MANAGER’S REPORT

6 May. 2008

The irrigation season has begun, accompanied by cool mornings and mostly cloudy skies. Demand for irrigation water is not as severe compared to the last few springs which were quite warm. We have now entered Season 2 as of May 1 and are running at nearly 70% with full flow rates available beginning May 15. Both reservoirs are still nearly full several weeks into the season with snowpack moisture still over 150%.

This month will see a release of several hundred thousand steelhead fry in Whychus Creek and in the Crooked River . While this is the second year there have been steelhead fry released in the Whychus it will be the first year of plantings in the Crooked River . The Endangered Species Act is in full effect with this species while NOAA pursues a 10j rule making. The successful issuance of a 10j rule designating the steelhead “experimental and non-essential” would suspend most liabilities associated with otherwise lawful activities such as river diversions for irrigation, but until the 10j rule is issued full criminal and civil penalties are in effect if an activity is deemed harmful to the fish. NOAA has stated that the 10j rulemaking could take up to 12 months before being in effect. While the Deschutes Basin Board of Control (DBBC) irrigation districts had received a prosecutorial discretion letter from NOAA last year, this discretion expires next week. The DBBC has requested another letter from NOAA that would extend this condition. This discretion is entirely a NOAA decision and is based on the conservation activities already completed over the past few years, including this past winter by the irrigation districts.

The Habitat Conservation Plan being pursued by the DBBC is still moving forward. Since receiving notification of the USFWS grant of $306,000, the DBBC has been meeting with its stakeholder partners, and the federal and state agencies involved with this process. It is anticipated that Request for Proposals will be sent out to consulting firms this summer, expectations are in July/August. It will be upon the selection of these consultants that the gathering of information and science will begin to establish what effects, if any, the irrigation districts have upon the steelhead, bull trout and red band trout in the basin. It is possible that there may be other entities that will need to pursue Incidental Take Permits (ITP) and become part of the DBBC HCP in the future. It is important to note that the HCP is still on track and is moving forward, but this is a multi-year process.

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

The City of Bend ’s UGB process is moving along and is now at the stage of evaluating suitable acreage for residential and commercial. The issue of irrigated lands versus non-irrigated lands will likely be a topic of discussion. COID had already filed comments requesting that the process follow the statutory requirements to place irrigated lands as lower priority. The approximate number of acres for the UGB is calculating out for now around 5,000 acres. COID remains active along with Swalley Irrigation District in this process through 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.
Separately but related is the irrigation districts with facilities or water rights within the existing Bend UGB 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 (actually combined into one large bill) have been passed by both the US Senate and US House and are awaiting the President’s signature. 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 and are conferencing on the bill. Passage is hoped for but not guaranteed. The current Farm Bill expired on March 15^thwith an extension passed to Mid-April. 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.
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 Deschutes River Conservancy (DRC) Board of Directors unanimously approved pursuing funding for the COID Juniper Ridge Hydro Project ($4MM), and the C-1 lateral ($80k) piping projects. A formal application to OWEB on behalf of the Juniper Ridge Project is expected to be filed this week.
Participated in a work session and tour with Senator Wyden’s Chief of Staff – Josh Kardon in the Badlands area south of Alfalfa. Sen. Wyden is evaluating the opportunity to pursue full wilderness designation for the area. COID has an interest in this as there is a proposed land swap with BLM included with the legislation.

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 on May 13, 2008 in Enterprise , Oregon . The amicus brief filed by COID, Swalley, Tumalo and Arnold Irrigation Districts was accepted by the Court.
Continued working with two groups of patrons effected 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

A grant was filed for Water Bank capitalization under the new Oregon Water Supply and Conservation Initiative.
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 – Andy Siemens and DEA did testing and monitoring studies on proposed site in April. Preliminary results of seepage tests are pending.

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

Sent letter to Mount Bachelor Village and Brooks Resources requesting discussions on scenic easement over the COID properties owned along the Deschutes River near the Siphon Power Plant.

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.

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.
State Legislative session in 2009 will see several initiatives relating to water supply and conservation. A report on the Mitigation Program in the Deschutes Basin is required.

PREVIOUS MANAGER'S REPORTS:

May 2007 Jun. 2007 Jul. 2007 Jul. 2007

Aug. 2007 Sept. 2007 Oct. 2007 Nov. 2007

Dec. 2007 Jan. 2008 Feb. 2008 Mar. 2008

Apr. 2008