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HomeMy WebLinkAbout2021-11-04 Katzaroff RE 508-SP 849-A - Exhibits 13-191 Tracy Griffin From:Katzaroff, Kenneth <KKatzaroff@SCHWABE.com> Sent:Thursday, November 4, 2021 11:58 AM To:Angie Brewer; 'Liz Fancher' Subject:RE: 508-SP; 849-A - Exhibits 13-19 [IWOV-pdx.FID4723617] Attachments:Exhibits 13 - 19 OLU 2021-11-03.pdf [EXTERNAL EMAIL] 508-SP; 849-A - Exhibits 13-19 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=418e2b82-f831- 4242-b31a-8234a1e943dd&auth=b6e5f914caa071e97c22b57421b394cc38777e44- cbba8526c0e955810976138292ad41aa834e8920 From: Katzaroff, Kenneth Sent: Thursday, November 4, 2021 11:53 AM To: 'Angie Brewer' <Angie.Brewer@deschutes.org>; 'Liz Fancher' <liz@lizfancher.com> Subject: RE: 508-SP; 849-A - Exhibits 11-12 [IWOV-pdx.FID4723617] Exhibits 11-12 Schwabe Williamson & Wyatt Kenneth Katzaroff Attorney Direct: 206-405-1985 kkatzaroff@schwabe.com 2 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=418e2b82-f831- 4242-b31a-8234a1e943dd&auth=b6e5f914caa071e97c22b57421b394cc38777e44- cbba8526c0e955810976138292ad41aa834e8920 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] 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 3 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. Ken Schwabe Williamson & Wyatt Kenneth Katzaroff Attorney Direct: 206-405-1985 kkatzaroff@schwabe.com Admitted in Washington and Oregon. LEARN HOW OUR CLIENTS ARE 4 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. September 14, 2021 VIA EMAIL: william.groves@deschutes.org Hearings Officer Gregory Frank c/o Will Groves, Senior Planner Deschutes County Community Development Department 117 NW Lafayette Ave. Bend, OR 97703 Re: File Nos. 247-18-000383-TP, 247-18000454-SP, and 247-18-000592-MA Dear Hearings Officer Frank: I am water rights counsel for Mr. Kameron DeLashmutt, Pinnacle Utilities, LLC, and Central Land & Cattle Company, LLC, the Applicant in the above-referenced file ("Applicant"). I am submitting these comments as part of final argument on my clients' behalf. My argument is limited to specific water issues, while comprehensive final argument is being submitted by Ms. Fancher and Mr. DeLashmutt. Introduction The narrow issue on remand is whether “without TP Condition 17, the tentative plan for Phase A-1 satisfies the no net loss/degradation standard and whether a change in the source of mitigation water [if proposed] constitutes a substantial change to the FMP approval . . .” See Ms. Fancher’s Final Argument (“Fancher Final Argument”), p. 1 (quoting LUBA) . As Ms. Fancher states very succinctly: • The answer to the first part of that question is that the Tentative Plan still satisfies the no net loss standard regardless of Condition 17 because “compliance with [the] FWMP assures compliance with [the no net loss/degradation test.” • The answer to the second part of the question is that there is no substantial change to the FMP approval because “there has been no change in the source of the mitigation water. Id. at 2, 4. EXHIBIT 13 Argument Leaving Water in Deep Canyon Creek by Purchasing Big Falls Ranch Deep Canyon Creek Water Rights Complies with the No Net Loss Standard. As stated above, compliance with the FWMP constitutes compliance with the no net loss standard. The FWMP provides that mitigation is required for purposes of no net loss prior to pumping of water for each phase of development. Upon full completion of development, the Applicant will have mitigated the “slight potential for increased stream temperature” by removing two impoundments from Deep Canyon Creek and by ceasing diversions from the creek. However, this is not required now, either under the FWMP nor under the question remanded by LUBA. The issue of removing impoundments in Deep Canyon Creek is not relevant to the current question on remand, because this issue was determined by LUBA against Gould. See Fancher Final Argument, p. 16. Yet many years before it is required by the FWMP, much of the creek flow restoration that was to be obtained by purchasing BFR Deep Canyon Creek water rights has already been provided. All pumping directly from the creek was discontinued in 2018, when OWRD approved Big Falls Ranch’s Transfer T-12651 to move its point of diversion (“POD”) for its Deep Canyon Creek surface water rights from the creek to its wells. At the same time, BFR removed its weir that had previously impounded the water in the creek so it could be pumped from the POD, now allowing water to flow downstream to the Deschutes.1 Applicant has previously submitted video and photographic evidence of creek flow after these changes, including some photographs submitted by the opponents themselves. See Fancher Final Argument, p. 13. Mr. Lambie’s Memorandum submitted for Ms. Gould does not directly counter this evidence. He uses one aerial photo from July 28, 2018, which he says shows no water flowing from the creek into the river, just a “vernal corridor.” September 7, 2021 Technical Memorandum from John M. Lambie to Karl Anuta (“Lambie”), p. 6 and Figure 2. First, a vernal corridor does in fact suggest the presence of water, and we do not agree with his interpretation of this photo. But even if Mr. Lambie’s interpretation were correct, it is irrelevant. OWRD’s final order approving T-12651 was not issued until November of 2018, so BFR was still authorized to dam the creek and pump 100% of their Deep Canyon water rights from the creek during the summer of 2018. 1 The BFR weir has been removed. See PDF 2019/2018 Rec 61, 64. A second impoundment further upstream on other landowners’ property will be fully removed on the timetable required by the FWMP, as will the concrete abutments that held the weir at the BFR POD. EXHIBIT 13 The rest of Mr. Lambie’s argument is essentially theoretical—the creek cannot be flowing because the elevation of the spring that feeds it is higher than the elevation of the static water levels in three of BFR’s wells, and the drawdown effect of the wells is further enhanced by the reach of the wells’ cones of influence. He concludes that all of the BFR wells are directly (and in real time) diverting water from Deep Canyon Creek, drying up Deep Canyon Spring and leaving no water in the creek, as “proven” by the aerial photo. Lambie p. 8. Evidence in the 2019 record filed by Ms. Fancher today shows that the creek was, in fact, flowing in 2019. Although the groundwater and surface water in the Deschutes Basin are hydraulically connected, which is the basis of the special transfer provision in ORS 530.431(3), they are not instantaneously connected in space and time. Pulling water out of the ground at wells located from roughly half a mile to nearly two miles from Deep Canyon Springs is patently not the same as pumping the same amount of water directly out of a single surface POD on the creek right now.2 In fact, based on Mr. Lambie’s charts of SWL elevations, the spring should have dried up some time ago if his theories were correct, but it did not. BFR continued to impound and divert water from the creek until recently, and even Applicant’s opponents claim that water still dams up in the creek. Therefore, Mr. Lambie’s Memorandum does not “prove” that “there is no source of water for mitigation at all” as he claims.3 Lambie, p. 10. And the argument about the adequacy of Deep 2 Mr. Lambie implies that Well No. 1 is located right at Deep Canyon Springs. Lambie, p. 8. This is incorrect. That well is approximately 8600 feet from the springs. See Map attached to Final Argument of Kameron DeLashmutt and Central Land and Cattle Company, LLC (“CLCC Final Argument”). The four wells Mr. Lambie discusses are all different distances from the creek, and different pumping regimes at each will have different impacts on spring or creek flows in terms of amount and timing. 3 In fact, Mr. Lambie seems to suggest that the situation is so dire on BFR that its wells are even pulling water from the Deschutes River at times (Lambie, p. 11), and that Deep Canyon Creek will not flow until BFR stops all pumping of all of its surface and groundwater rights from all of its wells for a considerable time, until the SWL exceed the elevation of Deep Canyon Springs. (Lambie, p. 9-11). (Although it is not a significant point, Mr. Lambie also includes an incorrect assumption in this analysis. On p. 11, he assumes that BFR can use all of its supplemental water rights on top of its primary water rights, but supplemental rights are only to be used when primary rights are not available—they are not additive. See ORS 540.505(3). This makes a difference of only about 50 AF of water. He also seems to misunderstand the way supplemental water rights work at the top of p. 10, where he assumes that if primary rights are transferred, the transferor can just replace the water with supplemental rights, EXHIBIT 13 Canyon Creek as mitigation was determined long ago and is not the subject of this remand. Additionally, Pinnacle recently purchased 90 acres of the Deep Canyon surface water rights from BFR (equivalent to 360 acre feet of water, which translates to 162 acre feet of mitigation water), meaning that BFR can no longer pump this amount of water from either its wells or from the creek. The Final Order on T-12651 prohibits any pumping from the creek, and BFR no longer owns the portion of rights conveyed to Pinnacle, so it cannot pump that amount from the ground. The Applicant has thus demonstrated early compliance with the FWMP as required to meet the no-net-loss/degradation standard. Furthermore, the BFR Agreement allows Pinnacle to purchase an additional 153 acre feet of mitigation water, and as additional amounts are purchased, pumping will be further reduced. This contract currently goes to December 1, 2021, but explicitly provides for additional extensions for a full year beyond that. See Exhibit I, Fancher Final Argument. Mr. Anuta’s claim that the Deep Canyon Creek water is still being used by BFR is thus incorrect as to the portion purchased by Applicant. This water is not being “double counted” for irrigation and mitigation because it can no longer be used for irrigation. Anuta, p. 1.4 which is not the case. Supplemental water rights must be transferred along with primary rights, or else be cancelled. See ORS 540.510(1).) 4 Mr. Anuta’s convoluted claim that the Deep Canyon Creek water cannot be claimed as mitigation until it has been transferred back “from ground water to surface water use” and then go through another transfer process to become an instream water right is wrong. The water right is still a surface water right, as provided in ORS 540.531(3), and as explained in detail by Ms. Fancher and confirmed by Mr. Lambie. The POD can be changed back to the surface location with an email request. See email from Patrick K. “Kelly” Starnes, OWRD, to Mr. DeLashmutt, Exhibit L, Fancher Final Argument. The FWMP provides that the BFR rights will be transferred to an instream right upon completion of the full purchase of water rights from BFR. See FWMP at 7. Opponents’ attempts to accelerate the mitigation obligations in advance of the OWRD mitigation requirements and the FWMP should be ignored. As explained in my letter of September 24, 2019, even before being officially transferred to an instream right, the water right is “protected” instream because no one else can divert the water from Deep Canyon Creek, as BFR holds the only water rights in the creek. See Exhibit K, Fancher Final Argument. This argument is distraction and noise, and has nothing to do with the specific issue on remand. EXHIBIT 13 The Source of Mitigation Water Has Not Changed Earlier, Ms. Gould argued through her attorneys that the “source” of the mitigation water has changed because of Transfer T-12651, and therefore, Condition 17 is required in order to assure that if this is the case, Applicant must amend the project’s Final Master Plan. Now, Ms. Gould’s expert Mr. Lambie has contradicted that position. He acknowledges that despite Transfer T-12651 changing the point of diversion for the Deep Canyon Creek water rights from a surface POD to a groundwater POD/POA, the “source” is the same—the hydraulically connected flows of groundwater and surface water. Pursuant to ORS 540.531(3), the Deep Canyon Creek water right retains its character as a surface water right. The source of mitigation water has not changed. As discussed at length by Ms. Fancher in her Final Argument, water quantity and quality mitigation requirements in the FWMP and in OWRD’s Deschutes Basin Mitigation Program provide the mechanisms needed to assure the provision of timely and effective mitigation in compliance with the approved project Final Master Plan. Conclusion Condition 17 is not required to assure compliance with the no net loss/degradation standard. Nor is it required to protect the source of mitigation water, as there has been no pertinent change proposed. Thank you. Sincerely, s/ Janet E. Neuman Janet E. Neuman Senior Counsel JEN/jw 041295\00001\12740525v1 EXHIBIT 13 FINAL ARGUMENT of Central Land and Cattle Company, LLC & Kameron DeLashmutt Remand of the Tentative Plan Phase A-1. Case: Deschutes County Case #247-18-000386-TP Thornburgh resort Phase A-1 Tentative Plan. Hearing Officer Gregory Frank c/o Will Groves, Senior Planner Deschutes County Planning Department Introduction: The FWMP makes clear the OWRD mitigation rules ensure that any thermal impacts of the resorts groundwater use on area streams and rivers will be were very minor, below levels that could be measured1. But the ODFW was however concerned that with other ongoing groundwater withdrawals, not related to the resort, the cumulative effects of all the withdrawals over time might have an impact. The FWMP addressed this minor issue. See the FWMP, Newton 9/7/21 Memo. In review of Thornburgh’s mitigation plans, ODFW commented that it was the most complete mitigation plan for the siting of a resort, and that the Thornburgh mitigation plan would provide a net benefit to the fish habitat. See ODFW letter June 2008, 2019/2018 Record PDF 110-112. Even so, Thornburgh’s mitigation plans have been litigated about 10 times since. This is an ideological, anti-development battle, with the goal being to stop the project. Ms. Gould believes, as stated by Anuta in a submittal to OWRD that there is “no right way to do the wrong thing”. 