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HomeMy WebLinkAboutMemo - Mail Packet - 2/1/2022 - Memorandum From Eric Potyondy Re: Montava: Summary Of The Developers Pending Water Court Case City Attorney’s Office 300 Laporte Avenue PO Box 580 Fort Collins, CO 80522 970.221.6520 970.221.6327 fcgov.com MEMORANDUM TO: Mayor and City Councilmembers FROM: Eric Potyondy, Assistant City Attorney THRU: Carrie Daggett, City Attorney DATE: January 27, 2022 RE: Montava: Summary of the Developer’s Pending Water Court Case ______________________________________________________________________________ This memo responds to a request from Leadership Planning Team this week. It summarizes the pending case filed by HF2M, Inc. (“Developer”) in the State of Colorado District Court for Water Division 1 (“Water Court”). This case concerns water rights (rights to use the waters of the State) to serve a development generally referred to as the Montava PUD (“Development”), depicted on the attached map. It does not concern determinations regarding rights to infrastructure or land, or whether the proposed water supply is adequate for the Development. BOTTOM LINE: The Developer has filed an application in Water Court seeking approval to pump groundwater through two proposed new wellfields in the shallow, alluvial aquifer that contributes water to Boxelder Creek and the Poudre River (“Tributary Wellfields”). Groundwater from the Tributary Wellfields would be used for indoor and outdoor uses on the Development. The application includes additional claims, primarily to provide augmentation water to the Poudre River to offset depletions from the Tributary Wellfields. One such claim is that certain groundwater in a deeper, bedrock aquifer under the Development is nontributary. The case is unresolved. The City and over 25 other entities have filed statements of opposition to protect their water rights. The City Attorney’s Office’s is representing the City with the Fort Collins Utilities Water Resources Division taking the staff lead with consultant support. It is anticipated that later this year the Water Court will schedule a trial in the case, likely in 2024. Below is explanation and discussion for those seeking more background and details. Mayor and City Councilmembers January 27, 2022 Page 2 of 3 DISCUSSION: The Developer filed an application in Water Court on December 30, 2020. The core of the case is the Developer’s claim requesting approval of an augmentation plan. If approved, this plan would authorize the Developer (or a successor metro district) to pump groundwater through the Tributary Wellfields. The Developer disclosed the attached map in the pending case to show the general location of the Tributary Wellfields, ponds, and other structures. The Developer claims that the groundwater pumped by the Tributary Wellfields will be used on the Development for: • indoor uses following treatment at a proposed new water treatment plant; and • irrigation uses following storage at two new ponds. The application includes additional claims. They are primarily to provide augmentation water to the Poudre River to offset depletions from the Tributary Wellfields so that other water rights are not deprived of water they are entitled to. The claims include: • Claims for water rights at the Seaworth gravel pit reservoirs near Laporte; • Claims to change the use of the water rights represented by the Developer’s 1.5 shares of the Water Supply and Storage Company, a ditch and reservoir company; • Claims to use other augmentation water supplies, including produced water from oil and gas operations near Wellington; and • Claims that the groundwater underlying the Development in the deeper Dakota Formation is nontributary; in other words, that it is so disconnected from surface waters that it is legally separate and can thus be pumped without augmentation or regard for other water rights on the Poudre River. (This deeper groundwater would be pumped through separate wells not included in the Tributary Wellfields.) The City filed a “statement of opposition” to participate in the case as an Opposer.1 The City’s primary concerns relate to potential injury and adverse impacts to the City’s water rights on and near the Poudre River that are managed by Fort Collins Utilities, the Natural Areas Department, and the Parks Department. The City has also retained BBA Water Consultants, Inc. for additional technical support. Twenty-five additional statements of opposition were filed by other Opposers.2 At this point, the Developer has not settled with any of the Opposers. After the application was filed, the Water Judge referred the case to the Water Referee, which is the standard practice. In the proceedings before the Water Referee, the Developer and the 1 The City actively monitors Water Court cases in Water Divisions 1, 5, and 6 and participates, as necessary, to protect its water rights. 2 The other entities are: Boxelder Ditch Company; Cache la Poudre Irrigating Ditch Company; Cache la Poudre Water Users Association; Central Colorado Water Conservancy District; City of Aurora; City of Greeley, acting by and through its Water and Sewer Board; City of Thornton; Colorado Water Conservation Board; Division Engineer for Water Division 1; East Larimer County Water District; Fort Collins Loveland Water District; GWIP, LLC; K & M Company, LLLP; Lake Canal Company; Lake Canal Reservoir Company; Larimer and Weld Irrigation Company; Larimer and Weld Reservoir Company; Martin Marietta Materials, Inc.; New Cache la Poudre Irrigating Company; North Weld County Water District; North Poudre Irrigation Company; Northern Colorado Water Conservancy District; Poudre School District R-1; Seaworth Augmentation LLC, William O. Seaworth and Paulette M. Seaworth; State Engineer; Town of Wellington; United Water and Sanitation District; Water Supply and Storage Company; and WRCC, Inc. Mayor and City Councilmembers January 27, 2022 Page 3 of 3 Opposers exchange information in a relatively informal manner. The information includes draft decrees, initial engineering reports, and other technical information. To date, the City and the other Opposers have provided the Developer with two sets of comments, with a third set scheduled for later this spring. The City has been coordinating with some Opposers and may do so more as the case progresses. The kind of issues raised by the Opposers include: various issues with the specificity and form of the proposed decree; various issues associated with the claimed augmentation water, including amounts and availability; disagreement that deeper groundwater in the Dakota formation has been or can be established to be nontributary; issues regarding how Tributary Wellfields groundwater pumping will be limited to the amount of augmentation water; and various measurement and accounting issues. It is anticipated that after July 2022, the Water Referee will re-refer the case to the Water Judge. The Water Judge will then schedule a trial along with various other pre-trial litigation and discovery deadlines. The earliest that trial would likely be set would be late 2023, though 2024 is more likely. Attachment: General location map pc: Kelly DiMartino, Interim City Manager Tyler Marr, Assistant City Manager Theresa Connor, Interim Executive Director, Fort Collins Utilities Liesel Hans, Deputy Director, Fort Collins Utilities Donnie Dustin, Water Resources Engineer, Fort Collins Utilities Caryn Champine Director, Planning Development and Transportation Paul Sizemore, Deputy Director, Planning Development and Transportation Rebecca Everette, Manager, Planning Jenny Axmacher, Senior Planner, Community Development and Neighborhood Services Scott Benton, Planner, Community Development and Neighborhood Services Seve Ghose, Community Services Executive Director Katie Donahue, Director, Natural Areas Department Jen Shanahan, Watershed Planner, Natural Areas Department Kurt Friesen, Director, Park Planning and Department Mike Calhoon, Director, Parks Department