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HomeMy WebLinkAbout2021-09-14 L. Fancher - Letter from J. Neuman and K. DeLashmutt as Applicants Final Legal Argument1 Chenelle Hale From:Liz Fancher <liz@lizfancher.com> Sent:Tuesday, September 14, 2021 3:50 PM To:William Groves Cc:Kameron DeLashmutt; Katzaroff, Kenneth; Kameron DeLashmutt Subject:File 247-21-000731-A Attachments:2021-09-14 Letter to HO Frank neuman.pdf; 20210914 KD FINAL FILED wEXHIBIT.pdf [EXTERNAL EMAIL] Will: Would you please include the attached documents, a letter from attorney Janet Neuman and Kameron DeLashmutt, in the record of File 247-21-000731-A as a part of the applicant’s final argument? Thank you, Liz Fancher Liz Fancher, Attorney 2465 NW Sacagawea Ln Bend, OR 97703 541-385-3067 (telephone) CONFIDENTIALITY NOTICE: The information contained in this electronic mail transmission is confidential. This information is intended for the exclusive use of the addressee(s). If you are not the intended recipient, please notify the sender immediately by return email and you are hereby notified that any use, disclosure, dissemination, distribution (other than to the addressee(s)), copying or taking of any action because of this information is strictly prohibited. Janet E. Neuman janet.neuman@tonkon.com 503.802.5722 direct 503.221.1440 main September 14, 2021 VIA EMAIL: william.groves@deschutes.org Hearings Officer Gregory Frank c/o Will Groves, Senior Planner Deschutes County Community Development Department 117 NW Lafayette Ave. Bend, OR 97703 Re: File Nos. 247-18-000383-TP, 247-18000454-SP, and 247-18-000592-MA Dear Hearings Officer Frank: I am water rights counsel for Mr. Kameron DeLashmutt, Pinnacle Utilities, LLC, and Central Land & Cattle Company, LLC, the Applicant in the above-referenced file ("Applicant"). I am submitting these comments as part of final argument on my clients' behalf. My argument is limited to specific water issues, while comprehensive final argument is being submitted by Ms. Fancher and Mr. DeLashmutt. Introduction The narrow issue on remand is whether “without TP Condition 17, the tentative plan for Phase A-1 satisfies the no net loss/degradation standard and whether a change in the source of mitigation water [if proposed] constitutes a substantial change to the FMP approval . . .” See Ms. Fancher’s Final Argument (“Fancher Final Argument”), p. 1 (quoting LUBA) . As Ms. Fancher states very succinctly: • The answer to the first part of that question is that the Tentative Plan still satisfies the no net loss standard regardless of Condition 17 because “compliance with [the] FWMP assures compliance with [the no net loss/degradation test.” • The answer to the second part of the question is that there is no substantial change to the FMP approval because “there has been no change in the source of the mitigation water. Id. at 2, 4. September 14, 2021 Page 2 Argument Leaving Water in Deep Canyon Creek by Purchasing Big Falls Ranch Deep Canyon Creek Water Rights Complies with the No Net Loss Standard. As stated above, compliance with the FWMP constitutes compliance with the no net loss standard. The FWMP provides that mitigation is required for purposes of no net loss prior to pumping of water for each phase of development. Upon full completion of development, the Applicant will have mitigated the “slight potential for increased stream temperature” by removing two impoundments from Deep Canyon Creek and by ceasing diversions from the creek. However, this is not required now, either under the FWMP nor under the question remanded by LUBA. The issue of removing impoundments in Deep Canyon Creek is not relevant to the current question on remand, because this issue was determined by LUBA against Gould. See Fancher Final Argument, p. 16. Yet many years before it is required by the FWMP, much of the creek flow restoration that was to be obtained by purchasing BFR Deep Canyon Creek water rights has already been provided. All pumping directly from the creek was discontinued in 2018, when OWRD approved Big Falls Ranch’s Transfer T-12651 to move its point of diversion (“POD”) for its Deep Canyon Creek surface water rights from the creek to its wells. At the same time, BFR removed its weir that had previously impounded the water in the creek so it could be pumped from the POD, now allowing water to flow downstream to the Deschutes.1 Applicant has previously submitted video and photographic evidence of creek flow after these changes, including some photographs submitted by the opponents themselves. See Fancher Final Argument, p. 13. Mr. Lambie’s Memorandum submitted for Ms. Gould does not directly counter this evidence. He uses one aerial photo from July 28, 2018, which he says shows no water flowing from the creek into the river, just a “vernal corridor.” September 7, 2021 Technical Memorandum from John M. Lambie to Karl Anuta (“Lambie”), p. 6 and Figure 2. First, a vernal corridor does in fact suggest the presence of water, and we do not agree with his interpretation of this photo. But even if Mr. Lambie’s interpretation were correct, it is irrelevant. OWRD’s final order approving T-12651 was not issued until November of 2018, so BFR was still authorized to dam the creek and pump 100% of their Deep Canyon water rights from the creek during the summer of 2018. 