MANAGER’S REPORT

9 October. 2007

Irrigation season is ending in the next few days and is coinciding with cool and partially wet weather.  The schedule for shutting off the canals is estimated to be around Oct 15th for both canals.  The date is dependent primarily on the weather.  Crane Prairie reservoir is at 30,000 acre feet and Wickiup reservoir is ending a bit better than earlier forecasts at 52,000 acre feet.  An average winter should get both reservoirs to decent levels before next spring.  It is too early to tell if there will be Upper Deschutes River flows above minimums this winter. 

STEELHEAD REINTRODUCTION & THE ENDANGERED SPECIES ACT

The reintroduction of Endangered Species Act (ESA) listed as threatened Steelhead in the basin is proceeding with additional fingerlings to be planted again in Whychus Creek and also the Crooked River in May 2007.  COID with the Deschutes Basin Board of Control (DBBC) is fully engaged with NOAA, US Fish & Wildlife Service (USFWS), and other basin stake holders with the Steelhead reintroduction effort as well as the resident Bull Trout (also listed as threatened under the ESA). The important point to understand with an ESA listed species, i.e. threatened Steelhead and Bull Trout, is that any entity in the basin that has operations potentially affecting the species negatively is potentially liable under Federal Law and therefore subject to enforcement actions, including civil and criminal penalties.  Because irrigation districts remove water from the rivers or streams in the basin it can potentially cause a negative effect to the fish and therefore subject the irrigation districts to ESA liabilities. In extreme cases involving the ESA, such as in the Klamath Basin, irrigation districts have had their water diversions during irrigation season significantly reduced or even shut down.

The DBBC efforts to date, beginning in March 2007, are directed towards eliminating or reducing future federal liabilities under the ESA.  To that end the DBBC has been working cooperatively with the federal agencies and other basin stakeholders to avoid any basin conflicts and legal actions by other parties.  A significant result of these efforts was the receipt, by all irrigation district members of the DBBC, of a letter of “Prosecutorial Discretion” from NOAA stating that NOAA will not pursue any legal action against the irrigation districts.  This letter was received in May 2007 and expires in May 2008, unless renewed by NOAA (copy attached to this report).  The letter was issued by NOAA based on all of the past water conservation efforts performed by the irrigation districts and issuance of a new letter in May 2008 is contingent on those efforts continuing.

In addition to the NOAA prosecutorial discretion letter, NOAA has also committed to purse a 10(j) rulemaking.  10(j) refers to a section of the ESA that if the appropriate conditions exist as determined by NOAA, that the reintroduced steelhead population above Lake Billy Chinook would be classified as “Experimental, Non-Essential”.  If a 10(j) rule is successfully issued, then the Steelhead would not carry full ESA liabilities while the rule is in effect.  It is the expectation that the conditions necessary to preserve a 10(j) designation for the steelhead is of a limited time period, and therefore not a permanent answer to ESA liabilities.  In addition, the rule making process will likely take up to two years and involves a public comment period.  If successful, it must be noted that this will be the first time that NOAA has issued a 10(j) rule on an anadromous species, and will not be without controversy and therefore not assured.

The stakeholder group, along with the federal agencies, met recently and continued to discuss the complex issues facing the basin, and the process is bringing definition for next steps.  The congressional delegation of Senators Wyden and Smith, and Congressman Walden are fully informed and engaged in support of the basin stakeholders and the efforts described below.  A copy of a letter of support sent by the delegation to NOAA is attached to this report.

Going forward there are only two ways to eliminate liability with an ESA listed species.  Either the species becomes “delisted” which will likely not occur for decades or possibly never, or for an entity to receive an Incidental Take Permit (ITP) from NOAA and USFWS.  The only method available to receive an ITP is to successfully pursue and complete a Habitat Conservation Plan (HCP).  The HCP is a process developed under the Endangered Species Act (ESA) that can provide the HCP parties with long-term certainty of liability protection from the enforcement actions and penalties of the ESA.  In order to receive the certainty of liability protection it will be necessary for the irrigation districts to “minimize and mitigate to the maximum extent practicable” any negative effects their activities have on the species.  Therefore, the irrigation districts will be required to make commitments under contract with NOAA and USFWS that, if followed and completed, provides for a guarantee often in excess of 20 years from any ESA liabilities in the form of the ITP.

The HCP process is expected to take approximately 7 years to complete with annual costs estimated at $500,000.  These costs will hopefully be absorbed by grants available from the USFWS specifically for HCP planning efforts and other federal and non-federal grant sources.  COID on behalf of the DBBC in cooperation with USFWS and ODFW has already applied for a grant to facilitate the beginning of the HCP.  These grants are available annually and the expectation is for approval before the end of the year.  It should be noted that COID will incur additional costs for legal fees and consultants not covered by grants as this process unfolds in combination with the other DBBC members.  All attempts are being made to finance this effort through grant funding and to link up with other partners in the basin in sharing the cost load.  The DBBC has met several times with the Counties and Cities of Central Oregon to discuss these issues and funding. 

 The opportunities pursued this past month include, but are not limited to:

·        COID has been invited to participate in a Technical Advisory Committee (TAC) formed to discuss and work with the City of Bend and Deschutes County on Bend’s UGB and URA expansion process.  COID intends to be involved with the TAC going forward.

·        Both the NUID and Deschutes River Conservancy legislative bills have been introduced in the US Senate and US House.  Other federal efforts pertaining or impacting irrigation districts are monitored by COID through its participation in the OWRC and the National Water Resources Association (NWRA).

