Testimony at UBSGWMD Hearing on August 11, 2010

Joe Kiely, Assistant Manager

Background and Opening Argument

This hearing has been requested by the Town of Limon pursuant to C.R.S. 37-90-
131 as a party adversely affected or aggrieved by an act of the District Board.
C.R.S. 37-90-131(1)(c) states:

(c) Any person adversely affected or aggrieved by an act of

the district board, other than the announcement of control
or conservation measures or regulations, has the right to
be heard by the board. Such person shall file a written
request for a hearing that states the basis of the alleged
injury. Unless agreed otherwise by all parties to a hearing
or unless otherwise approved by the district due to
extenuating circumstances, a hearing shall be held within
one hundred eighty days after filing the request for such a
hearing. Upon thirty days' written notice to all adverse
parties, the district shall conduct a hearing upon the
matter. Hearing procedures shall be as informal as
possible, with due regard for the rights of the parties. All
parties shall have the right to subpoena witnesses and to be
heard either in person or by attorney. The district board
may have such hearings conducted before an agent or
hearing officer. After such hearing, the district board shall
issue a written decision containing its findings and
conclusions and shall serve its decision upon all parties by
first-class mail. Judicial review of such district decisions
may be taken in the manner and governed by the standards
set forth for review of commission and state engineer
decisions in section 37-90-115.

This hearing was requested because of actions of the Board of Directors of the
Upper Big Sandy Ground Water Management District (The “Board of Directors”)
associated with but not limited to an application by Cedar Point LLC.

The application of Cedar Point LLC was submitted by Chris Thorne, Attorney for
Cedar Point LLC on January 14, 2008 requesting an export for no more than 35
acre-feet of water from the District.

As we will show, the certain interpretations of both Colorado Revised Statute and
District rules that have been discussed between the parties of this hearing and
others which continue to be the policy of the District Board which adversely
affect and aggrieve the Town of Limon.

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 The Town of Limon meets the definition of an adversely affected or aggrieved
person because it brings this action as owner of multiple groundwater well
permits within the District and representative of the taxpayer citizens who are
users of the groundwater permitted by these groundwater well permits. The
adverse affect and aggrievance is based upon the actions of the District Board in
ruling on the Application by Cedar Point LLC and its continued interpretation of
Colorado Revised Statutes and District Rules. This is not an appeal to the
validation of the District Rules, rather the interpretations that arose during the
application process and hearing process associated with Cedar Point LLC and
since the final ruling on the Application. These interpretations have resulted in
limiting the ability of the Town of Limon to sell bulk water resulting in increased
water rates for users of the Town of Limon Municipal Water System.

Prior to the Application for Approval of Temporary Water Use Outside District
Boundaries for the Cedar Point Wind Power Project, the Upper Big Sandy
Ground Water Management District approved Resolution 2004-07-02 on July 14,
2004 establishing a one (1) year moratorium on processing or hearing applications
that could result in exportation of ground water from the district. That
moratorium has been renewed by Resolution No. 2005-07-02 on July 13, 2005,
Resolution 2006-07-06 in July, 2006, Resolution 2007-09-02 on September 12,
2007, and Resolution No. 2008-12-5 in December of 2008 for 2009.

During the period of the moratorium resolutions, the District Board also approved
three exemptions to the Moratorium by Resolution No. 2006-5-4 on May 10,
2006, Resolution No. 2007-09-02 on September 12, 2007, and Resolution No.
2007-12-6 on December 12, 2007.

This last resolution provided an exemption from the moratorium under these
criteria:

1. The applicant seeks to export water on a temporary basis for use in

connection with a construction project for a period of time not to exceed
one (1) year from the commencement of construction.
2. The application proposes to take such water from existing wells that have
been permitted for municipal or industrial purposes.
3. At or before the commencement of the hearing on its application, the
Applicant shall provide the District with a copy of a contract between the
Applicant and the owner of municipal or industrial well(s) it proposes to
use, or other evidence of authorization to use the well(s). Such contract or
other authorization will be contingent, if at all, only on the District’s
approval of the application.
4. The amount of water the applicant seeks to export does not exceed thirty-
five acre-feet.
5. The application can involve non-tributary ground water and or alluvial
water.