1 The BFR weir has been removed. See PDF 2019/2018 Rec 61, 64. A second impoundment further upstream on other landowners’ property will be fully removed on the timetable required by the FWMP, as will the concrete abutments that held the weir at the BFR POD. September 14, 2021 Page 3 The rest of Mr. Lambie’s argument is essentially theoretical—the creek cannot be flowing because the elevation of the spring that feeds it is higher than the elevation of the static water levels in three of BFR’s wells, and the drawdown effect of the wells is further enhanced by the reach of the wells’ cones of influence. He concludes that all of the BFR wells are directly (and in real time) diverting water from Deep Canyon Creek, drying up Deep Canyon Spring and leaving no water in the creek, as “proven” by the aerial photo. Lambie p. 8. Evidence in the 2019 record filed by Ms. Fancher today shows that the creek was, in fact, flowing in 2019. Although the groundwater and surface water in the Deschutes Basin are hydraulically connected, which is the basis of the special transfer provision in ORS 530.431(3), they are not instantaneously connected in space and time. Pulling water out of the ground at wells located from roughly half a mile to nearly two miles from Deep Canyon Springs is patently not the same as pumping the same amount of water directly out of a single surface POD on the creek right now.2 In fact, based on Mr. Lambie’s charts of SWL elevations, the spring should have dried up some time ago if his theories were correct, but it did not. BFR continued to impound and divert water from the creek until recently, and even Applicant’s opponents claim that water still dams up in the creek. Therefore, Mr. Lambie’s Memorandum does not “prove” that “there is no source of water for mitigation at all” as he claims.3 Lambie, p. 10. And the argument about the adequacy of Deep 2 Mr. Lambie implies that Well No. 1 is located right at Deep Canyon Springs. Lambie, p. 8. This is incorrect. That well is approximately 8600 feet from the springs. See Map attached to Final Argument of Kameron DeLashmutt and Central Land and Cattle Company, LLC (“CLCC Final Argument”). The four wells Mr. Lambie discusses are all different distances from the creek, and different pumping regimes at each will have different impacts on spring or creek flows in terms of amount and timing. 3 In fact, Mr. Lambie seems to suggest that the situation is so dire on BFR that its wells are even pulling water from the Deschutes River at times (Lambie, p. 11), and that Deep Canyon Creek will not flow until BFR stops all pumping of all of its surface and groundwater rights from all of its wells for a considerable time, until the SWL exceed the elevation of Deep Canyon Springs. (Lambie, p. 9-11). (Although it is not a significant point, Mr. Lambie also includes an incorrect assumption in this analysis. On p. 11, he assumes that BFR can use all of its supplemental water rights on top of its primary water rights, but supplemental rights are only to be used when primary rights are not available—they are not additive. See ORS 540.505(3). This makes a difference of only about 50 AF of water. He also seems to misunderstand the way supplemental water rights work at the top of p. 10, where he assumes that if primary rights are transferred, the transferor can just replace the water with supplemental rights, September 14, 2021 Page 4 Canyon Creek as mitigation was determined long ago and is not the subject of this remand. Additionally, Pinnacle recently purchased 90 acres of the Deep Canyon surface water rights from BFR (equivalent to 360 acre feet of water, which translates to 162 acre feet of mitigation water), meaning that BFR can no longer pump this amount of water from either its wells or from the creek. The Final Order on T-12651 prohibits any pumping from the creek, and BFR no longer owns the portion of rights conveyed to Pinnacle, so it cannot pump that amount from the ground. The Applicant has thus demonstrated early compliance with the FWMP as required to meet the no-net-loss/degradation standard. Furthermore, the BFR Agreement allows Pinnacle to purchase an additional 153 acre feet of mitigation water, and as additional amounts are purchased, pumping will be further reduced. This contract currently goes to December 1, 2021, but explicitly provides for additional extensions for a full year beyond that. See Exhibit I, Fancher Final Argument. Mr. Anuta’s claim that the Deep Canyon Creek water is still being used by BFR is thus incorrect as to the portion purchased by Applicant. This water is not being “double counted” for irrigation and mitigation because it can no longer be used for irrigation. Anuta, p. 1.4 which is not the case. Supplemental water rights must be transferred along with primary rights, or else be cancelled. See ORS 540.510(1).) 4 Mr. Anuta’s convoluted claim that the Deep Canyon Creek water cannot be claimed as mitigation until it has been transferred back “from ground water to surface water use” and then go through another transfer process to become an instream water right is wrong. The water right is still a surface water right, as provided in ORS 540.531(3), and as explained in detail by Ms. Fancher and confirmed by Mr. Lambie. The POD can be changed back to the surface location with an email request. See email from Patrick K. “Kelly” Starnes, OWRD, to Mr. DeLashmutt, Exhibit L, Fancher Final Argument. The FWMP provides that the BFR rights will be transferred to an instream right upon completion of the full purchase of water rights from BFR. See FWMP at 7. Opponents’ attempts to accelerate the mitigation obligations in advance of the OWRD mitigation requirements and the FWMP should be ignored. As explained in my letter of September 24, 2019, even before being officially transferred to an instream right, the water right is “protected” instream because no one else can divert the water from Deep Canyon Creek, as BFR holds the only water rights in the creek. See Exhibit K, Fancher Final Argument. This argument is distraction and noise, and has nothing to do with the specific issue on remand. September 14, 2021 Page 5 The Source of Mitigation Water Has Not Changed Earlier, Ms. Gould argued through her attorneys that the “source” of the mitigation water has changed because of Transfer T-12651, and therefore, Condition 17 is required in order to assure that if this is the case, Applicant must amend the project’s Final Master Plan. Now, Ms. Gould’s expert