With no viable interim solutions that the Board can implement, the process is expected to take years
In October of 2018, the State Water Board received a petition from Madera Irrigation District for a statutory adjudication of the Fresno River watershed. In 2019, the Board adopted a resolution that postponed the adoption of the petition while the parties in the watershed went through a third-party facilitated effort to come up with a local solution for a pathway forward. Over the next year, stakeholders made some progress but ultimately were unable to resolve the number of contentious issues within the watershed. So on October 20, 2020, the Board adopted the petition and directed staff to update them on potential interim solutions.
At the April 6 meeting of the State Water Board, staff from the Division of Water Rights updated the Board members on the ongoing issues and possible interim solutions for the Fresno River watershed.
Erik Ekdahl, Deputy Director of the Division of Water Rights, noted that with the petition’s adoption in October 2020, there now exists ex parte prohibitions between certain parts of the Board. They have now set up an internal separation of functions between the investigation team and the hearings team. And while they are still many years away from any proposed hearing, the investigation team presenting today is under ex parte considerations. They are prevented from directly briefing board members and members of the Administrative Hearings office, which may someday receive some of these issues.
“This is a bit of a new approach, and a new issue for both the division and the board as the last statutory adjudication at the board was 40 years ago,” Mr. Ekdahl said. “So there is no real template or blueprint for how we approach some of these questions. … So we’ve done an internal staff assessment, but we haven’t had the opportunity to conduct our typical one-on-one briefings with board members. Our only opportunity to do that now is in a public setting.”
The adjudication process and timeline
Conny Mitterhofer, Manager of the Hearings and Special Projects Section at the Division of Water Rights, then began the presentation with a simplified flow chart for the main elements of the adjudication as well as the expected timeline for when those steps will take place. She noted that the actual timeframe will depend on available resources.
Ms. Mitterhofer briefly went through the steps of the adjudication process. The first step is to notify all known potential water rights claimants in the watershed of the pending proceedings. The notice also sets the deadline by which claimants must notify the Board in writing of their intent to file proofs of their claimed water rights.
The Board then conducts an investigation of the water supply and demand in the watershed, including field visits for each diversion and place of use. After the field investigation, claimants are provided with a copy of the investigation findings to help them prepare their proofs of claim. A proof of claim must be submitted for the Board to make a determination of right.
After conducting the investigations and receiving the proofs of claim, the Board prepares a draft report and preliminary order of determination establishing the rights to the water in the Fresno river stream system. A copy of the report is sent to each claimant, and copies of the proof of claim and any evidence collected by the Board are made available for inspection.
Claimants may file objections to the report’s findings and the order of determination which are subject to a hearing before the Board. Upon completion of the hearing, the Board adopts an order determining and establishing water rights in the stream system. After board adoption, a certified copy of the order, the evidence, and the transcript of the testimony are filed with the Superior Court. Parties may file notices of objections to the order with the court clerk. And after conducting a hearing of objections and other necessary proceedings, the court enters a decree which conclusively determines the rights of all parties involved in the proceeding.
As for the timeline, the staff is currently preparing the notice package as shown by the orange box; they are expected to go out mid-summer this year. The entire process is projected to wrap up in 2025 or 2026.
“Overall, we are forecasting a schedule delay of nine to 12 months due to staffing constraints,” said Ms. Mitterhofer. “We are still working with our Division of Administrative Services on adding four additional staff to the team. Our current team has been redirected to work full time on drought-related assignments.”
The slide lists the broad categories of issues brought forward by the parties, some of which may be candidates for interim solutions. Ms. Mitterhofer went down the list: There are uncertainties and disagreements on the nature, extent, validity, and relative priority of rights; a lack of transparency and disagreement on the implementation of the Fresno River Operations Protocol (FROP) and Allocation Model (FRAM); and claims of unauthorized diversions, unauthorized diversion structures, and storage of riparian water. The District has been acting or serving as the de facto watermaster but without the legal authority or compensation. There is at least one pending complaint of improper water allocation and some uncertainties due to the conversion of riparian land to permanent crops and the inclusion of unexercised riparian rights in the allocation model.
