Opinion ID: 4527148
Heading Depth: 1
Heading Rank: 2

Heading: Historical Background of the Subdistrict

Text: ¶13 As the water court observed, the Valley, which is located in south-central Colorado, spans approximately ninety miles from north to south and fifty miles from east to west. Findings of Fact, Conclusions of Law, Judgment and Decree, Concerning the Application for Water Rights of the Santa Maria Reservoir Co., Case No. 13CW3002 (Dist. Ct. Water Div. 3 June 1, 2018) (2018 SMRC Decree), ¶ 46. It is sandwiched between the Sangre De Cristo Range (to the east) and the San Juan 11 Mountains (to the west). Id. at ¶ 99. The Rio Grande enters the Valley on the west side near Del Norte and continues in a southeasterly direction through Monte Vista to Alamosa, where it takes a southerly course for nearly forty miles and, passing through a break in the San Luis Hills, flows into New Mexico. Id. at ¶ 46. In Simpson v. Cotton Creek Circles, LLC, 181 P.3d 252 (Colo. 2008), we described the unique water systems of the Valley as follows: The Valley contains underground water in the form of a confined aquifer and an unconfined aquifer. The unconfined aquifer lies above the confined aquifer, and it is directly connected with surface streams in some places. Below the unconfined aquifer lie “relatively impermeable beds of clay and basalt,” which separate the unconfined aquifer from the confined aquifer. The layers of clay and basalt do not exist around the perimeter of the Valley, and so surface water recharges the confined aquifer system at those edges. Id. at 255 (citations omitted). The illustration below depicts a cross-section of generic confined and unconfined aquifers:6 6 See Aquifer, Nat’l Geographic, https://www.nationalgeographic.org/media/ aquifer-illo/ [https://perma.cc/6KSU-JT9P]. 12 ¶14 There are multiple geographic regions within the Valley. One of those, the Closed Basin, is of particular relevance here. Below is a map outlining the area of the Closed Basin within the Valley (the Valley is depicted by the purple outline):7 7 See Jingyi Chen et al., Confined Aquifer Head Measurements and Storage Properties in the San Luis Valley, Colorado, from Spaceborne InSAR Observations, Water Res. Research (April 21, 2016) https://doi.org/10.1002/2015WR018466 [https://perma.cc/K5U2-X46C]. 13 ¶15 The Closed Basin is a watershed north of the Rio Grande that is separated from the Rio Grande and its tributaries by both a topographic divide and a hydraulic divide.8 2018 SMRC Decree, ¶ 50. As a result of the topographic divide, surface streams entering the Closed Basin do not flow into the Rio Grande. Id. at ¶ 51. Instead, they flow toward the “sump,” which is the topographic low point of the Closed Basin. Id. The hydraulic divide has the same effect: Groundwater in the unconfined aquifer of the Closed Basin flows to the sump, not to the Rio Grande. Id. Groundwater pumping occurs primarily in two regions of the Valley, the Closed Basin and the Conejos and Alamosa River Valleys, and is critical to support the thriving agricultural economy in the high-altitude desert-climate of the area. Jingyi Chen et al., Confined Aquifer Head Measurements and Storage Properties in the San Luis Valley, Colorado, from Spaceborne InSAR Observations, Water Res. Research (April 21, 2016) https://doi.org/10.1002/2015WR018466 [https://perma.cc/K5U2-X46C]. ¶16 Irrigation and recharge practices play an important role in the hydrology of the Closed Basin and, notably, affect the location and status of the hydraulic 8 The “hydraulic divide” refers to a ridge in the groundwater table that lies north of the Rio Grande and extends generally from northwest of Monte Vista to east of Alamosa. It is approximately at the southern boundary of the Closed Basin. This ridge prevents the natural movement of unconfined groundwater from the Closed Basin into the Rio Grande. See Alamosa-La Jara Water Users Prot. Ass’n v. Gould, 674 P.2d 914, 943 (Colo. 1983). 14 divide. 2018 SMRC Decree, ¶¶ 70–79. As the water court explained, “large-scale importation of water into the Closed Basin . . . created the hydraulic divide,” and the hydraulic divide’s “location varies in response to climatic conditions and irrigation practices.” Id. at ¶ 75. Historically, well-pumping within the Closed Basin has had the effect of diminishing the hydraulic divide, which in turn has led to injurious depletions to the Rio Grande. See Findings of Fact, Conclusions of Law and Order, Concerning the Office of the State Engineer’s Approval of the Plan of Water Mgmt. for Special Improvement Dist. No. 1 of the Rio Grande Water Conservation Dist., and In re Rio Grande Water Conservation Dist., Case Nos. 07CW52 and 06CV64 (Dist. Ct. Water Div. 3 Feb. 18, 2009) (2009 Subdistrict Decree), ¶ 59. In addition, well-pumping in the Closed Basin has depleted the surface streams and aquifers in the Closed Basin—a system that has long been understood to be overappropriated. See, e.g., Alamosa-La Jara Water Users Prot. Ass’n v. Gould, 674 P.2d 914, 918 (Colo. 1983) (“By 1900, the natural flow of all surface streams in the [V]alley was over-appropriated.”). Though efforts have been undertaken for years to offset these depletions, ultimately, it was “[t]he significant drought of the early twenty-first century [that] increased the urgency for a sustainable water supply solution” in the Closed Basin. San Antonio, Los Pinos & Conejos River Acequia Pres. Ass’n v. Special Improvement Dist. No. 1 (San Antonio I), 270 P.3d 927, 933 (Colo. 2011). 