Mr. Lambie has contradicted that position. He acknowledges that despite Transfer T-12651 changing the point of diversion for the Deep Canyon Creek water rights from a surface POD to a groundwater POD/POA, the “source” is the same—the hydraulically connected flows of groundwater and surface water. Pursuant to ORS 540.531(3), the Deep Canyon Creek water right retains its character as a surface water right. The source of mitigation water has not changed. As discussed at length by Ms. Fancher in her Final Argument, water quantity and quality mitigation requirements in the FWMP and in OWRD’s Deschutes Basin Mitigation Program provide the mechanisms needed to assure the provision of timely and effective mitigation in compliance with the approved project Final Master Plan. Conclusion Condition 17 is not required to assure compliance with the no net loss/degradation standard. Nor is it required to protect the source of mitigation water, as there has been no pertinent change proposed. Thank you. Sincerely, s/ Janet E. Neuman Janet E. Neuman Senior Counsel JEN/jw 041295\00001\12740525v1 FINAL ARGUMENT of Central Land and Cattle Company, LLC & Kameron DeLashmutt Remand of the Tentative Plan Phase A-1. Case: Deschutes County Case #247-18-000386-TP Thornburgh resort Phase A-1 Tentative Plan. Hearing Officer Gregory Frank c/o Will Groves, Senior Planner Deschutes County Planning Department Introduction: The FWMP makes clear the OWRD mitigation rules ensure that any thermal impacts of the resorts groundwater use on area streams and rivers will be were very minor, below levels that could be measured1. But the ODFW was however concerned that with other ongoing groundwater withdrawals, not related to the resort, the cumulative effects of all the withdrawals over time might have an impact. The FWMP addressed this minor issue. See the FWMP, Newton 9/7/21 Memo. In review of Thornburgh’s mitigation plans, ODFW commented that it was the most complete mitigation plan for the siting of a resort, and that the Thornburgh mitigation plan would provide a net benefit to the fish habitat. See ODFW letter June 2008, 2019/2018 Record PDF 110-112. Even so, Thornburgh’s mitigation plans have been litigated about 10 times since. This is an ideological, anti-development battle, with the goal being to stop the project. Ms. Gould believes, as stated by Anuta in a submittal to OWRD that there is “no right way to do the wrong thing”. 2019/2018 Record PDF 110. With that as the backdrop this project has been the source of unprecedented weaponization of the land use process with nearly 40 appeals. Now, Gould intends to weaponize the water process as well by protesting any transfer, regardless of its merits, all the while insisting that additional superfluous transfers are needed to give her additional appeal options. This case is a battleground in the weaponization of water law. According to Kleinman, Ms. Gould intends to oppose any, and all water permits for some time to come and says, “we are a long way from the time that building permits could issue here.”2019/2018 PDF 110. The same issues are routinely raised by opponents, some going back to 2005, and often regarding water availability, mitigation water and its use. These issues were resolved in favor of the applicant and the continued re-litigation of them is a collateral attack on the CMP/FMP. During the golf course site plan appeal Gould and the opponents raised a wide range of issues the majority of which were collateral attacks on prior approvals. The Board of County Commissioners, in their decision included Exhibit A, which was a 24-page description of 17 major categories of issues opponents raised that were resolved in 1 In the extensive analysis that took place over FWMP litigation those impacts were shown to be in the tens, hundredths, or thousandths (.1, .01, .001) of a degree, plus or minus, which cannot effectively be measured. prior proceedings. See Exhibit A, BOCC Golf Course approval. Many of those same issues are raised here. Again, they are barred by the theory of collateral attack. In this proceeding, as you noted at the hearing the issue is very narrow. LUBA asks if, without Condition 17 the Phase A-1 TP satisfies the no net loss standard, and whether a change in the source of the mitigation water constitutes a substantial change to the FWMP approval…. The BOCC in its decision on remand found that “this is the limit and extent of what must be answered by the County on remand”. The BOCC decision goes on to say: “In these proceedings the applicant removed uncertainty about whether it can purchase the Big Falls Ranch irrigation water described in the FWMP. The applicant has shown that the Big Falls Ranch water rights associated with Deep Canyon Creek are and remain surface water rights even though they are pumped from groundwater wells. They may be purchased by the applicant to mitigate for impacts that will occur after the resort starts to pump groundwater for resort uses. When Big Falls Ranch water rights are purchased, Big Falls Ranch will discontinue pumping the groundwater associated with the rights purchase. The applicant has shown in its evidence submitted to the record, that it is feasible for it to purchase the Big Falls Ranch water referenced in the FWMP.” And in 2019, the Board noted that “the applicant has demonstrated that the alleged situation that created uncertainty about the Big Falls Ranch mitigation water rights, the transfer of the point of diversion of Big Falls Ranch water – does not prevent compliance with the FWMP.” And it determined that “the applicant is not proposing to change the source of mitigation water…”. Further, “In summary, the Board finds the TP Condition 17 is not required to assure compliance with the no net loss/degradation standard of DCC18.113.070(D) because the applicant must follow the FWMP, a plan found by LUBA to meet the no net loss standard because the