Potential interim solutions …
The staff has identified five potential interim solutions. To be useful, Ms. Mitterhofer noted that an interim solution should provide a means to address the issues summarized earlier and be binding upon the parties involved. She went through the potential options:
Alternative Dispute Resolution under Administrative Procedure Act (APA)
The first interim solution identified would be to utilize the alternative dispute resolution process. The Administrative Procedure Act permits an agency to refer a dispute for resolution by mediation or arbitration with all parties’ consent. Section 648.6 of the State Water Board’s regulations allow the Board to refer a dispute or proceeding before it to mediation or non-binding arbitration in accordance with the APA. The water code also specifies that a hearing officer from the Administrative Hearing Office may preside over mediation. So if the parties consent, this provision would allow the Board to refer the issue to mediation by either an AHO officer or an outside mediator.
Ms. Mitterhofer said that staff has significant concerns using the AHO (administrative hearings office) as the primary vehicle to address concerns and issues in the Fresno River Watershed for several reasons.
“While there may be some merit and directing specific complaints to the AHO to review and develop evidence and background, such work may end up being premature, as many of these issues will likely need to be revisited as part of the adjudication,” she said. “Consequently, these early investigations could result in duplication of efforts that also leads to unnecessary complications and time spent. It’s unclear whether these efforts are cost recoverable. And this would likely result in an internal separation of functions within the AHO. Staff concludes that this is not recommended as a viable path or interim solution.”
Private Resolution with Board Support/Approval
Another option is that the parties could continue to attempt to resolve these issues between themselves, but Ms. Mitterhofer acknowledged such efforts have not been successful to date. However, with past negotiations, Board staff have not been involved; perhaps by providing someone either from the AHO or the Division to assist private negotiation by providing technical legal input would help the parties reach the solution.
“The primary downside to this approach is that without a means of binding the parties to the solution, parties could conceivably disregard that solution, in which case the investment of staff time would be lost,” she said. “There’s no clear mechanism for cost recovery or supportive staff efforts. Due to limited resources, staff would likely be redirected from other high-priority work, including work on the adjudication itself, in an attempt to mediate a resolution between entities. In conclusion, staff does not consider this approach viable.”
The Board’s Office of Enforcement, in combination with the Division’s enforcement branch, can investigate complaints and take appropriate action if a violation has occurred. The staff’s assessment is that there are insufficient staff resources to adequately address the issues identified in the Fresno River watershed through enforcement actions. Additional resources would be needed for both the Division as well as the Office of Enforcement.
“Even if staffing resources were available, this process would likely take as long or longer than the adjudication itself as it takes a considerable amount of time to bring a single complaint to resolution,” said Ms. Mitterhofer. “There are dozens of potential complaint or enforcement issues, and even potentially more in the watershed. An enforcement action will generally only cover a single diverter at a time. This approach would not be efficient and is unlikely to resolve the broader set of issues. In conclusion, and this is not a comment on the merits of enforcement for individual cases, while enforcement is an option, staff does not view this approach as a viable solution for addressing the broader set of issues and the watershed as a whole.”
Private litigation to resolve the interim dispute could be effective, particularly if the court ordered a reference of one or more issues to the Board. If that occurs, the Board would have a role in resolving the dispute by providing the court with findings of fact and conclusions of law regarding the dispute. However, litigation processes outside the Board’s control require the parties to initiate litigation and then the court to order a reference to the Board.
“Litigation is also costly, and there are likely disincentives for smaller, less financially capable parties to pursue this option,” said Ms. Mitterhofer. “As a result, staff have concerns over equity if this is the sole process by which Fresno River issues are addressed. However, litigation remains an ongoing option for any party that wishes to pursue it. There is no board process that prevents litigation, and the adjudication process itself does not prevent litigation between individual parties.”
