MANAGER’S REPORT

11 March. 2008

The last winter stock runs of the season are scheduled for the CO Canal March 10^th-14^th, and the PBC March 17^th-21^st. Each canal will have received four full stock runs this season. There has not been as much moisture the last month as earlier this winter, but the reservoirs have filled nicely and there have been some increased releases out of Wickiup the past month. Snow pack is still above average for this time of year, but there has not been any significant snowfall for several weeks.

Two town hall meetings were conducted last week in Powell Butte and Terrebonne. Patron attendance was about the same as in past years but with many who had not been to a COID town hall meeting. Town hall meetings are intended to be done every year between two rotating sites. Much of the discussion revolved around the steelhead reintroduction and the Endangered Species Act, along with discussion of the ongoing changes within the District and the Central Oregon area.

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

· COID is participating in the 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. In addition, the irrigation districts are holding discussions with City of Bend staff on issues that require coordination. These discussions are intended to provide the basis for a coordination agreement between the irrigation districts and the City of Bend.

· 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 continues. Both the US House and US Senate have passed their own versions of the Farm Bill. This will require a conference between the House and Senate and then passage from each chamber to be presented to the President for signature or veto. The current Farm Bill expires on March 15^th. It is not foreseen that a new Farm Bill will be passed by that time and an extension will likely be required. 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.

· Testimony was provided to the Oregon Water Resource Commission (OWRC) on the Mitigation Program in the Deschutes Basin on February 29^th in Corvallis. A status and explanation of the role of the DWA Water Bank and COID’s role in the Bank was provided. The OWRC expressed its thanks for the Basin’s proactive approach to solving water issues.

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

· 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. To date the evaluation of licensing requirements on the state side are minimal, and a formal determination application to FERC for federal licensing is in process. Once the licensing issues are resolved then a more formal evaluation of upgrade and transfer of facilities costs will be undertaken.

· The Energy Trust of Oregon (ETO) Board of Directors officially approved a $1MM grant request from COID for the Juniper Ridge Hydro Project. This funding will be available upon completion of the Hydro facility which is expected in May 2010.

The challenges presenting themselves:

· The State of Oregon has filed a petition for review of the Oregon Court of Appeals Ft Vannoy decision to the Oregon Supreme Court. The Oregon Supreme Court has decided to accept the petition and a hearing is scheduled in May 2008.

· HCP group on Steelhead Reintroduction is scheduled to meet on March 10^th. Status on HCP grant application is still pending with expected results by end of March.

o Met with USFWS/Reclamation and Department of Interior staff in Washington, DC to discuss timing of HCP grant release.

o Met with Commissioner of Reclamation, Bob Johnson and USBR staff on pursuing FY 2009 $1.5MM in funding for DBBC irrigation district conservation projects. Same discussion was held with staff from Senators’ Smith & Wyden’s offices.

o Met with Congressman Greg Walden to provide HCP update, discuss additional funding, and status of NUID and DRC bills.

· Working with two groups of patrons affected by development and atrophy of water deliveries and infrastructure in Redmond. Both groups are classified as Remnant Parcels and subject to the new COID policy.

STATUS REPORT

Deschutes Water Alliance

· COID and Swalley Board of Directors approved the 2008 targets for the DWA Water Bank.

· Discussions are underway to prepare and formalize an Inter-Governmental Agreement between the governmental parties associated with the Bank.

Status – On going

David Evans & Associates

· Assisting District on Juniper Ridge hydroelectric project

Status – Preliminary pipeline design and hydro facility completed

· Cooperative evaluation of potential 50-100 acre re-regulating structure on Central Oregon Canal with Audia-Gordon LLC. Some geotechnical work and elevation specifications were conducted last year with a thorough analysis to be scheduled upon Board approval.

Status – Proposal before Board February with no decision, will be discussed in Board March meeting.

Real Estate

· A Quiet Title action was successfully resolved in COID’s favor on the partitioned 40-acre parcel near Deschutes Market Road and Hwy 97 and a few other parcels along the Pilot Butte Canal in Bend. The Board approved proceeding with completion of all survey work after reviewing the updated appraisal report. The land has been officially declared surplus by the Board.

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 along with 215 acres owned by Deschutes County within the Redmond UGB and adjacent to the COID 250.

Status – In Process. Joint meetings being conducted with City of Redmond, Deschutes County and COID

· Surveying and Conditional Use permitting is being pursued for COID owned lands along Teal Road. Once completed the Board will evaluate for declaring surplus depending on market conditions and financial requirements of the District.

Status – In Process

· Deschutes County is moving forward on the 19^th Street extension south of the Fairgrounds all the way to the Deschutes Market Junction. Right of way will need to be acquired off of two COID parcels.

Status – Initial conversations with Deschutes County staff

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. City of Bend legal counsel has filed testimony that an agreement with COID is not necessary, but COID and Deschutes County legal counsels have filed testimony that an agreement is necessary and required. COID and Swalley have committed to City of Bend planning staff a first draft of the 195 agreement desired.

Status – 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. Redmond and COID met in December and agreed to schedule regular coordination meetings going forward, likely on a semi-annual basis.

 ON THE RADAR SCREEN

· Bull Trout Draft Recovery Plan

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