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 The District required Cedar Point LLC to make application for exportation of
water outside the District. The Town of Limon believes that it was adversely
affected and aggrieved by the interpretation by the District that this constituted an
export.

Application was made to the District by Cedar Point, LLC on January 14, 2008 to
export up to 35 acre feet of water to be purchased from the Town of Limon

Exhibit A – Application for Approval of Temporary Water Use Outside

District Boundaries – Cedar Point Wind Power Project

The Cedar Point LLC Application identified the criteria for exemption and
demonstrated that it met that criteria and the District scheduled a hearing on
March 12, 2008 at which four directors voted to approve the application and one
director voted to deny the application.

At the March 12, 2008 hearing, the Town of Limon testified that it had adequate
water rights that had already been put to beneficial use having addressed the
question of injury to other users in the permitting process to allow the use of an
amount not to exceed 35 acre-feet in one year.

Exhibit B – Limon Water Rights Available (Updated to current)

Exhibit C – Total Municipal Water Usage (Pumped) 1996-2009 (Updated
to Current)

During the March 12, 2008 hearing, the Town of Limon testified that it has the
appropriation and legal right to divert through its wells up to 2,087 acre feet per
year and that over the past several years, which included years of severe drought
that Limon’s pumping has varied between 850 and 940 acre-feet per year.
Testimony also indicated that this was less than 50% of the total amount of Limon
permitted water rights.

Exhibit D – Memorandum from Thomas M. Dea, P.E. TAZ Water

Engineers, Cedar Point Wind LLC – Evaluation of Temporary
Groundwater Exportation for Wind Farm Construction Purposes

Testimony from Thomas M. Dea, during the March 12, 2008 hearing testified to
the same facts as the Town of Limon and his conclusions were documents in
Exhibit D which states:

“It is our professional opinion that allowing the one-time export of up to

35 acre feet withdrawn from the Town’s existing, permitted wells for use
outside the District boundaries will not materially injure or affect other
water users within the District. Export of up to 35 acre feet is not even
likely to create a condition where the Town is pumping more than 50% of
its legal annual appropriation.”

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 No user in the District presented specific evidence of injury during the hearing.

Upon the closing of the March 12, 2008, a vote of the Board of Directors was
taken on the application and four directors voted to approve the Application and
one director voted to deny the Application.

At the beginning of the March 12, 2008 hearing, as the Attorney for the District,
Scott Krob introduced the process for the hearing he stated:

“There is one point that I did want to emphasis and that is according to
the district rules, the decision of the Board must be unanimous tonight in
order to approve the exportation of water, so that’s – and the burden of
proof is for the applicant to convince the board by a preponderance of
evidence that it has been established that the exportation will not
materially affect the rights required by permit by any owner or operator of
land within the district and will not result in injury to other (inaudible) in
the district”

The Town of Limon believes it was adversely affected and aggrieved by this
interpretation of District Rule No. 3.

Following the vote, Attorney Krob indicated that the requirement for a unanimous
vote was based on an interpretation of the rule. When he stated:

“At this point according to the interpretation of the rule that this would
not support the application but I would to the board that they allow the
applicant – I don’t know (inaudible) to submit an argument to suggest the
(inaudible).”

The hearing held on March 12, 2008 was continued to May 14, 2008 to allow
Cedar Point, LLC to present further argument as to why a majority vote would be
sufficient instead of a unanimous vote.

The May 14, 2008 hearing was continued to June 4, 2008 when the UBSGWMD
Board of Directors voted that a unanimous vote was required and the application
by Cedar Point, LLC was denied.

The Town filed on July 3, 2008 three claims for relief including one under
C.R.C.P 106(a)(4) and two under C.R.S. 13-51-1-1, et seq. and C.R.C.P. 57 and
District filed a Motion to Dismiss on November 12, 2008. The matter came before
Lincoln County District Court for oral argument, review, consideration and
resolution of the Motion to Dismiss on July 6, 2009. The Lincoln County District
Court granted in Motion to Dismiss with prejudice on July 9, 2009 in a written
Order. The July 9, 2009 Order concluded that the Town should exhaust all
remedies provided by law, including requesting its own hearing before the
UBSGWMD Board of Directors concerning its claims for relief.