Legislation to appoint an interim Watermaster
Some parties have suggested that the appointment of an interim Watermaster to administer the Fresno River stream system would be an effective means of resolving interim disputes. They have made requests to appoint a Watermaster for overseeing allocations and reviewing the allocation models currently in use.
“While the appointment of a Watermaster is a common result of the statutory certification, the board does not have general statutory authority to appoint a Watermaster at this time,” Ms. Mitterhofer. “This lack of authority could be corrected by relatively simple legislation, with sponsoring legislation requiring approval from the administration. Legislation could take years to complete, and there’s no certainty that such a bill will be passed. It is also unlikely that the legislature would provide such authority in a timeframe that could be used to successfully administer ongoing issues in the Fresno River watershed. But it could certainly be useful for future adjudications the Board receives.”
She also noted that the water users already have the authority to develop and appoint a Watermaster on their own. Staff considers the appointment of a Watermaster to be ultimately a helpful approach, and that remains an ongoing option for the parties to pursue on their own while the adjudication is underway.
… None of the interim options are really workable
The slide summarizes the potential interim solutions and the pros and cons of each.
“The takeaway really is that none of the options we discussed are ideal in meeting the water right holders and the board’s needs,” said Ms. Mitterhofer. “Some of the options are not viable due to the legal constraints, staffing, resources, or other factors. And referral of some limited issues to the AHO or external mediation or arbitration may be an option, but drawbacks outweigh the benefits for the Board and the adjudication process.”
“We’re somewhat testing out a process here when it comes to even how we handle or inform, discuss, and continue to consider this petition and this adjudication,” said Chair Joaquin Esquivel. “It’s because we ultimately are called to act as judges amongst these disputes in the water rights system. So regrettably, no easy solution for what it sounds like are a number of complex issues that would need to continue to be resolved to get to a final adjudication … What is best for us here as a Board to consider and provide to you by way of feedback, acknowledging that it’s a complex project. It’s also a matter of resources to pursue the paths that we have before us.”
Erik Ekdahl said there are some pathways available to the Board, but the staff recommendation is to proceed with the adjudication. He acknowledged the fairly long timeline, but the initial noticing period is basically sending an announcement to the water right holders in the watershed and asking them to provide information. They are proposing an extended timeline to provide flexibility for the water rights holders who may be dealing with drought concerns of their own. Staff can reconvene later in the year if hydrologic conditions have changed. And we may have more capacity to work directly take the next steps while also providing the time to work on the Board’s staffing to see if positions can be redirected internally to help work on this effort.
“The initial thought is to proceed with the adjudication process as outlined in statute,” said Mr. Ekdahl. “If there are other needs to describe the process or kind of highlight information to the public, we now have to go through a public process. The Board can request that at their discretion. Initially, we’re looking at the timeline to try and get the information out in August or September. If we can do that, an appropriate time to come back maybe once that notice has gone out and the initial reporting back to the division period has passed, so potentially as far as next winter 2022.”
Chair Esquivel asked how things went in the watershed during the last drought.
“I don’t wish to speak directly for the petitioners Madera Irrigation District or others,” said Mr. Ekdahl. “But my sense is that it was the previous drought that precipitated this petition in the first place; that the previous drought did raise issues of what is the priority of right, what is the validity of certain types of claims, and particularly with SGMA now playing a role and others looking at what the long term groundwater supply will be as it’s compared to surface water and riparian rights in particular. So it was the discussions and the contention that developed out of that time period that’s directly relating into the need to formally adjudicate the rights going forward.”
“Thinking more broadly about what role can this process play, it’s an intriguing question,” continued Mr. Ekdahl. “It’s something that we may see more of, if we are able to move effectively and quickly on the adjudication itself. As SGMA becomes more effective, as questions related to surface water supply, whether driven by climate change, or drought, or flood flows – whatever the kind of driver might be, there is going to be a greater need for a better understanding of the proof and the validity, and essentially the adjudication of all kinds of rights within certain watersheds.”
