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HomeMy WebLinkAbout2021-11-04 Katzaroff RE 508-SP 849-A - Exhibits 11-121 Tracy Griffin From:Katzaroff, Kenneth <KKatzaroff@SCHWABE.com> Sent:Thursday, November 4, 2021 11:53 AM To:Angie Brewer; 'Liz Fancher' Subject:RE: 508-SP; 849-A - Exhibits 11-12 [IWOV-pdx.FID4723617] Attachments:Exhibits 11-12; 508-SP; 849-A.pdf [EXTERNAL EMAIL] Exhibits 11-12 Schwabe Williamson & Wyatt Kenneth Katzaroff Attorney Direct: 206-405-1985 kkatzaroff@schwabe.com Admitted in Washington and Oregon. LEARN HOW OUR CLIENTS ARE INNOVATING IN THEIR INDUSTRIES: www.schwabe.com/fueling-change From: Angie Brewer <Angie.Brewer@deschutes.org> Sent: Thursday, November 4, 2021 11:06 AM To: Katzaroff, Kenneth <KKatzaroff@SCHWABE.com>; Liz Fancher <liz@lizfancher.com> Subject: FW: FW: DISREGARD LAST EMAIL - USE THIS ONE - CORRECTIONS [IWOV-pdx.FID4723617] Hi Ken, Please see below. Did you intend to attach more support documents? Thanks, Angie From: Gregory Frank <gregportlandlaw@gmail.com> Sent: Thursday, November 4, 2021 10:41 AM To: Angie Brewer <Angie.Brewer@deschutes.org> Subject: Re: FW: DISREGARD LAST EMAIL - USE THIS ONE - CORRECTIONS [IWOV-pdx.FID4723617] [EXTERNAL EMAIL] 2 Angie Were the attachments actually attached to the Katzaroff letter? I did not see them on the above pdf's... If not, how can I access them? Greg On Thu, Nov 4, 2021 at 5:57 AM Angie Brewer <Angie.Brewer@deschutes.org> wrote: Hi Greg, The applicant has asked me to share the attached documents with you in advance of this evening’s hearing. I received the email he’s referring to as an older, now corrected version, at nearly the same time. As a result, I’m only sending you the corrected version. If you’d like to see both, please let me know. Thank you and see you by Zoom this evening! Angie From: Katzaroff, Kenneth <KKatzaroff@SCHWABE.com> Sent: Thursday, November 4, 2021 4:37 AM To: Angie Brewer <Angie.Brewer@deschutes.org> Cc: liz@lizfancher.com; Schunk, Andrea K. <ASchunk@SCHWABE.com> Subject: DISREGARD LAST EMAIL - USE THIS ONE - CORRECTIONS [IWOV-pdx.FID4723617] [EXTERNAL EMAIL] Angie – Because it’s 4:30am, I mistitled one of the document files. Please use these corrected versions. Per last email, I’ve made two quick corrections to these documents, including adding the exhibit list to the last page. If you could please swap them out in the record and send the corrected versions to the hearings officer, it would be much appreciated. 3 Ken Schwabe Williamson & Wyatt Kenneth Katzaroff Attorney Direct: 206-405-1985 kkatzaroff@schwabe.com Admitted in Washington and Oregon. LEARN HOW OUR CLIENTS ARE INNOVATING IN THEIR INDUSTRIES: https://smex- ctp.trendmicro.com:443/wis/clicktime/v1/query?url=www.schwabe.com%2ffueling%2dchange&umid=04bbd 623-9027-49bd-ac08-364c925c1291&auth=b6e5f914caa071e97c22b57421b394cc38777e44- 362fba1907cdd8ce717c3729705f2739a0476564 __________________________________________________________ NOTICE: This email may contain material that is confidential, privileged and/or attorney work product for the sole use of the intended recipient. Any review, reliance or distribution by others or forwarding without express permission is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. __________________________________________________________ NOTICE: This email may contain material that is confidential, privileged and/or attorney work product for the sole use of the intended recipient. Any review, reliance or distribution by others or forwarding without express permission is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. BEFORE THE HEARINGS OFFICER FOR DESCHUTES COUNTY, OREGON File Number: 247-21-000731-A/Land Use Board of Appeals, Case No. 2018-140 Appellant: Central Land and Cattle Company, LLC Applicant/Owner: Central Land and Cattle Company, LLC Proposal: Affirm Approval of Tentative Plan/Site Plan on Remand Subject Property: Tax Lots 7700, 7800, 7801 and 7900, Map 15-12-00 Hearings Officer: Gregory Frank Planning Staff: Will Groves, Senior Planner APPLICANT’S FINAL ARGUMENT I. MITIGATION REQUIREMENTS There are two different kinds of mitigation. Resort opponents keep lumping them together. They are: • Water quantity mitigation for the water used for each development phase of use, determined by OWRD according to the incremental development plan and/required prior to pumping, consisting of a total of 1356.0 acre-feet annually in the General Zone of Impact (anywhere in the Deschutes Basin above the Madras gage, located on the Deschutes River below Lake Billy Chinook). • Fish and wildlife mitigation required by DCC 18.113.070(D), the no net loss/degradation standard, provided for by the approved FWMP which addresses water quality issues. BFR Deep Canyon Creek mitigation water is relevant to both mitigation programs but in different ways. The BFR water rights provide water quantity required by OWRD and water quality mitigation required by the FWMP. EXHIBIT 11 II. ARGUMENT AND ANALYSIS OF RELEVANT ISSUES LUBA’S Question on Remand The Land Use Board of Appeals (“LUBA”) remanded the County’s approval of the Phase A-1 tentative plan and site plan to determine whether the tentative plan approval meets the “no net loss/degradation” standard of DCC 18.113.070(D) without Condition of Approval 17.1 DCC 18.113.070(D) is a County standard only.2 LUBA also asked the County to address whether a change in the source of mitigation water, if proposed, would constitute a substantial change to the Resort’s Final Master Plan (FMP) that would require land use review of the change. This is how LUBA framed the issue: “On remand, the county must consider 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, requiring a new application, modification of the application, or other further review consistent with FMP and DCC destination resort regulations.” Gould v. Deschutes County, 79 Or LUBA 561, 580 (2019)(“Gould TP”).3 Answer to LUBA’s Question The answer to LUBA’s question is that without Condition 17, the applicant must comply with the FWMP (Addendum to the Resort’s Wildlife Mitigation Plan). The County and appellate bodies determined that the Thornburgh FMP and its FWMP achieves compliance with the no net loss/degradation standard when they approved and affirmed the FMP. Compliance with FWMP Assures Compliance with No Net Loss/Degradation Test LUBA has determined “[t]he resort’s impact on fish and wildlife, and the efficacy of required mitigation, was litigated over the course of multiple prior appeals ***.” Gould TP at 573. LUBA 1 Ms. Gould’s argument that the requirements of Condition 17 must be met on remand is clearly erroneous given the plain language of LUBA’s question on remand. 2 Given this fact, interpretations of this code by the Board of County Commissioners in prior decisions such as its approval of the CMP are due deference by LUBA on appeal. 3 LUBA’s question on remand assumes that no part of Condition 17 will remain in effect, including Condition 17(a). Condition 17(a) requires it to prove that OLUs are OLUs during the review of the OLU site plan. Condition 17(a) is not needed to assure compliance with relevant tentative plan approval criteria and nothing about the tentative plan prevents OLUs from being OLUs and LUBA found that the issue had been addressed and settled during review of the CMP. Furthermore, the requirement imposed by Condition 17(a) – whether OLUs are OLUs – is being addressed by the County as a part of its review of the OLU site plan. EXHIBIT 11 determined that “[i]n this appeal, petitioner does not challenge the mitigation plan, but instead challenges the Phase A-1 approval as inconsistent with the mitigation plan.” Gould TP at 573. This means that a showing of compliance with the FWMP establishes compliance with the no net loss/degradation test. Additionally, this means that all of the issues raised by opponents that challenge the mitigation plan on remand are barred by the doctrine of law of the case because the issues were not raised by Gould in her appeal of the County’s tentative plan decision. Beck v. City of Tillamook, 313 Or 148, 831 P2d 678 (1992); Gould v. Deschutes County, 272 Or App 666, 684, 362 P3d 679 (2015) (Beck law of the case doctrine holds that issues decided by LUBA and issues upon which judicial review was not sought are settled and not subject to review in a subsequent review by LUBA). Justification for Condition 17 Condition 17 was imposed because Hearings Officer Olsen thought Central Land might need to purchase irrigation water for mitigation from sources not described by the FWMP to satisfy its mitigation water obligations and that the possible use of a different source of mitigation water, if needed, might constitute a modification of the FMP and its FWMP barred by FMP Condition 1.4 LUBA determined, in its review of the Phase A-1 tentative plan decision, that mitigation water may be provided in subphases without violating or requiring a modification of the FWMP. Gould TP at 575. L UBA found that the FWMP requires the resort to provide mitigation water in advance for the full amount of water to be pumped under each development stage (e.g. tentative plan or site plan rather than resort approval phases). The FWMP does not require the applicant to provide upfront the full amount of mitigation required for an entire phase of resort development (e.g. Phase A of the FMP). Gould TP at 574-575. This means that the applicant must demonstrate, on remand, that it is feasible for it to acquire sufficient water rights from BFR to offset the quantity of water use allowed by the Phase A-1 tentative plan. 4 The availability of mitigation water was fully litigated during the review of the FMP. Consequently, the hearings officer’s decision re the availability of mitigation water was an impermissible collateral attack on the FMP that should not be repeated in future reviews of development applications. Safeway, Inc. v. City of North Bend, 47 Or LUBA 489, 500 (2004); Exhibit C of the Applicant’s Burden of Proof (BOCC Decision, Document No. 2020-579, pp. 4-5). Central Land did not, however, raise this issue on cross-appeal so it was not considered by LUBA. Additionally, LUBA determined in its decisions regarding the Phase A-1 tentative plan and Thornburgh golf course that compliance with the FWMP is properly addressed by the annual reporting requirement of FMP Condition 38 not by Condition 10. FMP Condition 38 requires a review of the annual reports by County staff; not a review of a development application such as a tentative plan or site plan. Gould TP at 583; Gould v. Deschutes County, __ Or LUBA __ (LUBA No. 2020-095, June 11, 2021) (“Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10.”) The Board of Commissioners (“BOCC”) also applied this reasoning in its approval of the Thornburgh golf course, Exhibit C of the Applicant’s Burden of Proof. EXHIBIT 11 Uncertainty about the feasibility of acquiring FWMP mitigation arose due to arguments presented by opponents. As to the Big Falls Ranch (BFR) water rights, opponents claimed that it would be impossible for Central Land to purchase them. Ms. Gould argued that the water rights were not available due to a transfer of the surface water point of diversion of the water rights from Deep Canyon Creek to a point of appropriation from groundwater. Rather than resolve these issues, Hearings Officer Olsen deferred review of them until the OLU site plan review by imposing TP Condition 17. This condition was stricken by LUBA because it believed the condition allowed the applicant to change the source of mitigation water to a source other than one specified by the FWMP.5 Resolution of Uncertainty on Remand Hearings Officer Olsen’s decision explained that during review of the OLU site plan, demonstrating that the applicant has rights from BFR “should be straight-forward.” TP Olsen Decision, p. 30. This is because those rights are required by the FWMP and compliance with the FWMP establishes, as a matter of law, that the no net loss test will be satisfied. The same holds true for this review on remand that addresses the same issue. Source of Mitigation Water The hearings officer has asked “what is the source of mitigation water?” As it relates to the issue on remand, the answer is that the source of mitigation water is BFR Deep Canyon Creek water rights. Mr. Olsen’s decision approving the Phase A-1 tentative plan provides this answer to this question. Mr. Olsen identified BFR and COID water rights as an FMP-approved source of mitigation water (page 29 of his decision). He explained later, on page 30, that he was unsure whether obtaining water from these sources remains feasible and, as a result, he imposed TP Condition 17.6 Condition 17 also identified the sources as “the Big Springs [Falls] Ranch and COID water referenced in the Mitigation Plan and FMP decision.” LUBA’s discussion of “Mitigation Water Sources” also makes it clear that BFR and COID are the sources of mitigation at issue in this remand. It says [t]he hearings officer found that the 5 The hearings officer also allowed the applicant to change the source of mitigation water – an option not exercised by the applicant on remand. 6As recognized by Mr. Olsen’s findings (p. 30), the issue of the availability/feasibility of obtaining mitigation water from Big Falls Ranch and COID was settled by approval of the FMP. Given the fact that the issue was settled by the FMP, Mr. Olsen should not have revisited the issue during the review of the tentative plan as it was an impermissible collateral attack on an issue settled by the FMP. Safeway, Inc. v. City of North Bend, 47 Or LUBA 489, 500 (2004). Additionally, FMP Condition 38 makes it clear that issues of compliance with the FWMP are to be addressed by County staff in their review of annual compliance reports; not during the review of a tentative plan or site plan application. EXHIBIT 11 mitigation plan relies on mitigation water acquired from the COID and Big Falls Ranch.” Gould TP at 577. The FWMP, as correctly determined by hearings officer Olsen, does in fact identify Big Falls Ranch as the source of mitigation water. It also describes Deep Canyon Creek water rights as the particular rights that will be purchased for use as mitigation water. Ms. Gould’s attorney Mr. Anuta agrees that the BFR water rights are the “source.” He also states on page 9 of his post- hearing argument that “the ‘source’ of the mitigation water is supposed to be a right with a certain priority date for use of surface water in Deep Canyon Creek …” The applicant has purchased and will purchase mitigation from the source described by Mr. Anuta – BFR Deep Canyon Creek water rights described in the FWMP. As they are the same rights, there is no question but that have the same priority date although that issue is not relevant as a priority date requirement is not imposed by the FWMP. There has been no change in the source of the mitigation water specified by the FWMP. Mr. Kleinman’s post-hearing argument [p. 3] is at odds with Mr. Anuta’s. Mr. Kleinman claims “the source [of mitigation water] is cold spring-fed water in Deep Canyon Creek.” While the term “source” may also mean the physical source of the water flowing in Deep Canyon Creek that is not the meaning of the term as it is used by the FWMP, Mr. Olsen, Mr. Anuta and LUBA.7 As explained later in this final argument, Hearings Officer Briggs determined, when she approved the FWMP, that water rights administered by OWRD would be the measure of mitigation rather than the volume of spring water discharged into Deep Canyon Creek. See, Exhibit E (fn 9, pp. 23-24).8 Availability of Mitigation Water The applicant has demonstrated that Pinnacle Utilities, LLC has purchased mitigation water from Big Falls Ranch. It has also shown that Pinnacle purchased the Deep Canyon water rights specified by the FWMP. See, Exhibit A9 (FWMP pp. 9). In August, 2021, Pinnacle Utilities, LLC purchased 90 acres of Deep Canyon Creek water rights (162-acre feet of mitigation water under the relevant state rules) from Big Falls Ranch. See, Exhibits B and C. The water rights 7 Even if a transfer of the point of diversion of water from the creek to groundwater were a change in source of mitigation, which it is not, it does not alter compliance with the no net loss standard. After the purchase of Deep Canyon Creek water rights from BFR, Pinnacle holds both the “paper” water rights appurtenant to the BFR property and the right to assure that the rights will not be pumped from the creek (in fact, pumping has ceased). These are the only mitigation events related to BFR water expected by the FWMP. 8 The original source of the creek water is precipitation that falls from the sky. A part of this precipitation enters the ground and most enters the vast regional aquifer that underlies the Deschutes Basin. The aquifer is the source of water for the Deep Canyon Creek springs and creek. 9 All exhibits are documents that have been included by the applicant in the record of 247-21-000731-A. EXHIBIT 11 are a portion of the BFR Deep Canyon Creek water rights identified for purchase by the Resort for use in mitigation by the FWMP. See, Exhibit D (Figures 3 and 4 of FWMP). The purchase of BFR Deep Canyon water rights is the action relied on by the County’s hearings officer when she approved the FWMP. See, Exhibit E (pp. 22 & 24 of FMP Decision by Hearings Officer Briggs). The issue of the availability of this mitigation water, therefore, has been resolved and should not have been reopened by hearings officer Olsen. Nonetheless, it was but it is clearly feasible for Pinnacle to purchase BFR Deep Canyon Creek water rights because it has already done so. The fact that these water rights were, prior to purchase, pumped from groundwater rather than Deep Canyon Creek is immaterial. Pinnacle’s purchase eliminates both the right of BFR to pump these water rights from groundwater or from the creek. Both the required actions, purchase of Deep Canyon Creek water rights, and its intended result (no pumping from the creek) have been or can be achieved. As a result, the tentative plan will not result in a violation of the no net loss test without Condition 17. Error by Kleinman in Describing County Conditions of Approval of the Tentative Plan Mr. Kleinman, on page 5 of his post-hearing comments under the heading “Availability of Water – Mitigation” inaccurately describes the tentative plan decision. He says that “the County conditioned approval on, the applicant providing cold spring surface water from Deep Canyon Creek, and the removal of two dams/reservoirs on that Creek – in order to off set the impact of the Resort ground water Permit (#G-17036) on Whychus Creek.” Mr. Kleinman apparently forgets that he argued to LUBA that the hearings officer erred because he did not impose a condition of approval to require removal of the two dams on Deep Canyon Creek. According to LUBA: “Petitioner argues that the hearings officer erred in failing to require a condition of approval for the tentative plan that, prior to beginning construction, intervenor remove the dams [from Deep Canyon Creek] and wells [from the resort property].” Gould TP at 583. There is also no condition of approval beyond Condition 17 that can fairly be described as requiring the applicant to provide “cool spring surface water from Deep Canyon Creek.” Opponents’ Arguments re Availability of Mitigation Water Pinnacle Has a Secret Contract and Hasn’t Proven it Can Purchase Mitigation Water from BFR Opponents have claimed that the applicant has not established that he has a contract to purchase Deep Canyon water rights from BFR. The applicant disproved this assertion by purchasing a significant portion of the BFR water rights described in the FWMP as the only “specific mitigation” required by the plan. The business terms of the agreement are not relevant to compliance with relevant tentative plan criteria or to the question on remand. EXHIBIT 11 Streamflow in Deep Canyon Creek is Non-existent or Inadequate During the review of the FMP and FWMP, opponents argued that the acquisition of water rights is not proof that “wet water” will actually be returned to Deep Canyon Creek. Ms. Briggs recognized that water rights might not mean that cool water will actually be available instream but rejected opponents’ arguments and determined that OWRD administration of water rights was “the only way to adequately account for water in the streams.” See, Exhibit E (fn 9, pp. 23- 24). This finding conclusively determines that the FWMP requires the applicant to purchase water rights; not to demonstrate that a certain volume of “wet water” exists in the creek. Opponents’ wet water and creek flow arguments presented on remand, including Mr. Lambie’s clearly erroneous claim that Deep Canyon Creek does not contain flowing spring water,10 constitute an impermissible collateral attack on the FMP and its FWMP. Safeway, Inc. v. City of North Bend, 47 Or LUBA 489, 500 (2004) (“As a general principle, issues that were conclusively resolved in a final discretionary land use decision, or that could have been but were not raised and resolved in that earlier proceeding, cannot be raised to challenge a subsequent application for permits necessary to carry out the earlier final decision.”) as quoted by LUBA in Gould TP at 570. Adequacy of 162 AF of BFR Mitigation Water to Meet Mitigation Requirements Associated with Phase A-1 Water Use The 162-acre feet of mitigation water acquired by Pinnacle is far more mitigation water than the 50-acre feet of mitigation needed for uses that will be allowed without further County land use review after the filing of the Phase A-1 final plat and compliance with additional FMP requirements. Ms. Gould’s attorney Jeffrey Kleinman argues that 50-acre feet of mitigation water is insufficient to meet the water needs of the Phase A-1 tentative plan because that figure does not include water use for all uses that may ultimately receive approval from Deschutes County to be built on land included in Phase A-1. Ms. Gould acknowledged, however, in her Petition for Review to LUBA that the tentative plan decision reduced the mitigation required for Phase A-1 down to 50 AF – the amount stated by Central Land in 2018 and this is correct. See, Exhibit H and Gould TP at 575.11 Additionally, Ms. Gould challenged Central Land’s accounting of its mitigation water requirements in her appeal of the Phase A-1 tentative plan and her challenges were rejected. 