March 15, 2001

Welcome

Reed Marbut thanked everyone for coming and encouraged people that were new, to sign-in so they can be sure to received future ADR mailings.

Reed noted that the U.S. Fish and Wildlife's Draft 2001 Biological Opinion is available. You can contact Jim Bryant at the Bureau of Reclamation in Klamath Falls for a copy.

Senator Gordon Smith has scheduled a congressional hearing in Washington D.C. on March 21, 2001. The Water Resources Department will prepare testimony which will be presented at the hearing.

Negotiation Session (Postponement and rescheduling options)

Reed distributed a handout about the Dividing the Waters Organization. The central mission of the Dividing the Waters project is to exchange information on stream adjudications and other water-related litigation.

Since its inception in 1993, the project has pursued five goals:

• To share information about how the different states and courts have structured and conducted stream adjudications and other complex water law litigation;
• To discuss some of the major problems judges confront in conducting these adjudications and cases;
• To discuss what works and what does not work so that others do not have to make the same mistakes;
• To benefit from the expertise of resource people who are involved in the many subject areas touched by these cases; and
• To enable judges, masters, and referees to meet one another and develop lasting personal and professional relationships.

State trial judges have been most directly served by this project, although state appellate judges, federal trial and appellate judges, and U.S. Supreme Court special masters are becoming more involved in project activities.

From 1993 to 1997, Dividing the Waters received funding from the Ford Foundation. On April 14, 1997, the William and Flora Hewlett Foundation made a generous three-year grant that overlapped the final months of the Ford grant. Hewlett awarded a second grant through January 2003. The General Service Foundation of Aspen, Colorado, granted funds for the calendar year 2000, and the project has applied for a second grant. In addition, the project is pursuing additional funding from other foundations.

Due to the many, complex and timely water issues in the Klamath Basin, the Dividing the Waters Organization became interested in helping with the Klamath Alternative Dispute Resolution program. On June 27 & 28, 2000, Dividing the Waters sponsored a workshop for stakeholders in the Klamath Adjudication. Due to the positive results from that workshop, Dividing the Waters decided to provide funding for an actual settlement session in the Klamath Basin. This was the Negotiation Session that was tentatively scheduled for April, 2001. Due to a number of new and changed circumstances, that Negotiation Session continues to be put on hold.

Reed noted that at the February, 2001 ADR meeting, the Administrative Subcommittee, in working with the facilitator, Steve Snyder, decided that the participants were not ready to proceed with the formal negotiation session. More preparation needed to be done. Dividing the Water continues to be committed to fund the services of the facilitators, Steve Snyder and Lucy Moore. The facilitators will provide a report before the next meeting to discuss whether or not to proceed with the Negotiation Session. When the Session happens, it will likely last close to a week and will consist of a core negotiating team with constituent groups breaking for caucus meetings. The idea is to try to get settlement of as many major issues in the Basin as possible.

Dividing the Waters will be providing the funding for the facilitator for the proposed Negotiation Session.

Reed gave a brief history of the adjudication process.

Kip Lombard commented that a pre-hearing conference on the contests involving the Forest Service Claims has been held and a briefing schedule has been established. The Parks Service claims are scheduled for pre-hearing conference on March 22, 2001; the Bureau of Reclamation pre-hearing conference was scheduled for the following week.

Reed stated that the process is progressing. It is an active adjudication and appears to be moving forward.

A decision needs to be made about whether or not there needs to be some form of settlement effort (negotiation session, negotiation groups, etc.).

From the State's point of view, the ADR had the following three goals when the process started:

1. To exchange information;

2. To settle contests; and

3. If possible, to address some of the bigger, Basin-wide issues (e.g., Clean Water, ESA, etc.).

The Framework that the Klamath Tribe has developed, addresses those goals that were initially addressed at the beginning of the ADR.

Reed encourages anyone with suggestions about how to modify the meeting process to make it more focused and productive, to let him know.

Bill Kennedy asked how committed people were to the process and to come up with a negotiated settlement. Especially when they take action that is contrary to the interests of others in the process. Reed noted that this question should be addressed during the portion of the meeting when the Tribes discuss their framework agreement.