applicant has shown it is feasible to obtain the Big Falls Ranch mitigation water”. BOCC TP remand pages 6-8. Although this decision is not binding due the stipulated remand, it was based on sound reasoning and a careful review of much the same evidence presented in 2021. The hearings officer should make the same finding here. During the appeal of the golf course site plan the BOCC noted: “The Board finds the Applicant is not proposing any change to the FWMP, which calls for the dams to be removed at points in the future. Further, that while not required at this point, before it begins any pumping that the Applicant has caused the cessation of pumping of the Deep Canyon Creek water and the removal of the head gate which impounded the water in the Big Falls pond, allowing the Deep Canyon Creek water to flow to the river, subject to the constraints the Beavers reinstall. At this point the Applicant has done more than is required by the FWMP”. BOCC Golf Course Exhibit A, Page 11. This decision was affirmed by LUBA on June 11, 2021. The Board based both this tentative plan and the golf course site plan decisions on largely the same information presented in this case. Save one critical thing. Thornburgh has now provided proof it has purchased 90 acres of BFR Deep Canyon Creek water. This equates to 162 acre-feet of mitigation which is more than 3x the 50 acre-feet of mitigation required for this Phase A-1 tentative plan. Earlier, the BOCC found it was “feasible” for applicant to purchase the BFR water, and that when it was purchased BFR would stop pumping groundwater. It’s clear what the Board thought with before when it just was feasible to acquire the BFR water, that it was feasible for Central Land to acquire the required mitigation water from BFR. Now Thornburgh has shown it has purchased the water and that BFR has stopped pumping groundwater. Opponents for their part, have largely made the same arguments, raising issues that are not relevant to the issue on remand, and constantly raising issues that were resolved and are impermissible collateral attacks on prior approvals. See Boards Exhibit A. Further, the bulk of opponent arguments deal with the issue of compliance with the FWMP, which is a matter not for the land use process, but the annual reporting required by the mitigation plans and FMP condition 38. FMP Condition 38 ensures compliance with the no net loss standard and compliance will be determined by the annual reporting about the status of the mitigation plans. This was accepted with the approval of the FMP and the mitigation plans. That the opponents were able to interject issues regarding the transfer of the BFR water did not belong in the tentative plan approval. It should not be a relevant issue unless and until the applicant requests to change the mitigation plan. This has been acknowledged in both this case and then again in the Golf Course site plan. In the original appeal in this case LUBA said the following: “We agree with intervenor that the details of the mitigation plan are established by the FMP, and compliance (or noncompliance) with the mitigation measures will be established by annual reporting required by FMP Condition 38. We reject petitioner's argument that the FMP required intervenor to “fill in the details” to obtain approval of a tentative plan during phased development.” See LUBA Phase A-1 TP decision, Page 13. In the Golf Course site plan LUBA added: “FMP Condition 38 requires intervenor to "abide by" the FWMP and "submit an annual report to the county detailing mitigation activities that have occurred over the previous year." Record 34. “Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10”. And: “The county found that the provision of water to satisfy the FWMP is not relevant to the review of the golf course site plan because intervenor did not propose and the county did not approve any change to the FWMP as part of the golf course site plan review”. Record 13 (citing Gould VIII, 79 Or LUBA at 583 -84). See LUBA Golf Course decision page 13. This tentative plan was submitted to the county for approval on May 2, 2018. Approval was received on October 18, 2018. Since then, it has been the subject of an appeal to LUBA, appeals to the Oregon Court of Appeals and the Oregon Supreme Court, a remand to the Hearing Officer, an appeal to the BOCC, and another appeal to LUBA to get here. Once done here, given Gould’s ideological stance to delay and thereby destroy Thornburgh, and her seeming endless resources to fight her ideological battle it’s reasonable to expect more trips to the BOCC, LUBA and the Court of Appeals. All this for a tentative plan allowed under the approved Conceptual Master Plan and Final Master Plans. To say this is an abuse of the system is a massive understatement. HO questions during the hearing. 1. Where is the source of the source. Response: The source of the mitigation water is the Deep Canyon water rights described in the FWMP. No changes have been made to the source of mitigation water. 2. Why is the source of the water important? Response: At the hearing Mr. Kleinman answered that question stating: The quality of the source matters. And that is because the importance of BFR water, specifically from the spring in deep canyon creek which it owns the rights to, is providing the cold water for salmon and steelhead. That is the quality issue as opposed to the quantity issue. While we disagree with Kleinman’s assessment on importance (see Newton August 31 memo) the water he refers to is the water we have purchased and are using. 3. If in fact the water comes from the same water right holder, BFR, if it comes from same entity does that make a difference? 