10 I have prepared a separate document that clearly shows that Mr. Lambie’s claim that Deep Canyon Creek is not flowing is erroneous and based on faulty science. 11 LUBA rejected Ms. Gould’s argument that this change was an impermissible modification of the FWMP/FMP finding that Ms. Gould had “not established that the changes in the amount and timing of mitigation water materially affect the findings underlying the mitigation plan.” Gould TP at 577. EXHIBIT 11 While the 50-acre feet figure does not account for water use by unapproved development that may be approved to occur on land included in the Phase A-1 tentative plan, the figure accounts for all uses that may occur without County site plan review (i.e. single-family homes). No other land uses may occur in Phase A-1 unless and until they obtain site plan approval and account for the water needs associated with that use. DCC 18.113.040(C); FMP Condition 10.12 This makes it clear that approval of the tentative plan and final plat for Phase A-1 does not authorize any water use beyond the use associated with single-family homes and that the 50-acre feet estimate provided in 2018 is correct.13 Pinnacle Utilities, LLC also has a water rights purchase agreement with Big Falls Ranch for that gives it the right to purchase up to 315-acre feet of BFR mitigation water (less the 162-acre feet recently purchased by Pinnacle). There is substantial evidence in the current record and in the 2019 partial record to demonstrate that the initial contract exists and secures the right of Pinnacle Utilities, LLC to purchase BFR Deep Canyon Creek water rights. The existence of the current contract with BFR, executed in 2019, is provided by Pinnacle’s water lawyer, Janet Neuman who was involved in drafting and reviewing the contract, Exhibit F, and by BFR President Rex Barber, Jr., Exhibit G as well as by numerous statements by Kameron DeLashmutt, Manager of Pinnacle Utilities, LLC. In her August 24, 2021 letter, Ms. Neuman again confirmed that the contract was executed on February 13, 2019 and has been extended through December 1, 2021; with the ability to be extended until December 1, 2022. See, Exhibit I. A memorandum of the contract filed in the record by the applicant’s attorney has also been recorded with the Deschutes County Clerk. It shows that the contract was to expire on June 1, 2021 but that it may be extended, as it has been. If the mitigation water purchase agreement did not exist, Pinnacle would not have been able to purchase 162-acre feet of mitigation water. The fact that the contract exists means that Pinnacle has the right to purchase more than enough BFR mitigation water to serve all Phase A uses which amount was estimated as 203-acre feet of mitigation during review of the tentative plan. This figure was not successfully challenged on appeal by Ms. Gould. As this figure includes all resort Phase A use, the 315-acre feet of BFR mitigation is also sufficient for all Phase A-1 uses. 12 Deschutes County and LUBA have determined in both the review of the Phase A-1 tentative plan and the resort’s golf course that FMP Condition 10 requires an estimate of the amount of mitigation water required for the development authorized by the approval and an update on the status of the resort’s water permit only. It does not require the applicant to “prove up” the water rights. Gould TP at 581. 13 Mitigation sufficient to offset the quantity of water pumped is provided and approved by OWRD prior to pumping water. Gould TP at 577. Compliance with the mitigation requirements of the FWMP is assured by the annual reporting and County staff review required by Condition 38 of the FMP, not during the review of development applications by staff or the County’s hearings officer. Gould v. Deschutes County, __ Or LUBA __ (LUBA No. 2020-095, June 11, 2021) (“Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10.”) EXHIBIT 11 Despite the fact that the 50 AF and 203 AF figures were not successfully challenged on appeal and the issue is settled, Ms. Gould’s attorney Karl Anuta again filed evidence about water use by the resort on August 23, 2021 attempting to convince the County to reopen the issue. It should decline the invitation because consideration of the issue now is barred by law of the case. Furthermore, the evidence filed by Mr. Anuta is the Resort’s proposed Water Management and Conservation Plan which estimates the Resort’s water needs for the first 10 years of development. The standard does not require the applicant to mitigate water uses projected to occur during the first 10 years. Instead, it must mitigate for uses allowed by the approval of the Phase A-1 tentative plan. The information provided does not answer that question. BFR Water Rights Have Been Transferred Opponent Gould’s attorneys Karl Anuta and Jeffrey Kleinman claims that the BFR Deep Canyon water rights have been transferred “to another location” so are not available for use as mitigation water by Pinnacle. This is incorrect. Water rights are appurtenant to land. Their location has not been changed. The 2018 transfer T-12651 changed only the point of diversion of the BFR Deep Canyon water rights – the specific location from which the water rights are pumped. It did not transfer the water rights to another location. This claim is without factual or legal merit. A Change from a POA to a POD is A Change of Source; Groundwater not an Authorized Source of Water Mr. Anuta claims that a change of point of diversion of the Deep Canyon Creek water is a change to a point of appropriation from groundwater. He also argues that groundwater is not an FWMP authorized source of water – ignoring the fact that the source of mitigation water for the FWMP is the BFR Deep Canyon Creek water rights as determined during the review of the FMP. See, Exhibit E (fn 9, pp. 23-24) (accepting the use of water rights for mitigation by the FWMP as a proxy for creek flow). While the “POA” term is used to describe this transfer, the correct term is “POD.” The approval of transfer T-12651, due to the provisions of ORS 540.531(3)(c), created a new point of diversion of the Deep Canyon Creek water rights. It did not create a point of appropriation (POA) from groundwater. ORS 540.531(3)(c) (emphasis added)14 says: “(3) Notwithstanding subsection (2) of this section, the department shall allow a transfer of the point of diversion [from surface water to groundwater] under subsection (1) of this section in the Deschutes Basin ground water study area if: 14 Typically, wells are called points of appropriation and surface diversions are called points of diversion. ORS 540.531(c), however, explicitly uses the term point of diversion for transfers from withdrawal of surface water to withdrawal from groundwater when authorizing these changes in the Deschutes Basin, thus making it clear that the transfer of the Deep Canyon Creek surface water rights grants a new point of diversion which is a right to divert surface water. EXHIBIT 11 (c) The use of the new point of diversion will affect the surface water source hydraulically connected to the authorized point of diversion specified in the water use subject to transfer. The department may not require that the use of the new point of diversion affect the surface water source similarly to the authorized point of diversion specified in the water use subject to transfer under this subsection.” A point of diversion is the right to appropriate surface water – in this case from Deep Canyon Creek. The approve of transfer T-12651, did not create a point of appropriation from a new source of water. Deep Canyon Creek Spring Flows are No Longer Available due to Transfer T-12651 Mr. Anuta claims that transfer T-12651, which changes the location of pumping for Deep Canyon Creek water rights, “means that the cold spring surface water flows in Deep Canyon Creek *** are no longer available as potential instream flow mitigation for the resort.” This transfer, however, did not change the water rights from a Deep Canyon Creek surface water right to a groundwater right. Mr. Anuta’s own expert, Mr. Lambie, refutes Mr. Anuta’s claim on page 3 of his September 7, 2021 Technical Memorandum stating: “OWRD identifies all the water rights under T-12651 as surface water rights because their source is surface water. They were not groundwater rights in 1967 and they have not become groundwater rights by way of any transfer or modification. The source of the water has not changed from the original surface water rights from 1967….”15 Mr. Lambie is correct that the BFR Deep Canyon water rights pumped from groundwater remain surface water rights. OWRD staff has advised the County of this fact and has stated that these water rights will be certificated as surface water rights which will occur when BFR’s Claim of Beneficial Use is approved. See, Exhibit J. Both before and after approval of the Claim of Beneficial Use, the BFR Deep Canyon Creek water rights will be surface water rights. Water rights attorney Janet Neuman agrees noting that under ORS 540.531 the Deep Canyon Creek water rights remain surface water rights even when pumped from groundwater. See, Exhibit K, p. 5. Claim of Beneficial Use Mr. Kleinman argues that the filing of a Claim of Beneficial Use of Deep Canyon Creek water rights weakens Central Land’s case. It does not. As shown by Exhibit J, the water rights certificates that will be issued in the future (over two years) will be issued as Deep Canyon Creek surface water rights. 15 Mr. Newton does not describe the BFR water rights as a groundwater right as claimed by Mr. Lambie. Mr. Newton does not opine on the topic. OWRD and State law say that the water rights are surface water rights after transfer. EXHIBIT 11 Additional Transfers are Needed After BFR Water Rights are Purchased Mr. Anuta’s claims that additional transfers and actions remain to be taken by the applicant. This claim has no bearing on the issue on remand. The issue on remand is whether the applicant can obtain Deep Canyon Creek mitigation water from BFR which it has already done. Furthermore, as explained by Ms. Neuman, the applicant has never argued that further OWRD review will not be required but Mr. Anuta’s position that the new point of diversion (pumping from groundwater) must be transferred back to the original point of diversion (pumping directly from the creek) before the water is available for mitigation is “simply wrong.” See, Exhibit K, p. 4. Even if such a transfer were required, which it is not, it does not mean that the BFR Deep Canyon Creek water rights are not available for purchase and use by Pinnacle. It only means it might take some time to accomplish. Mr. Anuta acknowledges that the point of diversion of Deep Canyon water rights can be transferred back to surface water in the creek. The applicant has provided information from OWRD that proves that such a transfer is feasible and not lengthy. See, Exhibit L. As a result, it is clear that BFR Deep Canyon surface water rights have been purchased and that additional rights remain available for purchase by Pinnacle in the future. The recent purchase by Pinnacle is in an amount that far exceeds the water use required for Phase A-1. This assures that BFR will not pump any water under the Deep Canyon water rights from groundwater or directly from the creek. Does An Application for a Backup Water Rights Permit Seek Approval of a New Source of Mitigation Water The fact the applicant has applied for a back-up water rights permit on the resort property does not propose a new water source for mitigation. First, the applicant has only applied and has not obtained approval of a new groundwater. Second, the water pumped is not the source of mitigation water referred to by LUBA in its question on remand. Mr. Anuta states, in response to this question, that the source of mitigation issue is not tied to the source of well water used by the resort. We agree. Instead, the source of mitigation water issue is addressed by the FWMP and relates to a creek and wells on land owned by BFR many miles north of the resort property. The FWMP requires the applicant to provide mitigation required by OWRD. OWRD requires that mitigation be provided from the General Zone of Impact as noted by the FWMP.16 The issuance of a new groundwater permit – assuming one is approved – will not change the applicant’s obligation to provide mitigation water from sources that comply with FWMP or from a source shown to comply with the no net loss/degradation standard. 16 The sources of OWRD mitigation were inaccurately identified by the hearings officer as only Big Falls Ranch and COID. The FWMP identifies these sources but also identifies an additional source of mitigation water which is outside of the COID district. For purposes of the tentative plan, however, this issue is settled. EXHIBIT 11 Thornburgh has “Double Counted” Water Rights Thornburgh, quite clearly, is not double counting water rights as claimed by Mr. Anuta in his rebuttal comments. Anuta says that the water cannot simultaneously be used by BFR for irrigation and claimed by Thornburgh as mitigation. This is correct but what eludes Mr. Anuta is the fact that this is not what is proposed and not what has happened. Pinnacle purchased BFR water rights. BFR discontinued pumping water to irrigate the lands to which the water rights attached. The two events – pumping and mitigation – are not and will not be occurring at the same time. There is no “double counting.” III. ISSUES OUTSIDE THE SCOPE OF REMAND The following issues are addressed below to show that they are outside the scope of the issue remanded to the County by LUBA and to respond on the merits in the event the issues are found to be relevant now or on appeal. Condition 17 Opponents argue that Condition 17 should be retained despite the fact the applicant has shown that it has purchased mitigation water rights for Phase A-1 from Big Falls Ranch, that it has a contract to purchase the same water for all of Phase A and that all of the water purchased is Deep Canyon Creek surface water. Condition 17 is not, however, a relevant approval criterion applicable to the review of the tentative plan. It was discussed above because LUBA directed the county to consider whether the tentative plan and site plan will result in a violation of the no net loss/degradation standard of DCC 18.113.070(D) without Condition 17. Opponents’ arguments regarding Condition 17, therefore, are outside the scope of remand and barred by the doctrine of law of the case. Approval of the tentative plan/site plan does not require Condition 17 because Central Land remains bound to obtain water rights for mitigation from the sources specified by the FWMP unless and until it is amended and has done so. The approval of the tentative plan does not require that Central Land purchase water from a source not identified in the FWMP – a document that assures compliance with the no net loss/degradation standard. Consequently, Condition 17 is not needed. Depletion of Flow of Deep Canyon Creek Ms. Gould and her expert, Mr. Lambie, allege that the flow of Deep Canyon Creek is either depleted or non-existent due to the pumping of groundwater by BFR. These claims are outside the issue on remand because Ms. Gould failed to challenge the sufficiency of the FWMP so all issues related to the efficacy of the plan are settled in favor of Central Land and Cattle Company. Hearings Officer Briggs, who approved the FWMP, also determined that it requires the purchase of Deep Canyon Creek water rights only and does not require Central Land to provide “wet water” in the creek in a certain volume. See, Exhibit E (fn 9, pp. 23-24). So, comments EXHIBIT 11 suggesting that a certain volume of water from the creek is required to meet the “no net loss/degradation” standard are incorrect. Mr. Lambie theorizes that the flow of the creek will not be able to be re-established once it has been depleted by groundwater pumping by discontinuing pumping. Mr. Lambie states that this event appears to have occurred and relies on a 2018 Google Earth photograph to make that claim and that his analysis confirms that this is what has occurred. He also says it will be difficult to restore flows to the creek by stopping pumping once this event has occurred. While we have been unable to submit expert evidence to rebut this claim because Mr. Lambie’s evidence was filed as rebuttal, expert evidence is not needed. Facts in the record show that Mr. Lambie’s claims are not correct. It is not correct that the springs no longer discharge and create a flowing creek. Evidence filed in 2019 clearly shows a flowing creek that is discharging its cool water into the Deschutes River after BFR pumping of its Deep Canyon Creek water rights from groundwater commenced. This issue is addressed in detail in a separate document that provides copies of documents from the 2019 record that disprove Mr. Lambie’s claim that the creek has run dry and that physics dictate this result. Additionally, BFR was not pumping Deep Canyon Creek water rights from groundwater at the time the Google Earth photograph was taken in the summer of 2018. The final order that authorizes pumping these water rights from ground, transfer T-12651, on and after November 20, 2018. 2019/2018 Record PDF 74-81. FMP Condition 10 Ms. Gould’s attorney Jeffrey Kleinman bases his legal analysis of issues on remand on his view of the requirements of FMP Condition 10 – a view that differs from that of the Oregon Court of Appeals, LUBA, the Board of Commissioners and the Phase A-1 tentative plan decision written by hearings officer Dan Olsen. Mr. Anuta argues that the state water right permit has expired and that this violates FMP Condition 10. This issue has been addressed and resolved by hearings officer Olsen and LUBA so may not be raised again on remand. Furthermore, the issue is not one relevant to the issue on remand. A response to Mr. Anuta “expired permit” claim is provided later in this document. All of Ms. Gould’s claims grounded in FMP Condition 10 were rejected by LUBA in its 2019 decision. Ms. Gould’s appeal of LUBA’s resolution of FMP Condition 10 to the Oregon Court of Appeals and her claims were rejected. As a result, claims based on Condition 10 are barred by the doctrine of law of the case. Beck v. City of Tillamook, 313 Or 149, 831 P2d 678 (1992). The 2018 hearings officer’s decision appealed by Gould found: “Condition 10 appears primarily to be an informational requirement requiring documentation of the water permit and an accounting of mitigation ‘under the water right.’ The record contains what appears to be a complete documentation of the status of the permit and IDP. This criterion [Condition 10] is met.” LUBA accepted the hearings officer’s interpretation of Condition 10 which it summarized: EXHIBIT 11 “The hearings officer concluded that FMP Condition 10 requires “documentation of the state water permit and an accounting of mitigation ‘under the water right,’” and that the condition was satisfied by the complete documentation of the status of the [water rights] permit and IDP [Incremental Development Plan filed with OWRD that may be revised over time to match phased use of water].” Gould TP at 580. LUBA then determined that compliance with the mitigation plan is determined in annual reporting required by Condition 38: “As established in prior appeals, the mitigation plan satisfies the substantive no net loss/degradation standard for destination resort development. 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.” Gould TP at 583. In LUBA’s decision approving the Resort’s golf course LUBA explained the meaning of these findings, stating: “Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10.” Gould v. Deschutes County, __ Or LUBA __ (LUBA No. 2020-095, June 11, 2021).17 LUBA’s ruling makes sense given the fact that Condition 10, as we have shown before, was imposed to address the issue of the availability of mitigation water to meet the mitigation requirements of OWRD’s Deschutes Basin groundwater mitigation program prior to the drafting and approval of the FWMP. I have enclosed a timeline of approvals that illustrates and documents this fact based on evidence in the record of this remand. Furthermore, Condition 17 was imposed to assure compliance with FMP Condition 1; not Condition 10. Condition 1 says that “[a]ny substantial change to the approved plan [FMP] will require a new application.” LUBA Rec. 60, 70, Doc 8. As a result, opponents are barred by the doctrine of law of the case from challenging the hearings officer’s determination of the meaning of Condition 10 on remand. 17 It is highly likely that LUBA’s decision will be affirmed on appeal. The Court of Appeals has notified the parties that it will be issuing a decision just three weeks after hearing oral argument. The short time frame typically means that a decision will be affirmed without opinion. EXHIBIT 11 Pinnacle Must Hold Mitigation Water Rights Now/Must Show Rights Have Been Transferred Instream Opponents argue that Central Land must “hold” mitigation water rights, provide mitigation before approval of the tentative plan and/or show that Big Falls Ranch water rights have transferred water instream to obtain approval of the tentative plan.18 This is clearly wrong. It is also an attempt to re-write the requirements of the FWMP to be more stringent. Central Land is bound by the FWMP but is also entitled to rely on it. As determined by LUBA, the FWMP requires mitigation to be provided when OWRD requires it. That is a date in the future after approval of the tentative plan when the resort is ready to pump water. The Board’s 2007 CMP decision settled the issue of when mitigation is required. It is required to be provided when required by OWRD. As our materials filed in 2019 show, until mitigation is required by OWRD, the 2007 CMP decision requires only that Central Land “is not precluded *** as a matter of law” from obtaining the required mitigation.” Central Land has shown that it is not precluded as a matter of law from obtaining the Big Falls Ranch mitigation water rights described in the FWMP. It has also met the higher standard of showing that it has obtained the water rights and that it is feasible for it to obtain additional water under its contract with BFR. Furthermore, this issue was settled against Ms. Gould by LUBA when it rejected Ms. Gould’s argument that the hearings officer erred by failing to impose the requirements of the FWMP as conditions of tentative plan approval. LUBA found: “[R]emoval of the dams and provision of mitigation water is required by the FMP approval and the tentative plan does not alter the mitigation plan. ***The hearings officer was not required to impose additional conditions to the approval of the tentative plan [to assure compliance with the FWMP].” Gould TP at 583. In so finding, LUBA agreed with Central Land that the tentative plan approval does not alter the mitigation plan and, therefore, does not require the county to impose conditions of approval related to the provision of mitigation water. Gould TP at 583. Additionally, mitigation is needed to mitigate for the impacts of using water. In the remanded tentative plan decision, the hearing officer found: “The primary focus of the FWMP, the OWRD and the IDP all are on mitigating use of water. As the applicant has stressed, if there is no water use, there is no impact.” 18 Ms. Gould intends to oppose any and all water permits for some time to come and her attorney has said “we are a long way from the time that building permits could issue here.” During this time period, there will be no water use and mitigation water will not be needed at all. This is one reason why the timing of mitigation is keyed to water use, not to development approvals. EXHIBIT 11 Page 27 of 2018 Olsen Decision, 2019/2018 Record19 at PDF 518. The hearings officer also found: “The key to the FMP, the OWRD permit and the ODFW letter is that mitigation occur in advance of using water. It is to mitigate water use, not development approvals.” Pages 28-29 of 2018 Olsen Decision, 2019/2018 Record at PDF 519-520.20 Additionally, Hearings Officer Olsen found that Condition 10 of the FMP requires an accounting of the amount of mitigation required by the OWRD permit and does not require Central Land to provide mitigation water at the time of tentative plan review. That finding was not disturbed on review by LUBA and cannot be collaterally attacked now. Removal of Dams on Deep Canyon Creek The issues of when the two Deep Canyon Creek dams must be removed and whether they have been removed are outside the scope of remand. The issue on remand is the availability of the source of mitigation water specified by the FWMP (Big Falls Ranch Deep Canyon Creek water rights) and, if needed, the efficacy of a new source of mitigation water. The resort is required to follow the FWMP’s dam removal requirements and the tentative plan application did not seek to change those requirements. Unless a change to the plan is approved and found to meet the no net loss standard. Furthermore, opponents are barred from raising the dam removal issue because it is barred by the doctrine of law of the case. Beck v. City of Tillamook, 313 Or 149, 831 P2d 678 (1992). In her petition for review to LUBA, Ms. Gould argued that the county should have required Central Land to remove one of the two dams in Deep Canyon Creek. LUBA disagreed finding that this obligation was imposed by the FWMP. Gould TP at 583. Big Falls Ranch Contract May Expire Pinnacle has a current, valid contract right to purchase Big Falls Ranch water rights up until the time it expires. It is reasonable to assume the expiration date was set to give Pinnacle sufficient time to purchase the water rights. The fact the contract will expire is not relevant to determining whether it is feasible for the applicant to purchase mitigation water from Big Falls Ranch at this time when the contract is valid. 19 This is a reference to the document filed by applicant with its burden of proof. It was uploaded later by County staff. It includes the 2018 record and documents from the 2019 remand record. 20 These findings were relied on by LUBA in rejecting other arguments presented by Gould regarding the impact of changing the timing of providing mitigation water. EXHIBIT 11 Mr. Anuta’s Claim that the OWRD Water Rights Permit has Expired This issue was settled against Ms. Gould by LUBA. It, therefore, is barred by law of the case. At LUBA, Ms. Gould argued the hearings officer erred in finding compliance with Condition 10 of the FMP because Ms. Gould was then challenging the extension of the resort’s water rights permit and that it had expired. LUBA ruled against Ms. Gould and found that the County did not err in finding that Central Land had established a valid water right. Gould TP at 581. Further, as explained by numerous letters by Ms. Neuman, the claim is without any legal merit. The issue was also presented and rejected by LUBA when it affirmed the County’s approval of the Thornburgh golf course. The Resort has Drilled a New Well and Applied for New Water Rights Permits These issues have no bearing on the issue on remand which is whether BFR mitigation water is available to mitigate for groundwater impacts of Phase A-1 water use. These arguments, therefore, should be rejected. The Resort has obtained approval of its golf course and is proceeding with development authorized by its own risk including drilling a well. The mitigation required for that project was addressed by the County under FMP Condition 10 during the review of the golf course site plan and the BOCC determined that compliance with FWMP would be assured by the annual monitoring required by FMP Condition 38. The FWMP Does Not Account for Additional Impacts of Proposed Wells or Water Uses The Resort is seeking, but has not obtained, water rights transfers and approval of a “back-up” water rights permit in the unlikely event Ms. Gould’s challenge to its current permit is successful. It understands that the Resort may not use more groundwater than authorized by its existing and valid water rights permit without addressing the impacts of an additional use of water. It will do so in the event water use above the level authorized by its existing permit occurs. Until then, this is not an issue and will not alter the efficacy of the FWMP mitigation program. Expert geologist David Newton has explained that changes in well locations on the Central Land property will not change the mitigation required by the FWMP because they will tap into the same regional aquifer as wells proposed when the FWMP was developed. It will not tap into a different aquifer that might have a different impact on the recharge of springs many miles downriver and north of the resort. Mr. Newton’s expert opinion demonstrates that Mr. Kleinman’s unsubstantiated claim that a “change in the source of quasi-municipal supply *** would thoroughly disrupt the balance methodically assembled over years of legal disputes” is not correct. EXHIBIT 11 Water levels are falling. The well indemnification agreement will not mitigate for impacts to area wells. I’ve had to redrill my well. LUBA’s decision found that “[i]n this appeal, petitioner does not challenge the mitigation plan, but instead challenges the Phase 1-A [sic] approval as inconsistent with the mitigation plan, as explained further below.” Gould TP at 573. The claim that water levels are falling is one that challenges the sufficiency of the mitigation plan. As no such claim was presented on appeal to LUBA, it is barred by the doctrine of law of the case. The CMP determined that well indemnification agreements would be required to mitigate for impacts to area wells which settled the issue of how these issues will be addressed by the Resort. The County’s resolution of this issue may not now be collaterally attacked by opponents. Central Land Must Abandon Exempt Wells on the Resort Property LUBA has determined that the County need not require Central Land to remove the exempt wells located on the resort property as a condition of approval of the tentative plan and site plan. Gould TP at 583. This issue is settled and may not be revisited due to the Beck doctrine of law of the case. The FWMP is an Agreement with ODFW Mr. Kleinman claims that the FWMP is an agreement with ODFW. It is not. It is the resort’s mitigation plan. As explained in our prior submittals, ODFW reviewed and commented on the plan as did many other parties but the FWMP is not an agreement between ODFW and the Resort. Furthermore, ODFW has commented on this remand and does not object to the use of Big Falls Ranch Deep Canyon Creek water as mitigation water. Central Land is Using a Well that Was to be Abandoned Central Land’s FWMP includes an agreement to abandon the domestic use of water from three “exempt” wells on its property. Mr. Anuta claims that this is a violation of the FWMP. This is clearly not relevant to the question on remand. Nonetheless, we disagree with Mr. Anuta. First, the FWMP’s requirement to abandon the three wells does not apply until the Resort’s water system is developed at some time in the future. See, p. 9 of the FWMP at 2019/2018 PDF 1117. Second, the exempt domestic use of water from these wells, over and above the amount of water use allowed by the Resort’s permit, is and will be abandoned. Any water pumped from any of the well will occur under the Resort’s groundwater permit. This is not a violation of the FWMP. The FWMP provides for abandonment of the wells to terminate the Resort’s right to use water over and above the water use limits of its water rights permit without mitigating for the water use. Those objectives will be achieved even if water is pumped from one of the former domestic exempt wells. EXHIBIT 11 Purchase of BFR Deep Canyon Water Rights Not Sufficient Mr. Anuta’s rebuttal argues that Central Land must show where the BFR water is from, that the temperature of the mitigation water before and after the mythical “de-watering” claim by Mr. Lambie is the same, that the quality is the same, where does the water flow into the Deschutes, what is the priority date of the water and that the water is protected in-stream. Central Land has shown it has purchased the BFR Deep Canyon Creek water rights specifically identified by the FWMP. It has included maps and certificate numbers to prove this point. The water rights come from Big Falls Ranch lands located north of Deep Canyon Creek. Deep Canyon Creek has not been “de-watered” as claimed by Mr. Lambie. BFR has discontinued pumping the water rights purchased. If they did not remain in the creek because they have been removed by groundwater pumping, they have been returned because they are not be pumped from any location whatsoever. The temperature of the flows in Deep Canyon Creek are not relevant to the issue on remand. Compliance with the FWMP does not require a particular creek temperature be achieved by purchasing BFR water rights. The quality of the water is its temperature. The value of the water rights as providing quality water has been settled by approval of the FWMP in 2008. The flow of the creek and the mitigation water into the Deschutes River, therefore, is not relevant and is unchanged. The priority date of the BFR water rights is not relevant but it was not changed by approval of the transfer of the point of diversion. The water rights, priority date and their character as surface water rights does not change because they are not new water rights. The transfer of the BFR water rights to an instream water right is an issue addressed by the FWMP. The approval of the tentative plan proposes no change to the FWMP related to this issue. As the issue was settled by approval of the FWMP, it is not subject to collateral attack now. Furthermore, the issue is clearly outside the scope of the question posed on remand which is the feasibility of purchasing mitigation water rights from BFR. The issue on remand in this case, as noted by LUBA in its recent affirmance of the approval of the resort’s golf course, is narrow. OWRD Review of Back Up Water Permit OWRD’s review of the back-up groundwater permit is completely irrelevant to the narrow issue posed by LUBA on remand. Whether or not a new permit will or will not over appropriate the aquifer has no bearing on the issue of mitigation. In a worst-case scenario, this finding might result in denial of the new permit but it does not impact the current permit that LUBA and the County determined remains a valid permit. OWRD Timely Participated in the 2019 Remand Mr. Kleinman argues that ODFW “timely” participated in the 2019 remand. ODFW did not, however, timely participate in the 2018 tentative plan review as shown by the record of that EXHIBIT 11 review I filed in the record of 274-21-000731-A. The County’s code requires that only persons who participated in the 2018 review of the tentative plan may participate in the review on remand. Lot of Record Issue Raised by Gould and Central Oregon LandWatch Issue Settled and Barred by Law of the Case The issue of the lot of record status of the land subject to the tentative plan decision was settled by the hearings officer on page 1 of this decision when he approved the tentative plan. Further of that issue is barred by the doctrine of law of the case. Beck v. City of Tillamook, 313 Or 148, 831 P2d 678 (1992) (issues decided by LUBA and issues upon which judicial review was not sought are settled and not subject to review in a subsequent review by LUBA). DCC 22.04.040(B)(1)(a) COLW claims that the subject property must be verified to be a lot of record concurrent with the issuance of a permit because it is zoned EFU. This is not entirely correct. DCC 22.04.040(A) says that “concurrent with or prior to the issuance of certain permits” a lot must be verified to be a lot of record. In this case, all parts of the subject property have been verified to be lots of record prior to the issuance of permits. This fact is shown by evidence the applicant has filed in the record in 2018 and 2021 (lot of record decision, deed and partition plan). In fact, the entire resort property the BOCC found that the entire subject property was a lot of record in 2006 when it the CMP and the decision would not have been approved unless the entire property was a lot of record. DCC 22.20.015(A) Ms. Macbeth claims that the deed conveyances result in a violation of applicable land use regulations so the County may not approve the tentative plan. We disagree that the deeds created parcels and violated the requirement that new parcels be created by approval of a partition. As we explain below, the deeds were a step toward completing a property line adjustment and were rescinded or corrected to convey a legal lot of record. Furthermore, the issue presented by DCC 22.20.015(A) is narrower than suggested by Ms. Macbeth. The term “violation” is, however, defined by DCC 22.20.015(B). An act is only a violation if a prior decision has found it to be a violation, an owner has admitted it is a violation in a voluntary compliance agreement or a finding of violation is settled by the review process for the current application. Subsection (B) allows, but does not require, a hearings officer to make a finding about whether a property is in violation of applicable land use regulations. In this case, given the narrow scope of the issue on remand and the doctrine of law of the case, the hearings officer should determine that he is not required to address this issue and decline to do so. Ms. Macbeth’s argument also fails to acknowledge that DCC 22.20.015(A) does not apply if any of the exceptions in DCC 22.20.015(D) apply. As relevant here, the law does not apply if the permit issued “results in the property coming into full compliance with all applicable provisions EXHIBIT 11 of the federal, state, or local law and Deschutes County Code.” DCC 22.20.015(D)(1). The approval of the tentative plan and filing of the final plat will eliminate all property boundaries and parcels within the area being platted. Weyerhaeuser Real Estate Development Company v. Polk County, 246 Or App 548, 267 P3d 855 (2011). This action will result in the property coming into compliance with all applicable laws related to the approval of subdivisions. Federal laws do not apply. The 2018 approval and the County’s final plat review will assure compliance with all applicable state and local laws. ORS 92.176 Ms. Macbeth claims that the recording of correction deeds does not validate new units of land under the provisions of ORS 92.176. We agree but disagree that this is relevant. The applicant is not seeking to obtain recognition of the land conveyed as a legal lot of record. It is seeking to eliminate all boundaries arguably created by the July 2021 quitclaim deeds. Furthermore, the Weyerhaeuser case makes it clear that the approval of the final plat of Phase A-1 will eliminate all lots, parcels and units of land within the area platted if the actions taken by the applicant thus