“But as also evidenced here, it’s a very contentious and challenging process in many respects, especially where the water rights themselves are not fully or clearly understood. I think already within the Division, we’ve made some significant progress. We have come up with a water rights database that we have shared with all of the rights holders in the watershed. It integrates claims of right with reports and shows it on a GIS or geographic interface so people can kind of directly look at: here’s the claim, here’s the parcel, here’s the point of diversion. And that serves as a pilot for how we could set things up in other watersheds or statewide if we had the capacity and resources to drive that effort going forward. But it also serves as a great blueprint. And it’s worked well so far.”
“So a lot of opportunities and a lot of potential,” Mr. Ekdahl continued. “It is a substantial workload to do this type of effort, both for the Division as well as the right holders. Some of the information will be old and hard to procure. And there will be legal questions that come out of it. And that’s the process that we’ll go through in a couple of years when it gets to that hearing phase, but it ultimately will help resolve questions in the watershed as a whole.”
Board member Sean Maguire said he recognizes that resources are limited, and with no real interim solution available, perhaps, in this case, the best course of action is just to proceed with the adjudication. However, staff did mention a couple of pathways – a stakeholder process to find a solution or to appoint an interim Watermaster. Are those two still options on the table? The parties that are involved in this may wish to revisit that over the next several years.
Mr. Ekdahl said that the stakeholders could voluntarily work together to set up and fund a Watermaster. “But I think it’s also telling that that hasn’t happened. And again, I don’t want to speak for the parties themselves, so I won’t venture into why that hasn’t happened, but it hasn’t yet happened. Whether or not it is possible, it could occur at any point throughout the adjudication process. It could occur after the adjudication process, and it still remains a viable option for them going forward.”
“The other option is the facilitated process going forward,” Mr. Ekdahl continued. “We did fund a third-party facilitator to come in and help try to resolve some of that conflict. That is something that the local water rights claimants have the authority and the ability to set up on their own at any time. And again, it hasn’t occurred, or they’ve chosen not to fully or directly move forward or engage that level of facilitation. Again, they have that opportunity, but they would have to fund it and pay for it themselves at this point. And they’ve chosen not to do so.”
“Understood, but things can change,” said Board member Sean Maguire. “ I just want to make sure that as we go forward, there are a lot of parties involved, so just that they’re aware that there are these other options. We may see other watersheds with similar challenges and conflicts, and desires for adjudication. So just to be clear about what are all the tools and options that each watershed has, these being some very viable ones that we would like to see. We don’t have the resources frankly to take on much more currently. So to see success, either through a formal adjudication process or a voluntary solution, either, for me, it would be a big relief.”
Mr. Ekdahl noted that if stakeholders were to come together in a facilitated process or appoint a Watermaster, it would considerably speed up the State Water Board process. “Speeding up our efforts is also going to save everyone money because ultimately, this is a cost recoverable project. So we agree and highly encourage local efforts to do what they can to help drive that going forward with the note that if there are delays, it actually then probably increases costs in the long run.”
“We’re always open to those voluntary solutions that local watersheds can self-organize around, and the board can look at and review and bless,” said Chair Esquivel. “ That is fundamental to the way we’ve carried out our work. It’s making sure we also emphasize the continuity of the information between, say, a full adjudication and some voluntary process should be the same. … You can ultimately have more self-assembly and self-organization in a watershed, and we benefit from that as it demonstrates a local leadership with the same data with the same information ultimately driving toward ostensively the same outcomes, but just different ways we can get there. And again, they complement each other. They don’t have to be seen as the antithesis to the Board doing that regulatory work. I echo your sentiments completely that we want to be clear that voluntary solutions are there.”