

3. Tribes filed to protect legal position, still willing to negotiate

4. Consider slowing down adjudication

5. Postpone the April Negotiation

6. Speed up the April Negotiation

7. Ignore Adair and proceed

Question Three: Other than what has already been said, what is necessary in order to proceed with April Negotiations?

1. ADR can not ask the adjudicator to slow down, but the parties can.

2. Can federal government come with a unified position? If not April, when?

3. Adequate stakeholder representation

4. Identify long-term needs

5. Broad-based participation

The items listed under each question where offered by the participants in the ADR process. There was an extensive discussion on the items listed above.

Roger Nicholson asked what the State of Oregon's stand was on the Adair case.

Reed Marbut stated that the State opposes the motion by the U.S. to reopen the Adair case. The State's position is based upon the fact that the State believes that the issues raised in the U.S. motion to the Federal District Court in Portland are all addressable in the State adjudication and ADR. He said the they believe that the State adjudication forum is the appropriate place to address these issues. The contested cases, the adjudicator's finding and the Klamath County Circuit Court proceedings all provide adequate proceedings to address the issues raised in the U.S. motion. The State does not agree that the issues will remain unresolved. There is a difference of opinion as to how quickly the issues need to be resolved. The U.S. thinks the issues can be resolved more efficiently in the federal court forum. The State believes it is just as efficient to address the issues in the adjudication and it is not necessary to go to federal court.

Barbara Scott-Brier said that the motion of the US is only a motion for construction (an interpretation of the Adair decision). There is no motion for quantification. They made it very clear in their briefs that they are asking for an interpretation of the courts ruling in the earlier Adair decisions and that the State then would apply those standards in figuring out the quantification of Tribal Rights in the adjudication.

Becky Hatfield-Hyde asked why the Tribes and Federal Government are incapable of holding this off until after the April Negotiations? Why is it so important to press forward at this moment?

Bud Ullman said there was a conference call with the judge a week ago. A hearing on whether or not the Federal Court will even exercise its jurisdiction is scheduled for May 22. This is a threshold issue: Whether or not the Federal Court is going to exercise its jurisdiction and take the case ­ listen to the arguments about water rights. Bud stated that nothing was going to happen with the case before April.

Kip Lombard said that the Federal Judge (Judge Panner) did order those who are opposing the reopening of Adair to file their briefs by March 2.

Steve Snyder asked the group to think about whether or not the April Negotiation Session should or should not take place.

Wally Watkins said he feels that the April Negotiation Session should be postponed.

Steve Snyder stated that the group had three options on the table.

    1. They could have the Negotiations Session and see where things go from there;
    2. Have the hearing in May and then decide whether to proceed with the Negotiations Session; or
    3. Not have the Negotiation Session at all.


    4. Reed said that it had been suggested that if the State agreed to slow down on the adjudication, that the Federal Government would agree to slow down on the Adair Case. Reed emphasized that the ADR process cannot influence the Adjudicator. The Adjudicator cannot be told what to do at anytime. If all the parties in a particular contest get together and go to the hearings officer or the Adjudicator and ask for more time to work out solutions they likely can get a delay.

      Reed suggested that the Administrative Subcommittee meet after the meeting to make sure that what has been said here was an accurate perception by the ASC members. Key players will be asked for help in making a decision about whether to proceed with the Negotiation Session, and if so when. There will be representatives of the Project, Upper Basin, Tribes, environmental groups and federal agencies at the ASC. After this subcommittee meets, a decision will be made whether or not to have the Negotiation Session as tentatively scheduled.

      Ed Bartell suggested that it might be better to discontinue the ADR Process until issues are resolved. He said that a lot people feel the same way. Ed stated that in his opinion the ADR has gone on for three years and nothing has happened.

      Steve Snyder asked what factors people would want the ASC to consider when deciding whether or not to hold the April Negotiating Session.

      Tom Burns asked if there was a way for the federal government to speak with one unified voice.

      Ned Livingston said that if the Negotiation Session is not going to be held in April, the ASC needs to come back with a date that it will happen.