U.S. Bureau of Reclamation "Demand Reduction" Program Report

Jim Bryant said the Demand Reduction Program has 560 proposals to idle land, ranging in size from 15 acres to 3000 acres. The offers were grouped based on what type of crop would be planted over the next year. The Bureau then tried to figure out how much water that crop would use during the irrigation season. After some calculations, they were able to come up with the cost per acre-foot of water. Then they went up the line until they ran out of money, which was approximately $4 million. They ended up with 170 out of the 560 proposals that fit the criteria. Those contracts were mailed out March 9, 2001. The Bureau must have the contracts completed and signed by March 23, 2001. The 170 contracts consist of approximately 16,000 acres and roughly 30,000 acre-feet of water.

The well purchase program has been more difficult. It is to hard to determine how much water is available when not all of the wells have been drilled. The Bureau hopes to know more by the end of March. The State's permitting process has an impact on the wells also. Until the Governor declares a drought, limited licenses or temporary permits are harder to get.

At this time, the contracted water supply is very small. Things are changing and well water may or may not produce all that was hoped for. Initially the Bureau was hoping for approximately 50,000 acre-feet of water from groundwater in addition to the 30,000 acre-feet from the Demand Reduction contracts.

A participant asked were the wells were located geographically. Jim said that a majority of the wells are located in the Tule Lake area, up against the east side of the Basin near the J Canal; several in Langell Valley; a couple in the Klamath Valley. All are located within the Project.

A participant asked about the remaining 390 proposals. Jim said that letters were sent out to them.

Jim said that there was a press release from PacifiCorp that is adopting a program that will allow the buy back of power from wells and irrigators. The problem is that it doesn't include the Klamath Basin.

A participant asked what the average cost per acre was of the 170 contracts. Jim said he thought it was $150-160 per acre-foot, which would be approximately $350 per acre. He said to call the Bureau for a more accurate figure.

U.S. Bureau of Reclamation - Update on 2001 Operation

Jim Bryant said that on March 1, the Bureau's 70% exceedance values for in flows to Klamath Lake were around 40%. On March 14, 2001, the Bureau received an updated mid-month forecast from NRCS, those values were at 30%. The weather service predicts that the weather is going to be dry for the rest of March.

Jim said that until they get the downstream flow model, the overall operation of the project and also the impact of the demand reduction and the well water, it is to early to say what will happen. They hope to have everything done by April 1, 2001.

Bill Kennedy asked about the flows that are coming out of Link River.

Jim said that the flows out of Link River are a function of the Irongate flows. He said that the Bureau is still operating out of the 2000-2001 Operating Plan which set the flows at 1300 cfs through April 1. That is why the 2001 Operating Plan is needed by April 1. He said that everyone would be kept advised.

A participant asked if the 170 conservation proposals are going to have the answers they need to make a decision whether or not to accept or reject the proposal, since the information they need won't be out until after April 1. Jim said he can't speak for the farmer. He said that there is currently enough information to at least some kind of idea what is going on.

Klamath Tribe Framework Principles of Agreement ­ Preliminary Discussion

Kip Lombard said that he was appreciative that the Tribe has submitted another framework proposal that might work as a framework for continued negotiations. He said that he thinks it is premature to spend any time on this. Because the Dividing the Waters report won't be available until April, the future of the negotiations are unknown at this time. Kip said that due to people venting and posturing and positioning on issues that really aren't very constructive. Rather than getting into that process, it would be better to table to discussion until after the report from Dividing the Waters in April.

Ed Bartell seconded that motion.

Reed explained what his intentions were for this portion of the meeting. He did not put the Framework on the agenda to debate the particulars, but for those people who had questions.

Bud Ullman said that the intention of this meeting was to walk through the Framework at whatever pace was appropriate. He said they want to make sure that people understand what the Tribes are saying by putting forth the Framework Principles of Agreement. He hopes that this effort will allow participants an opportunity to better understand the concepts the Tribe is putting forth.

Ed Bartell said that until people can see something in writing that will actually provide for something besides their extermination, there isn't anything to talk about.