far are not efficacious. Merits of Gould and COLW Claims The applicant erred and quitclaimed two small parts of its greater Resort property to Pinnacle Utilities, LLC at the end of July 2021. These are areas that have received County land use approval to be utility facilities for the resort in the decision under review on remand. Mr. Kleinman filed copies of the deeds in the record. They are recorded at 2021-44813 and 2021-44814 on July 30, 2021. The mistaken conveyance of these properties has been corrected by Central Land and Pinnacle as follows:21 A. Pinnacle quitclaimed all interest in the land conveyed by 2021-44813 back to Central Land and Cattle Company, LLC. This deed provides that it does not create a parcel and its intention is to eliminate all rights Pinnacle may have acquired in a part of Tax Lots 7800 and 7900. B. Central Land has caused a correction deed to be recorded for 2021-44814. The deed corrects the legal description of the land conveyed by it to convey the entire lot of record that includes the land previously conveyed. Pinnacle is now the owner of the entire lot of record. C. The parcel conveyed by the correction deed is Tax Lot 7801. It is a lawfully created lot of record. It was created as a lawful parcel in 1918 by a deed from the State of Oregon to 21 Given the fact that Central Land and Cattle Company owns many contiguous lots of record, the deeds would have been allowable as a lot line adjustment between Central Land’s lots of record. The applicant decided, however, to take the less time-consuming route of correcting the legal description of one deed and quitclaiming all interest conveyed by the other. EXHIBIT 11 John T. Park and has remained as a lawful parcel since that time. In 1979, a partition was approved that showed Tax Lot 7801 as a separate parcel of land. The mistaken recording of 2021-44813 and 2021-44814 is not consequential. ORS 92.017 clearly states that the recording of deeds does not create new lots or parcels. In LandWatch Lane County v. Lane County (Doughty), __ Or LUBA __ (LUBA No. 2019-044, October 15, 2019), LUBA held that deeds that illegally conveyed a larger property into different ownerships without partition approval did not create new parcels. It explained: “[N]ew parcels have not been created because the deed creating the parcels occurred after land use laws regulating land division became applicable. ORS 92.017 provides that “[a] lot or parcel lawfully created shall remain a discrete lot or parcel, unless the lot or parcel lines are vacated or the lot or parcel is further divided, as provided by law. (Emphasis added.) In the context of land use law, division by law requires a subdivision, partition or, prior to the applicability of the land division regulations, a deed conveyance.” LUBA’s decision and ORS 92.017 means that the lawfully created parcels remain intact despite the conveyances to Pinnacle. These lots comprise all of the land that will be platted when the Phase A-1 tentative plan receives approval and a final plat is recorded. It is also clear that deeds alone do not create parcels. For instance, a property line adjustment, by definition, does not create parcels but deeds are recorded to change lot boundaries without creating new lots or parcels. ORS 92.010(12). State law requires that new deeds be recorded to effectuate the adjustment of existing lots or parcels. ORS 92.190(3). Additionally, to effectuate a lot line adjustment, a portion of one or both lots needs to be conveyed from one owner to the other so each owner can convey the property to themselves in its final, approval configuration. The deeds that convey parts of each property do not create new parcels. Ms. Macbeth claims that the case of Ogan v. Ellison, 297 Or 25, 682 P2d 760 (1984) holds that a deed that divides land without first obtaining partition approval is not void and creates a parcel. That is incorrect. To the contrary, the case holds that a person who purchases a part of a lawful parcel that has not been lawfully divided “cannot enforce such an illegal conveyance.” Ogan at 31. The case provides remedies to the purchaser but none result in either the creation or ownership of the illegal parcel by the purchaser. The Court held: “The purchaser may, upon discovery of the illegality, (1) sue for rescission and be placed in status quo, Heverly v. Kirkendall, 257 Or. 232, 235, 478 P.2d 381 (1970), (2) rescind the contract absolutely and sue for any moneys paid for the purchase of land, Kruse v. Bush, 85 Or. 394, 397, 167 P. 308 (1917), (3) affirm the transaction and sue for breach of contract, Nisson v. Tillman, 213 Or. 133, 139, 323 P.2d 329 (1958), or (4) affirm the transaction and maintain an action for fraud, Musgrave v. Lucas, 193 Or. 401, 238 P.2d 780 (1951).” Ogan at 31. These remedies result in a return to the status in place prior to the illegal sale and/or an award of money damages. Ogan, therefore, contradicts Ms. Macbeth’s argument. EXHIBIT 11 Furthermore, the Ogan decision predates the adoption of ORS 92.017 in 1985, the law LUBA has found retains lawfully created lots as such until they are lawfully divided. Ms. Macbeth also claims that in Wolcott v. Lane County, __ Or LUBA __ (LUBA No. 2017-096, February 6, 2018) LUBA “explained that the recording of a deed produces parcels.” This is not correct. Instead, LUBA said “[r]ecording a deed *** was not and is not a lawful means of creating a parcel.” This finding is something entirely different and does not address and resolve the issue raised by Ms. Macbeth. Furthermore, the July 2021 deeds were, at most, a partially completed property line adjustment (additional deeds are needed to describe the lots increased in size). The deeds moved the boundary lines of lawfully-created parcels. This may or may not have required County approval (the County does not have an ordinance that requires such approvals). A property line adjustment, by definition, does not result in the creation of a lot or parcel. ORS 92.010 (12) Wolcott v. Lane County, __ Or LUBA __ (LUBA No. 2017-096, February 6, 2018). A property line adjustment, therefore, does not divide land and does not require partition approval from Deschutes County. Assuming County approval of a property line adjustment is necessary, Central Land could have secured County approval of a property line adjustment to rectify the lack of such an approval. Pinnacle determined, however, that it made the most sense to quitclaim the .5-acre area of land back to Central Land and to correct the legal description of the other deed to match that of a legal lot of record, TL 7801. The quitclaim deed back to Central Land returned the .5-acre parcel to the ownership of the Grantor and released all rights of Pinnacle in Tax Lots 7800 and 7900. All of the lots involved in the de facto adjustments have been determined by the County to be lots of record with the exception of TL 7801. TL 7801 is a lot of record due to County approval of a partition in 1979 and its creation by deed long before the County regulated land divisions. The following is an inelegant illustration of some of Central Land’s lots of record: EXHIBIT 11 Exhibits N-1, N-2 and N-3 illustrate the adjustments. Exhibit N-1 shows the relative location of legal lots of record Tax Lots 7800 (part), 7801 and 7900. Tax Lot 7801 was created by Deschutes County partition approval MP-79-159. Tax Lot 7900 was determined to be a lot of record by LR-98-44.22 The exhibit also shows a part of Tax Lot 7800. TL 7800 was determined to be a lot of record by LR-91-56. Exhibit N-2 illustrates the location of the .5-acre area of land conveyed by the July 30, 2021 quitclaim deed. Exhibit N-2 shows how the property lines of Tax Lot 7900 could be adjusted in one or more steps to create the shape conveyed by the July 30, 2021 quitclaim deed. Deschutes County applies State law when it reviews property line adjustments. According to ORS 92.010 (9) and (9)(b), “partitioning land,” the action that requires County approval of a land division does not include adjusting property lines. The adjustment may not create an additional parcel. ORS 92.010 (12). It does not. ORS 92.192 (2) requires that the lot reduced in size comply with the applicable zoning ordinance. In this case, this is the DR zoning district, DCC Chapter 18.113. It makes the lot standards of the EFU zoning district inapplicable. This fact was determined by hearings officer Olsen on page 9 of the tentative plan decision. DCC 18.113.060 (G) says that minimum lot area, width, lot coverage, frontage and yard requirements of the EFU zone do not apply. It imposes exterior setbacks for new construction but does not set lot standards for non-residential lots. Additionally, the CMP does not set standards for nonresidential lots and the lot size approved is no smaller than the size of lots approved by the tentative plan. Exhibit N-3 illustrates how Tax Lot 7801 could be adjusted, by one or more property line adjustments to create the lot conveyed by the July 31, 2021 deed. The size after adjustment is 10.73 acres. Like the .5-acre lot, this lot complies with the lot requirements of the DR zone. To rectify this error, Central Land corrected the legal description of the land of the quitclaim deed to convey all of Tax Lot 7801 to Pinnacle. Tax Lot 7801 is a legal lot of record. Thank you for your consideration of our arguments and responses to arguments presented by others. Please affirm approval of the tentative plan without its Condition 17. Respectfully submitted this 14th day of September, 2021. Liz Fancher Liz Fancher, Attorney for Central Land and Cattle Company, LLC OSB 812202 22 To obtain lot of record approval, the property owner must show that the lot in question was lawfully created. EXHIBIT 11 Thornburgh will at all times comply with the terms and conditions of the OWRD water right approval. As described above, the terms and conditions include providing flow mitigation for each phase of development prior to beginning water use, and monitoring and reporting water use to OWRD. In addition, Thornburgh will obtain all of its mitigation water through the conversion of existing irrigation water right into protected instream water rights and will not rely on canal lining, piping or similar conservation measures as part of its OWRD mitigation. Although conservation actions can be beneficial and reduce total surface water use, they have been questioned as viable measures for mitigating new ground water development. By providing mitigation water from the conversion of existing water rights, Thornburgh will eliminate approximately 7.5 to 10.4 cfs of existing surface water diversions during the irrigation season, restoring C1J natural stream flow to the system at or above the area of impact from Thornburgh wells during the time period when stream flows are typically the lowest and temperatures are warmest. B.Specific Mitigation from Big Falls Ranch Thornburgh will fully exercise the option for purchasing 464.9 acres of water rights under its existing option agreement with Big Falls Ranch, Inc. in fulfilling its mitigation obligation under the OWRD water right. By making this commitment, Thornburgh ensures that nearly two-thirds of its total mitigation water (expected total 836.82 AF per year) will come from a source that contributes cold spring-fed water to the Deschutes River above the Thornburgh location of impact. By retiring an existing irrigation water right, this measure will also result in restoration of 5.5 cfs of cold surface water flow to the Deschutes River from Deep Canyon Creek during the irrigation season. C.Elimination of Existing Irrigation Pond In connection with the instream transfer of the Big Falls Ranch irrigation water right rights, Thornburgh will work with the landowner to eliminate the existing instream impoundment used as part of the irrigation system. This is expected to provide a temperature benefit by eliminating temperature increases due to ponding effects. D.Terminate Use of Existing "Exempt" Wells on Thornburgh Property Thornburgh will terminate domestic and livestock use and abandon three existing wells on the Resort property when the Resort water system is developed. The three wells were originally constructed for domestic use serving three homes on the property. All three wells were in use for domestic purposes until the property was acquired by Thornburgh; currently, two of the wells are used for such purposes. The approximate location of the three wells is shown on Figure 7. Domestic water use for each of the three wells was estimated at 250 gallons per day (gpd). Of the three exempt wells, one is used to irrigate about one-half acre that is used to pasture goats. Until recently, another well was also used to irrigate about one-half acre and for livestock watering for up to about 20 horses at a time. The third well was used for 9 LUBA 2018-140 Record - Page 0666LUBA 2019-136 AMENDED RECORD - Page 1739 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 (ozh*FekTfrr0@hk2=,nfzhzEItnb€l^n2I2{R*frlDfbdItEo1EztbE+2€(of96m,sl'llit|,II(\-Wldght-PHl lsi26oor)1EOBlni :taI o8gFFgo6I t$1rsFEEEEI'f,$[Flfi F;<$5;E4to5gagJ'\f5'FeNil;a{oo{dIo,1,..Jl GsrlF)otu>l>3t3al@{lco_gJ{&oq!Tno3llFNito6oCllI+DIoIq6,E=oNtI3',fo{r{FEIt.6{$a6momzoffiffiFi{d55EEzEa$rtriHrs$$i$Efl FIts6gEPP..tE(t)(r!osFIOURE 31007-101 -07PrutrNEApr[ 2008UE:S.SdldnckEruOI}D.NeudonProposed Water Right Mitigation Transfers ; Phase A - ThornburghBlg Falls Ranch Co.Deschutes Cou ntl.UEpgff2008-203ffiilETNCONSUrIANT5 INC.Errlh, Watpr and R@k SpeciellslBFdid!ffi1S:0{t 604,S-HzoH.0QenF+tN)Ft9{LUBA 2019-136 AMENDED RECORD - Page 1001EXHIBIT 11 :IJ)7J1-wLR€htJHl l*26 04,/10/2m8 SSol\llEr-llz9loFfiil:lf;liF$illliltF'" l:lztol-{tml"Aa f;$$g i;I f taESSgB$$tsi5fiP PEIEfr€ s.g;rs6'eF0FEaNil:6fFgtF5trtrt-nomzUffiNffiffi\alHI/f\9E5f[:s1 i4B# FEFI gFgg6Etr€F8z3l.5I{F6p{.IaTno3ilN6@irDaIJstEA.E{g)54.,oootlIEnlr,rl:,Ft;31IozhRarlHhlDh(Dsh?2moELr3h6+hnzE€at$zzmh{f2(oz*2Iafz{2*€@€la{PROJFST NO.1007-10't{7Aprll 2008S;EDutri{ 8tS.ScfienokM.PsdaDEE]ilEO d:FIGURE 4NEWTONilEtrnCONSUITANTS INc.Errli, WEter Erld RGk apeck liBtEPh fli 601-*60 F.r: gl M@rProposed Water Right Mitigation Transfere - Phase B - ThomburghFalls Ranch Co.BigDeschutesjt-1l-Edz"Y x.loQet)ts(rrJ>lN)H(].) \)LUBA 2019-136 AMENDED RECORD - Page 1002EXHIBIT 11 If, at the time of development, insufficient off-site areas are not available, the applicant proposes to provide funding for implementing mitigation In a dedicated fund for use by ODFW to use to improve or purchase mitigation sites within Deschutes County. After the mitigation is established, the applicant wlll provide continuing funding for the lifetime of the development through a real estate transfer fee. 3.The applicant's fish mitigation plan The applicant obtained 2,129 acre-feet of water rights to support the proposed development year-round. The development's water supply is to be obtained from six wells that are proposed to be drilled on the property. The water rights were granted upon a finding that the applicant was responsible for providing 1,356 acre-feet of mitigation water.7 The applicant proposes to obtain 836 acre-feet from Deep Canyon Creek irrigation rights that were granted to Big Falls Ranch. The remaining mitigation water is to be obtained from the Central Oregon lrrigatioi:, District (COID}. With respect to the Deep Canyon Creek water, irrigation rights involve water flowing for six months of the year (mid-April through mid-October). Based on average daily consumption for the resort, the applicant asserts that the proposal will result in more mitigation water flowing into the creek during the summer months, that the average daily consumption of water from the development. To address water temperatures that affect salmonid habitat, the applicant has entered into an agreement with Big Falls Ranch to remove two diversion dams from the creek. As a result, water will flow directly from cold water springs and seeps into the creek, rather than be impounded above ground.8 In addition, the applicant proposes to abandon three on-site wells that pump approximately 3.65 acre-feet from the aquifer, and provide for thermal modeling on Whychus Creek. In the event the hearings officer concludes that the proposal will likely increase the creek water temperatures, the applicant provided evidence that it can purchase mitigation credits for 106 acre-feet of water from Three Slsters Irrigation District to increase instream water flows, and thereby mitigate the impact. The applicant asserts that the latter three measures have not been required by OWRD or ODFW, but are in addition to the required mitigation. 4.The Parties' Evidence The applicant argues that the combination of on-site and off-site mitigation Is sufficient to demonstrate that the proposal satisfies DCC 18.113.0?0(D}, and continued compliance can be assured by the adoption of conditions that require continued monitoring of the habitat in the selected areas. The opponents disagree. The opponents' evidence regarding impacts to wildlife can be reduced to three main points: (1} the applicant's use of the HEP analysis and choice of indicator species are inadequate to identify all of the impacts of development on fish and wildlife; (2) the applicant 7 The Oregon Water Resources Department (OWRD) calculated the needed mitigation water based on a 60 percent consumpUve use, meaning that 60 percent of the resort water supply will not be returned to the aquifer through golf course irrigation or other surface applications. The opponents dispute that ORWD used the appropriate consumption rate. 8 The parties agree that surface water tends to be warmer than aquifer water during the summer months. M-07-2; MA-OB-6 22 LUBA 2018-140 Record - Page 0213LUBA 2019-136 AMENDED RECORD - Page 1286 EXHIBIT 11 improperly identified the extent of impact of the proposed wells and underestimated its severity by assuming only 60 percent of the water used for the development would be consumed; and (3)the applicant has not adequately demonstrated that the proposed mitigation will compensate for the lost habitat or be successful in the long run. Further, the opponents argue that other alternatives, such as the purchase of lmpacL ...... i�nd and full restoration, are preferable to the more limlted restoration efforts proposed for BLM land. a.Indicator Species/HEP analysis v. Extensive On-site Ground Surveys The opponents point out that the applicant heavily relied on species survey data from Eagle Crest Ill and on general habitat investigations performed in the area that were then evaluated in a modified HEP analysis. The opponents argue that these studies and the applicant's indicator species are inadequate to account for and address the complete biota on the site. They also contend that the applicant has failed to demonstrate that the modified HEP analysis adequately accounts for the impact of development on the site, suggesting that a full HEP analysis is the minimum necessary to address habitat impacts. They argue that the· applicant's superficial survey is inadequate to provide essential baseline data from which to measure the success or failure of the applicant's mitigation plan. The opponents argue that at the very least, the applicant must provide a two-year survey of plant and animal specials, noting that a multi-year survey better accounts for the vast fluctuations in animal populations that can occur due to site conditions, weather and disease. Finally, opponents argue that even if the indicator species can adequately replicate habitat needs for a wider population, the applicant's studies do not address the cumulative impact of development in the Tumalo area. The applicant concedes that indicator species will not fully account for all of the many and varied species on the site and the effect the development will have on them. However, the applicant argues that such specificity is not needed to satisfy DCC 18.113.070(E>). Toe applicant asserts that its analysis has been subject to extensive review and comment from ODFW, and is more extensive than plans for other destination resort developments In the area. The applicant argues that its assumptions are reasonable, arid the modified HEP analysis adequately quantifies t�e Impacts, and provides a workable methodology to compensate for the Impact. With respect to cumulative impacts, the applicant argues that it considered and addressed reasonably foreseeable cumulative impacts. See August 12, 2008 rebuttal, Ex. B-14. The hearings officer agrees. b.Adequacy