2019/2018 Record PDF 110. With that as the backdrop this project has been the source of unprecedented weaponization of the land use process with nearly 40 appeals. Now, Gould intends to weaponize the water process as well by protesting any transfer, regardless of its merits, all the while insisting that additional superfluous transfers are needed to give her additional appeal options. This case is a battleground in the weaponization of water law. According to Kleinman, Ms. Gould intends to oppose any, and all water permits for some time to come and says, “we are a long way from the time that building permits could issue here.”2019/2018 PDF 110. The same issues are routinely raised by opponents, some going back to 2005, and often regarding water availability, mitigation water and its use. These issues were resolved in favor of the applicant and the continued re-litigation of them is a collateral attack on the CMP/FMP. During the golf course site plan appeal Gould and the opponents raised a wide range of issues the majority of which were collateral attacks on prior approvals. The Board of County Commissioners, in their decision included Exhibit A, which was a 24-page description of 17 major categories of issues opponents raised that were resolved in 1 In the extensive analysis that took place over FWMP litigation those impacts were shown to be in the tens, hundredths, or thousandths (.1, .01, .001) of a degree, plus or minus, which cannot effectively be measured. EXHIBIT 14 prior proceedings. See Exhibit A, BOCC Golf Course approval. Many of those same issues are raised here. Again, they are barred by the theory of collateral attack. In this proceeding, as you noted at the hearing the issue is very narrow. LUBA asks if, without Condition 17 the Phase A-1 TP satisfies the no net loss standard, and whether a change in the source of the mitigation water constitutes a substantial change to the FWMP approval…. The BOCC in its decision on remand found that “this is the limit and extent of what must be answered by the County on remand”. The BOCC decision goes on to say: “In these proceedings the applicant removed uncertainty about whether it can purchase the Big Falls Ranch irrigation water described in the FWMP. The applicant has shown that the Big Falls Ranch water rights associated with Deep Canyon Creek are and remain surface water rights even though they are pumped from groundwater wells. They may be purchased by the applicant to mitigate for impacts that will occur after the resort starts to pump groundwater for resort uses. When Big Falls Ranch water rights are purchased, Big Falls Ranch will discontinue pumping the groundwater associated with the rights purchase. The applicant has shown in its evidence submitted to the record, that it is feasible for it to purchase the Big Falls Ranch water referenced in the FWMP.” And in 2019, the Board noted that “the applicant has demonstrated that the alleged situation that created uncertainty about the Big Falls Ranch mitigation water rights, the transfer of the point of diversion of Big Falls Ranch water – does not prevent compliance with the FWMP.” And it determined that “the applicant is not proposing to change the source of mitigation water…”. Further, “In summary, the Board finds the TP Condition 17 is not required to assure compliance with the no net loss/degradation standard of DCC18.113.070(D) because the applicant must follow the FWMP, a plan found by LUBA to meet the no net loss standard because the applicant has shown it is feasible to obtain the Big Falls Ranch mitigation water”. BOCC TP remand pages 6-8. Although this decision is not binding due the stipulated remand, it was based on sound reasoning and a careful review of much the same evidence presented in 2021. The hearings officer should make the same finding here. During the appeal of the golf course site plan the BOCC noted: “The Board finds the Applicant is not proposing any change to the FWMP, which calls for the dams to be removed at points in the future. Further, that while not required at this point, before it begins any pumping that the Applicant has caused the cessation of pumping of the Deep Canyon Creek water and the removal of the head gate which impounded the water in the Big Falls pond, allowing the Deep Canyon Creek water to flow to the river, subject to the constraints the Beavers reinstall. At this point the Applicant has done more than is required by the FWMP”. BOCC Golf Course Exhibit A, Page 11. This decision was affirmed by LUBA on June 11, 2021. The Board based both this tentative plan and the golf course site plan decisions on largely the same information presented in this case. Save one critical thing. Thornburgh has now provided proof it has purchased 90 acres of BFR Deep Canyon Creek water. This equates to 162 acre-feet of mitigation which is more than 3x the 50 acre-feet of mitigation required for this Phase A-1 tentative plan. Earlier, the BOCC found it was “feasible” for applicant to purchase the BFR water, and that when it was purchased BFR would stop pumping groundwater. It’s clear what the Board thought with before when it just was feasible to acquire the BFR water, that it was feasible for Central Land to acquire the required mitigation water from BFR. Now Thornburgh has shown it has purchased the water and that BFR has stopped pumping groundwater. Opponents for their part, have largely made the same arguments, raising issues that are not relevant to the issue on remand, and constantly raising issues that were resolved and are impermissible collateral attacks on prior approvals. See Boards Exhibit A. Further, the bulk of opponent EXHIBIT 14 arguments deal with the issue of compliance with the FWMP, which is a matter not for the land use process, but the annual reporting required by the mitigation plans and FMP condition 38. FMP Condition 38 ensures compliance with the no net loss standard and compliance will be determined by the annual reporting about the status of the mitigation plans. This was accepted with the approval of the FMP and the mitigation plans. That the opponents were able to interject issues regarding the transfer of the BFR water did not belong in the tentative plan approval. It should not be a relevant issue unless and until the applicant requests to change the mitigation plan. This has been acknowledged in both this case and then again in the Golf Course site plan. In the original appeal in this case LUBA said the following: “We agree with intervenor that the details of the mitigation plan are established by the FMP, and compliance (or noncompliance) with the mitigation measures will be established by annual reporting required by FMP Condition 38. We reject petitioner's argument that the FMP required intervenor to “fill in the details” to obtain approval of a tentative plan during phased development.” See LUBA Phase A-1 TP decision, Page 13. In the Golf Course site plan LUBA added: “FMP Condition 38 requires intervenor to "abide by" the FWMP and "submit an annual report to the county detailing mitigation activities that have occurred over the previous year." Record 34. “Satisfaction of the no net loss standard is ensured through compliance with Condition 38, not Condition 10”. And: “The county found that the provision of water to satisfy the FWMP is not relevant to the review of the golf course site plan because intervenor did not propose and the county did not approve any change to the FWMP as part of the golf course site plan review”. Record 13 (citing Gould VIII, 79 Or LUBA at 583 -84). See LUBA Golf Course decision page 13. This tentative plan was submitted to the county for approval on May 2, 2018. Approval was received on October 18, 2018. Since then, it has been the subject of an appeal to LUBA, appeals to the Oregon Court of Appeals and the Oregon Supreme Court, a remand to the Hearing Officer, an appeal to the BOCC, and another appeal to LUBA to get here. Once done here, given Gould’s ideological stance to delay and thereby destroy Thornburgh, and her seeming endless resources to fight her ideological battle it’s reasonable to expect more trips to the BOCC, LUBA and the Court of Appeals. All this for a tentative plan allowed under the approved Conceptual Master Plan and Final Master Plans. To say this is an abuse of the system is a massive understatement. HO questions during the hearing. 1. Where is the source of the source. Response: The source of the mitigation water is the Deep Canyon water rights described in the FWMP. No changes have been made to the source of mitigation water. 2. Why is the source of the water important? Response: At the hearing Mr. Kleinman answered that question stating: The quality of the source matters. And that is because the importance of BFR water, specifically from the spring in deep canyon creek which it owns the rights to, is providing the cold water for salmon and steelhead. That is the quality issue as opposed to the quantity issue. While we disagree with Kleinman’s assessment on EXHIBIT 14 importance (see Newton August 31 memo) the water he refers to is the water we have purchased and are using. 3. If in fact the water comes from the same water right holder, BFR, if it comes from same entity does that make a difference? 4. What difference does it make whether or not it comes from that entities well or the surface? Response: For this proceeding these issues do not matter as we have purchased the Deep Canyon surface water that Kleinman refers to. But as Mr. Newton explained, the purchase o fany BFR water should provide essentially the same cool water benefit to Deep Canyon Creek and the Deschutes River. It therefore doesn’t matter whether the OWRD mitigation was to come from BFR well water or Deep Canyon surface water. Both will have the same effect and the no net loss will be met. 5. “If Ms. Fancher’s testimony is accurate, then there is no change in entity supplying water. If there is no change, then in fact the remand issue that talks about a change may not be important.” Response: As we have consistently stated we are not changing the source of mitigation water. In this proceeding we have shown we have purchased the Deep Canyon water rights. As a result, the premise of the question is correct, without a change in the source, the remand issue mentioning a change in water source is not applicable given the facts presented. Response to Opponent Comments: Karl Anuta: 1. Before the Deep Canyon Water can be used for mitigation it must: a) Be transferred back from groundwater to surface water use, and then, b) Go through another change of use transfer process, for an instream water right. Response: a) Applicant’s evidence clearly shows the water is still surface water. As shown above the BOCC found the transfer of the POD didn’t change the water and that it is available. Anuta’s own expert admits the Deep Canyon Water is still surface water. Hence there is no need to transfer the point of diversion back to the creek. Further, the question of whether there is an instream water right or the right has been transferred to the instream program is not part of this proceeding, nor was it required by condition 17. b) This is not the issue on remand. The tentative plan approval doesn’t create the need for mitigation. It is the construction of buildings with people in them that creates water use. Mitigation, per the OWRD rules is needed prior to that water use. This is not the issue on remand and has been raised and resolved in applicant favor numerous times. It is a collateral attack on the CMP/FMP. Further compliance with the FWMP is governed by the annual reporting requirements of the Wildlife mitigation plan, which has been raised and resolved in applicant favor. This is an impermissible collateral attack on the FMP. Anuta’s claim should be rejected. EXHIBIT 14 2. There is no evidence Thornburgh has closed on the 162 acre-feet of water from BFR. Response: Anuta is completely wrong. I testified at the hearing this has happened and htat I had closed on more than enough water from Big Falls Ranch. Mr. Newton who has represented both Thornburgh and Big Falls Ranch also stated the resort has acquired 90 acres of water, that is equivalent to 162 acre- feet of mitigation. And Ms. Fancher submitted the assignment of water rights form sent to OWRD that shows the purchase of the water. The evidence is overwhelming. 3. The recent Groundwater Review for Thornburgh’s back up water rights permit determined that the proposed withdrawal will over appropriate the aquifer. Response: This has nothing to do with the issue on remand, and nothing to do with the mitigation in the FWMP. Instead, this is thrown in to confuse the issue and distract from the relevant facts that show we are and will comply with the FWMP. Anuta attaches some pages from the groundwater review. The page he highlights is a form with a box checked. Items he overlooks are Page 6 of 10, section B, B1, (a) states the groundwater is not over appropriated, and (b) water will likely be available in the amounts requested without injury to prior water rights. This is like the issue raised by Mr. Arnold I dealt with in an earlier submittal. Further, the issue of the availability of water was resolved in applicants favor in the CMP. Raising the issue again is a collateral attack on the CMP. Furthermore, all issues related to the water rights permit, and FMP Condition 10 were resolved against Gould by LUBA in its review of this case. A further review of the issues is barred by the doctrine of law of the case. 4. The backup permit uses a well that will be abandoned. Response: This not an issue on remand and has been litigated and resolved in applicants favor earlier in this case. LUBA noted “The mitigation plan involves (1) the removal of two wells on the subject property, (2) the removal of two dams that impede the flow of spring water from Deep Canyon Creek to the Deschutes River, and (3) transfer of water from Deep Canyon Creek that Big Falls Ranch uses for irrigation for mitigation”. And: “Intervenor responds, and we agree, that removal of the dams and provision of mitigation water is required by the FMP approval and the tentative plan does not alter the mitigation plan.” See LUBA TP, slip opinion, page 13. Further, the well is being proposed for construction water under the limited license. It is to be removed prior to operation of the resorts water system. This is an issue of compliance with the FWMP that will be determined during the annual monitoring required by Condition 38. Nunzie Gould. 1. The applicant has not taken out the dams. This is not the issue on remand. The dams are not required to be taken out now. And when required it is a matter for the annual monitoring program, not a land use process for this proceeding or any other. Further it has been raised and resolved before. During the golf course site plan, the Board of Commissioners found, like here, that the Applicant is not proposing any change to the FWMP, that would require the dams to be removed earlier than in the future as required by the FWMP. BOCC Golf Course decision. 