      Kip Lombard said that since the scoping document that has been developed has 16 negotiating chairs at the first tier level, that ASC ought to determine whether or not there is going to be a representative to fill each category at the table and if there are going to be a lot of missing categories, that should factor into their decision about whether to reschedule the Negotiation Session.



      Hydrology Subcommittee Report

      Jonathan LaMarche and Bob Main gave the Hydrology Subcommittee report.

      The hydrology subcommittee reviewed Jonathan's report on "The Effects of Raising Upper Klamath Lake on Water Storage and Distribution between Upper Klamath Lake and Iron Gate Dam". The report was generated in response to the question "How would raising Klamath Lake two feet affect downstream supply?" asked at the November ADR meeting. Jonathan showed the audience a summary of that study. He emphasized that this was a preliminary report.

      Jonathan used the MODSIM model to answer the above question. Two different options for raising Klamath Lake were simulated along with a "no raise" option. In the first option, the increased storage space was modeled as if the dikes around the lake were raised. This was entitled the "raising dikes" option and the increase in storage space was not accompanied by an increase in lake surface area. The other option for increasing the storage space was modeled as if the dikes around the lake were breached. In this "breaching dikes" option the increase in storage space was accompanied by an increase in lake surface area. Finally, a "base case" option was simulated which entailed the current operations of the lake and project area (i.e., no raise in maximum lake elevation).

      The model structure was briefly described as follows.

      Assumptions:

      There are three assumptions that went into the model. They are: 1) That the regulatory environment above Klamath Lake is the status quo. There is no regulation of any users above Klamath Lake including tribal claims. This isolates the effects of increased storage on downstream water supply under the current regulatory conditions. 2) Gerber Reservoir and Clear Lake are operated independently of the Klamath system. No releases from Gerber or Clear Lake are used to meet demands from the Klamath system (including instream flows at Iron Gate). 3) The biological constraints for Klamath Lake and instream flows at Iron Gate are in place and at the 1999 level.

      Operations:

      The model was setup up to mimic fill and release operation as well as downstream demands as depicted in KPOPSIM. This is the Bureau's model that used to forecast how demands are to be met and how the lake is to be operated. Any additional storage space in Klamath Lake will be filled after all downstream demands. In other words, the additional storage space in Klamath Lake would have the most junior priority date of any demands in the basin, and would store excess water after all other demands were met.

      Demands:

      The demands are met in the following order: ESA requirements for lake levels; ESA requirements for instream flows at Irongate; agricultural deliveries; refuge deliveries; additional storage in Klamath Lake.

      The results were described next. Outputs were organized into annual amounts of: Agricultural shortages (project areas A1 & A2); refuge shortages; flows at Irongate; and Klamath lake levels. Jonathan noted that there was very little difference in any of the outputs (mentioned above) between the breaching and raising the dikes option. However, results from the "breaching dikes" option were dependent on extrapolating surface area from the existing area/capacity curve as well as the additional storage capacity being accessible for downstream use. Further topographic information regarding the "breaching dikes" option is needed to conclude this result. For the remainder of the presentation Jonathan compared the raised dikes scenario to the base-case (no increase in storage).

      For average and wet years there was a decrease in shortages to both agricultural and refuge lands over the base-case (no raise) scenario. This was accomplished by capturing more of the spring runoff with the additional storage space, while still meeting instream flow requirements at Iron Gate. Shortages to both agricultural and refuge demands were still present during average years as well as some wet years due to the high instream and out-of-stream demand combined with the lake level requirements.

      The model simulations illustrated that for dry years, the increase in storage space in Klamath Lake does not benefit water supply to downstream uses (instream flows, refuge and agriculture deliveries). During these dry years, inflows were insufficient to fill the additional storage space while still meeting downstream requirements. There was a very limited benefit of "carry over" storage between water years.

      Bob Main noted that this information can be found on the Water Resources Department's web page.

      ftp://www.wrd.state.or.us/pub/studies/klamath-adr/hydrology_model_output/

      The title of the document is "Raising Klamath Lake_Final.doc"

      Contest Hearing Report

      Reed Marbut said that three groups of contests have gone to the hearings officers. Hearings officers are in the process of setting up briefing schedules and pre-hearing conferences, etc. The three groups of contests consist of Park Service, BOR, and US Forest Service Wild & Scenic. Two more groups are going over soon. They are US Forest Service - instream flow and lake levels claims.