Roger Nicholson said that there isn't any difference in what the Tribes have brought forth compared to what has been seen or heard continually, which has gone nowhere. When it was first proposed, there were commitments from the Tribes which have been broken. He says that it should be ended now.

Bud said that this document is not something that proposes the cessation of irrigation or irrigated agriculture. He said that there are some serious misunderstandings. He would like to have the opportunity to address these misunderstandings.

Reed announced that Roger Nicholson had brought a summary and some of the documentation of the Adair case to the meeting (copies are available).

Kip Lombard said that those opposing the reconsideration of the Adair case are to have the briefs in by May 5, 2001. The reply briefs are due a month later. The hearing is scheduled for July 23, 2001.

Reed let members of the audience know that if they were not interested in the discussion on the Tribes Framework Agreement, they did not have to stay.

Ed Bartell said that just because something is said in the ADR, doesn't make it admissible in court.

There was a great deal of discussion as to whether or not to listen to the Tribes' Framework Principles of Agreement.

Bob Hunter, WaterWatch, explained what his lawsuit was about. It is the assurance that the processes being required by law occur and are followed and completed in a timely fashion.

Steve Kirk told the group there were FLIR reports available on their web site. You can find this reports at http:\\waterquality.deq.state.or.us.

Reed discussed the groundwater development in the project. He said that existing wells become a point of diversion for a right for the Bureau to pump and use that water, in lieu of using stored water. The goal is to have most of the water instream for fish so less stored water (i.e. Gerber, Clear Lake and upper Klamath Lake) goes downstream for fish. It will be used to augment fish flows. In other cases, the wells will be pumped into irrigation systems and reducing the demand on the surface water. Either the Bureau gets a water right to do this, or, if there is a drought declaration, they get a drought permit. It is a new water right using a new source of water that is a groundwater aquifer.

When the State of Oregon gets an application from the Bureau or anyone else, a hydro-geologic review of that well is done and a determination is made whether using the groundwater from that well at that location out of that aquifer, will deplete surface water flows. If the answer is yes, they are not allowed to proceed. If the answer is no, they will be allowed to proceed with conditions to protect other wells in the area. If other wells in the area begin to dry up or decline substantially, then the right would be cutoff because it is junior to the existing groundwater rights in the vicinity.

Bill Kennedy asked whether or not a limited license can be used for anything but what the groundwater use is?

Reed said that a limited license can be used for almost anything but irrigation.

A participant asked how is Oregon going to address the issue of the wells on the California side of the Basin that are affecting the groundwater on the Oregon side. Reed said that California has a similar situation on the California/Nevada border. He said that if Oregonians feel they are impacted, they should notify the Department so that California can be notified in order to work something out.

Alice Kilham said that California is aware of Oregon's situation. She said that she feels California will be willing to work things out if a problem should arise.

Klamath Tribe Framework Principles of Agreement ­ Ullman Summary

Bud Ullman, attorney for the Klamath Tribes, said that the Tribes are prepared to negotiate and have not taken a hard position on any of the settlement points now on the table. Nothing that the tribal officials have said should be taken as an implication that the Tribes think that irrigated agriculture is not an essential component of the Klamath community.

Bud briefly discussed the Adair case and the 60 day notice the Tribes filed on the ESA §7 consultation . He said that the Tribes believe the issues raised in Adair and the ESA litigation could be settled as a part of an ADR agreement. The Tribes felt that it was necessary to revisit the Adair issues because of the State's interpretation of the Tribes' water rights.

Bud asked whether or not anyone cares about what the Federal or State Courts or the Adjudicator eventually decides about the Tribes' water right. He said the Tribes do not care. What they care about it restoring a balanced healthy Klamath Basin that will support everyone's livelihood. If that can be accomplished through the Framework Principles of Agreement or something similar, then the Adair and Adjudication can be scrapped. The same thing is true with the ESA. Because the clock is ticking, the Tribes had to take the step of insisting that new biological opinion under the ESA be completed. The ADR is the forum that offers the opportunity to solve everything at once.