2. The well indemnification agreement is absurd. EXHIBIT 14 This is not an issue on remand. Also, the issue was litigated and resolved in 2007 in applicants favor and any attack today is a collateral attack on the CMP. To provide a little background, in 2005-2007 opponents were concerned about the potential for Thornburgh’s groundwater pumping to affect their wells. While Thornburgh disagreed, we understood their concern. In response we voluntarily offered to indemnify anyone within a 2-mile radius whose well the resort’s groundwater pumping caused to fail. This is not a code requirement nor anything forced upon us. It was a voluntary gesture of goodwill. The 2-mile distance was not an arbitrary distance. Rather it was the study area used in the hydrology study done by Newton and as I understand it, OWRD. John Lambie: This submittal is largely a new report, much of which is not rebuttal, rather, new evidence. The issues raised are rarely related to the issue on remand, and in cases are old issues, ones that have been raised and resolved against Gould in the past. 1. “The source of water has not changed from the original surface water rights…”. Lambrie: Page 1. Deep Canyon Creek water rights are surface water rights. Project opponents (Gould, Landwatch, etc..) have consistently argued, to create confusion, that the BFR transfer changed the source of the Deep Canyon water rights from surface water into groundwater rights and because of that change of source the BFR surface water rights are no longer available for mitigation until they were transferred back to surface water. Both the new evidence and rebuttal in this remand from both Anuta and Kleinman still argue this point. Apparently, they don’t believe their own expert. On this we do agree with Lambie that following the transfer, the Deep Canyon Creek water rights are surface water rights. We have consistently argued the source of the Deep Canyon water has not changed, that the Deep Canyon water is still surface water. Jan Neuman email, Sarah Henderson email, etc... Opponents are wrong on the law as confirmed by OWRD, and wrong on the facts. Finally, the truth comes out. The admission that the source of the water has not changed coupled with the fact that we have purchased that very water, should settle the issue and let us put all this to bed. For good. 2. Flow of water in Deep Canyon Creek has not been made available by BFR actions to date This is not the issue on remand. During the review of the FMP, the hearings officer determined that the FWMP’s reliance on the purchase of water rights – not actual stream flow – would serve as the proper measure of compliance with the FMP. Raising the creek flow issue vs. water rights issue now is a collateral attack on the FMP and the FWMP. Furthermore, Lambrie is not correct. It is uncontested that BFR has stopped pumping surface water from Deep Canyon Creek. Lambie claims groundwater pumping of the Deep Canyon Creek water rights has “dehydrated” Deep Canyon Creek springs, so they no longer create a flowing creek and that this result is consistent with groundwater data and physics. This is not, however, correct. To support his position Lambrie provides a Google Earth picture from July 2018 he claims shows that the creek is not flowing to the river. But the photo shows dense vegetation along the creek that is likely EXHIBIT 14 obscuring the flowing creek down to the BFR weir. Lambie has not accounted for the timeline of relevant events. At the time his photo of the creek was taken, BFR was damming the creek and pumping 100% of their Deep Canyon water from the creek. It wasn’t until November 2018 that OWRD issued the final order for transfer T-12651. In February 2019 the amended agreement between BFR and Pinnacle was executed. It prohibited BFR from pumping water from Deep Canyon Creek and required them to remove the weir. Thereafter, during the irrigation season they pumped groundwater. In 2019 after BFR ceased pumping, opponents submitted aerial photos of the creek showing the weir removed and the creek flowing to the river. Around the same time the applicant submitted a video of Deep Canyon Creek water flowing through the weir, although the beavers were making their own dam in the same location. See Ms. Fancher’s memo today on this subject which shows that the creek was flowing in 2019. All this supports our contention that prior to the transfer BFR was taking the water from the creek, after the transfer and agreement with Pinnacle, BFR stopped pumping, left the water in the creek, and removed the weir so it could flow onward to the river. 3. The spring stopped flowing because well #1 is below spring elevation. This is not the issue on remand. In spite of the evidence showing the creek flowing, to support this speculation to the contrary, Lambie provides well data from BFR for wells 1, 3, and 4. He ignores well #7 also in T-12651. In his explanation he notes that well 1 is the most significant in that it is located “at the upper end of Deep Canyon Creek.” Lambie’s comment implies well #1 is right at the spring, and because of that close proximity it is taking all the water from the spring thus leaving the creek dry. In fact, according to Lambie’s Figure 1 and supported by location information in the final order for T-12651, Well #1 is 3,600’ SW of Deep Canyon at the nearest point and 8,580’ from the spring. Further well 3 is 2,970’ from the spring, well 4 is 6,415’ from the spring, and well 7 is 4,884’ from the spring. See attached graphic overlaid on the Lambrie map showing well locations. Mr. Lambie says that if the hydraulic head of a well falls below the elevation of a spring, the spring discharge will cease “entirely.” This is clearly not occurring because the spring-fed Deep Canyon Creek is still flowing. It may be that Mr. Lambie has inaccurately calculated the hydraulic head of Well #1 or the area impacted by pumping at this well (assuming pumping impacts will extend 1.5 miles to the springs). Lambie’s memo explains how the distance from a stream is important noting a cone of depression exists from groundwater pumping that is “most acute at the well but more importantly extends across a region.” The depression is greatest at the well and diminishes the further away you go from the well. See page 4. Since the Deep Canyon Water right was transferred to 4 different BFR wells each of the wells has increased pumping. This combined pumping has not “dehydrated” the stream as postulated by Lambie. There is no empirical evidence that 100% of the pumping from all 4 wells (combined) is depleting Deep Canyon Spring much less pumping from just 1 well (#1) by itself. Lambie cites to OAR 690-380-2130(3) that he says eliminates the proximity requirement from section 2(d) of 2130. This requires, in the rest of the state that the new POD be within 500’ of the source. Here the new POD, the 4 wells range up to 2 miles away from the point of diversion. The final order for T- 12651 shows well 1 to be 11,246’ from the original POD on Deep Canyon Creek, while well 4 is 8,395’ from the POD, well 3 is 5,491’ away and well 7 is 2,956’ from the POD. The more important element of the OAR is the second half of 3(d) that Lambrie ignores. This changes language in 2(c) that required the new POD to have a similar impact on the source as the original. 3(d) EXHIBIT 14 prohibits OWRD from requiring a similar impact on the source between the original and new POD as a condition of approving a transfer. The law clearly assumes the effects on the source may not be the same from moving from a surface water POD to a well POA, and even prohibits OWRD from requiring it. Even so, Lambie concludes on the basis of well logs for wells a mile or two away that 100% of the groundwater pumping from them is coming from Deep Canyon spring. His conclusion is illogical. Lambie states that “BFR is interfering with its own groundwater rights at these same four wells and may find that their Deep Canyon Creek water rights are now subordinate and subject to curtailment or perhaps forfeiture.” OAR 690-380-2130(3)(a) states that “The proposed transfer would not result in injury to an existing water right or enlargement of the water right proposed for transfer.” In approving the transfer T-12651 and applying OAR 690-380-2130(3)(a), the OWRD found no injury by the transfer to an existing water right by the proposed groundwater pumping that would be authorized by the transfer. 4. Because Deep Canyon is diverted from wells you cannot stop diverting the surface water from Deep Canyon Creek. Lambie says this is a matter of fact, not a matter of water rights governance. This is illogical. The first premise that the entire flow of the creek is now being diverted from wells is not true, as shown above. He extends that premise to claim that “commingling of water rights” cannot easily be reversed to restore the surface flows in Deep Canyon Creek he mistakenly claims are absent. His claim is contrary to the entire premise on which the OWRD Mitigation rules were established. Newton’s August 31 memo says: “The premise for groundwater permits is that groundwater pumping reduces streamflows. Conversely if groundwater pumping is lowered, the impact of the pumping on streamflows will be reduced because less water is pumped and more will flow into the effected stream or river, which mitigates for the pumping event causing the impacts.” Logically, wherever stream flows are reduced when the pumping starts is where the stream flows will increase when pumping stops. Not somewhere completely different as Lambrie contends. This is related to the hearing officer question: “What difference does it make whether or not it comes from that entity’s well or the surface?” As Newton states, the effect from the reduction of groundwater pumping, whether from BFR well water, or the Deep Canyon surface water now pumped from the same wells, will be the same. When BFR stops pumping groundwater discharge into the river will increase, whether it occurs at the Deep Canyon Creek or directly into the river, resulting in net gains to the river. The effect is the same. See Newton August 31 memo. Because of his expertise and extensive knowledge of the geology of the Deschutes Basin, it is only logical to find that our expert hydrogeologist, David Newton,2 is correct in saying that any water diverted from the stream by groundwater pumping will be returned to the stream when pumping ceases. Pinnacle purchased 90 acres of Deep Canyon Surface water rights mentioned in the FWMP. As shown by documents filed by Ms. Fancher these water rights have been assigned to Pinnacle and Big Falls Ranch has stopped pumping that Deep Canyon water from the wells, which is equal to 162 acre-feet of mitigation. These are undisputed facts. 2 Mr. Newton’s work experience is included in his resume which is included in the 2018 record. It can be found at 2019/2018 PDF 832-841. The evidence shows Mr. Newton was a consultant to OWRD, a key member of the guiding mitigation committee during creation of the mitigation program, and one of the foremost experts on issues related to groundwater, its connectivity to surface water, and the overall hydrogeology of the Deschutes River Basin. EXHIBIT 14 5. There is no source of mitigation at all. Lambie makes a whole host of wild points that there is no water, no mitigation available, that BFR has no water available, etc. But then he admits that BFR has the rights to pump up to 24.14 cfs of water from its various sources, both groundwater and surface water. He interjects another transfer that BFR has applied for from the creek in MacKenzie canyon to further confuse things. None of this is the issue on remand. The source and availability of mitigation water and the adequacy of water rights to prove the quantity of mitigation was settled by approval of the FMP. Raising it now is a collateral attack on the FMP. 6. Battle of the Experts Lambie’s evidence stands, in many cases, in direct conflict to the expert evidence provided by our expert David Newton. Based on Mr. Newton’s verifiable superior knowledge of the Deschutes Basin he clearly wins that battle. Mr. Newton was raised in Redmond. His father and grandfather were involved in the installation of pumps and irrigation systems in the area. Water in the Deschutes Basin, and the Deschutes River is a passion of Mr. Newton’s and has been at the guiding core of his professional life. He has explained he was a key member of the guiding committee working for OWRD in the creation of the Deschutes Basin Mitigation program. He provided technical support and input on issues of geology, surface water and groundwater conditions in the upper Deschutes Basin. Along with Marshall Gannet, USGS, and Ken Lite, OWRD, he provided presentations to other committee members to provide them the technical knowledge needed to understand the issues pertaining to hydrogeology in the Deschutes Basin. David Newton is one of the foremost experts on the hydrology of the Deschutes Basin. Lambie, simply isn’t in the same league as Newton.3 Jeff Kleinman: 1. Must transfer the water back to surface water. This is immaterial and has been conclusively debunked above. Anuta has stated the transfer can happen. Lambrie says it doesn’t need to happen as the Deep Canyon water is still surface water. OWRD says the water is surface water. It is evident they want to further advance procedures that they can then protest to continue to delay the development to death. This is just another ideological ploy. David Arnold: Arnold makes numerous comments pertaining to water, most all of which he contends should require a new CMP/FMP. This includes issues such as; that we own additional water rights, have applied for other water rights transfers, and permits, and that BFR transferred their water to groundwater wells. Arnold also raises his concerns about population growth, drought, spring levels, and states that the original water permits were done without groundwater studies and should require them today. 3 As an aside, in 2008 when the FWMP was being developed, Thornburgh’s water attorney was Martha Pagel. Ms. Pagel was the Director of OWRD during the time OWRD was developing the Deschutes Basin Mitigation program. Mr. Newton was a consultant to OWRD, years of which were during Ms. Pagels directorship. EXHIBIT 14 Response: In a previous letter I responded to these claims, the bulk of which have nothing to do with the issue on remand. The evidence has shown that there is no change in source, that we are using BFR water as discussed. That we also have substantial other water rights that are not being used, rather are being left in the river to provide flow and habitat benefits to fish and aquatic species. As noted in my previous letter this equates to roughly 308 acre-feet of mitigation we have left in the river. We are not using it for this remand and have not requested “credit” for it. It is simply there. Landwatch: Direct comments from Landwatch comments in this proceeding are limited to the lot of record issues that Ms. Fancher is addressing in detail. Instead of making any comments related to the issue on remand Landwatch sent repeated pleas throughout their email list urging people to comment. Landwatch provided the talking points that in many cases recipients simply cut and pasted to form their “own” comments. Landwatch talking points included: 1. I am concerned about the excessive water use, 2. I am worried about the effect of such large water withdrawals on fish and wildlife, 3. Deschutes County requires resorts to prove that any negative impacts on fish and wildlife will be completely mitigated, 4. Thornburgh reached an agreement with ODFW for water sources, and it appears those sources are no longer available, 5. I am opposed to allowing Thornburgh to proceed until it shows it complies with mitigation, 6. If water has changed public should have right to participate in a new agreement with ODFW. While the above was paraphrased from the Landwatch emails, in numerous cases the actual talking points were repeated over and over in emails to the county and hearing officer. As is evident, most of the resulting comments were not relevant to the issue on remand, and often were issues previously resolved in favor of the applicant and are impermissible collateral attacks on the prior approvals. Ones that are relevant to the issue on remand have been lumped into others that were dealt with by me above, or by Ms. Fancher in other final arguments. Most of the commentors also did not participate in the case below and are not entitled to do so here so should not receive party status by virtue of filing comments. Conclusion. The issue on remand is very narrow and the applicant has conclusively shown that it meets the no net loss standard without Tentative Plan Condition 17. The evidence shows that the applicant has the rights to purchase the BFR Deep Canyon Creek water, that the Deep Canyon water is still surface water, that BFR has stopped pumping Deep Canyon spring water from the Creek, removed the weir and is letting that water flow through the BFR land. Further the applicant has given verbal and written testimony that it has purchased the very water that opponents say is important and provided written confirmation of such. There is no change in the source of the water, a fact that the opponent’s own expert admits. The evidence and prior rulings from the BOCC and LUBA show that FMP Condition 38 determines compliance with the FWMP which is accomplished by the annual monitoring required by the mitigation EXHIBIT 14 plans. Compliance is not to be determined in the land use process. The hearing officer should never have taken us here, but here it should end. Despite the frivolous claims, the distractions, and diversions proffered by opponents, there can be no question the applicant is complying with the FWMP, which has been held to meet the no net loss