4. What difference does it make whether or not it comes from that entities well or the surface? Response: For this proceeding these issues do not matter as we have purchased the Deep Canyon surface water that Kleinman refers to. But as Mr. Newton explained, the purchase o fany BFR water should provide essentially the same cool water benefit to Deep Canyon Creek and the Deschutes River. It therefore doesn’t matter whether the OWRD mitigation was to come from BFR well water or Deep Canyon surface water. Both will have the same effect and the no net loss will be met. 5. “If Ms. Fancher’s testimony is accurate, then there is no change in entity supplying water. If there is no change, then in fact the remand issue that talks about a change may not be important.” Response: As we have consistently stated we are not changing the source of mitigation water. In this proceeding we have shown we have purchased the Deep Canyon water rights. As a result, the premise of the question is correct, without a change in the source, the remand issue mentioning a change in water source is not applicable given the facts presented. Response to Opponent Comments: Karl Anuta: 1. Before the Deep Canyon Water can be used for mitigation it must: a) Be transferred back from groundwater to surface water use, and then, b) Go through another change of use transfer process, for an instream water right. Response: a) Applicant’s evidence clearly shows the water is still surface water. As shown above the BOCC found the transfer of the POD didn’t change the water and that it is available. Anuta’s own expert admits the Deep Canyon Water is still surface water. Hence there is no need to transfer the point of diversion back to the creek. Further, the question of whether there is an instream water right or the right has been transferred to the instream program is not part of this proceeding, nor was it required by condition 17. b) This is not the issue on remand. The tentative plan approval doesn’t create the need for mitigation. It is the construction of buildings with people in them that creates water use. Mitigation, per the OWRD rules is needed prior to that water use. This is not the issue on remand and has been raised and resolved in applicant favor numerous times. It is a collateral attack on the CMP/FMP. Further compliance with the FWMP is governed by the annual reporting requirements of the Wildlife mitigation plan, which has been raised and resolved in applicant favor. This is an impermissible collateral attack on the FMP. Anuta’s claim should be rejected. 2. There is no evidence Thornburgh has closed on the 162 acre-feet of water from BFR. Response: Anuta is completely wrong. I testified at the hearing this has happened and htat I had closed on more than enough water from Big Falls Ranch. Mr. Newton who has represented both Thornburgh and Big Falls Ranch also stated the resort has acquired 90 acres of water, that is equivalent to 162 acre- feet of mitigation. And Ms. Fancher submitted the assignment of water rights form sent to OWRD that shows the purchase of the water. The evidence is overwhelming. 3. The recent Groundwater Review for Thornburgh’s back up water rights permit determined that the proposed withdrawal will over appropriate the aquifer. Response: This has nothing to do with the issue on remand, and nothing to do with the mitigation in the FWMP. Instead, this is thrown in to confuse the issue and distract from the relevant facts that show we are and will comply with the FWMP. Anuta attaches some pages from the groundwater review. The page he highlights is a form with a box checked. Items he overlooks are Page 6 of 10, section B, B1, (a) states the groundwater is not over appropriated, and (b) water will likely be available in the amounts requested without injury to prior water rights. This is like the issue raised by Mr. Arnold I dealt with in an earlier submittal. Further, the issue of the availability of water was resolved in applicants favor in the CMP. Raising the issue again is a collateral attack on the CMP. Furthermore, all issues related to the water rights permit, and FMP Condition 10 were resolved against Gould by LUBA in its review of this case. A further review of the issues is barred by the doctrine of law of the case. 4. The backup permit uses a well that will be abandoned. Response: This not an issue on remand and has been litigated and resolved in applicants favor earlier in this case. LUBA noted “The mitigation plan involves (1) the removal of two wells on the subject property, (2) the removal of two dams that impede the flow of spring water from Deep Canyon Creek to the Deschutes River, and (3) transfer of water from Deep Canyon Creek that Big Falls Ranch uses for irrigation for mitigation”. And: “Intervenor responds, and we agree, that removal of the dams and provision of mitigation water is required by the FMP approval and the tentative plan does not alter the mitigation plan.” See LUBA TP, slip opinion, page 13. Further, the well is being proposed for construction water under the limited license. It is to be removed prior to operation of the resorts water system. This is an issue of compliance with the FWMP that will be determined during the annual monitoring required by Condition 38. Nunzie Gould. 1. The applicant has not taken out the dams. This is not the issue on remand. The dams are not required to be taken out now. And when required it is a matter for the annual monitoring program, not a land use process for this proceeding or any other. Further it has been raised and resolved before. During the golf course site plan, the Board of Commissioners found, like here, that the Applicant is not proposing any change to the FWMP, that would require the dams to be removed earlier than in the future as required by the FWMP. BOCC Golf Course decision. 