The Tribes are being told they have a junior water right based on the State's legal opinion, but they feel like the federal courts have said the Tribes have a senior right. This issue needs to be determined as soon as possible. These are steps that anybody facing what the Tribes are facing would take. Everything that is put at issue in the Adair case needs to be ironed out. The Tribes are putting forward, a proposal to try to settle these issues.

Before Bud began going over the Agreement, Bill Kennedy asked where this document fits in with respect to the Bureau of Indian Affairs (BIA). Bud said that the Agreement has been shared the BIA. He said that BIA hasn't said anything other than go for it. The BIA has not expressed any difficulties with the Agreement.

Bud went over the Framework Principles of Agreement section by section. Below is an account of the discussions.

I. Tributaries to Upper Klamath Lake

Bud went over each item one by one. Below is a summary of the comments for each item. If there was no discussion, the item number will denote this. Attached is a copy of the Framework Principles of Agreement.

Item 1.

Bud said the Tribes are willing to let existing water uses continue.

Kip Lombard asked what happens when the other measures are put in place, with regards to the temporary subordination issue.

Bud said that the goal is that when the other measures are in place, the Tribes water right will not need to defer to anyone. He said the idea is that if the Tribes get agreement on everything else, they can let existing water uses continue.

Earl Miller clarified by saying that the agreement would be a permanent subordination versus a temporary subordination. Bud agreed with Earl.

Bud jumped ahead to page 2, number 11. He said that all participants need to develop something that everyone can agree to. He said that these Principles of Agreement are things that are put forth because there is a need to be discussed and included in the settlement. If people are willing to discussion these issues, then everyone should go forward and with the negotiation discussion. If people don't want to discuss issues, then there we have a basic negotiation problem. If people are willing to talk about a timetable for achievement of measurement goals, to achieve the Tribes' goals, then something can probably be worked out.

Kip asked if it determined that some of the programs are not achievable, primarily due to the lack of control by the parties, can it be assumed that, within the Tribes, negotiation structure, there will be some recognition or adjustment for those types of situations.

Bud said yes. The most important thing is to identify those things up front, to the extent that we can, and build in contingency plans. Have it be practical and something that everyone can agree on.

Item 2.

Bud said that the Tribes want to see more flow in the stream. There is a need to figure out how to keep the water in the stream and not be diverted.

Ed Bartell feels there is a concern.

Bud said that there needs to be a way to rebuild streamflows.

Ed said that the Basin has been rebuilding streamflows, and that their reward is getting sued. They have been rebuilding streamflows by putting in fish ladders, etc.

Bud said that they applaud all of the things that are being done. It needs to be done in a way that the Tribes can rely on and know they are going to get the benefit. It won't work for the Tribes if all of this done solely under the people that others are working with now. The Tribes would like to talk with people about how much is being done and the time table.

Item 3.

Tribes need a common, agreed upon definition of "legitimate existing consumptive uses."

Earl Miller asked if people must have a permit or certificate to prove their water right.

Bud said, yes, a permit or certificate. Any other documentation of a water right, would need to be defined.

Kip clarified that part of the negotiation in defining "legitimate" or similar terms.

Bud said that the Tribes are ready to enter that discussion to talk with anyone about amount of water use. Anyone who is using twice the duty that the state says is appropriate on their land will need to understand that the Tribes need cooperation in reducing excessive, wasteful water uses.

Bill Kennedy said that people can interpret data differently and that it is going to be important for parties involved to come to an agreement.

Item 4.

Screening and fish passage needs to be accomplished in an effective way with an eye to cost and sources of funding.

Item 5.

The Tribes want to work with people to come up with plans that restore the health of the streams.

Item 6.

Participants need to know where the water is going. Water users need to use only what can be beneficially and reasonably used. Measuring devices need to be installed and used. Annual reports need to be made and a system developed that will keep track of all uses.

Item 7.

There needs to be enforcement on a level that encourages voluntary compliance.

Wally Watkins asked what the Tribes proposal is regarding water regulation. The county currently has only one watermaster. Bud said that they want to work the Water Resources Department to develop a coordinated and effective enforcement function. Reed said that there is an assumption that once the regulation starts under the Adjudication, there will need to be a watermaster, assistant watermaster and possibly a federally funded watermaster (similar to the Umatilla Basin).