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 The Board of Trustees of the Town of Limon held a Public Hearing December 15,
2009 at Limon Town Hall to hear comment and to receive evidence on its water
resources and those of the lower portions of the UBSGWMD, and the need to
provide affordable water for the sustenance of a vibrant community in order to
determine the best action of the Town of Limon in relationship to its current and
future water use requests.

As a result we are in this hearing tonight.

Before I continue, let me reiterate that the Town of Limon continues to support
the ongoing study of the water system in the UBS aquifer and wishes to see the
District take reasonable actions on behalf of the users of the District to protect this
important resource from large long term exportations. The time spent in
defending interpretations that create questions of use through bulk water sales by
municipalities, requirements for unanimous votes and the creation of a situation
where there is no reasonable way to measure the potential injury from a potential
export do little to protect the taxpayers of the Upper Big Sandy Ground Water
Management District except expend their tax dollars.

Introduction of Petition

I would like to submit the Petition from the Town of Limon which outlines the
determinations requested by the Town of Limon

Exhibit E – Petition of the Town of Limon

Read items 1-4

Claims for Relief

Exhibit F – Brief in Support of Petition of the Town of Limon by Raymond L.

Petros, Jr. and David S. Hayes, Petros and White, LLC, Attorneys for the Town of
Limon

Exhibit G – May 1, 2009 Memorandum by Christopher S. Thorne, Holland &

Hart, LLP to Scott Krob Regarding Rule 3 of the Upper Big Sandy Ground Water
Management District Rules

Claim for Relief No. 1 -- Municipal Bulk Water Sales – Not an Export.

As indicated in the opening statement and background, The Town of Limon

believes it is an adversely affected and aggrieved person due to the interpretation
by the District that a sale of Bulk Water within the District may be determined to
be an export of water from the District.

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 Limon requests that the Board determine, as a matter of policy and by majority
vote pursuant to District Rule 26, that bulk water sales by a municipality, where
such sales and deliveries of water occur wholly within the boundaries of said
municipality, constitute a beneficial use of water for municipal purposes within
the boundaries of the District; therefore such bulk sales are not subject to the
export determinations under District Rule 3.

Under such a determination, Rule 3 of the Rules, Regulations and Guidelines

Covering the Conservation, Preservation, Protection and Recharge of Ground
Water Located in Aquifers Within the Upper Big Sandy Ground Water
Management District in El Paso, Elbert and Lincoln Counties, Colorado
(“District Rules”), concerning export of water, is not triggered by such a
municipal use, regardless of what the bulk sale customer does after taking
possession of the water.

A. A municipal utility functions by treating and selling water to public and

private customers; therefore, beneficial use of water for municipal
purposes is accomplished upon sale and delivery of the treated water to the
municipality’s customers.

Colorado law grants every municipality in Colorado the power “to operate
and maintain water facilities . . . for its own use and for the use of public
and private customers and users within and without the territorial
boundaries of the municipality . . .” § 31-35-402(1)(b), C.R.S. The
diversion and use of water consistent with the foregoing power has been
recognized as a beneficial use under Colorado water law. See State Dept.
of Natural Resources v. Southwestern Colorado Water Conservation Dist.,
671 P.2d 1294, 1322 (Colo. 1983), superseded by statute on other grounds
(“Thus, we have recognized municipal use, which includes a variety of
uses incident to governmental activities, as a beneficial use.”). The
Colorado Ground Water Commission has issued permits for wells within
the Upper Big Sandy Designated Ground Water Basin authorizing
municipal use, including for municipal use by Limon.

A municipality is effectively a water retailer, accomplishing its beneficial

use by diverting water into its treatment plant, chemically treating the
water, and then delivering the treated water to its customers via the
municipality’s infrastructure. Customers are charged a fee based on the
amount of water delivered, typically in a rate per thousand gallons.
Measurement of deliveries is made using a meter at the point of delivery;
thus, the transaction, and, consequently, the municipality’s beneficial use,
is completed upon delivery of the water to the customer. Revenues
generated from the sale of treated water by a municipality are then used to
pay debts associated with development of the municipal system and to
fund improvements to the municipal system.

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 B. Municipal use occurs upon sale and delivery regardless of whether
the treated water is delivered to the customer through a single-
purpose tap or through a “bulk sale” tap.