2. The well indemnification agreement is absurd. This is not an issue on remand. Also, the issue was litigated and resolved in 2007 in applicants favor and any attack today is a collateral attack on the CMP. To provide a little background, in 2005-2007 opponents were concerned about the potential for Thornburgh’s groundwater pumping to affect their wells. While Thornburgh disagreed, we understood their concern. In response we voluntarily offered to indemnify anyone within a 2-mile radius whose well the resort’s groundwater pumping caused to fail. This is not a code requirement nor anything forced upon us. It was a voluntary gesture of goodwill. The 2-mile distance was not an arbitrary distance. Rather it was the study area used in the hydrology study done by Newton and as I understand it, OWRD. John Lambie: This submittal is largely a new report, much of which is not rebuttal, rather, new evidence. The issues raised are rarely related to the issue on remand, and in cases are old issues, ones that have been raised and resolved against Gould in the past. 1. “The source of water has not changed from the original surface water rights…”. Lambrie: Page 1. Deep Canyon Creek water rights are surface water rights. Project opponents (Gould, Landwatch, etc..) have consistently argued, to create confusion, that the BFR transfer changed the source of the Deep Canyon water rights from surface water into groundwater rights and because of that change of source the BFR surface water rights are no longer available for mitigation until they were transferred back to surface water. Both the new evidence and rebuttal in this remand from both Anuta and Kleinman still argue this point. Apparently, they don’t believe their own expert. On this we do agree with Lambie that following the transfer, the Deep Canyon Creek water rights are surface water rights. We have consistently argued the source of the Deep Canyon water has not changed, that the Deep Canyon water is still surface water. Jan Neuman email, Sarah Henderson email, etc... Opponents are wrong on the law as confirmed by OWRD, and wrong on the facts. Finally, the truth comes out. The admission that the source of the water has not changed coupled with the fact that we have purchased that very water, should settle the issue and let us put all this to bed. For good. 2. Flow of water in Deep Canyon Creek has not been made available by BFR actions to date This is not the issue on remand. During the review of the FMP, the hearings officer determined that the FWMP’s reliance on the purchase of water rights – not actual stream flow – would serve as the proper measure of compliance with the FMP. Raising the creek flow issue vs. water rights issue now is a collateral attack on the FMP and the FWMP. Furthermore, Lambrie is not correct. It is uncontested that BFR has stopped pumping surface water from Deep Canyon Creek. Lambie claims groundwater pumping of the Deep Canyon Creek water rights has “dehydrated” Deep Canyon Creek springs, so they no longer create a flowing creek and that this result is consistent with groundwater data and physics. This is not, however, correct. To support his position Lambrie provides a Google Earth picture from July 2018 he claims shows that the creek is not flowing to the river. But the photo shows dense vegetation along the creek that is likely obscuring the flowing creek down to the BFR weir. Lambie has not accounted for the timeline of relevant events. At the time his photo of the creek was taken, BFR was damming the creek and pumping 100% of their Deep Canyon water from the creek. It wasn’t until November 2018 that OWRD issued the final order for transfer T-12651. In February 2019 the amended agreement between BFR and Pinnacle was executed. It prohibited BFR from pumping water from Deep Canyon Creek and required them to remove the weir. Thereafter, during the irrigation season they pumped groundwater. In 2019 after BFR ceased pumping, opponents submitted aerial photos of the creek showing the weir removed and the creek flowing to the river. Around the same time the applicant submitted a video of Deep Canyon Creek water flowing through the weir, although the beavers were making their own dam in the same location. See Ms. Fancher’s memo today on this subject which shows that the creek was flowing in 2019. All this supports our contention that prior to the transfer BFR was taking the water from the creek, after the transfer and agreement with Pinnacle, BFR stopped pumping, left the water in the creek, and removed the weir so it could flow onward to the river. 3. The spring stopped flowing because well #1 is below spring elevation. This is not the issue on remand. In spite of the evidence showing the creek flowing, to support this speculation to the contrary, Lambie provides well data from BFR for wells 1, 3, and 4. He ignores well #7 also in T-12651. In his explanation he notes that well 1 is the most significant in that it is located “at the upper end of Deep Canyon Creek.” Lambie’s comment implies well #1 is right at the spring, and because of that close proximity it is taking all the water from the spring thus leaving the creek dry. In fact, according to Lambie’s Figure 1 and supported by location information in the final order for T-12651, Well #1 is 3,600’ SW of Deep Canyon at the nearest point and 8,580’ from the spring. Further well 3 is 2,970’ from the spring, well 4 is 6,415’ from the spring, and well 7 is 4,884’ from the spring. See attached graphic overlaid on the Lambrie map showing well locations. Mr. Lambie says that if the hydraulic head of a well falls below the elevation of a spring, the spring discharge will cease “entirely.” This is clearly not occurring because the spring-fed Deep Canyon Creek is still flowing. It may be that Mr. Lambie has inaccurately calculated the hydraulic head of Well #1 or the area impacted by pumping at this well (assuming pumping impacts will extend 1.5 miles to the springs). Lambie’s memo explains how the distance from a stream is important noting a cone of depression exists from groundwater pumping that is “most acute at the well but more importantly extends across a region.” The depression is greatest at the