of Fish Mitigation Plan Opponents argue (1) the Deep Canyon Creek water is already pledged to mitigate development on another property or has been abandoned;9 {2) the amount of mitigation water required by 11 Opponents argue that the acquisition of water rights is not evidence that water will actually be returned to the rivers and streams as alleged. According to opponents, water rights are merely paper representations of water quantities; and do not mean that the cool water needed to maintain lnstream temperatures will be available. The hearings officer understands the limitations of the water rights process, but concludes that under Orego·n water law, the only way to adequately account for water In the streams is through the ORWD administration. Therefore, the hearings officer concludes that evidence M-07-2; MA-08-6 23 LUBA 2018-140 Record - Page 0214LUBA 2019-136 AMENDED RECORD - Page 1287 EXHIBIT 11 OWRD is inadequate to assure that surface water flows will be maintained year-round, as fish need more water early in the spring season; and (3) the use of surface water will degrade existing conditions by taking cold water out of the aquifer where it seeps Into Whychus Creek and replacing.it with warmer surface water. The applicant acknowledges that the .proposal require the development of wells on the property that will affect basin water flows. However, the applicant argues that It has addressed those impacts by purchasing mitigation credits from COID, and by acquiring irrigation water rights that will return water to Deep Canyon Creek. They argue that both OWRD and ODFW have reviewed its proposal and have agreed that the proposal mitigates both water quantity and quality that will be removed from the aquifer due to the resort development. The applicant supplied a copy of an agreement between the owners of Deep Falls Ranch and the Daniels Group showing those owners have agreed to the removal of two dams that diverted flow from Deep Canyon Creek.10 In response to testimony from opponents that the proposed mitigation does not adequately address increases in water temperature in Whychus Creek, the applicant argues its proposal will have little or no impact on water temperatures on the creek. Even if water temperatures In Whychus Creek do increase incrementally, the applicant asserts that the increase can be addressed by requiring the applicant to fund a water conservation· project sponsored by the Three Sisters Irrigation District to return 106 acre-feet of water to instream uses. The OWRO mitigation requirement adequately addresses water quantity; it does not fully address water habitat quality. Its assumptions regarding the benefits of replacing more water during the irrigation season than is consumed on �n average daily basis by the resort does not account for the higher water consumption that will likely occur during the summer months. Therefore, the hearings officer concludes that the additional mitigation offered through the Three Sisters Irrigation District restoration program is necessary to assure that water temperatures in Whychus Creek are not affected by the proposed development. c.Adequacy and Llkely Success of the Proposed Mitigation The opponents generally dispute that the applicant's proposed mitigation plan will result in no net loss to fish and wildlife resources. The opponents argue that the plan assumes that terrestrial animals will adapt to the built environment on the site, or will be attracted to the . improved habitat that is being provided off-site. The opponents argue that such assumptions do not take Into account the fragmentation of habitat, or address species recovery from the changes in the habitat. Further, opponents argue that the proposal does little to address. or combat the problem of invasive species, such as starlings, who are attracted to the environment regarding the location and volume of water rights ·1s substantial evidence as to the fikely location and volume of water in the Identified streams. 10 The Daniels Group owns a former strip mine that has recently been proposed to be redeveloped for residential uses. It is this entity· that the opponents assert owns or has options to the Deep Canyon Creek water. However, the opponents have not provided evidence as to the nature and extent of the conflict. The hearings officer concludes there is substantial evidence in the record to support a finding that the appficanl has the authority to use water from Deep Canyon Creek, and to remove dams that would impede flows from underground seeps and springs. M-07-2; MA-08-6 24 LUBA 2018-140 Record - Page 0215LUBA 2019-136 AMENDED RECORD - Page 1288 EXHIBIT 11 September 24, 2019 Page 2 remand, as Mr. DeLashmutt has pointed out in previous submissions and in his final argument. Cold Water Mitigation in Deep Canyon Creek. Applicant is already providing cold water mitigation in Deep Canyon Creek, several years ahead of the time that was anticipated in the Fish and Wildlife Mitigation Plan approved by the county as part of its approval of the Final Master Plan. Big Falls Ranch ("BFR") holds the only water rights for the use of water from Deep Canyon Creek (Certificates 76371 and 88027) and the ranch has stopped diverting any water from the creek. Transfer T-12651 approved a change from the previously-used surface water point of diversion ("POD") on Deep Canyon Creek to groundwater Points of Appropriation ("POA") at three wells. Paragraph 7 of T-12651 says, "The original point of diversion of surface water shall not be retained as an additional or supplemental point of diversion under the transferred portion of the right." (Emphasis added.) These commitments are also included in the terms of the Water Rights Purchase and Sale Agreement between my clients and Big Falls as follows: "6. Removal of Deep Canyon Spring Impoundments and Dams. a. Immediately upon the Effective Date [February 13, 2019], and for so long as this Agreement is effective, Seller shall: i. Cease diverting surface waters directly from Deep Canyon Creek. ii. Cease impounding surface waters of Deep Canyon Creek and will not otherwise impede the flows of such surface waters to the Deschutes River_ Seller will open any existing release valves, flashboards, or other devices that would allow surface waters to flow through any earthen barriers or impoundment structures in Deep Canyon Spring or Deep Canyon Creek on the Big Falls Ranch *** b. Buyer, at its sole discretion and at its sole cost, will cause the removal of the upper dam on the Weigand and Reimenschneider property (the 'W & R Property") adjacent to the Big Falls Ranch. *** c. Buyer, at Buyer's cost, may remove any remaining earthen barrier or impoundment structure on the Big Falls Ranch in Deep Canyon Creek at any time after April 1, 2024 . . . ." itLUBA 2019-136 AMENDED RECORD - Page 0272 EXHIBIT 11 September 24, 2019 Page 3 Thus, BFR is legally and contractually bound to cease pumping surface water from the creek and has already met this commitment. My clients and Big Falls have also already removed the weir (flashboards) from the concrete channel previously used by Big Falls to impound and divert the spring water from the creek into their irrigation pumps. As a result, the water can now flow through the concrete channel to the Deschutes River.2 Applicant acknowledged that beavers had subsequently blocked the channel, but the beaver dam has now been removed, as shown by the photos and videos submitted during the rebuttal period. The upper dam (not on BFR property) has already been breached as well, though beavers have since plugged that opening as well. That beaver dam and the remaining earthen footings will be removed in accordance with the FWMP prior to construction of Phase A as required. The important point is that without the diversion by BFR, cold spring water is now allowed to flow down Deep Canyon Creek to the Deschutes River. This flow is legally protected in the creek because no other surface water rights are authorized for this source and OWRD's administrative rules and its water availability analysis substantially preclude new surface water rights in the Deschutes Basin. Furthermore, ODFW has a pending permit application (Application IS-70695) for an instream right in a segment of the Deschutes River that includes Deep Canyon Creek for 250 cfs of instream flow, thus further insuring there could not be any new water rights available at this location. Gould Submission/Letter from Robert Long. Through her attorney Jeffrey Kleinman, Ms. Gould offered a September 17, 2019 letter from Consultant Robert Long. Mr. Long says that he reviewed "two rights under Permit S-32049, one right under Permit S-37392, and one surface water certificate 76372." He then goes on to say that his letter "focuses on the likely permitting requirements necessary to use the Primary water rights under Permit S-32049 as instream mitigation for new water rights or a water right transfer downstream." I am not sure why Mr. Long is discussing these three water rights at all. First, both permits he references were proven up and replaced by certificates some time ago. Certificate 44281 was initially issued upon proving up of Permit S-32049 and Certificate 44283 was issued upon proving up of Permit S-37392. In 2000, OWRD approved transfer T-6854, which made changes to those two certificates 2 As previously noted, the remaining concrete footings will be removed soon after April 1, 2024, which is the completion date for T-12651. LUBA 2019-136 AMENDED RECORD - Page 0273 EXHIBIT 11 EXH|B|T B PAGE- From: Rex Barber <bigfalls@cbbmail.com> Date: Augusl27,2OI9 alL2:27:45 PM PDT To: Kameron De Lashmutt <kameron@ bendcable'com> Subject: RE: remand and confirmation of water Kam, The agreement is for in excess of 50 acres Rex Barber Sent from Mail for Windows 10 From: Kameron Delashmutt Sent: TuesdaY, August 27,2019 11:55 AM To: rexba mail.com:'Rex Barber' Subject: remand and confirmation of water Rex, per our conversation we have a hearing next Tuesday on the remand of the Tentative Plan. We have provided the memorandum that we executed which confirms the existence of our agreement. Jan Neuman has provided a statement that our agreement is for amounts far in excess of the 50 acres of mitigation water that are required under this initial tentative plan. As we discussed it would be helpful to provide the hearing officer confirmation from you as the seller that this is correct and our agreement for water rights far exceeds 50 acres of mitigation water' lf you could please simply confirm this Sincerely, Kameron DeLashmutt s41-3s0-847e (P) 866-4e2-s3s4 (F) Theinformationinthisemailisconfidentialandonlyfortheuseofthereciepientnamed' Youarenot allowed to forward it on without the permission of the sender. lf you have received this message in error please delete it. LUBA 2019-136 AMENDED RECORD - Page 0871 EXHIBIT 11 modification of the mitigation plan to show that it still complies with the approval standards. If this is not done, the earlier agreement to mitigate is rendered meaningless and the foundation for the development approval is removed. Rather than apply for a modification though, the applicant merely had its expert say the newly proposed mitigation will be good enough If the applicant will not comply with the fish mitigation plan documents it verified to LUBA and the Court Appeals that "it must comply with," then the required process for review and approval of new mitigation plan documents must be initiated. The hearings officer erred in failing to so hold A. Water Issues 1. Water Quantify Issues The hearings offrcer allowed the applicant to make significant changes in the FMP water mitigation requirements without going through the required modification process. He simply concluded that the applicant's changes are not "substantial." He reached this conclusion despite clear numerical and timing changes from the adopted CMPÆMP, including (1) a reduction of mitigation water in Phase A from 610 AF (acre feet) to 203 AF (and down to only 50 AF in the current supposed subphase of Phase A), and (2) the elimination of the provision for all mitigation water to be provided in Phases A and B. Page 43 - PETITION FOR REVIEW LUBA Record000250LUBA 2019-136 AMENDED RECORD - Page 0503 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 Kameron Delashmutt From: Sent: HENDERSON Sarah A* WRD [Sarah.A.Henderson@oregon.gov] Monday, September 09, 2019 3:14 PM To: Kame·ron Delashmutt Subject: RE: surface diversion transfer to groundwater appropriation Hi Kameron, Please see my response below in red ... I am directing you to others so that you receive the correct information. Sarah *********************************************************** Sa rah He nde rs on Flow Restoration Program Coordinator Transfer and Conservation Division Water Resources Department I 725 Summer St. NE, Suite A I Salem, Oregon 97301 Ph: 503.986.0884 I fax: 503.986.0901 Email: sarah.a.henderson@oregon.gov I Web: http://www.oreqon.gov/owrd ************************************************************ From: Kameron Delashmutt <kameron@bendcable.com> Sent: Monday, September 09, 2019 2:53 PM To: HENDERSON Sarah A* WRD <Sarah.A.Henderson@oregon.gov> Subject: surface diversion transfer to groundwater appropriation Sarah, In our conversation with ODFW the other day you confirmed that a transfer of the Big Falls.Surface water point of diversion to a groundwater point of appropriation does not change the underlying permit and that when OWRD issues new certificated to Big Falls that those certificates will be for surface water permits. I would appreciate your confirming that I have this correct. Yes, the confirming certificates issued from the transfer of a sw pod to•gw poa will be considered surface water rights. Also if you could send to me the legal rules or policy positions that place the moratorium on the issuance o'r new surface water permits in the Middle Deschutes Basis I would appreciate it. From Kyle Gorman I understand that there is both a limit on new surface water permits because the river is over allocated and also that there is a ban on new surface permits for use in the summer months for any tributary to the Columbia River. If you could provide that info or direct me to it. Please contact Dwight French for this information (Dwight.W.French@oregon.gov ) Lastly I understand ODFW has a application for 250 cfs of instream water in the Deschutes. Where could I find a copy of that application? Please contact Patricia McCarty for a copy of the application IS-70695 (Patricia.E.McCarty@oregon.gov) Thank you for the help. Sincerely, Kameron Delashmutt 541-350-8479 {P) 866-492-5354 (F) 1 LUBA 2019-136 AMENDED RECORD - Page 0754 EXHIBIT 11 11- ToST P" September 24, 2019 HAND-DELIVERED Jacob Ripper, Senior Planner Deschutes County Community Development Department 117 NW Lafayette Avenue Bend, OR 97703 Janet E. Neuman janet.neuman@tonkon.com 503.802.5722 direct 503.221.1440 main RE: 247-19-000611-A, Land Use Board of Appeals Remand (LUBA No. 2018-140) Dear Mr. Ripper: As you know, I represent Kameron DeLashmutt, Pinnacle Utilities, LLC ("Pinnacle"), and Central Land and Cattle, LLC ("Applicant") on water rights matters pertaining to the Thornburgh Resort ("the Resort"). This letter is provided as part of the final argument for the Applicant in the above-referenced land use matter. Introduction. The issues in this remand are narrow. Applicant's land use counsel quoted LUBA on the remanded issue in Applicant's Burden of Proof: "On remand, the county must consider 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 . . . "1 The water issues are correspondingly narrow. The Burden of Proof, along with Applicant's submissions during the open record and rebuttal period, have clearly stated that Applicant does not propose any change in the source of mitigation water, thus the only remaining water issue is whether the tentative plan for Phase A-1 satisfies the no net loss/degradation standard. As discussed below, Applicant has made this showing and the rebuttal comments submitted by Ms. Gould and Central Oregon Land Watch ("COLW") do not show otherwise. In fact, to a considerable extent, those submissions address issues beyond the scope of this 1 Burden of Proof p. 1. Tonkon Torp LLP Advocates & Advisors l 888 SW Fifth Ave. l Suite 1600 l Portland OR 97204 l tonkon.com LUBA 2019-136 AMENDED RECORD - Page 0271 EXHIBIT 11 September 24, 2019 Page 2 remand, as Mr. DeLashmutt has pointed out in previous submissions and in his final argument. Cold Water Mitigation in Deep Canyon Creek. Applicant is already providing cold water mitigation in Deep Canyon Creek, several years ahead of the time that was anticipated in the Fish and Wildlife Mitigation Plan approved by the county as part of its approval of the Final Master Plan. Big Falls Ranch ("BFR") holds the only water rights for the use of water from Deep Canyon Creek (Certificates 76371 and 88027) and the ranch has stopped diverting any water from the creek. Transfer T-12651 approved a change from the previously-used surface water point of diversion ("POD") on Deep Canyon Creek to groundwater Points of Appropriation ("POA") at three wells. Paragraph 7 of T-12651 says, "The original point of diversion of surface water shall not be retained as an additional or supplemental point of diversion under the transferred portion of the right." (Emphasis added.) These commitments are also included in the terms of the Water Rights Purchase and Sale Agreement between my clients and Big Falls as follows: "6. Removal of Deep Canyon Spring Impoundments and Dams. a. Immediately upon the Effective Date [February 13, 2019], and for so long as this Agreement is effective, Seller shall: i. Cease diverting surface waters directly from Deep Canyon Creek. ii. Cease impounding surface waters of Deep Canyon Creek and will not otherwise impede the flows of such surface waters to the Deschutes River_ Seller will open any existing release valves, flashboards, or other devices that would allow surface waters to flow through any earthen barriers or impoundment structures in Deep Canyon Spring or Deep Canyon Creek on the Big Falls Ranch *** b. Buyer, at its sole discretion and at its sole cost, will cause the removal of the upper dam on the Weigand and Reimenschneider property (the 'W & R Property") adjacent to the Big Falls Ranch. *** c. Buyer, at Buyer's cost, may remove any remaining earthen barrier or impoundment structure on the Big Falls Ranch in Deep Canyon Creek at any time after April 1, 2024 . . . ." itLUBA 2019-136 AMENDED RECORD - Page 0272 EXHIBIT 11 September 24, 2019 Page 3 Thus, BFR is legally and contractually bound to cease pumping surface water from the creek and has already met this commitment. My clients and Big Falls have also already removed the weir (flashboards) from the concrete channel previously used by Big Falls to impound and divert the spring water from the creek into their irrigation pumps. As a result, the water can now flow through the concrete channel to the Deschutes River.2 Applicant acknowledged that beavers had subsequently blocked the channel, but the beaver dam has now been removed, as shown by the photos and videos submitted during the rebuttal period. The upper dam (not on BFR property) has already been breached as well, though beavers have since plugged that opening as well. That beaver dam and the remaining earthen footings will be removed in accordance with the FWMP prior to construction of Phase A as required. The important point is that without the diversion by BFR, cold spring water is now allowed to flow down Deep Canyon Creek to the Deschutes River. This flow is legally protected in the creek because no other surface water rights are authorized for this source and OWRD's administrative rules and its water availability analysis substantially preclude new surface water rights in the Deschutes Basin. Furthermore, ODFW has a pending permit application (Application IS-70695) for an instream right in a segment of the Deschutes River that includes Deep Canyon Creek for 250 cfs of instream flow, thus further insuring there could not be any new water rights available at this location. Gould Submission/Letter from Robert Long. Through her attorney Jeffrey Kleinman, Ms. Gould offered a September 17, 2019 letter from Consultant Robert Long. Mr. Long says that he reviewed "two rights under Permit S-32049, one right under Permit S-37392, and one surface water certificate 76372." He then goes on to say that his letter "focuses on the likely permitting requirements necessary to use the Primary water rights under Permit S-32049 as instream mitigation for new water rights or a water right transfer downstream." I am not sure why Mr. Long is discussing these three water rights at all. First, both permits he references were proven up and replaced by certificates some time ago. Certificate 44281 was initially issued upon proving up of Permit S-32049 and Certificate 44283 was issued upon proving up of Permit S-37392. In 2000, OWRD approved transfer T-6854, which made changes to those two certificates 2 As previously noted, the remaining concrete footings will be removed soon after April 1, 2024, which is the completion date for T-12651. LUBA 2019-136 AMENDED RECORD - Page 0273 EXHIBIT 11 September 24, 2019 Page 4 (and others as well). As a result of the transfer, Certificates 44281 and 44283 were both cancelled and replaced by new certificates reflecting both the portion of the water rights not changed by the transfer and the portion of the water rights changed and proven up under the transfer. After completion of that transfer, Big Falls Ranch held Certificates 76371, 87558, 87655, 88027, 88028, and 88224. Only Certificate 76371 and 88027 were for surface water in Deep Canyon Creek; the others are groundwater rights. Deschutes Valley Farms held surface water Certificate 76372 (to a creek in McKenzie Canyon, not Deep Canyon) and groundwater certificates 75672, 76373, and 79237. The two permits referenced by Mr. Long are no longer pertinent to any discussion of Big Falls Ranch water rights and these rights are not inchoate, as he claims. Second, as noted, Certificate 76372 pertains to water withdrawn from a stream in McKenzie Canyon, not to Deep Canyon Creek, which is the focus of this proceeding. Third, crucially, Mr. Long's discussion of requirements that might apply to changing the terms of a permit is not pertinent to either Applicant's water right purchase agreement with Big Falls Ranch or to Transfer T-12651 that approved changing the surface water point of diversion for certain water rights from surface water PODs to groundwater points of appropriation located on Big Falls Ranch. The agreement with Big Falls Ranch covers portions of the water rights represented by surface water Certificates 76371 and 88027. Transfer T-12651 covers Certificates 76371, 87655, and 88027, the first and third of which pertain to Deep Canyon Creek. (Note that the effect of Transfer T-12651 will be to cancel those three certificates and replace them with new certificates once the transfer has been completed.) See attached copies of transfer orders. Finally, even if Mr. Long's letter pertained to the water rights at issue here, all that his letter does is describe that further OWRD review proceedings would be required to make changes to any water rights. Applicant has never argued otherwise. However, to the extent that Mr. Long argues that Permit S-32049 is inchoate and requires a transfer back to its original point of diversion before it could be subject to any further transfer by the Applicant, he is simply wrong. First, as noted, that permit is not inchoate and it was proven up long ago. Additionally, there is no requirement under T-12651 to transfer the groundwater POA back to a surface water POD. Mr. Long cites to condition #6 of the Transfer Order approving T- 12651 (although he is really citing condition #7), which says in part: "...if within 5 years after approval of the transfer, the Department receives a transfer application to return to the last authorized surface water point of diversion..." LUBA 2019-136 AMENDED RECORD - Page 0274 EXHIBIT 11 September 24, 2019 Page 5 Mr. Long seems to take this to mean that a transfer application to change back the POD is clearly required. But that is not what this provision says. It says if BFR (or Applicant after purchasing the BFR right) wanted to transfer the right back to the original point of diversion it would require a transfer application. Furthermore, Mr. Long left off the rest of the sentence, which says "the application shall be approved" thus indicating that a change back would be automatic. Despite this clear language, Mr. Long wrote "It is unclear how, other than by standard transfer rules and statutes such a change of the point of diversions or point of appropriation could occur." An automatic approval is certainly not a "standard" transfer. Finally, as Applicant has already explained (including with a document from OWRD), the change of POD to a POA under ORS 540.531 does not change the right to a groundwater right; it remains a surface water right. In summary, Mr. Long's letter is irrelevant to the specific issues involved in this remand proceeding. Gould Submission/Memorandum from Jeffrey Kleinman. Mr. Kleinman, Ms. Gould's attorney, submitted a memorandum that purports to respond to Applicant's September 10, 2019 rebuttal submissions. Stripped of the bombastic arm-waving,3 Mr. Kleinman's memorandum is essentially reduced to an argument that he does not trust or believe the Applicant's evidence. As I stated in my previous letters in this proceeding, my clients have a written agreement with the Big Falls Ranch providing for the purchase of water rights well in excess of the acreage needed for the Tentative Plan supply and mitigation requirements. There is nothing nefarious about the parties desiring to keep private the specific terms of the agreement—including price and other sensitive matters— and Mr. Kleinman's suggestion that the agreement contains "damning contents" is completely unfounded and inappropriate. If he is suggesting that either Mr. Barber, as a party to that agreement, or I, as Applicant's counsel involved in drafting the agreement, are making statements about the agreement that are not true, he is essentially slandering us without a shred of evidence. The fact is that Applicant has secured the necessary water because it has a binding agreement to purchase water rights. 3 "Song and dance, shell game (complete with dictionary definition), lip service, end of the line, sagebrush subdivision, double-dark secret agreement, damning contents, hearsay on hearsay, since when, this is the time and this is the place, smoke and mirrors, Q.E.D., pig in a poke, talked to death, now or never, the goal posts have just left the stadium"—all of these flip statements in Mr. Kleinman's memorandum are simply arm-waving and do not constitute appropriate argument. LUBA 2019-136 AMENDED RECORD - Page 0275 EXHIBIT 11 September 24, 2019 Page 6 Furthermore, it is not a "shell game" for the Applicant to point out that OWRD enforces the mitigation requirements for use of groundwater in the Deschutes Basin. It is an uncontestable fact that OWRD will not allow Applicant to pump a single gallon of water for the project unless and until Applicant has demonstrated to the Department's satisfaction that Applicant has the required amount of wet water mitigation in hand to offset the water use. OAR 690-505- 0620-0625. Applicant has satisfied its burden of proof for the water quality mitigation as well. Removal of the upper dam in Deep Canyon Creek was required prior to construction, not prior to approval of the Tentative Plan here. The removal of the lower dam is not required for many years into the future, after full development of Phase A of the resort. Yet the removal of the weir from the lower dam has already occurred, thus providing this portion of the mitigation ahead of when it is required. As explained by Mr. DeLashmutt at the hearing, it is the weir that impounded the creek water to allow its diversion for irrigation use. The evidence shows that the weir has been removed, which is what applicant claimed. The fact that the concrete base for the weir is still in place does not mean the "dam" is still in place. See Dorsey photos #2 & 5 (9/17) and Applicant's Ex. 3a, 3c-d (9/10) and Applicant's Ex. B1 and B2 from Mr. DeLashmutt's final argument dated September 24. Furthermore, Applicant has extensively demonstrated that the beaver dam which blocked the channel subsequent to removal of the weir has also been removed. And most important of all, no water is being diverted from Deep Canyon Creek. COLW Comments. The above responses to Ms. Gould's submissions answer COLW's comments as well. Applicant has submitted sufficient proof of its acquisition of water rights in excess of what is required for its first phase of development. Deep Canyon Creek now flows to the Deschutes River, without impoundment or diversion by Big Falls Ranch. No matter how many times opponents say it isn't so, these facts have been established and Applicant has met its burden of proof. Sincerely, J et E. Neuman Senior Counsel cc: Liz Fancher (by email: liz@lizfancher.com) Kameron DeLashmutt (by email: kameron@bendcable.corn) 035992/00001/10386164v1 LUBA 2019-136 AMENDED RECORD - Page 0276 EXHIBIT 11 1 Liz Fancher From:Kameron DeLashmutt <kameron@bendcable.com> Sent:Friday, September 3, 2021 11:15 AM To:David Newton; Janet Neuman Cc:Liz Fancher; Katzaroff, Kenneth Subject:FW: Discussion regarding Reverting back to Deep Canyon Creek From: STARNES Patrick K * WRD <Patrick.K.Starnes@oregon.gov> Date: Friday, September 3, 2021 at 11:12 AM To: Kam DeLashmutt <kameron@bendcable.com>, HENDERSON Sarah A * WRD <Sarah.A.Henderson@oregon.gov>, JARAMILLO Lisa J * WRD <Lisa.J.Jaramillo@oregon.gov> Subject: Re: Discussion regarding Reverting back to Deep Canyon Creek Hi Kameron, Given the current work situation with COVID, I would estimate that it would take at least two weeks to process the reversion request. Kelly Kelly Starnes, Transfer Program Analyst Oregon Water Resources Department 725 Summer St NE Suite A Salem OR 97301-1271 Cellphone: 503-979-3511 Fax: 503-986-0903 E-mail: patrick.k.starnes@oregon.gov Please Note: Under Oregon Law, messages to and from this e-mail address may be available to the public. From: Kameron DeLashmutt <kameron@bendcable.com> Sent: Thursday, September 2, 2021 8:04:30 PM To: STARNES Patrick K * WRD <Patrick.K.Starnes@oregon.gov>; HENDERSON Sarah A * WRD <Sarah.A.Henderson@oregon.gov>; JARAMILLO Lisa J * WRD <Lisa.J.Jaramillo@oregon.gov> Subject: Re: Discussion regarding Reverting back to Deep Canyon Creek Patrick, Thank you for the speedy response. I think Sarah mentioned that once you received such email as noted below that it automatic and quickly reverts. Please confirm that is the case. And if not please note the time involved. I appreciate your assistance in clarifying. Sincerely, Kameron Kameron DeLashmutt 541-350-8479 EXHIBIT 11 2 kameron@bendcable.com kameron1959@gmail.com From: STARNES Patrick K * WRD <Patrick.K.Starnes@oregon.gov> Date: Thursday, September 2, 2021 at 10:15 AM To: HENDERSON Sarah A * WRD <Sarah.A.Henderson@oregon.gov>, Kam DeLashmutt <kameron@bendcable.com>, JARAMILLO Lisa J * WRD <Lisa.J.Jaramillo@oregon.gov> Subject: Re: Discussion regarding Reverting back to Deep Canyon Creek Good Morning Sarah and Kam, The rules that Sarah quoted are correct. However, the transfer application referred to in the rules has to be filed on rights subject to transfer. According to WRIS, I do not believe the Department has issued certificates confirming T- 12651, thus there are no rights subject to transfer. IF confirming certificates have not been issued, then the transfer applicant can revert the transfer back to the authorized point of diversion. Such a reversion request can be made by e- mail. Kelly Kelly Starnes, Transfer Program Analyst Oregon Water Resources Department 725 Summer St NE Suite A Salem OR 97301-1271 Cellphone: 503-979-3511 Fax: 503-986-0903 E-mail: patrick.k.starnes@oregon.gov Please Note: Under Oregon Law, messages to and from this e-mail address may be available to the public. From: HENDERSON Sarah A * WRD <Sarah.A.Henderson@oregon.gov> Sent: Thursday, September 2, 2021 8:34:26 AM To: Kameron DeLashmutt <kameron@bendcable.com>; STARNES Patrick K * WRD <Patrick.K.Starnes@oregon.gov> Cc: HENDERSON Sarah A * WRD <Sarah.A.Henderson@oregon.gov> Subject: RE: Discussion regarding Reverting back to Deep Canyon Creek Hi Kameron, I always enjoy speaking with you সহ঺঻ And I want to apologize up front… it didn’t register to me last night when we were talking that this was not a regular pod transfer change, T-12651 (Big Falls Ranch) was a SW POD to GW POA change, and I might have given you some incorrect information. OAR 690-380-2130 has its own procedure for returning back to the original SW POD, it would not be like the regular pod transfer change “reverting back” with just an email to Kelly Starnes, like I told you last night. I’m sorry!!! EXHIBIT 11 3 I am asking Kelly to chime in here and help you and I out, I believe in the SW to GW changes that an application would have to be submitted … “(8) The Department shall approve a transfer application to return to the last authorized surface water point of diversion if the required transfer application is received within five years after the Department approves a transfer under this rule. It shall be presumed, for transfers under this subsection, that there is no injury, including injury to rights obtained or transferred after the approval of the first transfer.” T-12651 was approved on 11/20/2018 so we are still within that five year period. Also, the final order states (7) The original point of diversion of surface water shall not be retained as an additional or supplemental point of diversion under the transferred portion of the right. However, if within five years after approval of the transfer, the Department receives a transfer application to return to the last authorized surface water point of diversion, the application shall be approved. Kelly – please help us out, I want to make sure that Kameron is getting the correct information, I told him that a pod revert would be super easy, just send an email to Kelly… as you can see above I forgot about the sw to gw rules. If you could explain in detail what would need to happen to revert to the original pod that would be great. Again, sorry Kam!! And thank you Kelly! Sarah Sarah A. Henderson Flow Restoration Program Coordinator Transfer and Conservation Section 725 Summer St. NE, Suite A |Salem, OR 97301 Work Cell 503-979-9872 Email: sarah.a.henderson@oregon.gov From: Kameron DeLashmutt <kameron@bendcable.com> Sent: Wednesday, September 1, 2021 7:26 PM To: HENDERSON Sarah A * WRD <Sarah.A.Henderson@oregon.gov> Subject: Discussion regarding Reverting back to Deep Canyon Creek Sarah, It was nice speaking to you this afternoon. Thank you for further clarifying earlier conversations we had about reverting the Deep Canyon Creek rights to a Point of Diversion in Deep Canyon Creek from the existing POA in the ground. As we have discussed previously, and you confirmed today the process, to revert the current Point of Appropriation in the Big Falls wells to the previous Point of Diversion in Deep Canyon Creek is very simple. As I understand it the process to do so is to send an email to Kelly Karnes (sp?) informing that we would like to change the POA back to a POD and that will be acknowledged and approved immediately after which the POD would be back in Deep Canyon Creek. This would be limited to the interference period, that would last 5 years from the time of issue of the final order approving the change in the POD. EXHIBIT 11 4 Please confirm that I have accurately portrayed our discussions and the process as you understand it to revert the POA back to the POD in Deep Canyon Creek. Sincerely, Kameron DeLashmutt 541-350-8479 kameron@bendcable.com kameron1959@gmail.com EXHIBIT 11 247-18-000386-TP / 454-SP / 592-MA Hearings Officer Decision Page 76 of 81 III. CONCLUSION: Based on the foregoing findings and the record herein, I find that the applications meet all applicable criteria, subject to the conditions of approval set forth below. Note: Other permits may be required. The applicant is responsible for obtaining any necessary permits from the Deschutes County Building Division, the Deschutes County Environmental Soils Division and the Deschutes County Road Department, as well as any required state and federal permits. IV. CONDITIONS OF APPROVAL: 1. Tentative Plan & Final Plat: This approval is based on the information submitted by the applicant. The subdivision final plat shall be in substantial conformity with the provisions of the tentative plan for the subdivision, as approved. Any substantial change will require a new land use application. 2. Site Plan Review: This approval is based upon the application, site plan, specifications, and supporting documentation submitted by the applicant. Any substantial change in this approved use will require review through a new land use application. 3. Clear Vision Area: As an ongoing condition of approval, clear vision areas shall be maintained at the intersections of access roads and Cline Falls Road. 4. Parking: As an ongoing condition of approval, required parking space shall be available for the parking of operable passenger automobiles of residents, customers, patrons and employees only and shall not be used for the storage of vehicles or materials or for the parking of trucks used in conducting the business or used in conducting the business or use. 5. Parking Lighting: As an ongoing condition of approval, lighting illuminating off-street parking areas shall be arranged so that it will not project light rays directly on any individually owned (non-resort owned) residential single-family dwelling. 6. Service Drive Sign: The applicant must post a sign on the service drive stating that it is for service vehicles only. 7. Bicycle Parking: Prior to initiation of use for the reservoir and septic drainfield utility sites, the applicant shall provide revised plans or documentation demonstrating compliance with DCC 18.116.031. 8. Landscape & Topography Preservation: During construction and as an ongoing condition of approval, the landscape and existing topography shall be preserved to the greatest extent possible, considering development constraints and suitability of the landscape and topography. Preserved trees and shrubs shall be protected. 9. Exterior Lighting: As an ongoing condition of approval, all exterior lighting shall be shielded so that direct light does not project off site. 10. FMP Condition 4: Prior to Final Plat approval or issuance of a building permit, whichever comes first, the secondary emergency resort access road or roads shall be improved. Subject to US Department of the Interior-Bureau of Land Management (BLM) approval, any LUBA 2018-140 Record - Page 0116LUBA 2019-136 AMENDED RECORD - Page 1189 EXHIBIT 11 247-18-000386-TP / 454-SP / 592-MA Hearings Officer Decision Page 77 of 81 secondary emergency ingress/egress across the BLM-owned land or roadways shall be improved to a minimum width of 20 feet with all-weather resort access surface capable of supporting a 60,000-lb. fire vehicle. Until such time, if any, that the road is approved for full access, a sign shall be posted at each end stating that it is for emergency access only. 11. FMP Condition 6: Prior to final plat approval, all easements of record and/or rights-of-way shall be shown on the Final Plat. These plans shall be approved by the County Road Department prior to construction. 12. FMP Condition 7: Prior to final plat approval, all new proposed road names must be reviewed and approved by the County Property Address Coordinator. 13. FMP Condition 14(D): Prior to final plat approval, all open space areas shall be clearly delineated and labeled on the Final Plat. 14. FMP Condition 17: All development within the proposed resort shall meet all fire protection requirements of the Redmond Fire Department (Redmond Fire & Rescue). Fire protection requirements shall include all minimum emergency roadway improvements. 15. FMP Condition 21. The final plat shall provide or reference a recorded deed restriction and equitable servitude in favor of and enforceable by the County, requiring that the sale of individual (single-family) lots may not close until a minimum of 50 overnight lodging units are constructed and ready for rent as provided in FMP condition no. 21. The County shall execute and record a release or satisfaction of the deed restriction and equitable servitude within 30 days of a request from the applicant demonstrating that this condition has been satisfied. The exact wording of the plat reference and recorded document shall be reviewed and approved by County Counsel. 