Water from a municipality is most often delivered via an individual tap

plumbed directly to the customer’s property off of the municipality’s
water delivery infrastructure. However, customers with transient water
demands, such as for construction, emergency domestic or stock water,
rural firefighting, and other purposes, may not be able to justify the fees
required for a permanent, individual tap. Although such demands
constitute a very small percentage of the overall water requirements in a
typical community, satisfying these demands is nonetheless necessary to
foster the economic and social success of the community. Accordingly,
such customers can be served through use of a “bulk sale” or common tap
located within the municipality.

It is a common practice for municipalities in Colorado, including

municipalities like Limon within designated ground water basins, to
deliver water to certain customers by bulk sale. Attached hereto is
information about bulk water sales in the following municipalities in
Colorado, providing examples demonstrating the prevalence of this
practice: Town of Limon, Town of Bennett, City of Greeley, City of
Durango, City of Golden, Town of Meeker, Town of Rifle, Town of
Basalt, and City of Pueblo. The method for accomplishing such bulk sales
varies from use of drive-up coin/credit card operated filling stations to
issuance of permits and meters to fill trucks from fire hydrants.
Regardless of method, the need to provide for “spot” deliveries of water to
certain customers, and the correlative benefits to the community and
region associated with satisfying such demands, are widely recognized by
municipalities in Colorado.

Retail bulk water sales, which transactions occur within the service area of
a municipality and include small quantities of water for temporary use, are
distinguished from deliveries of water that occur outside the service area
of a municipality via a pipeline outside the District – such outside
deliveries and sales are distinguishable and not within the scope of the
policy requested by Limon.

C. Possession of the treated water is relinquished by a municipality

upon delivery to the customer with an understanding that the water
may be fully-consumed.

While the right to divert the publicly-owned waters of Colorado is

recognized as interest in real property, a possessory interest in the water is
obtained following diversion pursuant to such a right, and this interest
survives so long as the water is under the control of the person or entity.

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August 11, 2010
 See West End Irrigation Co. v. Garvey, 117 Colo. 109, 115, 184 P.2d 476,
479 (1947); Brighton Ditch Co. v. Englewood, 124 Colo. 366, 373, 237
P.2d 116, 120 (1951); Bijou Irr. Dist. v. Empire Club, 804 P.2d 175, 184
(Colo. 1991). Thus, when delivering treated water to a customer, a
municipality transfers possession of the water to the customer – further
evidence that beneficial use for municipal purposes has been
accomplished.

Upon taking possession of the water, the customer may utilize it for any
number of purposes including domestic, irrigation, industrial, commercial,
or others. Certain of these purposes will fully consume the water, while
others may eventually return a portion of the water back to the custody of
the municipality, via its sewer system. Water delivered to customers may
also be transported far beyond the boundaries of the municipality by the
customer; for example, a town resident or visitor may fill up containers for
use while traveling, a gas station may use water from its tap to fill the
radiators of vehicles passing through on the interstate, a fire truck may use
the water to extinguish a fire outside the municipal boundaries, or a
cannery, bottling plant or brewery may use the water to produce products
and beverages for transport to grocery shelves across the country. The
variability of water consumption by customers of a municipality is
recognized and contemplated as part of any municipality’s appropriation
of water for treatment and sale to its customers. Therefore, the
consumptive disposition of the water following sale to a customer,
whether delivered by single-purpose tap or by bulk sale, is irrelevant to the
consideration of the policy requested by Limon.

Issue 1 Conclusion

Beneficial use of water for municipal purposes is accomplished

when a municipality diverts, treats, delivers and sells water within its
service area to its customers, both public and private, within and without
the boundaries of the municipality. The final step in the municipality’s
“use” occurs at the point of delivery to the customer, whether via single-
purpose tap or bulk sale, when possession of the water is transferred to the
customer for a fee. The Town of Limon requests the Board to confirm
that bulk sales of water in its service area are not an export of water for
purposes of invoking Rule 3. Limon owns municipal water rights
pursuant to permits issued by the Colorado Ground Water Commission,
and has developed, at great expense, water supply infrastructure in
reliance on Limon’s ability to sell and deliver the water diverted pursuant
to these rights to its customers.

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 Claim for Relief No. 2 -- Majority Vote for Export Approval.

Next, the Town of Limon believes it is an adversely affected and aggrieved

person due to the interpretation that the District Rules require a unanimous vote to
allow exportation.