standard. Condition 17 is not needed for that. It is happening today. Thank you for the consideration. Sincerely, Kameron DeLashmutt Central Land and Cattle Company, LLC EXHIBIT 14 EXHIBIT 14 FINAL ARGUMENT RESPONSE TO JOHN LAMBIE’S CLAIM RE ALLEGED LACK OF FLOW IN DEEP CANYON CREEK Filed by Liz Fancher, Attorney for Central Land and Cattle Company, LLC File No. 247-21-000731-A, Remand of Phase A-1 Tentative Plan In his technical memorandum dated September 7, 2021, John M. Lambie states that “it is reasonable to expect that flow at the spring will cease” due to the pumping of groundwater by BFR from its Well #1 due to the elevation of the springs and the location of the hydraulic head. Mr. Lambie supports this claim with a Google Earth aerial photograph he claims shows there is no open surface water flow to the Deschutes River in July 2018. Mr. Lambie claims that the observation of no surface water flow from the springs and creek is consistent with groundwater data and physics. The results of the data and physics are not, however, accurate. The record clearly shows that the creek has flowing surface water. The fact that the creek was flowing was well-documented in 2019. I filed a part of the LUBA record for the 2019 review on remand and the entire record of the 2018 review of the tentative plan in the record of the current remand proceeding, File 247-21-000731-A. I have provided photographs and a chart below to point to places in the .pdf document I filed with the County that contains this information using the page numbers of this .pdf document earlier because the record page numbers are difficult to read for the 2018 record (the numbering is overwritten) and to be consistent when citing to the 2019 partial record. I have also attached the pages I cite on the chart and have added .pdf page numbers for ease of reference by the hearings officer. Mr. DeLashmutt filed a number of photographs and a video in the record in 2019 that show that Deep Canyon Creek is flowing to the Deschutes River and that the Deep Canyon spring is active and discharging water to the creek. The following photograph taken on September 16, 2019 shows ripples of water in the upper pond on Deep Canyon Creek as it travels downstream toward the beaver dam that slows the flow of the creek at the east end of EXHIBIT 15 the pond. This pond is also visible in the Google Earth image relied on by Mr. Lambie but he does not explain how the pond was created if not from flows from Deep Canyon spring that feeds the creek. EXHIBIT 15 The following photograph filed by opponent Sage Dorsey taken in July 2019 also shows that Deep Canyon Creek is flowing from the point of diversion of BFR water rights to the Deschutes River. Shading was professionally added to the photographs at the request of Mr. DeLashmutt to identify the location of the creek: EXHIBIT 15 Mr. Dorsey also filed a second July 2019 photograph in the record. It shows the breached BFR dam and the flowing creek behind it. This contradicts Mr. Lambie’s theory that no surface flows would continue to flow in the creek after BFR began pumping from groundwater no later than 2018. EXHIBIT 15 The following chart identifies additional evidence in the 2019 record, like evidence in the 2021 record, that proves the same thing. PDF # Description of Document Information Contradicting Lambie’s Dry Creek Theory 61 9/24/2019 Letter from Jan Neuman, water rights lawyer Weir for Big Falls Ranch (BFR) dam removed; Deep Canyon creek water can flow through the concrete channel to the Deschutes River (as shown in photo on preceding page) 91 Central Land’s 9/24/2019 Final Argument by Liz Fancher Explains that opponents acknowledged that removal of the BFR weir allows Deep Canyon Creek to flow to the Deschutes River when not impeded by beaver dams and that this is what is shown in the photographs filed by Sage Dorsey. 102- 103 9/24/2019 Final Argument by Kameron DeLashmutt Deep Canyon Creek is flowing to the Deschutes River. EXHIBIT 15 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 15 “The first dam will be removed before beginning construction of the Initial Stage of water use and the second dam will be removed before the Applicant begins development of a water use equivalent to the original Stage B, a use over 1,201 AF annually.” LUBA Rec 489. ODFW erred in describing the order of removal of the dams in it June 13, 2008 letter, LUBA Rec -677, but corrected the error in subsequent comments. LUBA Rec 489, footnote 1. Central Oregon Landwatch (“COLW”) quotes from and relies on the June 13, 2008 ODFW letter in their September 17, 2019 argument to claim that the Big Falls Ranch dam must be removed first and prior to construction of Phase A. As explained above, ODFW’s June 13, 2008 was in error. While COLW claims the Big Fall Ranch dam has to be removed upfront, they are wrong. The applicant and Gould both understand that it is the upper dam, not the Big Falls Ranch dam that must be removed first. Gould’s Petition for Review acknowledges that the first dam to be removed is the dam on the Nolan and Reimenscheider property; not the Big Falls Ranch dam. Gould’s Petition for Review, p. 57. Gould, nonetheless, makes the erroneous claim that both dams must be removed now. In addition to being erroneous, this argument has been waived because it was not presented during the County’s initial review of the tentative plan/site plan application. ORS 197.763(1)(“raise it or waive it rule”); ORS197.835(3). The issue of dam removal is also barred by law of the case. Beck v. City of Tillamook, 313 Or 149, 831 P2d 678 (1992). LUBA denied Gould’s request to place a condition of approval in the decision requiring removal of the dams finding that dam removal need not be assured by the tentative plan approval. Gould TP, pp. 37-38. Furthermore, the opponents overlook the fact that BFR has ceased pumping water from Deep Canyon Creek and has removed the BFR weir. This allows Deep Canyon Creek to flow into the Deschutes River when not impeded by beaver dams. This fact is acknowledged on page 6 of the Rebuttal Memorandum (Kleinman) and in Landwatch rebuttal of 9/17 pg. 2-3. This is what the memorandum of agreement requires BFR to do, and what the applicant has said has taken place - - in its burden of proof, in hearings testimony, in photographs and videos and in the letter from Ms. Neuman. The photos submitted by Sage Dorsey also show that the weir has been removed with the line of the creek winding down to where it enters the river. It is critical to recognize that removal of the weir is not required to occur until after completion of Phase A of the FWMP – long after completion of Phase A of the Resort. As noted by Newton in his September 25, 2018 letter, the BFR impoundment was not to be removed until after the applicant was pumping an amount of water equal to 1,201 acre feet annually.12 The reason this has happened in advance of when required is that BFR, in consultation with applicant, moved the point of diversion (pod) from the creek to a point of appropriation (poa) in the ground. Ms. Neuman explained in her October 8, 2018 letter explained that “the transfer of the point of appropriation away from Deep Canyon Spring may allow dam removal to occur sooner than 12 The amount of water needed by the tentative plan is only about 8% of that amount. LUBA 2019-136 AMENDED RECORD - Page 0304 EXHIBIT 15 With such overwhelming evidence, we thought this was truly straightforward as you had suggested in your decision. Oh how wrong we were. Instead of offering evidence on the merits (which they lacked), Gould and related project opponents raised roughly 43 separate issues in this case. See Exhibit A, to this letter. Of the 43, only 4 deal, at least in part, with the issue on remand.2 All others are outside the scope of the remand. In addition to being outside the scope of the remand, roughly half of the issues raised are barred from being raised now because they have been settled by LUBA, barred by the Beck v. City of Tillamook doctrine of law of the case, or are barred because of the raise it or waive it rule. Of these issues, some were resolved in 2007, including the issue of the well indemnification agreement, raised by Gould in rebuttal, and concern over groundwater levels, both of which were settled and resolved in applicants favor in 2007 by the BOCC. These issues are not subject to collateral attack in this proceeding. In spite of being settled 12 years ago, these issues are raised over and over again, the latest being on September 17, 2019. In addition to the strategy of distraction, Mr. Kleinman (Gould’s attorney) has threatened to protest and appeal any action we take to use our mitigation water, regardless of the merits (lack of merit) of the case and has employed a hyperbolic doomsday strategy coupled with an attack on everything and anyone Thornburgh accusing us of: “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, and then that the entire BFR and Thornburgh relationship and agreement is simply a “Pay to Say Deal.” While the depths that team Gould is willing to descend to is staggering, these aren’t real arguments, more a series of desperate distractions. Instead of dealing with the issue on remand, the opponents hype issues that are irrelevant to the issue on remand. Dam Removal Much evidence was submitted by opponents pertaining to the dams and the timing of their respective removal. In the decision approving the tentative plan, Hearing Officer Olsen wrote: “the balance of the letter (ODFW 06/13/2008) focuses on dam and well removal which the applicant states will be done as originally approved. To clarify, as represented in Mr. Newton’s Sept. 25, letter the first dam (Nolan and Reimenschneider property) must be removed prior to beginning construction under the tentative plan approval at issue.” LUBA Rec 68. Newton’s September 25 letter that begins at LUBA Rec 481 explains: “The first dam will be removed before beginning construction of the Initial Stage of water use and the second dam will be removed before the Applicant begins development of a water use equivalent to the original Stage B, a use over 1,201 AF annually.” LUBA Rec 489. While this issue is settled and barred from being raised again, it doesn’t stop opponents from taking another run at it. In this case, opponents have taken 3 separate flights over the Big Falls property to take photographs proving the dams have not been taken out. This was in spite of the timing of the dam removal having been resolved in the applicants favor in 2018 and LUBA ruled 2 Issues relevant to the remand are highlighted in yellow. Issues barred from being raised either under Beck or the “Raise it or waive it” rule are underlined. LUBA 2019-136 AMENDED RECORD - Page 0315 EXHIBIT 15 that dam removal was assured by the FWMP and was not impacted by the tentative plan approval. As such, this issue settled by LUBA and is barred by the law of the case. The irony of the flyovers and the resulting evidence they provided shows what the applicant claimed has actually happened.3 Specifically, the evidence shows: i) the weir impoundment damming the creek and forming the BFR pond has been removed. See Dorsey Photo #5 (9/17), and Central Ex. B1 (9/24), ii) the creek is discharging into the Deschutes River, See Dorsey photo #2 (9/17) and Central Ex. B2 (9/24), and; iii) the upper earthen dam has been breached and within the “breach” a beaver family has built a 15’ wide dam diminishing the flow of the creek and forming the upper pond. See Dorsey photo #4, and Central Ex. 3, 3a-d. The opponents acknowledge these facts in written materials as well. See: Kleinman rebuttal memo Page 5, and COLW memo 9/17 page 2-3. Note: When the beaver dam is removed it will release the entire pond that has formed which should clear the channel below of debris and vegetation and allow the spring to flow from its source to the river without ponding. There will be no impact of the new groundwater pumping on Deep Canyon Creek Spring. This argument is a red herring that is wholly irrelevant. As applicant has said repeatedly, Pinnacle is buying water rights from BFR. As Pinnacle acquires that water, BFR will cease pumping that water from its wells and it will be used as mitigation for the resort’s groundwater pumping. Until that time, the transfer of the point of point of diversion (pod) in the creek to a point of appropriation (poa) in the ground will serve as a temporary parking place for the water rights until Pinnacle acquires them. This is detailed in Ms. Neuman’s letter of October 8, 2018, and in Mr. DeLashmutt’s September 17, 2019 rebuttal that says: “While the transfer of the BFR water to the ground is largely a temporary event that lasts until Pinnacle acquires BFR water and takes possession, it immediately restored the entire flow of the spring……” The net result of the transfer of the pod to a poa and Pinnacle’s water purchase agreement is to immediately cool temperatures and improve the health of fish habitat in the Deschutes River. The agreement and transfer discontinues pumping cold water from the creek now – long before required by the FWMP. This benefit is assured by contract as of the date of the water purchase agreement with Pinnacle that was signed in February, 2019. As of the date of the agreement with Pinnacle, BFR ceased pumping all 464.9 acres of water from Deep Canyon Creek, equal to 837 acre of mitigation, leaving that water in Deep Canyon Creek rather than removing it for use in irrigating BFR farm fields. What the opponents are doing is taking a huge benefit for granted and trying to taint it, claiming that the benefit is somehow bad and that the significant benefit might be impacted slightly by groundwater pumping. Their arguments lack a basis in fact. Instead are loaded with innuendo and conjecture. They should be viewed for what they are – a concerted effort to confuse the issue with spurious claims. The BFR Transfer Did Not Convert the Surface Water Rights to Groundwater Rights. COLW in its August 27th comments claimed transfer T-12651 transferred the BFR surface water rights to groundwater rights and that BFR would have to transfer the rights back to surface water before applicant could use them. Kleinman on September 10th also claimed that BFR’s surface water rights were now groundwater rights that could take years (if ever) to become surface rights 3 Gould’s flights are what Mr. Kleinman refers to as Gould’s aerial feat. LUBA 2019-136 AMENDED RECORD - Page 0316 EXHIBIT 15 August 2021 IN THE COURT OF APPEALS OF THE STATE OF OREGON ANNUNZIATA GOULD and PAUL J. LIPSCOMB, Petitioners, vs. DESCHUTES COUNTY and KAMERON K. DELASHMUTT, Respondents. EXPEDITED PROCEEDING UNDER ORS 197.850 AND ORS 197.855 Land Use Board of Appeals No. 2020-095 CA A176353 ANSWERING BRIEF FOR RESPONDENT KAMERON K. DELASHMUTT On Appeal from the Final Opinion and Order of the Land Use Board of Appeals dated June 11, 2021 Jeffrey L. Kleinman, OSB #743726 Email: KleinmanJL@aol.com 1207 SW Sixth Avenue Portland, OR 97204 Telephone: 503-248-0808 Attorney for Petitioner Annunziata Gould Paul J. Lipscomb, OSB #752301 Email: judgelipscomb@gmail.com PO Box 579 Sisters, OR 97759 Telephone: 503-551-7272 Attorney for Petitioner Paul J. Lipscomb David Adam Smith, OSB #170317 Email: adam.smith@deschutes.org Deschutes County Legal Counsel 1300 NW Wall Street, Suite 205 Bend, OR 97703 Telephone: 541-388-6593 Attorney for Respondent Kenneth Katzaroff, OSB #143550 Email: KKatzaroff@schwabe.com Schwabe, Williamson & Wyatt, P.C. 1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Telephone: 206-622-1711 Attorney for Respondent Kameron K. Delashmutt i TABLE OF CONTENTS STATEMENT OF CASE ................................................................................... 