Ed Bartell expressed concern with having the Tribes regulating water uses.

Bud said that the structure needs to be discussed. He understands that there will be resistance to the Tribes having any authority over non-tribal members. The tribes do want to have an effective enforcement authority on the ground. It doesn't have to be the Tribes, just effective enforcement authority.

Reed clarified that legally there are only two authorities to regulate water. One is through the State of Oregon and the other is federal watermaster or marshall.

Item 8.

Bud said that a program must be developed so that for water rights that are retired, the water goes back into the stream and stays in the stream.

Earl Miller asked if land is purchased that has a 1965 priority date, then is it possible for that water right can be converted to time immemorial ahead of everyone else.

Bud said that may be what is necessary to restore the streamflows. He wants to make this effective for everyone. There is a need to have a program that rebuilds streamflows. He said they are willing to defer that until they are able to retire water rights. There needs to be people who are willing to part with their water rights. This system needs to allow the water to be returned to the stream to rebuild the streamflow.

Item 9.

Bud said that people need to get together and figure out what can be done. He feels that some streamflow restoration can be achieved by improving the efficiency.

Item10.

Bud said that this is something that is long overdue in the Basin.

Item11.

Bud said again, people need to work together.

II. Klamath Allottees

Bud said that the Allottees claims will be treated like any other consumptive use claims.

III. Klamath River Mainstem

Item 1.

The Tribes will agree to refrain from exercising their senior water rights as against legitimate existing consumptive pre-1997 water uses while other measures provided for in the agreement are put in place.

Item 2.

Management of streamflows below Iron Gate will include strategies that do not consider fixed flows for the Klamath River.

IV. Upper Klamath Lake; Klamath Project Irrigation; Refuge Lease Lands

Item 1.

This is the flexibility in the lake level that people say they need in order to reach a settlement.

Item 2.

The tribes can live with flexible lake levels if the other issues in the agreement are put in place.

Item 3.

This is something the project users wanted.

Item 4.

No discussion.

Item 5.

The Tribes agree that this should continue.

Item 6.

The Tribes feel that the people who don't agree need to talk to one another. The Tribes will only move positions forward that they believe will be acceptable to a significant majority of parties.

V. Endangered Species Act ("ESA")

Item 1.

The general principle is: if everything that is in an agreement is fleshed out and put in place, it should take care of the ESA issues in the Basin.

Item 2.

The agreement will result in the avoidance of take of listed species by consumptive use in those tributaries.

Item 3.

A biological opinion will be issued on all federal actions in the agreement including but not limited to operations of the Klamath Project.

Someone asked if there is a concept for a habitat conservation plan (HCP) for the whole Upper and Lower Basin. Bud said either like that or something like that.

Someone asked if the ESA would have to be re-written so that there could be no further listings of any new candidate species. Bud said no. The idea is that if there are new listings, and those new listings need water, that the water for that species has to come from somewhere else ­ someone other than the irrigators.

VI. Water Quality

Bud said what is being proposed is that everyone who lives on the rivers, needs to have a specific plan for water quality protection up and down all the rivers. There is a need to make water quality a top priority assisted by individual land management plans.

VII. Tribal Land Recovery, Compensation and Infrastructure

Item 1.

No discussion.

Item 2.

No discussion.

Item 3.

No discussion.

Item 4.

VIII. Klamath Marsh National Wildlife Refuge

Item 1 through 3.

No discussion.

.

IX. U.S. Forest Service Lands

Item 1 through 3.

No discussion.

X. Water Supply Augmentation; Out-of-Basin Transfers

Item 1 and 2.

No discussion.

Item 3.

Transbasin diversions to the Rogue are a part of the Klamath watershed.

John Bragg asked where the water comes from and who has the right to the water. Bud said there is a series of diversions at the crest of the Cascades that captures water that would otherwise come down in two places on the Klamath side.

XI. Funding: Financial Participation

Item 1.

U.S. Department of the Interior funding of Tribal water right settlement.