If the bulk water sales described in paragraph 1, above, are determined to be

subject to District Rule 3, then Limon requests the Board to determine, by
majority vote pursuant to District Rule 26, that a vote by the majority of the Board
is necessary to deny a proposed export of water from the boundaries of the
District, in order to be consistent with the authority granted to the Board (and not
just one board member) pursuant to § 37-90-130(2)(f), C.R.S.

Rule 3 of the District Rules presently states as follows (emphasis added):

No ground or surface waters shall be removed from the

aquifers within the boundaries of the District and put to an
approved beneficial use outside the boundaries of the District
without the written authority of all members of the Board of
Directors of the Upper Big Sandy Ground Water
Management District, after a hearing is scheduled within the
District for any such contemplated use.

Any person making an application to remove water from the

District must submit a comprehensive plan for such use to the
District Board for exportation of waters out of the District
prior to consideration of the application by the Board. If the
applicant does not own the land or facilities to be served, a
binding written contract with the others who will be using the
water must also be submitted.

The Board recently interpreted this Rule as requiring unanimous approval by

board members of exports. Limon requests that the Board reconsider this
decision and determine, by majority vote pursuant to District Rule 26, that a vote
by the majority of the Board is necessary to deny a proposed export of water from
the boundaries of the District, in order to be consistent with the authority granted
to the Board pursuant to § 37-90-130(2)(f), C.R.S.

A. The unanimity requirement of Rule 3 vests the authority to prohibit export

in the hands of any one board member, which is inconsistent with the
requirements of Colorado law, including the Groundwater Management
Act, that decisions of a public body be made by a deliberate majority.

By requiring all members of the Board to approve an application for

export, Rule 3 provides any solitary member of the board with the ability
to prohibit the requested export. Vesting a lone individual with the power

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August 11, 2010
 to make such a determination is contrary to Colorado law, which places
the determination authority of a public body in the majority of the
members of the body. § 2-4-110, C.R.S. (“A grant of authority to three or
more persons as a public body confers the authority upon a majority of the
number of members fixed by statute.”)(emphasis added). 1

The foregoing rule conferring authority on a majority of a public body

applies unless there is an express provision specifying different voting
requirements. See O’Gorman v. Indus. Claim Appeals Office, 839 P.2d
1149, 1151-52 (Colo. 1992). The Groundwater Management Act, §§ 37-
90-101, et seq., C.R.S., under which the District and its board are
established and derive their authority, does not expressly provide for less
than majority vote. To the contrary, § 37-90-104(4), C.R.S., concerning
the Groundwater Commission, expressly provides that a majority vote of
present members of the Commission shall rule. Moreover, C.R.S. § 37-
90-130 grants certain powers to the District, acting through its board,
including the authority “[t]o prohibit, after affording an opportunity for a
hearing before the board of the local district and presentation of evidence,
the use of ground water outside the boundaries of the district . . . .” § 37-
90-130(2)(f), C.R.S. (emphasis added). Significantly, the foregoing
section expressly vests authority to prohibit export in the District’s board,
not in any single individual. As currently interpreted, Rule 3 is
inconsistent with the Groundwater Management Act.

If requiring unanimity, and thereby authorizing any single board member

to prohibit export, Rule 3 is also inconsistent with all of the other District
Rules addressing decisions by the board. Specifically, Rules 5, 6, 9, 11,
22, 25, & 26, in addition to Policy Guideline No. 3, all speak to decisions
by the board, which means a majority of the board. Notably, Rule 26
authorizes the Board of Directors to amend the District Rules by a
majority vote.

B. Allowing a single member of the Board to control the quasi-judicial

determinations made pursuant to Rule 3 subjects the District to an
increased risk of litigation and otherwise unnecessary expenses.

As previously stated, Rule 3 is rooted in authority granted by the

Groundwater Management Act, § 37-90-130(2), C.R.S.:

(2) . . . [T]he district board has the authority to

regulate the use, control, and conservation of the
1
The law firm of Holland & Hart, representing Cedar Point Wind, LLC in a request for approval of a
temporary use of water outside the District pursuant to Rule 3, previously submitted a memo to the District,
dated May 1, 2008, setting forth in detail the legal basis for majority decision making under Rule 3 of the
District Rules. Limon adopts the arguments set forth in the Holland & Hart Memo in support of its request
to change Rule 3.