1 I. Nature of the Proceeding and Relief Sought .............................................. 1 II. Nature of the Order Being Reviewed ......................................................... 1 III. Statutory Basis for Jurisdiction .................................................................. 1 IV. Effective Date of Appeal ............................................................................ 1 V. Questions Present on Appeal ...................................................................... 2 VI. Summary of the Arguments ....................................................................... 2 VII. Statement of Facts ...................................................................................... 3 RESPONSE TO PETITIONER GOULD’S ASSIGNMENT OF ERROR ............................................................................................... 4 LUBA correctly affirmed the County’s interpretation of and findings of compliance with Condition 10 of the resort’s FMP. This determination and interpretation of said condition is the same interpretation affirmed by this Court in Gould v. Deschutes County, 310 Or App 868 (2021). ................................................................ 4 I. Preservation ................................................................................................ 4 II. Standard of Review .................................................................................... 4 III. Argument .................................................................................................... 5 A. Condition 10 ..................................................................................... 5 B. Gould Misunderstands the Status of G-17036 ................................. 7 C. Gould Confuses Mitigation Requirements ..................................... 11 1. DCC 18.113.070(K) and Water Mitigation – Condition 10 ........................................................................ 12 2. DCC 18.113.070(D) and FWMP – Condition 38 ................ 15 ii RESPONSE TO PETITIONER LIPSCOMB’S ASSIGNMENT OF ERROR ............................................................................................. 16 LUBA correctly interpreted and applied ORS 197.455. The destination resort siting criteria of ORS 197.455(1) are not applicable to the development decision upheld by LUBA. Lipscomb’s argument ignores the plain text of the statute. This assignment of error should be denied. ...................................................... 16 I. Preservation .............................................................................................. 16 II. Petitioner makes no effort to cite to the record or otherwise establish preservation of this assignment of error as required ORAP 5.45. However, Thornburgh agrees that Lipscomb previously argued that ORS 197.455 should apply to the County’s decision. Standard of Review ................................................................... 16 III. Argument .................................................................................................. 17 A. ORS 197.455(1) Criteria are Mapping Criteria Only .................... 17 B. A Golf Course Site Plan Does Not “Site” a Resort ....................... 21 C. Foland v. Jackson County is Inapposite to the Facts Presented ........................................................................................ 23 CONCLUSION ................................................................................................. 26 iii TABLE OF AUTHORITIES Page(s) Cases Central Land and Cattle Company, LLC v. Deschutes County, 74 Or LUBA 326 (2016) ..................................................................... 3 Central Oregon LandWatch v. Deschutes County, 245 Or App 166, 262 P3d 1153 (2011) ............................................ 19 Foland v. Jackson County, 101 Or App 632, 792 P2d 1228 (1990), aff’d 311 Or 167, 807 P2d 801 (1991) .............................................................. 23, 24, 25 Foland v. Jackson County, 311 Or 167, 807 P2d 801 (1991) ...................................................... 25 Gould v. Deschutes County, 310 Or App 868, 484 P3d 1073 (2021) .................................... 4, 5, 13 Gould v. Deschutes County, 79 Or LUBA 561 (2019) ............................................. 4, 12, 13, 15, 16 Kine v. Deschutes County, 313 Or App 370 (2021) .................................................................... 17 Mountain West Investment Corp. v. City of Silverton, 175 Or App 556, 30 P3d 420 (2001) ................................................ 17 Portland General Electric v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993) as modified by State v. Gaines, 346 Or 160, 206 P3d 1042 (2009) .................................. 17 Statutes DCC 18.113 .................................................................................... 21, 23 DCC 18.113.010 ................................................................................... 21 DCC 18.113.020(A)............................................................................... 22 iv DCC 18.113.040(B)............................................................................... 22 DCC 18.113.040(C)......................................................................... 22, 23 DCC 18.113.050 – 18.113.070 .............................................................. 22 DCC 18.113.070(D) .............................................................................. 15 DCC 18.113.070(K) ........................................................................ 12, 14 DCC Title 22 ......................................................................................... 22 Oregon Revised Statutes (“ORS”) ......................................................... 2 ORS 197.445 ................................................................................... 19, 20 ORS 197.455 ................................................................................. passim ORS 197.455(1) ............................................................................ passim ORS 197.455(1)(a) .............................................................. 18, 19, 20, 23 ORS 197.455(2) ............................................................................ passim ORS 197.455(2)(a) ................................................................................ 19 ORS 197.610 to 197.625 ....................................................................... 20 ORS 197.850(9)(a) ................................................................................ 17 ORS 537.211(1) .................................................................................... 10 ORS 537.230 ......................................................................................... 10 ORS 537.230(4) ...................................................................................... 9 ORS 537.260(1) ................................................................................ 9, 10 ORS 537.410 ......................................................................................... 10 ORS 537.410-450 .................................................................................... 9 ORS 537.450 ......................................................................................... 10 v Other Authorities 25 Op. Att’y Gen. 91 (1951) ................................................................. 10 OAR 690 Division 505 .......................................................................... 13 ORAP 5.45 ............................................................................................ 16 Oregon Attorney General Opinion No. 1637 ...................................... 10 Oregon Rules of Appellate Procedure ................................................... 2 1 STATEMENT OF CASE I. Nature of the Proceeding and Relief Sought Petitioner Annunziata Gould (“Gould”) and Petitioner Paul J. Lipscomb (“Lipscomb”)1 appeal the Land Use Board of Appeals (“LUBA”) order in LUBA No. 2020-095, dated June 11, 2021 (the “LUBA Order”).2 That order affirmed Respondent Deschutes County’s (the “County”) approval of site plan review for a golf course, irrigation lakes, and a road system as part of the Thornburgh Destination Resort owned by Intervenor-Respondent Kameron DeLashmutt (“Thornburgh”).3 LUBA Rec 3. II. Nature of the Order Being Reviewed Thornburgh agrees with petitioners’ statement of the nature of the order. III. Statutory Basis for Jurisdiction Thornburgh agrees with petitioners’ statement of jurisdiction. IV. Effective Date of Appeal Thornburgh agrees that petitioners filed timely petitions for review. 1 Gould was the Petitioner at LUBA and Lipscomb was an Intervenor- Petitioner. 2 We cite to LUBA’s record transmittal as “LUBA Rec” and the County’s underlying record as “Rec”. Similarly, Petitioner Gould’s opening brief is cited as “Pet Br” and Petitioner Lipscomb’s opening brief is cited as “IP Br” as he was Intervenor-Petitioner below. 3 Respondent Kameron DeLashmutt controls all entities that are developing the Thornburgh destination resort. For ease of reference, we refer to respondent as Thornburgh throughout this brief. 2 Petitioner Lipscomb, however, did not comply with brief filing requirements. Specifically, on July 19, 2021, the Appellate Court Records Section Clerk informed Lipscomb that his brief was noncompliant with the Oregon Revised Statutes (“ORS”) and/or the Oregon Rules of Appellate Procedure (“ORAP”), stating that his brief would not be considered if he did not file a corrected brief on or before July 26, 2021. App 1. Lipscomb failed to make a timely corrective filing. His brief, therefore, should not be considered.4 V. Questions Present on Appeal 1. Did LUBA err in its interpretation of Condition 10 of the Final Master Plan (“FMP”), which interpretation was the same as the interpretation upheld by this court in A171603? 2. Did LUBA err in interpreting ORS 197.455 consistent with the previous interpretations made by it and this Court regarding the application of that statute? VI. Summary of the Arguments LUBA correctly affirmed the County’s interpretation of Condition 10 and determination that such condition had been met. LUBA properly addressed Petitioner Gould’s arguments regarding mitigation, including articulating the proper standards for mitigation pursuant to Condition 10 and separate and 4 In the abundance of caution, Thornburgh provides a response to Lipscomb’s brief. 3 distinct mitigation required by other conditions, namely Condition 38. LUBA correctly interpreted and applied ORS 197.455 and precedent interpreting that statute. VII. Statement of Facts LUBA accurately described the facts of this case. LUBA Rec 76-78. For ease of reference, a quick overview and timeline of the final land use decisions related to Thornburgh and their timing is provided here:  2006 - County approves Thornburgh conceptual master plan (“CMP”). LUBA Rec 3. The CMP is final on December 9, 2009. Rec 1839.  2008 – County approved a final master plan (“FMP”). Id. FMP approved phased development. FMP “effectively incorporated and displaced the CMP approval.” Central Land and Cattle Company, LLC v. Deschutes County, 74 Or LUBA 326, 346 (2016). The FMP became final in September of 2018. Rec 1839.  2018 – Thornburgh received County approval of the “Phase A-1” subdivision tentative plan and utility site plan. LUBA Rec 7. We refer to those approvals as the Phase A-1 TP. o LUBA remanded Phase A-1 TP on a narrow question; whether a condition of approval violated the right to public participation on the no net loss standard. LUBA Rec 8. 4 o Court of Appeals affirmed the Remand. Gould v. Deschutes County, 310 Or App 868, 484 P3d 1073 (2021). The first site plan approved by the County was the approval of the resort’s utility facilities in the Phase A-1 TP decision, which is pending review on remand at the County, following this Court’s affirmance. Rec 2026. The utility site plan approval was not challenged and is not at issue in the remand. The decision challenged here is an approval of the second site plan filed for development of Thornburgh, which includes a golf course, irrigation lakes, and a road system. LUBA Rec 79. RESPONSE TO PETITIONER GOULD’S ASSIGNMENT OF ERROR LUBA correctly affirmed the County’s interpretation of and findings of compliance with Condition 10 of the resort’s FMP. This determination and interpretation of said condition is the same interpretation affirmed by this Court in Gould v. Deschutes County, 310 Or App 868 (2021).5 I. Preservation Gould previously argued that Condition 10 was not satisfied. II. Standard of Review Gould adequately articulates the standard of review. 5 The LUBA decision affirmed is Gould v. Deschutes County, 79 Or LUBA 561 (2019). 5 III. Argument Gould has established no legal error in LUBA’s decision. Gould assigns error to LUBA’s decision “because it affirmed the county’s interpretation of Condition 10, determining that the county had not misconstrued the applicable law.” Pet Br 15. Gould is incorrect. LUBA reviewed the County’s interpretation of Condition 10 and found it legally correct. LUBA Rec 90-91. LUBA noted that this Court has already upheld this interpretation in Gould v. Deschutes County, 310 Or App 868, 484 P3d 1073 (2021). LUBA Rec 91. Gould also assigns error because “there is no assurance that the permit in question will ultimately be extended.” Pet Br 17. That is not, however, what Condition 10 requires. A. Condition 10 Thornburgh provided a review of the relevant history and local code provisions related to the adoption of FMP Condition 10 to LUBA that is summarized at LUBA Rec 135-137. This information provides the contextual background for the County’s interpretation and determination of compliance with the condition.6 While context is helpful, it is the plain language of the condition itself that controls and further defeats Gould’s challenge. Condition 6 We again note that this is the same determination previously reviewed and upheld by this Court. 6 10 requires: Applicant shall provide, at the time of tentative plat/site plan approval 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. Rec 15. As is clear by its plain language, Condition 10 imposes two requirements: (1) updated documentation for the state water right permit; and (2) an accounting of mitigation required under the water right by the Oregon Water Resources Department (“OWRD”), for that phase. Nothing in Condition 10 requires that the Applicant make any showing that an approved and valid water right permit will be extended by OWRD over a project opponent’s objection. The only requirement regarding the state water right permit is to provide “updated documentation[.]” Thornburgh provided that information. Rec 403. Gould has not challenged the sufficiency of this information or provided any reason that the information provided failed to meet the requirements of Condition 10. Instead, Gould argues that Condition 10 cannot be met because of Gould’s pending challenge to OWRD’s Proposed Final Order proposing to approve the water right permit extension.7 7 Gould also appears to argue that required mitigation for fish habitat is not met. Pet Br 3, 18. Gould confuses the mitigation requirements of Condition 10 with those contained in Condition 17, which require adherence to the Fish and Wildlife Habitat Mitigation Plan (“FWMP”). This argument is addressed below. 