16. FMP Condition 29: As an ongoing condition, comply with the ODOT Contribution Agreement to “assure the applicant’s mitigation responsibility to ODOT is met now and through completion” of the resort. 17. Site design approval. Prior to issuance of building permits for the single-single family dwellings, obtain site design approval for at least 50 OLU’s, which approval shall demonstrate that: a) the OLU’s qualify as such and b) the Big Springs Ranch and COID water referenced in the Mitigation Plan and FMP decision have been secured, demonstrate that the proposed alternate source is acceptable to ODFW and provides the same quantity and quality mitigation so as to not constitute a substantial modification or justify a modification to the FMP. 18. Construction. Prior to closing on the sale, lease or rental of any residential lots or dwellings: a. Obtain land use approvals for development of the remaining elements of Phase ‘A’ including the remaining OLU’s, restaurant, meeting rooms and recreational facilities. b. Construct at least 50 OLU’S c. Construct or provide financial assurance for construction of the remaining 100 OLU’s d. Construct or provide financial assurance for construction of the restaurant, meeting rooms and recreational facilities for Phase ‘A’ and as noted in FMP Condition 33. LUBA 2018-140 Record - Page 0117LUBA 2019-136 AMENDED RECORD - Page 1190 EXHIBIT 11 247-18-000386-TP / 454-SP / 592-MA Hearings Officer Decision Page 78 of 81 19. FMP Condition 34: As an ongoing condition of approval, where construction disturbs native vegetation in open space areas that are to be retained in substantially natural condition, the applicant shall restore the native vegetation. This requirement shall not apply to land that is improved for recreational uses, such as golf courses, hiking or nature trails or equestrian or bicycle paths. 20. FMP Condition 38. Prior to issuance of building permits for any Phase ‘A’ development: obtain BLM/ODFW concurrence that no mitigation is required; provide such mitigation or establish the escrow and deposit funds equal to the area of such mitigation. 21. FMP Condition 39. Prior to issuance of building permits for any portion of Phase ‘A’, submit to Deschutes County an executed agreement with Three Sisters Irrigation District providing for restoration of 106-acre feet of water to Whychus Creek no later than the date groundwater pumping to serve the development commences. 22. Subdivision Name: Prior to final plat approval, the subdivision plat name shall be approved by the County Surveyor. 23. Private Road Approval: Prior to final plat approval, streets and roads held for private use and indicated on the tentative plan shall be approved by the County Road Department. 24. Conformity to Tentative Plan: Prior to final plat approval, the subdivision final plat shall be in substantial conformity with the provisions of the tentative plan for the subdivision, as approved. 25. Explanations: Prior to final plat approval, explanations for all common improvements required as conditions of approval of the tentative plan of the subdivision shall be recorded and referenced on the subdivision plat. 26. Domestic Water Supply Certification: Prior to final plat approval, the applicant shall provide to the County a certification by the owner of the privately-owned domestic water supply system, subject to regulation by the Public Utility Commission of Oregon, that water will be available to the lot line of each and every lot depicted in the proposed subdivision plat. 27. Sewage Disposal Statement: Prior to final plat approval, the applicant shall provide to the County a certification by the owner of the privately-owned sewage disposal system, subject to regulation by the Public Utility Commission of Oregon, that a sewage disposal system will be available to the lot line of each and every lot depicted in the proposed subdivision plat. 28. Irrigation District Certification: Prior to final plat approval, and subject to any standards and procedures adopted pursuant to ORS 92.044, no plat of subdivision or partition located within the boundaries of an irrigation district, drainage district, water control district, water improvement district or district improvement company shall be approved by the county unless the county has received and accepted a certification from the district or company that the subdivision or partition is either entirely excluded from the district or company or is included within the district or company for purposes of receiving services and subjecting the subdivision or partition to the fees and other charges of the district or company. 29. Northbound Left Turn Lane: Prior to final plat approval, the applicant shall construct a left turn lane for northbound Cline Falls Rd at the proposed southeast site access in conformance with Recommendation No. 3 in the September 28, 2005 TIA. LUBA 2018-140 Record - Page 0118LUBA 2019-136 AMENDED RECORD - Page 1191 EXHIBIT 11 247-18-000386-TP / 454-SP / 592-MA Hearings Officer Decision Page 79 of 81 30. Road Improvements: Prior to final plat approval, all required road improvements shall be constructed. 31. Existing Easements and Rights-of-Way: Prior to final plat approval, the applicant shall note all easements of record and existing rights-of-way on the final plat, in conformance with DCC 17.24.060 and FMP condition 6. 32. Location of Roads: At the time of final plat submittal, the surveyor or engineer submitting the plat shall submit information showing the location of the existing roads in relation to the roads rights-of-way, on behalf of the applicant to the County Road Department. This information can be submitted on a worksheet and does not necessarily have to be on the final plat. All existing road facilities and new road improvements are to be located within legally established or dedicated rights-of-way. In no case shall a road improvement be located outside of a dedicated road right-of-way. If research reveals that inadequate right- of-way exists or that the existing roadway is outside of the legally established or dedicated right-of-way, additional right-of-way will be dedicated as directed by the Deschutes County Road Department to meet current County Standards. 33. Fire District Approval: Prior to final plat approval, the applicant shall submit confirmation from Redmond Fire and Rescue verifying the proposed configuration of the subdivision will conform to applicable Fire Code. 34. Cline Falls Road Right-of-Way Dedication. Prior to final plat approval, the applicant shall dedicate additional right-of-way along the boundaries of the subject property where it abuts the public right-of-way of Cline Falls Road to provide the required right-of-way width of 40 feet from the centerline (80-feet total width) pursuant to DCC 17.36.020(B), 17.36.080, and 17.48A. 35. Street Names: Prior to final plat approval, no street name shall be used which will duplicate or be confused with the name of an existing street in a nearby city or in the County. Street names and numbers shall conform to the established pattern in the County and shall require approval from the County Property Address Coordinator. 36. Utility Easements: Prior to final plat approval, all required utility easements shall be shown on the final plat. Easements shall be provided along property lines when necessary for the placement of overhead or underground utilities, and to provide the subdivision or partition with electric power, communication facilities, street lighting, sewer lines, water lines, gas lines or drainage. Such easements shall be labeled "Public Utility Easement" on the tentative and final plat; they shall be at least 12 feet in width and centered on lot lines where possible, except utility pole guyline easements along the rear of lots or parcels adjacent to unsubdivided land may be reduced to 10 feet in width. 37. Grading: Prior to the issuance of building permits on individual lots, the applicant shall demonstrate cut slope ratios shall not exceed one foot vertically to one- and one-half feet horizontally, fill slope ratios shall not exceed one foot vertically to two feet horizontally, and that grading plans comply with DCC 17.36.230. 38. Water and Sewer Lines: Prior to curbing and paving new streets, water mains and water and sewer lines shall be constructed and installed to County standards and specifications. 39. Public Water System: Prior to final plat approval, plans for the water system shall be submitted and approved by the appropriate state or federal agency. The water system shall LUBA 2018-140 Record - Page 0119LUBA 2019-136 AMENDED RECORD - Page 1192 EXHIBIT 11 247-18-000386-TP / 454-SP / 592-MA Hearings Officer Decision Page 80 of 81 be constructed and operational, with lines extended to the lot line of each and every lot depicted in the proposed subdivision. 40. Road Improvement Plans Prior to final plat approval, the applicant shall submit a complete set of certified mylar improvement plans to the Road Department Director for approval. Public and private road design and construction shall be in accordance with all applicable sections of DCC 17.48. Applicant shall submit public and private road improvement plans to Road Department for approval prior to commencement of construction pursuant to DCC 17.40.020 and 17.48.060 and in conformance with Condition No. 5 of the Hearings Officer Decision for the FMP. Improvements shall be constructed under the inspection of a register professional engineer consistent with ORS 92.097 and DCC 17.40.040. 41. Road Names: Prior to final plat approval, all roads shall be named in conformance with the provision of the Deschutes County uniform road naming system set forth in DCC Title 16. 42. Mountain Bike Trails: As an ongoing condition of approval, mountain bicycle trails used for transportation shall have a two-foot minimum tread width and a six-foot minimum clearing width centered over the trail, and a minimum overhead clearance of seven feet. Trails used solely for recreational use may be narrower with less clearing of vegetation. 43. Road Maintenance Covenant: Prior to final plat approval, all interior subdivision roads shall be private roads. Maintenance of all interior private roads shall be assigned to owners of the subdivided land or a home owners association by covenant pursuant to DCC 17.16.040 and 17.48.160(A). Applicant shall submit covenant to Road Department for review and shall record covenant with the County Clerk upon Road Department approval. A copy of the recorded covenant shall be submitted to the Community Development Department prior to final plat approval. 44. Private Roads: Prior to final plat approval, all private roads shall comply with the minimum private road standards of DCC 17.48.180. 45. Drainage: Prior to final plat approval, the applicant shall provide certification by a licensed professional engineer that drainage facilities have been designed and constructed to receive and/or transport at least a design storm as defined in the current Central Oregon Stormwater Manual created by Central Oregon Intergovernmental Council and all surface drainage water coming to and/or passing through the development or roadway. The engineer’s certification shall confirm that all drainage features have been designed and constructed to comply with DCC 17.48.190. 46. Driveway Approach Permits: Prior to final plat approval, the applicant shall obtain driveway access permits for any new or existing unpermitted road accesses to Cline Falls Road pursuant to DCC 12.28.050 and 17.48.210(A). 47. Service Drives: Prior to opening for use, post a sign on the service drive stating that it is for service vehicles only. 48. Emergency Access: Post signs “Emergency Access Only” signs at each end of the access road unless not permitted by the USA. LUBA 2018-140 Record - Page 0120LUBA 2019-136 AMENDED RECORD - Page 1193 EXHIBIT 11 247-18-000386-TP / 454-SP / 592-MA Hearings Officer Decision Page 81 of 81 49. Parks: Pursuant to DCC 17.44, no later than the time of recording the final plat for the subdivision pay a fee of $350 per proposed dwelling unit or obtain approval to dedicate “suitable and adaptable” land for a private park open to the public. V. DURATION OF APPROVAL: This Tentative Plan and Site Plan Review approval shall be void after two years from the date this decision becomes final, unless the final plat has been submitted to the Planning Division for final approval within that time period, an extension is sought under DCC 22.36.010, or the preliminary plat approval has been initiated as defined in DCC 22.36.020. This decision becomes final twelve (12) days after the date of mailing, unless appealed by a party of interest. Done and dated this 29th day of October 2018 Dan R. Olsen Hearings Officer LUBA 2018-140 Record - Page 0121LUBA 2019-136 AMENDED RECORD - Page 1194 EXHIBIT 11 7801 7900 7800 1 SHEET DATE: 9/13/21SCALE: 1" = 600' CENTRAL LAND AND CATTLE COMPANY LLC EXISTING TAX LOTS DRAWN BY: MPD LOCATED IN THE NORTH HALF OF THE SOUTHEAST QUARTER (N1/2 SE1/4) OF SECTION 29, TOWNSHIP 15 SOUTH, RANGE 12 EAST, W.M., DESCHUTES COUNTY, OREGON NORTH EXHIBIT B-1EXHIBIT 11 7801 7800 2 SHEET DATE: 9/13/21SCALE: 1" = 600' CENTRAL LAND AND CATTLE COMPANY LLC LOT LINE ADJUSTMENT 1 DRAWN BY: MPD LOCATED IN THE NORTH HALF OF THE SOUTHEAST QUARTER (N1/2 SE1/4) OF SECTION 29, TOWNSHIP 15 SOUTH, RANGE 12 EAST, W.M., DESCHUTES COUNTY, OREGON NORTH EXHIBIT B-1 AREA BEFORE ADJUSTMENT = 436.5± Ac AREA AFTER ADJUSTMENT = 474.76± Ac ADJUSTED TAX LOT 7900 AREA BEFORE ADJUSTMENT = 38.76± AcAREA AFTER ADJUSTMENT = 0.50 Ac EXHIBIT 11 7800 3 SHEET DATE: 9/13/21SCALE: 1" = 600' CENTRAL LAND AND CATTLE COMPANY LLC LOT LINE ADJUSTMENT 2 DRAWN BY: MPD LOCATED IN THE NORTH HALF OF THE SOUTHEAST QUARTER (N1/2 SE1/4) OF SECTION 29, TOWNSHIP 15 SOUTH, RANGE 12 EAST, W.M., DESCHUTES COUNTY, OREGON NORTH EXHIBIT B-1 AREA BEFORE ADJUSTMENT = 474.76± Ac AREA AFTER ADJUSTMENT = 504.03± Ac ADJUSTED TAX LOT 7801AREA BEFORE ADJUSTMENT = 40.0± Ac AREA AFTER ADJUSTMENT = 10.73 Ac TAX LOT 7900 EXHIBIT 11 DECISION OF THE DESCHUTES COUNTY HEARINGS OFFICER THORNBURGH RESORT COMPANY FINAL MASTER PLAN FILE NUMBER: APPLICANT! OWNER: M-07-2; MA -08-6 Thornburgh Resort Company PO Box 264 Bend, OR 97702 APPLICANT'S Schwabe, Williamson & Wyatt, PC REPRESENTATIVE: Peter Livingston, Attorney at Law 1211 SW Fifth Avenue, Suite 1600 Portland, OR 97204 REQUEST: The Applicant requests approval of a Final Master Plan (FMP) and a Modification of Application (MA) for a 1,970 -acre Destination Resort located near Cline Buttes, west of Redmond. STAFF CONTACT: Ruth Herzer, Associate Planner HEARING DATES: DECISION ISSUED: June 17, 2008, continued to July 15, 2008 Record held open for written submittals until September 11, 2008 Final written legal argument submitted September 17, 2008 October 6, 2008 I. APPLICABLE CRITERIA: Title 18, Deschutes County Code, County Zoning Ordinance Chapter 18.113.090, .100, .110 Title 22, Deschutes County Land Use Procedures Ordinance Title 23, The Deschutes County Comprehensive Plan CU -05-20 CMP, issued by the Board of County Commissioners on May 11, 2006, and revised on remand from the Oregon Court of Appeals on April 9, 2008 Oregon Revised Statutes (ORS) Chapter 197.435 to 197.467 II. BASIC FINDINGS: A. LOCATION: The subject property consists of approximately 1,970 acres of land located west of Redmond, Oregon, on the south and west portions of a geologic feature known as Cline Buttes. The property is bordered on three sides by BLM land, and is also in close proximity to Eagle Crest, another destination resort development. The subject property is identified on County Assessor's Index Map 15-12, as tax lots 5000, 5001, 5002, 7700, 7701, 7800, 7801, 7900 and 8000.' 1 The applicant also has leased inholding parcels from the Department of State Lands for buffer and access roads. See August 12, 2008 rebuttal testimony, Ex. F-2. EXHIBIT 12 If, at the time of development, insufficient off-site areas are not available, the applicant proposes to provide funding for implementing mitigation in a dedicated fund for use by ODFW to use to improve or purchase mitigation sites within Deschutes County. After the mitigation is established, the applicant will provide continuing funding for the lifetime of the development through a real estate transfer fee. 3. The applicant's fish mitigation plan The applicant obtained 2,129 acre-feet of water rights to support the proposed development year-round. The development's water supply is to be obtained from six wells that are proposed to be drilled on the property. The water rights were granted upon a finding that the applicant was responsible for providing 1,356 acre-feet of mitigation water.' The applicant proposes to obtain 836 acre-feet from Deep Canyon Creek irrigation rights that were granted to Big Falls Ranch. The remaining mitigation water is to be obtained from the Central Oregon Irrigation District COID). With respect to the Deep Canyon Creek water, irrigation rights involve water flowing for six months of the year (mid-April through mid-October). Based on average daily consumption for the resort, the applicant asserts that the proposal will result in more mitigation water flowing into the creek during the summer months, that the average daily consumption of water from the development. To address water temperatures that affect salmonid habitat, the applicant has entered into an agreement with Big Falls Ranch to remove two diversion dams from the creek. As a result, water will flow directly from cold water springs and seeps into the creek, rather than be impounded above ground.8 In addition, the applicant proposes to abandon three on-site wells that pump approximately 3.65 acre-feet from the aquifer, and provide for thermal modeling on Whychus Creek. In the event the hearings officer concludes that the proposal will likely increase the creek water temperatures, the applicant provided evidence that it can purchase mitigation credits for 106 acre-feet of water from Three Sisters Irrigation District to increase instream water flows, and thereby mitigate the impact. The applicant asserts that the latter three measures have not been required by OWRD or ODFW, but are in addition to the required mitigation. 