well and diminishes the further away you go from the well. See page 4. Since the Deep Canyon Water right was transferred to 4 different BFR wells each of the wells has increased pumping. This combined pumping has not “dehydrated” the stream as postulated by Lambie. There is no empirical evidence that 100% of the pumping from all 4 wells (combined) is depleting Deep Canyon Spring much less pumping from just 1 well (#1) by itself. Lambie cites to OAR 690-380-2130(3) that he says eliminates the proximity requirement from section 2(d) of 2130. This requires, in the rest of the state that the new POD be within 500’ of the source. Here the new POD, the 4 wells range up to 2 miles away from the point of diversion. The final order for T- 12651 shows well 1 to be 11,246’ from the original POD on Deep Canyon Creek, while well 4 is 8,395’ from the POD, well 3 is 5,491’ away and well 7 is 2,956’ from the POD. The more important element of the OAR is the second half of 3(d) that Lambrie ignores. This changes language in 2(c) that required the new POD to have a similar impact on the source as the original. 3(d) prohibits OWRD from requiring a similar impact on the source between the original and new POD as a condition of approving a transfer. The law clearly assumes the effects on the source may not be the same from moving from a surface water POD to a well POA, and even prohibits OWRD from requiring it. Even so, Lambie concludes on the basis of well logs for wells a mile or two away that 100% of the groundwater pumping from them is coming from Deep Canyon spring. His conclusion is illogical. Lambie states that “BFR is interfering with its own groundwater rights at these same four wells and may find that their Deep Canyon Creek water rights are now subordinate and subject to curtailment or perhaps forfeiture.” OAR 690-380-2130(3)(a) states that “The proposed transfer would not result in injury to an existing water right or enlargement of the water right proposed for transfer.” In approving the transfer T-12651 and applying OAR 690-380-2130(3)(a), the OWRD found no injury by the transfer to an existing water right by the proposed groundwater pumping that would be authorized by the transfer. 4. Because Deep Canyon is diverted from wells you cannot stop diverting the surface water from Deep Canyon Creek. Lambie says this is a matter of fact, not a matter of water rights governance. This is illogical. The first premise that the entire flow of the creek is now being diverted from wells is not true, as shown above. He extends that premise to claim that “commingling of water rights” cannot easily be reversed to restore the surface flows in Deep Canyon Creek he mistakenly claims are absent. His claim is contrary to the entire premise on which the OWRD Mitigation rules were established. Newton’s August 31 memo says: “The premise for groundwater permits is that groundwater pumping reduces streamflows. Conversely if groundwater pumping is lowered, the impact of the pumping on streamflows will be reduced because less water is pumped and more will flow into the effected stream or river, which mitigates for the pumping event causing the impacts.” Logically, wherever stream flows are reduced when the pumping starts is where the stream flows will increase when pumping stops. Not somewhere completely different as Lambrie contends. This is related to the hearing officer question: “What difference does it make whether or not it comes from that entity’s well or the surface?” As Newton states, the effect from the reduction of groundwater pumping, whether from BFR well water, or the Deep Canyon surface water now pumped from the same wells, will be the same. When BFR stops pumping groundwater discharge into the river will increase, whether it occurs at the Deep Canyon Creek or directly into the river, resulting in net gains to the river. The effect is the same. See Newton August 31 memo. Because of his expertise and extensive knowledge of the geology of the Deschutes Basin, it is only logical to find that our expert hydrogeologist, David Newton,2 is correct in saying that any water diverted from the stream by groundwater pumping will be returned to the stream when pumping ceases. Pinnacle purchased 90 acres of Deep Canyon Surface water rights mentioned in the FWMP. As shown by documents filed by Ms. Fancher these water rights have been assigned to Pinnacle and Big Falls Ranch has stopped pumping that Deep Canyon water from the wells, which is equal to 162 acre-feet of mitigation. These are undisputed facts. 2 Mr. Newton’s work experience is included in his resume which is included in the 2018 record. It can be found at 2019/2018 PDF 832-841. The evidence shows Mr. Newton was a consultant to OWRD, a key member of the guiding mitigation committee during creation of the mitigation program, and one of the foremost experts on issues related to groundwater, its connectivity to surface water, and the overall hydrogeology of the Deschutes River Basin. 5. There is no source of mitigation at all. Lambie makes a whole host of wild points that there is no water, no mitigation available, that BFR has no water available, etc. But then he admits that BFR has the rights to pump up to 24.14 cfs of water from its various sources, both groundwater and surface water. He interjects another transfer that BFR has applied for from the creek in MacKenzie canyon to further confuse things. None of this is the issue on remand. The source and availability of mitigation water and the adequacy of water rights to prove the quantity of mitigation was settled by approval of the FMP. Raising it now is a collateral attack on the FMP. 6. Battle of the Experts Lambie’s evidence stands, in many cases, in direct conflict to the expert evidence provided by our expert David Newton. Based on Mr. Newton’s verifiable superior knowledge of the Deschutes Basin he clearly wins that battle. Mr. Newton was