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| 3/6/2010 6:00:00 AM | Email this article • Print this article | McPhee storage
spurs water war
Kimberly Benedict
Journal Staff Writer
As winter melts into spring and McPhee Reservoir begins its slow ascent to full capacity, the placid waters conceal a raging battle with the hallmarks of history.
Two major water providers, Montezuma Valley Irrigation Co. and the Dolores Water Conservancy District, are locked in litigation reminiscent of historical water wars and, at the moment, there is no end in sight. At stake for one is the idea of private property rights. For the other, the integrity of accounting practices.
MVIC filed a lawsuit June 5, 2009, against the Dolores Water Conservancy District and the U.S. Bureau of Reclamation for allegedly not meeting water requirements agreed to in 1977 contracts of the Dolores Project.
"MVIC has lost the ability to exercise its full water rights because of actions taken by DWCD," said MVIC Manager Jim Siscoe. "They are not allowing us to use our water right how we choose."
The lawsuit states that the district "improperly charged and assessed 'delivery' of Dolores Project water in the amount of 29,658 acre-feet despite (MVI's) direct-flow rights in the Dolores River (that) have produced 100 percent of MVI's demand."
An acre-foot is equal to 325,829 gallons of water, enough to fill an entire football field to the depth of 1 foot.
"They have taken an amount of water illegally," said MVIC President Randy Carver. "That was based on accounting principles that cannot be enforceable. The only way we could get their attention was to file the lawsuit.
"The goal of the lawsuit is to gain control of our full water right."'
The assertion on the part of MVIC is that 20 years of confusion regarding contract language has led to a misunderstanding on the part of DWCD's board regarding the allocation of water from McPhee.
The 1977 contracts of the Dolores Project charged DWCD, formed in 1961, with the task of accounting for water flows in and out of McPhee. District representatives disagree with MVIC's claims that their accounting practices are faulty.
"We have two major responsibilities," said Mike Preston, DWCD manger. "We are responsible for seeing everyone gets their entitled share of project water - no more, no less. As a part of that responsibility, we have to account for every acre foot of water that comes into McPhee Reservoir and every acre foot that goes out of McPhee Reservoir."
Water from McPhee is the lifeblood of Montezuma County. The reservoir supports 28,500 acres of full service irrigation land from Yellow Jacket to Dove Creek, served by DWCD, 7,600 acres of Ute Mountain Ute tribal lands, rural water users in Montezuma County, the fishery below the McPhee dam, and the municipalities of Dove Creek, Cortez and Towaoc, according to Preston.
MVIC was formed in 1920, and through individual shareholders it irrigates roughly 37,500 acres in the Montezuma Valley. In addition to water from the Dolores Project, MVIC holds historic Dolores River direct flow water rights.
"Because we are a privately held company and we hold private property rights, we have in McPhee Reservoir two distinct buckets of water," Siscoe said. "We have the largest direct flow water right in this basin. That water comes in and passes through McPhee."
In 1977 MVIC willingly surrendered half of its direct flow rights to aid in the creation of the reservoir. In exchange, the irrigation company was guaranteed use of storage water to fulfill its obligations.
"MVIC is a private company that has the legal right to store water in a federally owned project," Siscoe said.
In drought years, MVIC's direct flow rights on the Dolores River superceed Dolores Project rights. In extremely dry years, such as 2002, MVIC's pull from the river leaves little water for reservoir storage.
The irrigation company claims that 10,000 acre-feet of water stored in McPhee has been seized by DWCD, leading to a potential loss of $60,000,000 for the company, according to Siscoe.
"They have misinterpreted the contracts, they have usurped their authority over us," Carver said. "Our shareholders never intended that to happen."
MVIC says the impacts of the disagreement were felt last year when their irrigation season was shortened.
"Last year I had to curtail delivery of water to our shareholders as a direct result of the district's actions," Siscoe said. "It puts me in a terrible position because how do I explain to somebody that they have paid for their water but this company called DWCD won't open the headgate to allow me to deliver it?"
DWCD sees the dispute in a different light.
"You've got two water rights involved here," Preston said. "One is MVIC's direct flow water right, then you've got Dolores Project storage rights in McPhee. When the (Dolores) river is producing less water and there is irrigation demand they are entitled to a share of Dolores Project storage.
"The crux of the lawsuit is that they want a change in the accounting rules that would give them more water out of storage than they are entitled to."
Both parties claim that their appeals for meetings to settle the lawsuit have been rebuffed by the other side.
"In Nov. of 2008, DWCD President Joe Mahaffey wrote Randy Carver requesting a jointly planned series of meetings to hash out these water allocation and accounting issues that MVIC was raising," Preston said. "MVIC declined to respond to that invitation."
Carver maintains DWCD has mischaracterized the invitation, which he claims specifically dealt with a water study.
"We were sitting down with them," Carver said. "When the taking of the water happened, we left that study."
On MVIC's part, Carver says he has appealed to the DWCD board at least 14 times for conferences and has yet to receive a response. Preston states the current legal actions have prevented such meetings.
Settlement talks between the two organizations, mediated by a magistrate in Durango, broke down in December when MVIC decided to seek new representation. Shortly after that, the case was given to a magistrate in Grand Junction.
"We were having meetings that were being conducted by a federal agency that were leading toward settling this case," Preston said. "They pulled the plug on that settlement in December."
MVIC's decision to switch attorneys was simply a case of self-interest, according to Carver.
"I was never comfortable with the settlement at that point and the boards had never visited with each other," Carver said. "We changed attorneys at that time because we felt like our needs were not being met by the current attorney."
MVIC is currently represented by Holsinger Law, LLC, based in Denver. Local attorney Kelly McCabe is no longer affiliated with the company.
The two groups have been ordered to begin settlement talks immediately as the next step in the legal process. Both are hopeful a conclusion will be met quickly.
"It is difficult to go into an irrigation season not knowing what you have," Siscoe said. "If I have my way, we will get this settled before April 1, when the water season starts. At the heart of this you have to remember, MVIC's desire is not only to protect its private property rights, but all the water in this basin for the community. This is deadly serious and has huge implications, massive.
"But also, we have a real respect for the district's water right and we recognize how we all share in this resource together."
As far as DWCD is concerned, it will be business as usual for the upcoming water season.
"We have these contracts and these water accounting procedure that have always been there and they are still in place," Preston said. "We are going to proceed to account for water and administer every participant's water allocations in accordance with the rules that have been in place since 1977.
"It's about everybody getting their fair share of Dolores Project storage."
On the Net: Dolores Water Conservancy District, www.doloreswater.com; Montezuma Valley Irrigation Co.; www.mvic.us.
Journal Staff Writer Steve Grazier contributed to this report.
Reach Kimberly Benedict at kimberlyb@cortezjournal.com.
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