15 ¶17 In 2004, the General Assembly took up this issue and adopted Senate Bill 04-222 (“SB 04-222”), which requires the State Engineer to focus on the sustainability of the Closed Basin’s aquifer system by regulating the confined and unconfined aquifers so as to “maintain a sustainable water supply in each aquifer system.” § 37-92-501(4)(a)(I), C.R.S. (2019). The passage of SB 04-222 also offered water users in the Valley “the opportunity to work together to protect senior water rights by collective actions” aimed at reducing “water use in general via the formation of subdistricts.” Findings of Fact, Conclusions of Law, Judgment and Decree, In re Confined Aquifer New Use Rules for Div. 3, Case No. 04CW24 (Dist. Ct. Water Div. 3 Nov. 9, 2006) (2006 Confined Aquifer New Use Rules Decree), ¶ 417; see § 37-92-501(4)(b)(I), (c). A group of water users in the Rio Grande Water Conservation District (“RGWCD”) followed suit and developed the framework for what would become the Subdistrict (the Subdistrict’s formal name is “Special Improvement District No. 1 of the Rio Grande Water Conservation District”). 2009 Subdistrict Decree, ¶ 20. The designated goal of the Subdistrict was the management of groundwater in the Closed Basin. Id. at ¶¶ 20, 38. ¶18 Once the Subdistrict was approved by the Alamosa County District Court in July 2006, the RGWCD appointed a board of managers (the “Board”) and charged it with preparing a plan of water management, pursuant to section 37-48-126, C.R.S. (2019). Id. at ¶ 21. The Board held several public meetings to 16 gather input from the major ditch companies and other irrigators operating in the Closed Basin regarding declining water levels in the aquifers and depletions to the Rio Grande. Id. Based on this feedback and consultations with expert water engineers, the Board decided that it needed more information on the current location and status of the hydraulic divide to formulate a groundwater management plan that accurately accounted for the Closed Basin’s current hydrological conditions. See id. The Board thus sought and received approval for state funding to conduct a study. See id. ¶19 The completed study, titled “Engineering Report on San Luis Valley Groundwater Level Study” (“Hydraulic Divide Study”), revealed that as of the fall of 2007, “groundwater contours from Del Norte to near Monte Vista d[id] not indicate the existence of a groundwater divide northerly of the Rio Grande,” which led to the conclusion that well-pumping in the unconfined aquifer of the Closed Basin was causing depletions to the Rio Grande. Id. at ¶ 67. “The Hydraulic Divide Study also concluded, however, that a reduction in such well pumping in the Closed Basin and recovery of the aquifer” to sustainable levels “would likely result in restoring the [h]ydraulic [d]ivide,” which in turn would yield a significant reduction in depletions to the Rio Grande. Id. at ¶ 68. ¶20 Given the findings of the Hydraulic Divide Study, the Subdistrict, through the Board, prepared a plan for water management (the “Plan”) that included a 17 groundwater management strategy “based upon the premise that when or if the [h]ydraulic [d]ivide is north of the river between Del Norte and Alamosa, it reduces the injurious depletions to senior surface rights because it reduces leakage from the Rio Grande into the Closed Basin.” Id. at ¶ 71. Thus, the Plan proposed to re-establish and maintain the hydraulic divide to help reduce or eliminate the depletions to the Rio Grande caused by irrigation-related well-pumping in the Closed Basin. Id. at ¶ 63. ¶21 To re-establish the hydraulic divide, the Subdistrict agreed to (1) “work closely with the State and Division Engineers . . . to calculate injurious stream depletions resulting from well pumping,” and (2) “replace those depletions in the time, at the location, and in the amount needed to prevent injury.” Id. at ¶ 95. Once re-established, the Plan explained, the hydraulic divide would be maintained through “a system of self-regulation using economic-based incentives that promote responsible irrigation water use and management and insure the protection of senior surface water rights.” Id. at ¶ 41. Such incentives would include giving owners of surface water rights within the Subdistrict “surface water credits which [would] reduce the variable fee they are . . . assessed for water they pump,” and could be “exchanged, traded, leased or sold to other well water users within the Subdistrict.” Findings of Fact, Conclusions of Law, Judgment and Decree, In re Rio Grande Water Conservation Dist., and Concerning the Office of the 18 State Engineer’s Approval of the Plan of Water Mgmt. for Special Improvement Dist. No. 1 of the Rio Grande Water Conservation Dist., Case Nos. 06CV64 and 07CW52 (Dist. Ct. Water Div. 3 May 27, 2010) (2010 Subdistrict Decree), ¶¶ 77–78. In other words, the Plan sought to replace the injurious stream depletions caused by operation of the Subdistrict wells with water rights that would be purchased or leased by the Subdistrict. Id. at ¶ 267. ¶22 Following many rounds of revisions, the Subdistrict’s amended Plan (the “Amended Plan”) was approved by the water court in May 2010. It was subsequently upheld by this court in December 2011 in San Antonio I, 270 P.3d at 935. ¶23 The implementation of the Amended Plan meant that the Subdistrict had to begin replacing injurious stream depletions in 2012. Recognizing that it would need both stored water and storage space to meet its replacement obligations, the Subdistrict approached SMRC, which owns two reservoirs, about leasing water from the Company’s shareholders to replace depletions under the Amended Plan. SMRC took the Subdistrict up on its proposal. But because its water rights were limited to irrigation, SMRC had to apply for a change of use to include the replacement of depletions. That application became the genesis of the dispute that is at the heart of this case. 19