4. The Parties' Evidence The applicant argues that the combination of on-site and off-site mitigation is sufficient to demonstrate that the proposal satisfies DCC 18.113.070(D), and continued compliance can be assured by the adoption of conditions that require continued monitoring of the habitat in the selected areas. The opponents disagree. The opponents' evidence regarding impacts to wildlife can be reduced to three main points: (1) the applicant's use of the HEP analysis and choice of indicator species are inadequate to identify all of the impacts of development on fish and wildlife; (2) the applicant The Oregon Water Resources Department (OWRD) calculated the needed mitigation water based on a 60 percent consumptive use, meaning that 60 percent of the resort water supply will not be returned to the aquifer through golf course irrigation or other surface applications. The opponents dispute that ORWD used the appropriate consumption rate. 8 The parties agree that surface water tends to be warmer than aquifer water during the summer months. M-07-2; MA -08-6 22 EXHIBIT 12 improperly identified the extent of impact of the proposed wells and underestimated its severity by assuming only 60 percent of the water used for the development would be consumed; and 3) the applicant has not adequately demonstrated that the proposed mitigation will compensate for the lost habitat or be successful in the long run. Further, the opponents argue that other alternatives, such as the purchase of impacted land and full restoration, are preferable to the more limited restoration efforts proposed for BLM land. a. Indicator Species/HEP analysis v. Extensive On-site Ground Surveys The opponents point out that the applicant heavily relied on species survey data from Eagle Crest III and on general habitat investigations performed in the area that were then evaluated in a modified HEP analysis. The opponents argue that these studies and the applicant's indicator species are inadequate to account for and address the complete biota on the site. They also contend that the applicant has failed to demonstrate that the modified HEP analysis adequately accounts for the impact of development on the site, suggesting that a full HEP analysis is the minimum necessary to address habitat impacts. They argue that the applicant's superficial survey is inadequate to provide essential baseline data from which to measure the success or failure of the applicant's mitigation plan. The opponents argue that at the very least, the applicant must provide a two-year survey of plant and animal specials, noting that a multi-year survey better accounts for the vast fluctuations in animal populations that can occur due to site conditions, weather and disease. Finally, opponents argue that even if the indicator species can adequately replicate habitat needs for a wider population, the applicant's studies do not address the cumulative impact of development in the Tumalo area. The applicant concedes that indicator species will not fully account for all of the many and varied species on the site and the effect the development will have on them. However, the applicant argues that such specificity is not needed to satisfy DCC 18.113.070(D). The applicant asserts that its analysis has been subject to extensive review and comment from ODFW, and is more extensive than plans for other destination resort developments in the area. The applicant argues that its assumptions are reasonable, and the modified HEP analysis adequately quantifies the impacts, and provides a workable methodology to compensate for the impact. With respect to cumulative impacts, the applicant argues that it considered and addressed reasonably foreseeable cumulative impacts. See August 12, 2008 rebuttal, Ex. B-14. The hearings officer agrees. b. Adequacy of Fish Mitigation Plan Opponents argue (1) the Deep Canyon Creek water is already pledged to mitigate development on another property or has been abandoned;9 (2) the amount of mitigation water required by 9 Opponents argue that the acquisition of water rights is not evidence that water will actually be returned to the rivers and streams as alleged. According to opponents, water rights are merely paper representations of water quantities and do not mean that the cool water needed to maintain instream temperatures will be available. The hearings officer understands the limitations of the water rights process, but concludes that under Oregon water law, the only way to adequately account for water in the streams is through the ORWD administration. Therefore, the hearings officer concludes that evidence M-07-2; MA -08-6 23 EXHIBIT 12 OWRD is inadequate to assure that surface water flows will be maintained year-round, as fish need more water early in the spring season; and (3) the use of surface water will degrade existing conditions by taking cold water out of the aquifer where it seeps into Whychus Creek and replacing it with warmer surface water. The applicant acknowledges that the ,proposal require the development of wells on the property that will affect basin water flows. However, the applicant argues that it has addressed those impacts by purchasing mitigation credits from COID, and by acquiring irrigation water rights that will return water to Deep Canyon Creek. They argue that both OWRD and ODFW have reviewed its proposal and have agreed that the proposal mitigates both water quantity and quality that will be removed from the aquifer due to the resort development. The applicant supplied a copy of an agreement between the owners of Deep Falls Ranch and the Daniels Group showing those owners have agreed to the removal of two dams that diverted flow from Deep Canyon Creek.10 In response to testimony from opponents that the proposed mitigation does not adequately address increases in water temperature in Whychus Creek, the applicant argues its proposal will have little or no impact on water temperatures on the creek. Even if water temperatures in Whychus Creek do increase incrementally, the applicant asserts that the increase can be addressed by requiring the applicant to fund a water conservation project sponsored by the Three Sisters Irrigation District to return 106 acre-feet of water to instream uses. The OWRD mitigation requirement adequately addresses water quantity; it does not fully address water habitat quality. Its assumptions regarding the benefits of replacing more water during the irrigation season than is consumed on an average daily basis by the resort does not account for the higher water consumption that will likely occur during the summer months. Therefore, the hearings officer concludes that the additional mitigation offered through the Three Sisters Irrigation District restoration program is necessary to assure that water temperatures in Whychus Creek are not affected by the proposed development. c. Adequacy and Likely Success of the Proposed Mitigation The opponents generally dispute that the applicant's proposed mitigation plan will result in no net loss to fish and wildlife resources. The opponents argue that the plan assumes that terrestrial animals will adapt to the built environment on the site, or will be attracted to the improved habitat that is being provided off-site. The opponents argue that such assumptions do not take into account the fragmentation of habitat, or address species recovery from the changes in the habitat. Further, opponents argue that the proposal does little to address or combat the problem of invasive species, such as starlings, who are attracted to the environment regarding the location and volume of water rights is substantial evidence as to the likely location and volume of water in the identified streams. 1° The Daniels Group owns a former strip mine that has recently been proposed to be redeveloped for residential uses. It is this entity that the opponents assert owns or has options to the Deep Canyon Creek water. However, the opponents have not provided evidence as to the nature and extent of the conflict. The hearings officer concludes there is substantial evidence in the record to support a finding that the applicant has the authority to use water from Deep Canyon Creek, and to remove dams that would impede flows from underground seeps and springs. M-07-2; MA -08-6 24 EXHIBIT 12 that will be developed on the property, and will compete for the limited habitat that remains on the site. With respect to long term habitat improvements, the opponents argue that the applicant is unreasonably optimistic about cheatgrass eradication, and CC&Rs that limit domestic animals to indoor or leashed pets. Finally, the opponents argue that the applicant's mitigation on BLM land does not adequately account for competing BLM priorities, such as grazing, off-road vehicle recreational use, that undermine the restorative goals of the mitigation plan. The applicant responds that the HEP analysis considered habitat degradation, including habitat fragmentation and the introduction of new non-native species. As a result, the applicant proposes mitigation activities on approximately 4,500 acres to compensate for the loss of 1,000 acres of habitat on its site. Further, the applicant asserts that while it is not certain that the "if you build it, they will come" habitat restoration efforts will be completely effective, the academic evidence supports a finding that habitat improvements will attract species that are being squeezed out by development elsewhere. With respect to the success of its cheatgrass eradication program and competing BLM priorities, the applicant argues that it does not expect that cheatgrass will be fully eradicated, but has proposed a series of measures to minimize its growth and spread, including periodic chemical applications and the introduction of more acceptable competing plant species. In addition, the applicant concedes that the BLM may adopt programs that will cause the mitigation to be less successful than if the mitigation sites were completely off-limits to those competing uses, but argues that there is substantial evidence to support its reliance on the identification of special habitat restoration areas to compensate for those competing activities, and on its mitigation efforts within those areas, to compensate for the loss of habitat on this site. The applicant also notes that it has accounted for circumstances where the BLM mitigation land is not available, by funding replacement mitigation programs through ODFW. While the applicant's mitigation plan does rely on its program to make general habitat improvements on BLM land, it also acknowledges that BLM management priorities may reduce the success of those efforts. Its plan includes monitoring and alternatives to provide replacement mitigation in the event the anticipated BLM improvements are not successful. The hearings officer concludes that the applicant has demonstrated that the mitigation plan, as conditioned is reasonably likely to success. d. Alternative Mitigation Plans The applicant's expert explained that the proposed mitigation is consistent with current wildlife habitat restoration practices, and that the opponents' alternatives, while potentially viable, are no more restorative than the applicant's proposal. The hearings officer has concluded that its plan is adequate to ensure that the impact of the development on fish and wildlife habitats results in no net loss. Therefore, the applicant need not address or consider alternatives that would work equally well or better. For the reasons set forth above, the hearings officer concludes that, as conditioned, DCC 18.113.070(D) is satisfied. M-07-2; MA -08-6 25 EXHIBIT 12 V. DECISION: For the reasons set out above, the hearings officer concludes that the proposal , satisfies all applicable criteria, or that it is feasible to satisfy the criteria through the implementation of conditions of approval. Accordingly, M 07- 2/MA 08-6 are approved, subject to the following conditions. To provide consistency among the decisions, the hearings officer retains the numerical listings included in the BOCC's CMP decision, noting by the word "satisfied" those conditions that no longer apply. 1. Approval is based upon the submitted plan. Any substantial change to the approved plan will require a new application. 2. All development in the resort shall require tentative plat approval through Title 17 of the County Code, the county Subdivision/Partition Ordinance, and/or Site Plan Review through Title 18 of the County Code, the Subdivision Ordinance. Satisfied. 4. Subject to US Department of the Interior -Bureau of Land Management (BLM) approval, any secondary emergency ingress/egress across the BLM-owned land or roadways shall be improved to a minimum width of 20 feet with all-weather surface capable of supporting a 60,000 -Ib. fire vehicle. Emergency secondary resort access roads shall be improved before any Final Plat approval or issuance of a building permit, whichever comes first. 5. The developer will design and construct the road system in accordance with DCC Title 17. Road improvement plans shall be approved by the Road Department prior to construction. All easements of record or right-of-ways shall be shown on any final plat. Plans shall be approved by the Road Department prior to construction. 7. All new proposed road names must be reviewed and approved by the Property Address Coordinator prior to final plat approval. 8. Satisfied. 9. Satisfied. 10. Applicant shall provide, at the time of tentative plat/site plan review for each individual phase of the resort development, updated documentation for the state water right permit and an accounting of the full amount of mitigation, as required under the water right, for that individual phase. 11. Satisfied. 12. Commercial, cultural, entertainment or accessory uses provided as part of the destination resort shall be contained within the development and shall not be oriented to public roadways. Commercial, cultural and entertainment uses allowed within the destination resort shall be incidental to the resort itself. As such, these ancillary uses shall be permitted only at a scale suited to serve. M-07-2; MA -08-6 26 EXHIBIT 12 visitors to the resort. Compliance with this requirement shall also be included as a condition of FMP approval. 13. Satisfied. 14. Applicant and it successors shall do the following to ensure that all open space used to assure the 50% open space requirement of Section 18.113.060 (D) '(1) is maintained in perpetuity: A. Satisfied. B. Satisfied. C. All deeds conveying all or any part of the subject property shall include the following restriction: This property is part of the Thornburgh Resort and is subject to the provisions of the Final Master Plan for Thornburgh Resort and the Declaration of Covenants, Conditions and Restriction of Thornburgh Resort. The final Master Plan and the Declaration contain a delineation of open space areas that shall be maintained as open space areas in perpetuity. D. All open space areas shall be clearly delineated and labeled on the Final Plat. E. Any substantial change to the open space approved under this decision will require a new land use permit. 15. Satisfied. 16. All temporary structures shall be limited to a maximum of 18 months on the resort site. 17. All development within the proposed resort shall meet all fire protection requirements of the Redmond Fire Department. Fire protection requirements shall include all minimum emergency ingress/egress roadway improvements. 18. No development shall be allowed on slopes of 25% or more on the site. 19. Applicant shall implement a "Wildfire/Natural Hazard Protection Plan" for the resort, as identified in Ex. 15, B-29 of the CMP burden of proof statement. Prior to approval of each subdivision and site plan, Applicant shall coordinate its evacuation plans through that development phase with the Deschutes County Sheriffs Office and the Redmond Fire Department. At the same time, Applicant shall also coordinate its plans for the movement of evacuees over major transportation routes with the Oregon State Police and the Oregon Department of Transportation. M-07-2; MA -08-6 27 EXHIBIT 12 20. The cumulative density of the development at the end of any phase shall not exceed a maximum density of 0.72 dwelling units per acre (including residential dwelling units and excluding visitor -oriented overnight lodging). 21. Each phase of the development shall be constructed such that the number of overnight lodging units meets the 150 overnight lodging unit and 2:1 ratio of individually owned units to overnight lodging unit standards set out in DCC 18.113.060 (A) (1) and 18.113.060 (D) (2). Individually owned units shall be considered visitor oriented lodging if they are available for overnight rental use by the general public for at least 45 weeks per calendar year through one or more central reservation and check-in services. As required by ORS 197.445 (4) (b) B), at least 50 units of overnight lodging must be constructed in the first phase of development, prior to the closure of sale of individual lots or units. In addition to complying with the specific requirements of DCC 18.113.070 (U), 1- 5, Applicant, its successors and assigns, shall at all times maintain (1) a registry of the individually owned units subject to deed restriction under DCC 18.113.070 U) (2), requiring they be available for overnight lodging purposes; (2) an office in a location reasonable convenient to resort visitors as a reservation and cheek -in facility at the resort; and (3) a separate telephone reservation line and website in the name of "Thornburgh Resort", to be used by members of the public to make reservations. As an alternative to or in addition to (3), Applicant may enter into an agreement with a firm (booking agent) that specializes in the rental of time- sharing of resort property, providing that Applicant will share the information in the registry required by (1) and cooperate with the booking agent to solicit reservations for available overnight lodging at the resort. If Applicant contracts with a booking agent, Applicant and the booking agent shall cooperate to ensure compliance with the requirements of DCC 18.113.070 (U) (5), by filing a report on January 1 of each year with the Deschutes County Planning Division. 22. The final covenants, conditions and restrictions adopted by the developer and amendments thereto shall conform in all material respects to this decision and the requirements of the DCC. 23. No permission to use or improve Barr Road as access to the Resort is given or implied by this decision. 24. Satisfied. 25. Applicant shall submit a detailed erosion control plan with the first Tentative Plat or Site plan, whichever comes first. 26. Lot size, width (frontage), coverage, off-street parking and setbacks, including solar setbacks, are permitted as described in Applicant's Exhibit 8, B -24a in the Burden of Proof document, subject to review during the subdivision approval process to confirm that there will be safe vehicle access to each lot. Compliance with the dimensional standards shall be confirmed during subdivision approval for each development phase. All multi -family units, commercial structures, and other resort facilities are exempted from meeting the solar setback standards. M-07-2; MA -08-6 28 EXHIBIT 12 27. Road width shall be consistent with the requirements set forth in the County's subdivision ordinance, DCC Chapter 17.36. 28. See conditions #38 and #39. 29. Applicant shall abide at all times with the MOU with ODOT, regarding required improvements and contributions to improvements on ODOT administered roadways (Agreement Number 22759, dated 10/10/05). 30. Satisfied. 31. All exterior lighting must comply with the Deschutes County Covered Outdoor Lighting Ordinance per Section 15.10 of Title 15 of the DCC. 32. No permission to install helicopter landing zone (helipad) at the Resort is given or implied by this decision. 33. The Resort shall, in the first phase, provide for the following: A. At least 150 separate rentable units for visitor -oriented lodging. B. Visitor -oriented eating establishments for at least 100 persons and meeting rooms which provide eating for at least 100 persons. C. The aggregate cost of developing the overnight lodging facilities and the eating establishments and meeting rooms required in DCC 10.113.060 (A) (1) and (2) shall be at least $2,000,000 (in 1984 dollars). D. At least $2,000,000 (in 1984 dollars) shall be spent on developed residential facilities. E. The facilities and accommodations required by DCC 18.113.060 must be physically provided or financially assured pursuant to DCC 18.113.110 prior to closure of sales, rental or lease of any residential dwellings or lots. 34. Where construction disturbs native vegetation in open space areas that are to be retained in a substantially natural condition, Applicant shall restore the native vegetation. This requirement shall not apply to land that is improved for recreational uses, such as golf courses, hiking or nature trails or equestrian or bicycle paths. 35. The contract with the owners of units that will be used for overnight lodging by the general public shall contain language to the following effect: "[Unit Owner] shall make the unit available to [Thornburgh Resort/booking agent] for overnight rental use by the general public at least 45 weeks per calendar year through a central reservation and check-in service." 36. Applicant shall coordinate with the Sheriffs Office and its designated representative to address all public safety needs associated with the resort and the development process. 37. Satisfied. M-07-2; MA -08-6 29 EXHIBIT 12 38. The applicant shall abide by the April 2008 Wildlife Mitigation Plan, the August 2008 Supplement, and agreements with the BLM and ODFW for management of off-site mitigation efforts. Consistent with the plan, the applicant shall submit an annual report to the county detailing mitigation activities that have occurred over the previous year. The mitigation measures include removal of existing wells on the subject property, and coordination with ODFW to model stream temperatures in Whychus Creek. 39. The applicant shall provide funding to complete a conservation projectby the Three Sisters Irrigation District to restore 106 acre-feet of instream water to mitigate potential increase in stream temperatures in Whychus Creek. The applicant shall provide a copy of an agreement with the irrigation district detailing funding agreement prior to the completion of Phase A. Dated this 6th day of October, 2008. Mailed this day of October, 2008. OriAnneCorcoranggsHearings'Officer THIS DECISION IS FINAL UNLESS APPEALED IN ACCORDANCE WITH THE PROVISIONS OF DOG TITLE 22. M-07-2; MA -08-6 30 EXHIBIT 12