raised in Redmond. His father and grandfather were involved in the installation of pumps and irrigation systems in the area. Water in the Deschutes Basin, and the Deschutes River is a passion of Mr. Newton’s and has been at the guiding core of his professional life. He has explained he was a key member of the guiding committee working for OWRD in the creation of the Deschutes Basin Mitigation program. He provided technical support and input on issues of geology, surface water and groundwater conditions in the upper Deschutes Basin. Along with Marshall Gannet, USGS, and Ken Lite, OWRD, he provided presentations to other committee members to provide them the technical knowledge needed to understand the issues pertaining to hydrogeology in the Deschutes Basin. David Newton is one of the foremost experts on the hydrology of the Deschutes Basin. Lambie, simply isn’t in the same league as Newton.3 Jeff Kleinman: 1. Must transfer the water back to surface water. This is immaterial and has been conclusively debunked above. Anuta has stated the transfer can happen. Lambrie says it doesn’t need to happen as the Deep Canyon water is still surface water. OWRD says the water is surface water. It is evident they want to further advance procedures that they can then protest to continue to delay the development to death. This is just another ideological ploy. David Arnold: Arnold makes numerous comments pertaining to water, most all of which he contends should require a new CMP/FMP. This includes issues such as; that we own additional water rights, have applied for other water rights transfers, and permits, and that BFR transferred their water to groundwater wells. Arnold also raises his concerns about population growth, drought, spring levels, and states that the original water permits were done without groundwater studies and should require them today. 3 As an aside, in 2008 when the FWMP was being developed, Thornburgh’s water attorney was Martha Pagel. Ms. Pagel was the Director of OWRD during the time OWRD was developing the Deschutes Basin Mitigation program. Mr. Newton was a consultant to OWRD, years of which were during Ms. Pagels directorship. Response: In a previous letter I responded to these claims, the bulk of which have nothing to do with the issue on remand. The evidence has shown that there is no change in source, that we are using BFR water as discussed. That we also have substantial other water rights that are not being used, rather are being left in the river to provide flow and habitat benefits to fish and aquatic species. As noted in my previous letter this equates to roughly 308 acre-feet of mitigation we have left in the river. We are not using it for this remand and have not requested “credit” for it. It is simply there. Landwatch: Direct comments from Landwatch comments in this proceeding are limited to the lot of record issues that Ms. Fancher is addressing in detail. Instead of making any comments related to the issue on remand Landwatch sent repeated pleas throughout their email list urging people to comment. Landwatch provided the talking points that in many cases recipients simply cut and pasted to form their “own” comments. Landwatch talking points included: 1. I am concerned about the excessive water use, 2. I am worried about the effect of such large water withdrawals on fish and wildlife, 3. Deschutes County requires resorts to prove that any negative impacts on fish and wildlife will be completely mitigated, 4. Thornburgh reached an agreement with ODFW for water sources, and it appears those sources are no longer available, 5. I am opposed to allowing Thornburgh to proceed until it shows it complies with mitigation, 6. If water has changed public should have right to participate in a new agreement with ODFW. While the above was paraphrased from the Landwatch emails, in numerous cases the actual talking points were repeated over and over in emails to the county and hearing officer. As is evident, most of the resulting comments were not relevant to the issue on remand, and often were issues previously resolved in favor of the applicant and are impermissible collateral attacks on the prior approvals. Ones that are relevant to the issue on remand have been lumped into others that were dealt with by me above, or by Ms. Fancher in other final arguments. Most of the commentors also did not participate in the case below and are not entitled to do so here so should not receive party status by virtue of filing comments. Conclusion. The issue on remand is very narrow and the applicant has conclusively shown that it meets the no net loss standard without Tentative Plan Condition 17. The evidence shows that the applicant has the rights to purchase the BFR Deep Canyon Creek water, that the Deep Canyon water is still surface water, that BFR has stopped pumping Deep Canyon spring water from the Creek, removed the weir and is letting that water flow through the BFR land. Further the applicant has given verbal and written testimony that it has purchased the very water that opponents say is important and provided written confirmation of such. There is no change in the source of the water, a fact that the opponent’s own expert admits. The evidence and prior rulings from the BOCC and LUBA show that FMP Condition 38 determines compliance with the FWMP which is accomplished by the annual monitoring required by the mitigation plans. Compliance is not to be determined in the land use process. The hearing officer should never have taken us here, but here it should end. Despite the frivolous claims, the distractions, and diversions proffered by opponents, there can be no question the applicant is complying with the FWMP, which has been held to meet the no net loss standard. Condition 17 is not needed for that. It is happening today. Thank you for the consideration. Sincerely, Kameron DeLashmutt Central Land and Cattle Company, LLC