7 Thornburgh provided substantial evidence that documented the status of the relevant water right. This included information from OWRD showing that the permit was “Non-Cancelled” (Rec 2236) and that “applicants have an active permit (G-17036)” (Rec 1581). Thornburgh’s water lawyer, Janet Neuman, provided additional information related to the status of the Resort’s water rights, including legal analysis and citation to state law that indicate water right permits remaining in force and effect until cancelled. Rec 398, 434, 873, 2308- 2320. The above information is all that Condition 10 requires – “updated documentation.” Gould has not argued that this information is insufficient. Instead, Gould argues that OWRD’s decision to approve the permit extension is being challenged (by Gould) and so Condition 10 cannot be complied with because “there is no assurance that the permit in question will ultimately be extended.” Pet Br 17. Gould goes on to argue that LUBA’s Order would “grant the applicant a license to violate Condition 10.” Id. That is simply not the case. Condition 10 is an informational requirement only and Thornburgh has complied with it. On that basis alone, LUBA’s decision is not unlawful in substance and should be affirmed. B. Gould Misunderstands the Status of G-17036 Gould attempts to litigate the status of the water rights permit in the land use context and under the guise of a challenge to Condition 10. However, Gould 8 cites to no law, case, rule, or authority whatsoever to support her claim that G-17036 is not a valid water right. Furthermore, she has failed to explain why the information provided does not satisfy Condition 10. Gould does not dispute that G-17036 is a valid water right permit. In fact, Gould admits that it is not “void or invalid[.]” Pet Br 16. Gould argues that Thornburgh had to seek an extension of the water right permit, and that because Gould has challenged OWRD’s decision to allow the extension, Gould speculates that “result of that proceeding may well be the denial of the requested extension.” Pet Br 16. Gould fails, however, to explain why, if her challenge to the extension is successful, Thornburgh would fail to meet Condition 10. Instead, Gould argues that denial of the extension would leave Thornburgh without water for consumptive use. Id. Gould goes on to state, without any citation, that G-17036 is the “sole source of water approved for resort use under the resort’s Final Master Plan.” Id. That is not a challenge to compliance with Condition 10 and is not a basis to determine that LUBA’s Order is unlawful in substance.8 More importantly, both OWRD and Thornburgh agree, the water right permit is still active, is non-cancelled, and may still be relied upon. Rec 1581, 8 Gould’s assertion is also incorrect. The record includes evidence of hundreds of acres of water rights that can be used by the resort that are not covered by G-17036. LUBA Rec 229. 9 Rec 398, 434, 873, 2308-2320. No statute, rule, or case provides for the automatic, unilateral cancellation of a water right permit and OWRD has taken no steps to cancel the permit, here. See ORS 537.410-450 (outlining procedures OWRD is required to follow to cancel a permit). Gould has provided no authority that establishes that her challenge of the extension changes the status of the permit. Simply put, G-17036 is still a valid and existing water right and Gould’s challenge to an extension has no bearing on compliance with Condition 10. More importantly, Gould misunderstands or misstates the significance of her challenge to the Proposed Final Order granting the extension request. Under ORS 537.230(4) “for good cause shown, [OWRD] shall order and allow an extension of time” to complete works to perfect a water right. Emphasis added. The “good cause shown” standard is the standard that will be litigated in Gould’s challenge. It is reasonable to believe that “good cause” exists given that the primary reason Thornburgh’s efforts to perfect the water right permit were not completed were due to Gould’s dozens of legal challenges at the County, LUBA, and other judicial proceedings. Rec 238, 1838-1840. Relatedly, OWRD cannot unilaterally cancel a permit. Under ORS 537.260(1), OWRD “may . . . order cancellation of the permit” but only after the permit completion date “has expired and the owner of the permit fails or 10 refuses” to submit proof of completion as required by ORS 537.230. OWRD “may” order cancellation, but it is not required to do so. ORS 537.260(1). Pursuant to ORS 537.211(1), “…upon receipt of the permit the permittee may proceed with the construction of the necessary works and may take all action required to apply the water to the designated beneficial use and to perfect the proposed appropriation.” That is exactly what Thornburgh is attempting to do by seeking site plan approval and developing its golf course and irrigation lakes. ORS 537.410 to ORS 537.450 provide a detailed process for cancelling a permit. OWRD “may” cancel the permit for, among other things, failure to “complete the construction work within the time required by the law, or as fixed in the permit, or within such further time as may be allowed under ORS 537.230 . . .” ORS 537.410.( Emphasis added.) Thornburgh complied with these statutes and applied for an extension prior to the permit’s expiration, and that extension application is currently subject to OWRD’s Proposed Final Order proposing to grant the extension. Gould’s challenge to that decision by the agency does not automatically result in a cancellation. Thornburgh is pursuing to complete work “within such further time.” Consequently, OWRD has no authority to cancel the permit while an extension proceeding is still pending. This is consistent with the Oregon Attorney General Opinion No. 1637 that stresses the need to follow cancellation procedures in Oregon’s water code. See 25 Op. Att’y Gen. 91 at 6 11 (1951) (“the grounds for cancellation are specifically set out. Where a statute authorizes revocation of a permit for causes enumerated, such permit cannot be revoked on any other grounds other than the causes specified.”).9 Nothing in the various and applicable water rights statutes indicates that a permit for which an extension has been timely requested could be automatically cancelled by OWRD or that Gould’s challenge to a request to an extension operates to render a non-cancelled permit void. C. Gould Confuses Mitigation Requirements LUBA’s Order does not, as Gould suggests, leave a “hanging chad” where Thornburgh can “locate an entirely different source of water” and thereby upset wildlife habitat or the Fish Addendum to the Wildlife Mitigation Plan (“FWMP”). Pet Br 18. In making this argument, Gould conflates the mitigation requirements of Condition 10 (OWRD mitigation) and Condition 38 (FWMP mitigation) – an issue we address in more detail below. Furthermore, Gould’s unsubstantiated concern about disrupting the approved scheme for wildlife mitigation is not well founded. Even if Thornburgh pumps groundwater from resort wells as under the authority of a different permit, it will still be pumping the same water for use on the same 9 OWRD has indicated that it intends to grant the extension, and in fact issued a final order approving it. LUBA Rec 87. Upon challenge by Gould, OWRD withdrew the final order to allow the issue to go a contested case hearing, which remains pending. Id. 12 resort property from the same regional aquifer – presumably with the same impacts to the same aquifer.10 Rec 193, 496, 938, 1138-1160. Thornburgh will remain bound by the FWMP to provide mitigation through Condition 38. LUBA Rec 13. Gould has not challenged Condition 38 or the County’s underlying findings of compliance with Condition 38.11 Gould may not bring such a challenge now. 1. DCC 18.113.070(K) and Water Mitigation – Condition 10 During the review of the CMP, the County was required by DCC 18.113.070(K) to determine that adequate water will be available for all proposed uses for each phase of development. LUBA Rec 18. Condition 10 was imposed to ensure compliance with that code. LUBA Rec 16. Condition 10 requires “mitigation” – but the context for that mitigation is “. . .documentation for the state water right permit and an accounting of the full amount of mitigation, as required under the water right . . .” LUBA Rec 13. Using a labored and out-of-context quote from Gould v. Deschutes County, 79 Or LUBA 561 (2019)(“Gould VIII”), Gould argues that LUBA determined that Condition 10 requires “proving up” of necessary mitigation 10 Pumping from the regional aquifer is required by DCC 18.113.070(K). 11 The County found, in approving the golf course site plan: “Compliance with the FWMP is assured by Condition 38 of the FMP and its program of annual monitoring. As long as a proposed development application does not alter the FWMP, the FWMP is not relevant in the review of a site plan or tentative plan application.” Rec 34. Gould has not challenged this finding. 13 water.12 Pet Br 20. LUBA’s quote addresses water availability in general. It discusses not only Condition 10, but also Condition 38 and Condition 39 – a fact not mentioned by Gould. Gould VIII at n 9. LUBA’s view of the mitigation required by Condition 10 is: “***water mitigation [required by Condition 10] is based on consumptive use, the condition [10] requires proof of adequate water rights and mitigation commensurate with the estimated consumptive use of water for the development approved at each phase of development, and in advance of actual water consumption.” Gould VIII at 574-575. LUBA makes it clear that “consumptive use” mitigation is the mitigation required under the Deschutes Basin Ground Water Mitigation Rules found at OAR 690 Division 505. Gould VIII at 575, n 11. The mitigation required by OWRD is required to come from the General Zone of Impact (Rec 1159, 2322, 2324), whereas the mitigation required by the FWMP is more specific. Rec 2329 (FWMP). As is evident from the above, LUBA understood that there is a difference in water quantity mitigation under the water right addressed by Condition 10 and fish and wildlife mitigation under the no net lost standard addressed by Condition 38 and the FWMP. This fact is again reflected in LUBA’s Order 12 Gould VIII was affirmed by this Court. Gould v. Deschutes County, 310 Or App 868, 484 P3d 1073 (2021). 14 affirming approval of the golf course site plan at page 13 of its decision. See also LUBA Rec 44. Further, Gould misunderstands the requirements of DCC 18.113.070(K). Gould argues that if a new application were before the county, the applicant would have to “prove up” the water and that if “the applicant lacked the requisite permit from OWRD, its application would almost certainly be denied.” That is incorrect. This issue was before the County when it approved the Thornburgh CMP. It found that the water availability required by DCC 18.113.070(K) is met if there is substantial evidence in the record that the Resort “is not precluded from obtaining such state agency permits [for water rights] as a matter of law.” Rec. 938 (Decision of Deschutes County Board of County Commissioners approving CMP). DCC 18.113.070(K), the water availability rule, provides that: “Adequate water will be available for all proposed uses at the destination resort, based upon the water study and a proposed water conservation plan. Water use will not reduce the availability of water in the water impact areas identified in the water study considering existing uses and potential development previously approved in the affected area. Water sources shall not include any perched water table. Water shall only be taken from the regional aquifer. Where a perched water table is pierced to access the regional aquifer, the well must be sealed off from the perched water table.” Nothing in that code provision requires that a permit have been granted or be unchallenged, or that the full amount of mitigation be “proved up” or 15 actually provided at the time of application. What Gould is really arguing is that Thornburgh must provide all mitigation water for all consumptive use now. That is not what the condition requires and Gould has already lost on that issue. Gould VIII at 573-574. All that is required here is that Thornburgh provide updated information regarding the water right and the mitigation needed for the golf course use. Thornbugh has done so and LUBA properly affirmed the County’s determinations on that point. LUBA Rec 46. 2. DCC 18.113.070(D) and FWMP – Condition 38 Condition 38 of the FMP assures that Thornburgh will meet the County’s “no net loss” standard regarding fish and wildlife found at DCC 18.113.070(D) by requiring compliance with the Wildlife Mitigation Plan, including the fish habitat addendum (FWMP). LUBA Rec 65-66. Nevertheless, Gould again argues that fish habitat, including impacts to Whychus Creek, are somehow embedded in the requirements of Condition 10 and that LUBA does not understand that this is her argument. Pet Br 22-23. LUBA understood and correctly rejected Ms. Gould’s argument. LUBA correctly determined that the requirement to meet the “no net loss” standard is part of a different condition – Condition 38 – which Gould has not challenged. LUBA Rec 41.13 13 Condition 38 requires: “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 offsite mitigation efforts. Consistent with the plan, the applicant shall submit an annual report to the county detailing 16 Gould states that the applicant (Thornburgh) has “fail[ed] to comply with the plain language of Condition 10.” That is simply incorrect. The County (now on two occasions), LUBA (now on two occasions), and this Court, have all determined or affirmed that the mitigation reporting required by Condition 10 is an informational requirement only. Thornburgh provided the requisite accounting and LUBA’s finding as such should be affirmed. LUBA Rec 69-71. RESPONSE TO PETITIONER LIPSCOMB’S ASSIGNMENT OF ERROR LUBA correctly interpreted and applied ORS 197.455. The destination resort siting criteria of ORS 197.455(1) are not applicable to the development decision upheld by LUBA. Lipscomb’s argument ignores the plain text of the statute. This assignment of error should be denied. I. Preservation Petitioner makes no effort to cite to the record or otherwise establish preservation of this assignment of error as required ORAP 5.45. However, Thornburgh agrees that Lipscomb previously argued that ORS 197.455 should apply to the County’s decision. 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.” Gould VIII at 575, n. 9. 17 II. Standard of Review Petitioner provides no standard of review except to say that “interpretation of statutory provisions such as ORS 197.455 is a question of law for this Court on review.” IP Br 5. Based upon this statement, this Court’s review is governed by ORS 197.850(9)(a), which provides that: “(9) The court may affirm, reverse or remand the order. The court shall reverse or remand the order only if it finds: “(a) The order to be unlawful in substance or procedure, but error in procedure is not cause for reversal or remand unless the court finds that substantial rights of the petitioner were prejudiced thereby[.]” LUBA’s order is “unlawful in substance if it represent[s] a mistaken interpretation of applicable law.” Kine v. Deschutes County, 313 Or App 370 (2021) citing Mountain West Investment Corp. v. City of Silverton, 175 Or App 556, 30 P3d 420 (2001)(internal quotations omitted). Statutory interpretation begins with the plain language of the statute. Portland General Electric v. Bureau of Labor and Industries, 317 Or 606, 610– 12, 859 P2d 1143 (1993) as modified by State v. Gaines, 346 Or 160, 171, 206 P3d 1042 (2009). III. Argument A. ORS 197.455(1) Criteria are Mapping Criteria Only ORS 197.455(1) allows for the siting of destination resorts “only on lands 18 mapped as eligible for destination resort siting by the affected county.” ORS 197.455(1)(a) then includes a list of conditions that disqualify certain lands from being mapped as eligible for destination resort siting. Petitioner argues that these conditions should also apply after land has been mapped as eligible and approved for resort development. IP Br 8-9. This argument is clearly wrong. If land is mapped as eligible, as it is here, a county may approve the siting of a resort on that land unless and until the map is updated or changed to remove eligibility. ORS 197.455(2). ORS 197.455(2) requires a county to adopt an eligibility map as part of its comprehensive plan. Once adopted, a “map adopted pursuant to this section shall be the sole basis for determining whether tracts of land are eligible for destination resort siting[.]” Id. That map conclusively establishes the property that is eligible for siting and development of a resort. A review of the mapping criteria of ORS 197.455(1) is not permissible during each individual phase of resort development thereafter. LUBA correctly interpreted the statute stating: “The limitations on resort siting in ORS 197.455(1) apply at the time that county adopts maps identifying lands eligible fors siting destination resorts. After a county has adopted such maps, the limitations in ORS 197.455(1) do not apply to specific applications for destination resorts. Instead, the adopted maps control whether a specific property is eligible for destination resort siting.” LUBA Rec 10. 