·        The 2007 Farm Bill activity in Washington, DC is front and center as Congress reconvenes following its summer recess.  COID in conjunction with the Oregon Water Resource Congress is heavily involved with making its views known for expanded provisions for irrigation districts under the proposed Regional Watershed Enhancement Program as part of the established EQIP program. The District will continue to be active in this process and monitor the Bill’s progress as it makes its way through the congressional approval process which will likely take until the end of this fall.

·        A Master Agreement with Crook County is underway to address both entities’ authorities and requirements for road development and improvement projects.

·        Discussions with the participants of the Deschutes Water Alliance Bank (formally Central Oregon Water Bank) are continuing on formalizing into a multi-party agreement.  While allocations and transactions have been occurring under an existing Memorandum of Understanding, it is believed that a more formal structure would be beneficial to provide assurances to all participants.

·        Reinitiated discussions with PacifiCorp regarding the expiration of the lease on the Cline Falls land and evaluation of COID taking over the small hydroelectric facility already on site.  Several steps need to be evaluated with regards to the facility including state and federal licensing requirements and costs of upgrade.

The challenges presenting themselves:

·        The State of Oregon has filed its second extension to the Oregon Supreme Court for the purposes of filing a petition for appeal to the Ft. Vannoy decision rendered by the Oregon Court of Appeals in July.

·        US Representative Oberstar (D-MN) introduced a bill in the US House titled “Clean Water Act Restoration” that if passed and signed into law would have an incredibly negative impact on all irrigation districts and patrons.  The introduced bill would extend the onerous regulatory framework of the CWA through the Army Corps of Engineers to basically all waters connected to a stream or river including farmer ponds and all irrigation canals and laterals.  An accompanying and identical bill has been introduced by US Senator Feingold (D-WI) in the US Senate.  Hearings are scheduled in the House after the summer recess.  COID is playing a very active role with the NWRA and OWRC in providing information on the negative impact this will have on irrigation districts and its patrons.

·        COID provided testimony to the Bend City Council on a specific subdivision proposed to be built near the CO Canal off of Reed Market Road.  COID expressed concern that “off-site” mitigation projects for traffic impacts of the new sub-division included the construction of two bridges over the Canal and that COID was not consulted.  COID has concerns with regards to any additional structures along this stretch of the canal effecting the integrity of the canal banks and stressed that this section of canal needs to be piped to eliminate these concerns.

·        Meetings have been held with the City of Redmond staff and several developers involved with piping of the C Lateral in Redmond’s Northwest Area Plan.  While there is a cost associated with the piping many benefits were identified and discussed, including the reduction of COID easement creating more buildable lots for developers along with eliminating flooding of subdivisions and improving public health, safety and welfare.  Annexation agreements are likely to be executed before the end of 2007 and COID is coordinating with the City of Redmond on a number of development issues.

STATUS REPORT

 Deschutes Water Alliance

·        Formulating formal organizational structure for Water Bank with funds from Water 2025 grant being utilized for legal assistance.  Naming water bank to Deschutes Water Alliance Water Bank.

Status – In Process

David Evans & Associates

·        Assisting District on Juniper Ridge hydroelectric project

Status – Preliminary pipeline design and hydro facility completed

·        Assisting District on evaluating retention structures in Dry Canyon

Status – Landowner contacted COID regarding potential crossing of Dry Canyon in Powell Butte area and transfer of water rights to west side of canyon.  Opportunity may exist to build small retention structure and eliminate any tailwater flows continuing down canyon towards the Crooked River.

 ·        Assisted District in evaluation of excavation work being done along North Canal Blvd in Redmond.  Will be involved in the development of standards for electrical utilities.

Status – Standard Operating Procedures in development. Follow up discussion with PacifiCorp to be scheduled.

·        Cooperative evaluation of potential 50-100 acre re-regulating structure on Central Oregon Canal with Audia-Gordon LLC.  Geotechnical work and elevation specifications are underway.

Status – On Hold, No progress

Real Estate

·        Bid schedule for partitioned 40-acre parcel near Deschutes Market Road and Hwy 97 still delayed pending a clarification of deed to property. Issue is being worked for resolution with Steve Scott, Title Company, and Legal Counsel.

Status – In Process

·        DesertScape and COID executed a new option agreement for acreage in east Redmond.  DesertScape, COID and the Redmond School District are proceeding on filing for rezoning changes of the 250-acre parcel in east Redmond. The draft Redmond TSP has been received but only included the COID 250 acre parcel under its current OSPR zoning.  A second TSP is being pursued to assess the traffic loading with the COID 250 acre parcel under its proposed zoning as filed with the City of Redmond under the Master Plan.   

Status – In Process

 Development 

·        Coordination agreements with Deschutes County and the City of Bend are required under Oregon Revised Statute (ORS) Chapters 195 & 197 for the establishment of new Urban Reserve and Growth Boundaries.  Both entities have begun the conversations with likely effected irrigation districts and other special districts.

Status – See discussion above in Challenges section.  Discussions held and ongoing

 ·        Direct communication with City of Bend and Redmond public works and planning staff on resolving issues of canal safety and impacts of development that will require piping.

Status – In Process.  Preliminary discussions held, issues ongoing, no resolution expected for some time.

·        Special District representatives conducted a field evaluation of canal structures within the city limits of both Redmond and Bend.  Recommendations include COID to implement main canal monitoring program utilizing District field and managerial staff.

Status – In Process.  Monitoring Program to be established before end of irrigation season.

 

 ON THE RADAR SCREEN

            ·        Bull Trout Critical Habitat Final Rule amendments

·        Funding for the Habitat Conservation Plan work associated with the Steelhead reintroduction.