MANAGER’S REPORT

11 May. 2010

Irrigation season is well underway and the weather is more or less cooperating as is typical in Central Oregon. The Juniper Ridge pipeline is performing as expected and the increased water flows as the season progresses are not having any impact on the project as we continue to construct the hydro plant.

The US Fish & Wildlife Service (USFWS) Regional Director, Ms. Robyn Thorson and State Director Paul Hanson along with USFWS local staff and members of the Deschutes Basin Board of Control irrigation districts, City of Prineville and other organizations participated in a two day basin wide tour. The tour’s purpose was for USFWS personnel connected to the Habitat Conservation Program and Grant Funding process to become familiar with all of the conserved water piping projects and to meet the people of the basin and reinforce the success of the HCP efforts to date. The USFWS also announced the award of the HCP Grant Application of $407,000. This is great news and will fund the HCP effort, along with matching funds from the DBBC and Prineville, for the next year and a half.

The new statutes passed by the Oregon State Legislature involves changes to the State’s Business Energy Tax Credit Program and rules hearings are underway to establish the new rules. COID is involved with these hearings and has provided official comments to the Oregon Department of Energy. While the pre-certification tax credit amount and status of the Juniper Ridge Project is intact, there will be possible changes influencing any new hydro plants that COID pursues into the future.

The Deschutes Water Alliance (DWA) has submitted a letter of interest to the US Bureau of Reclamation for the funding of a Basin Study to update the work done by the DWA in 2005. Reclamation announced acceptance of this letter and the next step is to formulate an action plan along with Reclamation personnel and provide a proposed budget.

The Oregon Water Resources Department will be conducting a public “town hall” meeting at the Redmond Firehall on Thursday May 13^th from 4-7pm to discuss and receive comments from the public regarding the Integrated Water Resource Planning effort.

Opportunities

· The DBBC continues to pursue and expend efforts on the submitted appropriation requests to the Congressional Delegation for additional federal funding of the Bureau of Reclamation’s Deschutes Project line item.

· COID along with NUID and Swalley are conducting negotiations with two energy companies interested in implementing small scale hydro at the North Canal Dam in Bend. This process will be ongoing over the next few years.

· COID and BLM have begun the anticipated two year process to complete the land swap authorized by Congress in the public lands bill passed this year in Badlands area east of Bend.

· COID has re-engaged Pacific Power in conversations over termination of their lease and hydro facility at Cline Falls. COID is still evaluating pursuit of licensing thru FERC and the State of Oregon if it wishes to generate hydroelectricity at that site. Analysis and evaluation of the costs of licensing are currently under review and contact has been positive with DEQ and ODFW for the project. There has been a private company that has filed a preliminary permit application with FERC for the COID Cline Falls site. COID is evaluating the options on how to deal with this filing and will be addressed as a separate Board agenda item.

· The DBBC met with the Executive Committee of the DRC – Ellen Grover, Jim Manion and Bobby Brunoe (including Steve Johnson COID) to discuss the relationship of the irrigation districts and the DRC in general. Discussions were primarily centered around the need for more frequent communication needed between all the entities and for development of a consensus prioritization of conserved water projects. It was agreed that more regularly scheduled meetings should be scheduled.

· The Oregon Department of Environmental Quality (DEQ) will be embarking on a Watershed Assessment and Action Plan (WAAP) in the coming year. A stakeholder meeting to be attended by COID is scheduled for Monday May 12.

Challenges

· Issues continue to arise with patrons and the delivery of water to parcels past the District’s Point of Delivery. The District is evaluating its existing statutory authorities and reviewing policies to assist in resolving these issues.

· Persistence of patrons failing to beneficially use their water either due to economics, absentee ownership, or mismanagement resulting in potential confiscation by the District as the only viable option to prevent forfeiture.

STATUS REPORT

Juniper Ridge Piping & Hydroelectric Project

· See separate Project Update report

Real Estate

· One 20 acre parcel near Deschutes Market Road and Hwy 97 was listed for sale through Steve Scott Realtors. Listing, as per District policies, was at the recently updated appraised value. No offers have been received to date. The remaining 20 acre parcel was not listed.

Status – In Process with no change in last month

· COID and the Redmond School District filed and received approval of a partition plat to the City of Redmond. Traffic issues in Redmond are affecting the timing of the zoning change possibility and execution of a sale to Desertscape.

Status – Paused. No joint meetings have been conducted with City of Redmond, Deschutes County, COID, Division of State Lands, Oregon Department of Transportation and the Oregon Transportation Commission for several months.

· A Conditional Use permit was received for COID owned lands along Teal Road pending county road improvements. Once completed the Board will evaluate for declaring surplus depending on market conditions and financial requirements of the District.

Status – In Process with no change in last month

Development

· 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. Successful coordination and planning on Odem-Medo improvements most recent example of effort.

Status – Ongoing.