19 LUBA’s Order is consistent with Central Oregon LandWatch v. Deschutes County, 245 Or App 166, 262 P3d 1153 (2011)(“COLW”) which finds: “ORS 197.455 concerns the first step in the establishment of a destination resort, that is, the identification of the land that is eligible for development of destination resorts and the mapping process.” COLW at 170. During a review of a resort proposal, ORS 197.445 and the resort map apply. This Court found in COLW that, “Unlike ORS 197.455, which concerns the identification of land and the mapping process, ORS 197.445 concerns the second discrete step in the establishment of destination resorts—that is, the approval standards for individual destination resort proposals.” COLW at 172. Lipscomb offers a tortured read of the statute, arguing that lands mapped as “eligible” may not qualify to be “approved” to site a destination resort. IP Br 8. Lipscomb argues that “times change and with those changes lands previously mapped as ‘eligible’ may not qualify to be ‘approved.’” IP Br 8. Lipscomb further argues that the City of Bend exceeds the 100,000 population threshold for qualifying lands for mapping under ORS 197.455(1)(a).14 IP Br 13. 14 Lipscomb mistakenly cites to the mapping criteria found at ORS 197.455(1) ORS 197.455(2)(a). IP Br 10, 13. 20 Lipscomb misunderstands the statute. The population threshold contained in ORS 197.455(1)(a) is applicable only to the County’s mapping of eligible lands. And, if the legislature had intended such requirement to apply for after the mapping of eligible lands, it would have included that requirement in ORS 197.445, which provides criteria for individual destination resorts and not the mapping eligibility requirements at ORS 197.455. Lipscomb cites no authority that holds that the population threshold applies after lands have been mapped as eligible for destination resort siting. Lipscomb argues that the “actual current conditions” control and that ORS 197.455(1)(a) allows resort development but limits residential development to staff housing only. IP Br 14-15. This argument concedes that a destination resort and golf course may be sited on land within 24 air miles of a city with a population of 100,000 and does not prevent approval of the Thornburgh golf course. IP Br 15. Additionally, Lipscomb’s argument that residential development is limited to staff housing is properly rejected. The statute plainly states that “[a] map adopted pursuant to this section shall be the sole basis for determining eligibility.” Id. The statute also provides that such map may be amended as part of a post-acknowledgement procedure pursuant to ORS 197.610 to 197.625, but only once every 30 months not during the review of site plan applications. ORS 197.455(2). 21 B. A Golf Course Site Plan Does Not “Site” a Resort Lipscomb attempts to distinguish the terms “eligible” and “siting”, arguing that mapping is not siting and that the CMP and FMP approvals “are just planning for future siting, rather than actual siting.” IP Br 9. According to Lipscomb, “siting” does not take place unless and until a site plan is approved. IP Br 9. That is incorrect.15 Once mapped as eligible, a resort may be sited and developed. In this case, Thornburgh Resort has obtained approval of a conceptual master plan (CMP) and a final master plan (FMP) that authorizes resort development, including construction of the improvements proposed here.16 DCC 18.113.010 describes this process: DCC 18.113.010. Purpose. A. The purpose of the DR Zone is to establish a mechanism for siting destination resorts to ensure compliance with LCDC Goal 8 and the County Comprehensive Plan. The destination resort designation is intended to identify land areas which are available for the siting of destination resorts, but which will only be developed if consistent with the purpose and intent of DCC 18.113 and Goal 8. Once a property is mapped (pursuant to ORS 197.455(2)), the map 15 We also point out that Phase A-1 included site plan review and approval for utility facilities. That approval was not challenged and is not part of the remand of that case. 16 Phase A-1 remains pending in a narrow remand proceeding. 22 allows development of a destination resort, so long the other requirements of state law are met. See ORS 197.455(2); See also DCC 18.113.020(A). If land is mapped as eligible, an applicant may apply for and receive approval of a conceptual master plan (CMP) and conditional use permit that site the resort. See DCC 18.113.040(A). The CMP assures compliance with the requirements of the County’s resort code that implement state law. See DCC 18.113.050 – 18.113.070. The CMP is the original, guiding document that allows siting and addresses all impacts of the proposed destination resort. DCC 18.113.050 – 18.113.070 impose detailed criteria related to a proposed site such as acres developed, natural features, requirements for traffic study, how development will occur, design guidelines, open space management, public facilities, utility facilities, and an “explanation of how the destination resort has been sited or designed to avoid or minimize adverse effects on adjacent lands” (emphasis added), among many other requirements). Once a CMP is approved, a resort is “sited” for purposes of ORS 197.455. Once a CMP is approved, the applicant must prepare a final master plan (FMP). The FMP must “incorporate all requirements . . . of the CMP.” DCC 18.113.040(B). The FMP then subsumes the CMP and “shall be treated as a land use permit in accordance with DCC Title 22”. DCC 18.113.040(B). Lastly, in order to actually develop the sited destination resort, specific site plans for each phase must receive additional approval. DCC 18.113.040(C). 23 This make sense, because it is at that time that the development must comply with subdivision and site plan criteria that specify the details of how master planned development will occur. Further, DCC 18.113.040(C) (and indeed, most of the rest of DCC 18.113) directly contemplates phasing of development. If ORS 197.455(1)(a) could suddenly bar approved future phases because of a population increase of a nearby UGB, the provisions permitting phased development or reliance upon a final binding land use decision (the CMP or FMP), would be meaningless. That would be an absurd result. C. Foland v. Jackson County is Inapposite to the Facts Presented Lipscomb’s reliance on and interpretation of Foland v. Jackson County, 101 Or App 632, 792 P2d 1228 (1990), aff’d 311 Or 167, 807 P2d 801 (1991), is incorrect. Lipscomb states that this Court previously “dealt with a similar problem and *** reached this same result: compliance with ORS 197.455(2) should be measured by current conditions, and not just by the conditions present previously at the time of original mapping.” IP Br 10. That interpretation misapplies the Court’s decision. The Court’s Foland decision held that additional evidence may be considered when amending a destination resort map and allowed siting a resort on the newly mapped land. Foland, 104 Or App at 635-636. It does not stand for the proposition that the mapping rules of ORS 197.455 apply after resort 24 siting has been approved or that mapping criteria under ORS 197.455(1) apply to bar subsequent development approvals. Foland does not authorize a county to ignore the plain language of ORS 197.455(2) that dictates that maps adopted under that statute shall be the sole determinant of whether a resort may be sited on a particular tract of land. In Foland, the petitioners sought review of a LUBA order and contended that LUBA had erred in holding that “decisions [to amend a resort map and to site a resort on that land] could be based on later studies and maps . . . rather than solely on the county’s adopted destination resort siting map. Foland, 101 Or App at 634. In that case, the county had adopted a specific map within its comprehensive plan determining which lands were eligible for destination resort siting. Id. The county’s comprehensive plan, however, also included a “refinement clause” which allowed an applicant to use “more precise soils resource mapping” to determine eligibility. Id. at 635. The applicant provided such information and the county approved siting eligibility, including adopting amendments to the comprehensive plan and zoning maps based upon that data. Id. at 634-635. Petitioner’s challenged use of the new maps to determine resort siting, arguing that county’s original map was the “sole method for determining eligibility” and that only the original soil maps were allowed. Id. at 638. Petitioners also argued that such changes evaded review under Goal 8. Id. at 634. The court rejected that argument and determined that supplemental 25 mapping – as permitted by the refinement clause – was consistent with the statute. On review, the Supreme Court of Oregon affirmed. Foland v. Jackson County, 311 Or 167, 807 P2d 801 (1991). In its opinion, the Supreme Court provided analysis regarding comprehensive plan amendments and opined that once an amendment to an acknowledged plan is itself acknowledged, it is “insulated from scrutiny for goal compliance[.]” Id. at 179. The Supreme Court held that changes to the destination resort map using the refinement clause were allowed because the refinement clause was acknowledged and therefore no longer subject to review. On that basis, the Supreme Court held that “the county is not bound by its original map of ‘Areas Excluded from the Goal 8 Resort Siting Process” and may adopt an amended map of eligible lands. Id. at 181. Notably, both the Court of Appeals and the Supreme Court still relied on the destination resort maps – which had been updated as part of the application to prove eligibility. Nothing in the case or its disposition support Lipscomb’s argument that the existing and acknowledged map cannot or should not be relied upon, or that the map must or even may be revisited for each and every subsequent phase of destination resort development. LUBA’s order here is consistent with both the statute and the Foland decisions. The statute is clear. Siting eligibility is determined by inclusion on the relevant map. Thornburgh is included in the County’s map. LUBA Rec 166. 26 This assignment of error is properly denied. CONCLUSION LUBA’s order is well-reasoned and correct. This court should affirm it. DATED: August 12, 2021. SCHWABE, WILLIAMSON & WYATT, P.C. By: s/ J. Kenneth Katzaroff J. Kenneth Katzaroff, OSB #143550 Schwabe, Williamson & Wyatt, P.C. 1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Telephone: 206-622-1711 Email: KKatzaroff@schwabe.com Of Attorneys for Respondent Kameron L. DeLashmutt 1 PDX\135849\262760\JKKA\31502048.1 CERTIFICATE OF COMPLIANCE WITH BRIEF LENGTH AND TYPE SIZE REQUIREMENTS I certify that: (1) this brief complies with the word-count limitation in ORAP 5.05(2)(b); and (2) the word count of this brief—as described in ORAP 5.05(2)(a)—is 5,732 words. I certify that the size and type in this brief is not smaller than 14 point for both the text of the brief and footnotes as required by ORAP 5.05(4)(f). DATED this 12th day of August, 2021. Respectfully submitted, SCHWABE, WILLIAMSON & WYATT, P.C. By: s/ J. Kenneth Katzaroff Kenneth Katzaroff, OSB #143550 Email: kkatzaroff@schwabe.com Of Attorneys for Respondent Kameron K. Delashmutt 2 PDX\135849\262760\JKKA\31502048.1 CERTIFICATE OF FILING AND SERVICE I certify that on August 12, 2021, I filed this RESPONDENT KAMERON L. DELASHMUTT’S ANSWERING BRIEF with the State Court Administrator by the Oregon Judicial Department’s Appellate eFiling system. I further certify that I serve this RESPONDENT KAMERON L. DELASHMUTT’S ANSWERING BRIEF on the following parties by the Oregon Judicial Department’s Appellate eFiling system (with courtesy copy by e-mail): Jeffrey L. Kleinman, OSB #743726 Email: KleinmanJL@aol.com 1207 SW Sixth Avenue Portland, OR 97204 Telephone: 503-248-0808 Attorney for Petitioner Annunziata Gould Paul J. Lipscomb, OSB #752301 Email: judgelipscomb@gmail.com PO Box 579 Sisters, OR 97759 Telephone: 503-551-7272 Attorney for Petitioner Paul J Lipscomb David Adam Smith, OSB #170317 Email: adam.smith@deschutes.org Deschutes County Legal Counsel 1300 NW Wall Street, Suite 205 Bend, OR 97703 Telephone: 541-388-6593 Attorney for Respondent Deschutes County 3 PDX\135849\262760\JKKA\31502048.1 SCHWABE, WILLIAMSON & WYATT, P.C. By: s/ J. Kenneth Katzaroff Kenneth Katzaroff, OSB #143550 Email: KKatzaroff@schwabe.com Schwabe, Williamson & Wyatt, P.C. 1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Telephone: 206-622-1711 Attorney for Respondent Kameron K. Delashmutt 11/2/21, 11:24 AM Permit: G 17036 * https://apps.wrd.state.or.us/apps/wr/wrinfo/wr_details.aspx?snp_id=175658 1/2 Oregon Water Resources Department Water Rights Information Query Permit: G 17036 *   Main    Help    Return    Contact Us Contact Information (Click to Collapse...) Contact information OWNER: PINNACLE UTILITIES LLC 2447 NW CANYON DR REDMOND, OR 97756 Prior Contact information OWNER: THORNBURGH UTILITY GROUP LLC 2447 NW CANYON DR REDMOND, OR 97756 Processing History (Click to Collapse...) Application: G 16385 Permit: G 17036 document , paper map Signature: 4/3/2013 Process Step Date Completed Result Completed By Extension Application Received 4/2/2018 JEFFREY PIERCEA Completion Date [C Date]4/3/2018 Extension Comment Period Ends 5/3/2018 JEFFREY PIERCEA Extension PFO 315 Issued 5/8/2018 Propose to Deny JEFFREY PIERCEA Extension PFO 315 Issued 5/22/2018 Withdrawn JEFFREY PIERCEA Extension PFO 315 Issued 6/5/2018 Propose to Approve JEFFREY PIERCEA Extension PFO Protest Period Ends 6/22/2018 Propose to Deny JEFFREY PIERCEA Extension PFO Protest Period Ends 7/20/2018 Propose to Approve JEFFREY PIERCEA Extension FO Issued 10/26/2018 Approved JEFFREY PIERCEA Extension FO Issued 1/31/2019 Withdrawn JEFFREY PIERCEA WMCP FO Issued 11/24/2020 KERRI COPE WMCP FO Issued 3/9/2021 Withdrawn KERRI COPE WMCP Progress Report Due 11/25/2025 KERRI COPE WMCP Due Date (WMCP FO)5/25/2030 KERRI COPE WMCP In Effect Until 11/25/2030 KERRI COPE Order(s) Order Origin Volume-Page Signature Description Special 109-810 10/26/2018 APPLICATION FOR EXTENSION OF TIME G-16385 Special 118-117 11/24/2020 APPROVING WMCP FOR PINNACLE UTILITIES, LL Special 118-673 3/9/2021 WMCP WITHDRAWL OF FINAL ORDER DESCHUTECOUNTY, PINNACLE UTILITIES, LLC View right with Web Mapping View Places of Use from Water Rights in the Same Area View Reported Water Use Water Right Information (Click to Collapse...) Status: Non-Cancelled County: Deschutes