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August 11, 2010
 ground water of the district . . . by any one or more of
the following methods . . . .

(f) To prohibit, after affording an opportunity for a

hearing before the board . . . the use of ground water
outside the boundaries of the district where such use
materially affects the rights acquired by permit by
any owner or operator of land within the district.

Accordingly, a request made under Rule 3 involves a determination of the

rights of a specific individual or party, making the determination of the
board a quasi-judicial action. See Colorado Ground Water Com’n v.
Eagle Peak Farms, Ltd., 919 P.2d 212, 217 (Colo. 1996) (Actions
involving a determination of the rights, duties, or obligations of specific
individuals are quasi-judicial actions). Pursuant to §§ 37-90-131(1)(c) and
37-90-115(1)(a), C.R.S., such actions may be appealed to the district court
in the county where the water right is situated. Review by the district
court shall be de novo. § 37-90-115(b)(III), C.R.S.

An export request made pursuant to Rule 3 requires the board to consider

potentially complex facts as to whether or not such request materially
affects the rights of others in the District. Vesting the power to deny such
a request in any single member of the board increases the potential for
determinations contrary to the evidence presented to the board, and,
consequently, the likelihood of appeal. The taxpayers of the District
should not be subjected to having to pay to defend such actions on appeal.

Issue 2 Conclusion

Colorado law requires that the decisions of a public body represent the
deliberate will of majority, and not be negated by a single or minority
vote. Section 37-90-130(2), C.R.S., vests the board, not any single
individual, with the authority to prohibit the export of water from the
District. The unanimity requirement of Rule 3 is contrary to Colorado law
and increases the likelihood of unnecessary appeals and expenses to the
District. Therefore, Rule 3 should be interpreted to ensure that approval or
denial of export requests be made by majority vote of the board.

Claim for Relief No. 3 -- Approval of Limited Bulk Water Sales by Limon.

Next, the Town of Limon believes it is an adversely affected and

aggrieved person due to the determination of the District to deny the
application for export of limited bulk water for the Cedar Point Wind
Power Project because no competent evidence proving that such uses
materially affect other specific rights within the District as required by
statute was presented by any user.

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August 11, 2010
 If the bulk water sales described in paragraph 1, above, are determined to
be subject to District Rule 3, then Limon requests the Board to reconsider
and approve, by a vote conducted in a manner consistent with the
determination requested in Paragraph 2 above, the proposed export of
water from the boundaries of the District where such water is from an
existing Town of Limon municipal well, for temporary use, and within the
allowed annual amount of withdrawal of the permit for the municipal well.

The proposed limited use of water from Limon’s municipal wells for
temporary uses outside of District boundaries should be approved by the
board because there is no competent evidence proving that such uses
materially affect other specific rights within the District as required by
statute.

Limon requests the Board to approve the export of water from the
boundaries of the District, where such water is from an existing Town of
Limon municipal well, for temporary use, and within the allowed annual
amount of withdrawal of the permit for the municipal well. Limon’s
existing wells have permits granting the right to pump up to 2700 acre-feet
annually from the Upper Big Sandy alluvial aquifer, Limon has not
previously used more than 947 acre-feet of such appropriations on an
annual basis, temporary delivery of up to 35 acre-feet of water per year for
export from Limon’s municipal wells will not cause Limon to exceed its
annual appropriations, and Limon’s wells are located at the “downstream”
end of the Upper Big Sandy Designated Ground Water Basin where water
is flowing out of the District boundaries. Section 37-90-130(2)(f), C.R.S.,
authorizes the District Board to prohibit exports only where export would
materially affect other water rights in the District. In the absence of
competent evidence proving that such limited exports materially affect
other specific rights within the District, the District shall approve the
proposed use for the limited and temporary purposes.

Water Usage by Town of Limon

As documented, the Town of Limon has never used more than 33% of the
total amount of rights it has. When you consider that the Town returns
about 55% of the amount pumped back to the aquifer as discharge from
the WWTP their impact is fairly insignificant. The average consumptive
use (difference between amount pumped and amount returned) the Town
has averaged over the last 6 years would be less than the amount that
would be expected to be used in the irrigation of 150 acres of alfalfa
during that same period.