      With the 5600 contests that were filed, 2000 of them are in the first five groups that are or will be before the hearing officers in the very near future.

      Reed noted that the hearings officers set their own schedules. The Department cannot participate in trying to change the schedule, but the parties can. If the contestants want to slow things down, they have the right to go the hearings officer and ask for a continuance.

      The Klamath Water Users have filed a motion to consolidate their contests of the BOR claims.

      The State Adjudicator informed Reed that he would not oppose that motion.

      Earl Miller asked what the chances were of getting some negotiation with the State on their contests of their own preliminary evaluations. Reed said that the Adjudicator has indicated that he is ready to discuss with claimants ­ where there was a claim, a preliminary evaluation was issued, and the claimant has filed a contest challenging the preliminary evaluation.



      Legal Subcommittee Report

      Reed Marbut said that the topic of discussion at the subcommittee was the two bills that had been proposed by Water for Life. The bills are SB 17 and SB 18. A hearing date for the bills has not been scheduled. Those interested in SB 17 and SB 18 should notify the legislature that they want to be notified as soon as a hearing date has been set.

      Reed noted that there was no representative for the bills at the Legal Subcommittee meeting.

      The Legal Subcommittee reviewed these bills. The state has some concern with SB 17, and feels that the current statute is adequate and will operate as it always has in the history of the adjudications in the state.

      Ed Bartell said that under the current language, the bond would be impossible because you have to assume total liability. If you assume total liability, you would be looking at least $1 billion.

      Reed said that current law says that the court has discretion to set the amount of the bond or decide whether it is necessary based on a case-by-case assessment of potential damages. SB 17 would restrict this discretion, and may restrict the court's willingness to approve stays secured by damaged bonds.

      Reed asked for a discussed as to what SB 18 does. Under the current language of SB 18, when the adjudication's findings are given to the court, the state begins regulation. That regulation is based on priority date. SB 18 carves out a group of rights that are exempt from regulation, until the decree is issued. There was a disagreement within the Legal Subcommittee as to which rights are carved out.

      Reed said that there are three areas that are previously decreed in the Klamath Basin. They are the upper reaches of the Sprague (east of the boundary of the former reservation ­ North and South Forks of the Sprague), Wood River and its tributaries, Annie Creek, Cherry Creek. Rights were established in those decrees. During the pendency of the findings before the court, under SB 18 those rights would be exempt from regulation. Other members of the Legal Subcommittee thought that it could mean all rights represented by state permits and the above decreed areas.

      Reed said the Department thinks it would be difficult to carve out a group of rights for regulation based upon a criteria unrelated to priority date.

      Ed Bartell said that Water for Life felt it was unfair to regulate prior to it going to court, where the state is having one employee make a decision, which will shut down people's water rights, and thus their livelihood. Ed stated that the lower Basin irrigators feel there is a need to have some immediate enforcement. Water for Life feels that before one employee goes and starts shutting people off, those people should be allowed their day in court. He said that Water for Life feels this is a huge state-wide issue.

      Reed said that the Department is concerned both from a regulatory point of view and that the Department could be opened up to another federal challenge on the state's adjudication process.

      Reed noted that the Department will have a position on the bills that will be carefully researched and will be ready to present testimony if and when a hearing is held. That testimony will be available to anyone on request.

      Updates

      The person that spoke during the first update was unclear. Something about a meeting on March 16.

      Reed said that the City of Bonanza is interested in bringing together people who have an interest in the groundwater/surface water activity in their groundwater aquifer. The City is attempting to schedule a meeting on March 17 (since rescheduled to April 19). The parties involved would be the BOR, City, Langell Valley and Horsefly Irrigation District, Water Resources Department, Health Department and DEQ.

      SB 1010

      Jim Carpenter said that the Headwaters Local Advisory Committee is going to have a public meeting in Chiloquin at the High School Library on March 26.

      There being no further business, the meeting was adjourned.