File Folder Location: Salem Watermaster District: 11 Scanned Documents (Click to Expand...) Point(s) of Diversion (Click to Collapse...) POD 1 - A WELL > DESCHUTES RIVER (View Groundwater Site PROP0000019) POD 2 - A WELL > BUCKHORN CANYON (View Groundwater Site PROP0000022) POD 3 - A WELL > BUCKHORN CANYON (View Groundwater Site PROP0000023) POD 4 - A WELL > BUCKHORN CANYON (View Groundwater Site PROP0000018) POD 5 - A WELL > BUCKHORN CANYON (View Groundwater Site PROP0000020) POD 6 - A WELL > DEEP CANYON (View Groundwater Site PROP0000021) Place(s) of Use (Click to Collapse...) Add TRS grouping Use - QUASI-MUNICIPAL USES (Primary); Priority Date: 2/9/2005 Water Right Genealogy (Click to Collapse...) App: G 16385 Permit: G 17009 CN Permit: G 17036 * View Water Rights in same Family Report Errors with Water Right Data EXHIBIT 17 EXHIBIT 6: Jeremy Giffin Email 12124119 I Cynthia Smidt From: Sent: To: Cc: Subject: IEXTERNAL EMAIL] GIFFIN Jeremy T * WRD <Jeremy.T.Giffin@oregon.gov> Tuesday, December 24,2019 9:21 AM Cynthia Smidt GORMAN Kyle G * WRD; NASHEM William D * WRD File247-19-000881-5P (Central Land and Cattle Company, LLC) Cynthia, The applicants have an active permit (G-17035) for a full build out rate of 9.28 CFS and 2,129.O AF of water use for the resort. The applicant will need to mitigate for the consumptive use of the permit at several previously determined increments as shown in their incremental mitigation plan submitted to the Oregon Water Resources Department. For 2019 they were required to have 3.6 mitigation credits purchased for the first increment, which they provided. For years 2O2O-2O24 they are required to provide 24.9 mitigation credits which they still have time to purchase, either through temporary credits or permanent credits, lf at any time we find the applicant to be appropriating more water than is allowed per the mitigation plan we will regulate accordingly. As of the comment period the applicant is in compliance on their water usage and mitigation plan. Jeremy Giffin Deschutes Basin Watermaster District 11 s41-306-6885 1 16.ca Packet Pg. 1931 Attachment: 2020-06-17 BoCC Hearing Exhibit A6 - K DeLashmutt - Extent. of Wtr Rights Permit (3483 : Deliberation Work Session - ThornburgLUBA 2020-095 - Record 1581 EXHIBIT 18 Janet E. Neuman janet.neuman@tonkon.com 503.802.5722 direct 503.221.1440 main July 8, 2020 VIA EMAIL: william.groves@deschutes.org William Groves Deschutes County Board of County Commissioners 1300 NW Wall St Bend, OR 97703 Re: Application 247-19-000881-SP/Thornburgh Resort/Rebuttal Dear Commissioners Adair, DeBone, and Henderson: I am water rights counsel for Mr. Kameron DeLashmutt, Pinnacle Utilities, LLC, and Central Land & Cattle Company, LLC, the Applicant in the above-referenced file ("Applicant"). I am submitting this letter on my clients' behalf during the rebuttal period for this matter. This letter addresses only water issues; Mr. DeLashmutt and his land use counsel, Ms. Fancher, will provide additional rebuttal material. 1. Permit G-17036 is currently valid. Appellant Gould continues to argue that Applicant's water rights permit G-17036 "has expired." Gould 7-1-2020 Submission on Water Use and Availability, from Karl Anuta ("Gould/Anuta"), at 2. That is not correct. Permits do not expire automatically. Crucially, Mr. DeLashmutt/Pinnacle Utilities filed an application for extension of the permit in April of 2018 prior to the expiration date, thereby tolling the permit's expiration. See Exhibit H-4, OWRD Water Right Permit Query. Even without any extension application, OWRD must take affirmative action to cancel the permit under ORS 537.260(1) and ORS 537.410-537.450, including providing notice and a hearing. OWRD has not done so here. Mr. Anuta's comment that the permit "has not yet been cancelled" (Gould/Anuta, supra at 2; emphasis in original) is beside the point, since OWRD could not initiate cancellation proceedings in any event while the extension application is pending. Ms. Gould's insistence that "no extension of that permit currently exists" because OWRD withdrew its Final Order approving the extension is also misleading. Gould/Anuta, id. The withdrawal of the Final Order did not operate as a denial of the extension application—instead, its withdrawal leaves the Proposed Final Order ("PFO")—which proposed to approve the extension—as the currently applicable OWRD decision, as Ms. Gould acknowledges. Id.; see also Applicant's Exhibit I (PFO). Ms. Gould protested the PFO and the matter will be referred to a contested 16.j Packet Pg. 636 Attachment: 2020-07-08 K DeLashmutt Comments RE comment chart and Ex. 30a, 40-45 (3483 : Deliberation Work Session - Thornburg GolfLUBA 2020-095 - Record 0398 EXHIBIT 18 July 8, 2020 Page 2 case for resolution. Unless and until this process results in a final decision overturning the PFO and denying an extension, Permit G-17036 remains in place, as shown in the records of OWRD and confirmed on two occasions by OWRD staff in this case. See Applicant's Exhibits O and 6 (Emails from Jeremy Giffin, OWRD). Ms. Gould simply refuses to acknowledge OWRD's own statements about the status of the permit. None of the materials submitted by Ms. Gould during the open record period prove otherwise. The June 25, 2020 email from Kyle Gorman, OWRD, to David Arnold confirms the facts described above—that Pinnacle applied for an extension in April of 2018 and that, due to the withdrawal of the Final Order, the operative pending document is the June 5, 2018 PFO proposing to approve the extension; this PFO is awaiting a contested case hearing on Ms. Gould's protest.1 Mr. Gorman's email also confirms that Permit G-17036 is in compliance with its water quantity mitigation obligations to date and that further mitigation is only required when pumping occurs. At no point does Mr. Gorman take issue with his own agency's previous submissions to the County stating that Permit G-17036 is in place and in good standing. He also clarifies that the only requirement for pumping water under the Incremental Development Plan (IDP) is posting the mitigation water the IDP requires. 2. The proof of applicant's water quantity and quality mitigation is satisfactory, and not subject to collateral attack in the proceedings on this Site Plan. Appellants Gould, Central Oregon Land Watch ("COLW"), and others continue to attack the sufficiency of Applicant's agreement to use Big Falls Ranch water for mitigation of impacts to fish and wildlife, as well as quantity mitigation. First, this represents a collateral attack because the adequacy of this agreement for mitigation was determined when the FMP was approved. At this phase, all that is required is for Applicant to update the status of his water right permit and mitigation, which Applicant has done. Even assuming for the purpose of argument that Applicant needed to make this showing again, Appellants' claims fail. The main argument to date has been that the contract is "secret" because only a memorandum of it has been provided and not the whole document. 1 Mr. Gorman's email also states that Big Falls Ranch was allowed to change its point of diversion from a surface point of diversion ("POD") to a groundwater point of appropriation ("POA"), but that the change does not determine whether the rights are surface water rights or groundwater rights. 16.j Packet Pg. 637 Attachment: 2020-07-08 K DeLashmutt Comments RE comment chart and Ex. 30a, 40-45 (3483 : Deliberation Work Session - Thornburg GolfLUBA 2020-095 - Record 0399 EXHIBIT 18 July 8, 2020 Page 3 As I stated in my August 9, 2019 letter to Mr. Ripper on the Tentative Plan: "Pinnacle has a fully-executed, in-place agreement with Big Falls Ranch to obtain water rights for the Thornburgh Resort Project, as described in the recorded Memorandum of Agreement included in Applicant's burden of proof. The amount of water that has been secured from Big Falls considerably exceeds the amount needed for the Phase A-1 Development. In addition, as part of its agreement with Pinnacle, Big Falls has already removed the impoundment from Deep Canyon Creek and ceased pumping any water from the creek, thus allowing all of the cold spring water to flow directly to the Deschutes River." I assisted Mr. DeLashmutt in drafting his agreement with Big Falls Ranch and I stand by this statement. There is nothing in the Code that entitles project opponents to know the details of Mr. DeLashmutt's business deals—and certainly nothing that entitles them to learn sensitive business or financial information pertaining to the third parties in those transactions. Given the history of this matter, the BOCC can surely appreciate the reluctance of third parties to be dragged into the fight and to have every aspect of their business and transactions picked apart.2 Ms. Gould now also argues that because the water rights were included as security for a loan that Applicant has "impaired its ability to obtain or control any water or water rights for the project or this phase of it." Kleinman Memorandum, supra note 2, at 4. This issue was resolved in the CMP and FMP and is a collateral attack on those prior approvals. At the time those approvals were granted, Applicant's property was already posted as security for loans. Neither approval placed any conditions on the Applicant regarding the use of the land or other assets to secure loans. Further, this argument flies in the face of the obvious need for financing for a project of this magnitude, and of standard business practices which routinely post property as collateral for such financing. According to the agreement's terms, Applicant is still in control of his property in the absence of default. Appellants attempt to move the goal posts in another way regarding the Big Falls Ranch water. They have argued before that Applicant and his attorneys falsely stated that the impoundments on Deep Canyon Creek have been removed. The 2 For instance, Ms. Gould says that "mitigation water will not be available after December 1 of this year" even though the quoted portion of the agreement explicitly allows for extension. July 1, 2020 Memorandum from Jeffrey Kleinman to Deschutes County Board of Commissioner on behalf of Ms. Gould ("Gould/Kleinman"), at 3-4. 16.j Packet Pg. 638 Attachment: 2020-07-08 K DeLashmutt Comments RE comment chart and Ex. 30a, 40-45 (3483 : Deliberation Work Session - Thornburg GolfLUBA 2020-095 - Record 0400 EXHIBIT 18 July 8, 2020 Page 4 record is clear that Big Falls Ranch has ceased impounding and diverting water from the creek, and removed its water control head gates. Even opponents have so admitted. See, e.g., David Arnold Email to William Groves, July 1, 2020, 2:36 PM, at page 4 (acknowledging that head gate has been removed); Exhibits 32 and 39, submitted on July 1, 2020, by Mr. DeLashmutt (showing that opponent Sage Dorsey's own photos prove that the head gate was removed). To the extent that water continues to back up to some degree it is due to beaver activity. See, e.g., Applicant's Exhibits 32, 39, id., and Lind Email supra, at 2 (statement from Jeremy Giffin that beavers had "reclaimed the dams"). Mr. Arnold also complains about the concrete abutments that are still in place in Deep Canyon Creek, even though the head gate itself has been removed. Again, these arguments are collateral attacks on the FMP and FWMP. LUBA has held that monitoring the FWMP comes from the annual reporting that the plan requires, not the approval process, See Exhibit G. More importantly, the actions taken to date, to cease pumping from Deep Canyon Creek and to stop impounding the water, are mitigation actions taken years in advance of when required to meet the no net loss standard. So now appellants argue that there is no proof of what the actual flow is from the creek to the river. COLW Letter to BOCC, June 30, 2020; Yancy Lind Email to William Groves, July 1, 2020, 2:52 PM. This new argument is also a collateral attack on the FMP. Ms. Gould raised this issue during arguments on the efficacy of the FWMP in the FMP proceedings. See Exhibit 25. Her claims failed. Similarly, COLW could have raised the issue at that time as well. They cannot use the current site plan process to make a belated argument on the FWMP/FMP and this argument should not be credited. Furthermore, the claim that stopping withdrawals from Deep Canyon Creek is somehow not providing quantifiable mitigation ignores the fact that Big Falls Ranch was previously permitted to divert 1,859.6 acre-feet of “wet” water from Deep Canyon Creek during every irrigation season.3 It has ceased doing so, removed its head gate, and instead is allowing all of that water to flow through the head gate to the Deschutes River (interrupted only by the beavers). David Newton, author of the FWMP, explained that this change provides the bulk of the required mitigation for 100% of the pumping anticipated under the FWMP. See Exhibit Q, Newton letter, September 25, 2018. Even though the mitigation needed for this site plan is a mere fraction of the mitigation water already returned to Deep Canyon 3 Mr. Giffin, OWRD, told Mr. Lind that the landowner had been "ready, willing, and able to pull the full water right." Lind Email, id., at page 2 (attaching July 1, 2020, 9:08 AM email from Giffin to Lind). 16.j Packet Pg. 639 Attachment: 2020-07-08 K DeLashmutt Comments RE comment chart and Ex. 30a, 40-45 (3483 : Deliberation Work Session - Thornburg GolfLUBA 2020-095 - Record 0401 EXHIBIT 18 July 8, 2020 Page 5 Creek, the project opponents routinely dismiss it, or attempt to undermine its value. See Exhibit AA, Mitigation Debit Table. 3. The Water Management and Conservation Plan does not provide any basis for attacking the Site Plan. Ms. Gould and Mr. Arnold seem to offer the Resort's Water Management and Conservation Plan ("WMCP") for two purposes—to "prove" that no water use has yet occurred, which Applicant does not dispute, and to try to focus attention on the amount of water and mitigation that will be required during peak use at full development of the resort, which is not pertinent to review of this Site Plan. The relevant amounts of water use for this phase of development are shown in Exhibit AA, previously submitted by Applicant with its application and attached here for convenience. The water needed for this site plan is only a fraction of the amount that Big Falls Ranch has already ceased diverting and allowed to remain in Deep Canyon Creek, and it is a small part of the peak water needs that Mr. Anuta cites on the first page of his 7/01/20 Submission that he states are “undisputed”. His comments are misleading. Mr. Arnold seems not to understand the timing of either the proposed water use or the required mitigation, arguing that a final WMCP is required now and that full mitigation must also be provided now. No mitigation is needed until the project begins pumping water. This argument was also made by opponents during review of the CMP. At that time, the BOCC determined that mitigation is not required until OWRD requires it. That issue is resolved, yet it is raised again. 4. Conclusion. To borrow a phrase from project opponents and Appellants, "the bottom line" is that Applicant has provided all of the information required of it pertaining to the status of its water right and mitigation in support of approval of the Site Plan. Appellants' and others' arguments to the contrary recycle settled issues and misstate the status of OWRD proceedings. Sincerely, s/ Janet E. Neuman Janet E. Neuman Senior Counsel JEN/jw 035992/00001/11318685v1 16.j Packet Pg. 640 Attachment: 2020-07-08 K DeLashmutt Comments RE comment chart and Ex. 30a, 40-45 (3483 : Deliberation Work Session - Thornburg GolfLUBA 2020-095 - Record 0402 EXHIBIT 18 EXHIBIT 19 EXHIBIT 19 EXHIBIT 19