By looking at the spreadsheet on the historical pumping (Exhibit C) you’ll

notice that usage for 2009 was significantly below any of the previous 14

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August 11, 2010
 years. This is most likely due to the fact that residents are being more
conservative with usage due to economics, the reduction of commercial
use as indicated by sales tax revenues and the loss of one of the significant
industrial users we had until June of 2008 and the fact that we received
much more rainfall in 2009, reducing the need to irrigate lawns. Is this a
permanent trend or only a temporary situation, only time will tell?

Issue 3 Conclusion

The export of water consistent with the limits described above should be
approved by the District Board. Section 37-90-130(2)(f), C.R.S., requires
such an export to be approved without competent evidence establishing a
material affect on other specific rights in the District.

Claim for Relief No. 4 -- Rule 3 Amendments.

Finally, the Town of Limon believes it is an adversely affected and aggrieved

person due to the determination of the District described in Claims No. 1-3 and
has offered a proposal which would result in all claims presented today vacated
by the Town of Limon if the District would approve certain amendments to Rule
3 of the District.

Exhibit H – Town of Limon resolution No. 01-10-06- A Resolution

approving Findings of Fact resulting in proposed amendments to the
Upper Big Sandy Ground Water Management District (UBSGWMD) rules
and the filing of a request for approval to export a limited amount of water
from the Upper Big Sandy Ground Water Basin for specific purposes and
defined periods of time addressed to the Board of Directors of the
UBSGWMD.

The Town of Limon provided the District with a copy of its Resolution
No. 01-10-06 which consists of findings developed from a public meeting
on the current status of the Limon water resources. That resolution
suggests amending Rule 3 in its entirety to read:

No ground waters shall be removed from aquifers within the

boundaries of the District and exported for first use outside the
District boundaries unless approved by a majority of the Board of
Directors of the Upper Big Sandy Ground Water Management
District present at the hearing. Such approval is not required for
uses of water when the water is from an existing municipal well,
amounting in aggregate to 10 acre-feet per year or less from said
well, for temporary use (less than 3 years), and within the allowed
annual amount of withdrawal of the permit; any such exempt use
will be metered and reported to the District. Any proposed use
outside the boundaries of the District that does not meet the

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August 11, 2010
 previous exemption shall require approval by a majority of the
Board of Directors of the Upper Big Sandy Ground Water
Management District present at the hearing after appropriate
filing requirements and hearing presentations have been provided.

Any owner or operator of permitted water rights located within the

district claiming that the owner or operator’s permitted water
right would be materially affected as a result of the requested use
of ground water outside the boundaries of the district shall have
the burden of proving such material affect by clear and convincing
evidence to the satisfaction of a majority of the board of directors
of the district if the water is pumped from a municipal well. If the
water is not pumped from a municipal well the burden of proof lies
solely on the export applicant to satisfy the majority of the board of
directors of the district that the use will not unreasonably affect the
existing permitted water rights.

Consideration of an application shall be made at a public meeting

to be held within the District with Notice. Such Notice shall consist
of:
• A minimum of 28 days before the public meeting the
District shall cause to be published written Notice in
newspapers of record in El Paso, Elbert and Lincoln
Counties.

The application for export shall consist, as a minimum, of the

following:
• The type of use proposed outside the District boundaries;
• The maximum amount of water to be used outside the
District boundaries;
• The maximum time of the proposed use;
• A summary of current water rights and current usage
during the past five years;

Any approval of such application for export shall require a

majority vote of the Board of Directors of the District present at
the hearing. Such approval shall require findings that
• existing well owners will not be unreasonably affected;
• the applicant has adequate water rights in place to provide
for the use;
• the proposed use corresponds to the type of use approved
for the well;
• there is recognizable public benefit achieved by the
utilization of the well;

Testimony at Hearing Before UBSGWMD Page 14

August 11, 2010
 • and all use will be metered and reported to the District as
specified by the District.

Issue 4 Conclusion

The Town of Limon, following a public hearing of its jurisdiction, offers

these changes as an opportunity to end the current issues without further
legal expenses to District taxpayers while protecting the District from the
real issue which is large, permanent exports of what from the Upper Big
Sandy Ground Water Management District.

ààà

Testimony at Hearing Before UBSGWMD Page 15

August 11, 2010