Wally Watkins asked if it would include having the Department of the Interior putting up the money for the Winema National Forest and other land that the Tribes seek. Bud said that he wasn't sure whether any money needed to change hands on the land proposal. This issue is not clear at this time.

Bud said a distinction needs to be made between funding for general improvements and costs that are legitimately associated with the settling of water rights.

Item 2.

Funding for habitat restoration.

Wally asked if the Klamath Tribes had any part in the litigation regarding the Trust Fund. Bud said the Tribe did not, but Tribal members may have.

Item 3.

U.S. Department of Agriculture will assist with funding watershed issues.

Bud said the funding needs to come in a way that is reliable.

Item 4.

State/Federal partnership in stream rehabilitation.

Ambrose McAullife asked, if the irrigation community, as a whole, came together in support of the proposal and the Basin community were in support of the restoration of the Winema to the Tribes, would the environmental community also be in support?

Bud said that, as for the general community, he felt the answer was yes. When people listen to the Tribes explanation of what really happened, there needs to be gaps filled in as to the way the Tribal members were treated. As to the environmental groups, they have begun talking with them and certainly encouraged that the potential exists.

Wally Watkins said that the Tribes had assured him that they would come up with an appropriate plan as to what they are going to do with the Winema National Forest that will take into consideration all of the different entities. In order to sell their package, they are going to have to come up with something prior to trying to get it moved from the Agriculture and the Interior, over to the Tribes.

Bob Hunter said that if WaterWatch discusses with the Tribes the issue regarding the concept of turning the USFS land into tribal trust land, they are in support of the concept.

Bud said that the BIA is clearly on board with the Winema issue.

Wally said that environmental groups in Washington, D.C., that have a lot of strength, and he belives they will oppose the issue.

Bud said they have addressed this issue and that the environmental groups are not fighting. The environmental groups have expressed a willingness to discuss this issue.

Ambrose suggested the message be put across in such a way so that people would feel comfortable coming to the table with the understanding the issue is not cast in stone.

Bud said he was struggling with the idea of the Tribes authority. He struggles with what seems to be the reaction that the Tribes are presenting a "take it or leave it" document. He says that he is bringing forward things that need to be part of the settlement. If they are not there, it is difficult for the Tribes to see how they can agree to it. They are willing to talk about it. They are trying to offer a foundation for discussions and a give a sense of what the Tribes think the framework of the discussion needs to be.

Wally Watkins congratulated Bud on his presentation.

Bud said that everything in the Adair case gets settled in this process. There is nothing that's been put in the Adair case that hasn't been put in the agreement. If people can come to an agreement, the Adair case can just go away.

It was pointed out that everything in the agreement was contingent on huge sums of tax dollars. Everyone can come to the table and decide they are going to settle, but the ranching community can't afford to do a lot of what is in the document. She asked if there was really going to be money to do this.

Bud said he believes federal money will be available to implement the agreement. If all parties turn to the federal government and tell them that they created the problem and how much it is going to cost to get out of the problem, the agencies will fund the solution.

Reed said that there is a plan to go to Congress and build a federal fund that is available for states and Tribes to tap into as settlements are approved on the local level.

Steve West said that in Oregon, the state is funded by income tax, the counties are funded by property income. Because of three statewide measures in the last ten years, property tax dollars can only increase by up three percent per year. Fifty-seven percent of Klamath County is already owned by the public. The revenue stream is limited by law to three percent growth per year. As the demand for services keep going up, the people that provide those services keep going down.

Walt Smith asked where are the farmers going to get money to handle this kind of situation.

Bud said that they are not trying to cause anyone to have to do anything without getting compensated for additional expenses They are trying to make improvements without putting the costs on everyone.

Ed Bartell said that in order to make that happen, the Tribes need to withdraw the lawsuits that have been filed. There was the intent to sit down and work things out until the lawsuits happened. Bud said that the best thing to do is to work up an agreement that will solve the issues that are in play.

Alan Foreman said that he wanted to thank everyone that attended the meeting. He said there have been good ideas from the meeting. He thank everyone again for their support.

There being no further business, the meeting was adjourned.