Activists Push for Additional Species Listings on the Klamath River

One day after announcing that a federal court had determined that the federal government must reconsider listing the green sturgeon on the federal Endangered Species Act (ESA), environmental activists called for the government to add another Klamath River species to the ESA list. Magistrate Judge Elizabeth D. Laporte on Tuesday remanded a January 2003 federal decision to reject listing the species back to the National Marine Fisheries Service (NMFS) for reconsideration. The Court concluded that NMFS "arbitrarily and capriciously" failed to consider "whether lost spawning habitats together constitute a major geographical area in which the sturgeon once was viable, but is no longer." Judge Laporte concluded that "this matter must be remanded for further analysis and decision of the issue of whether the green sturgeon are endangered or threatened in a significant portion of its range."

The legal challenge was brought by the Environmental Protection Information Center (EPIC), Center for Biological Diversity (CBD), and Oregon Natural Resources Council (ONRC). Already, coho salmon are protected by the ESA, which has led NMFS to develop regulations that reallocate water away from the federal Klamath Project to meet disputed flow standards for the coho. The sturgeon lawsuit was initiated by environmental activists intent on similarly providing more water for the bottom-feeding fish.

“Green sturgeon were among the fish that perished in the large fish kill that occurred in the Klamath River in September 2002 that also resulted in the death of over 33,000 salmon. The precarious status of this magnificent fish makes it imperative to restore the flows to the Klamath, considered to be the center of the world for the green sturgeon," said Wendell Wood of ONRC.

The day after the court decision was announced, ONRC and eleven other environmental activist organizations filed a 60 day notice of intent to sue the US Fish & Wildlife Service, under the ESA, over the agency’s failure to take federally required steps to protect four species of lampreys as threatened or endangered. The eel-like fish inhabit large streams up and down the Pacific Coast , and the adults of some species spend 6 to 18 months in the ocean, where they attach themselves to a wide variety of large fishes, including salmon.

According to a 1991 report prepared by the Klamath River Basin Fisheries Task Force, populations of Pacific lamprey trapped above Lewiston and Trinity Dams have formed landlocked populations that predate heavily on the Kokanee salmon and other resident fish of Lewiston and Trinity Lakes . Dwarfed landlocked forms have also been reported in the Klamath River above Iron Gate Dam and in Upper Klamath Lake . The stunted adults from Iron Gate Reservoir can attach to adult salmon and steelhead being held for spawning at the hatchery. Despite these seemingly unpleasant characteristics, environmental activists on Wednesday did their best to put a positive spin on the attributes of lamprey.

“Pacific lamprey have co-adapted with their prey, which can include salmon as well as other marine fish species,” said ONRC’s Wood. “Of the four lamprey species being petitioned by conservationists, only the Pacific and river lampreys ever produce adults which prey on other fish during these lampreys’ shorter marine life stages,” he said.

2001 O&M Reimbursements Delivered to Klamath Project Irrigation Districts

The U.S. Bureau of Reclamation this week began delivering reimbursement checks to irrigators in the Klamath Basin who were required by law to pay canal operation and maintenance fees during the 2001 water year, despite receiving virtually no water. Congressman Greg Walden introduced legislation in August 2001 to authorize the reimbursement of the fees to Klamath irrigation districts and other parties. Walden's bill, the Klamath Basin Emergency Operation and Maintenance Refund Act of 2001 (HR 2828), passed the House on November 13, 2001 , without opposition. The legislation passed unanimously in the Senate almost a year later and was signed into law by President Bush on December 17, 2002 .

"This is great news for the farmers and ranchers of the Basin," said Walden. "The delivery of reimbursement checks to the Klamath Basin irrigators who were denied irrigation water is the culmination of a long struggle I've waged to help restore fairness in the Basin after the federal government's disastrous water shut-off. I've said many times that you shouldn't have to pay for something you don't receive, and that's exactly what the law required of Klamath irrigators who paid for the operation and maintenance of the canals even though they received virtually no water in 2001."

Last year, Walden made a formal request for the funds needed to reimburse Klamath Basin irrigators. The annual Energy and Water Appropriations bill provided $2.6 million for the reimbursements, though the Bureau of Reclamation determined that only $2.3 million was required to refund the irrigators. More than $2 million will be delivered starting this week, with the balance being provided over the course of the next few months.

Dave Solem, Manager of the Klamath Irrigation District, applauded the release of the operation and maintenance reimbursements and praised the Klamath congressional delegation for its work on behalf of Klamath irrigators.

"We couldn't be more pleased with the release of these reimbursements," said Solem. "This has always been a matter of simple fairness, and I'm glad the irrigators who paid the operation and maintenance fees will finally get back the money they deserve. We sincerely appreciate the tenacity shown by Congressman Walden, Senator Wyden and Senator Smith in pursuing these funds."

Solem emphasized the importance of the reimbursements, not just to the farmers, but to the irrigation districts, as well.

“Even when the farmers learned that they weren’t going to receive water in 2001, they still paid their O&M fees to the district,” he said. “This kept the district’s doors open, allowed 25 employees to keep their jobs, and supported district purchases of fuel and materials that year. The bottom line is, even though the reimbursement goes back to the farmers, and they can break even, the real beneficiaries are the irrigation districts.”

The reimbursements will be delivered this week to Klamath Irrigation District (ID), Klamath Drainage District, Ady District Improvement Co., Enterprise ID, Pine Grove ID, Malin ID, Shasta View ID, Midland District Improvement Co., Pioneer District Improvement Co., Plevna District Improvement Co., Poe Valley ID, Sunnyside ID, and Van Brimmer Ditch Co.

- Source (in part): Rep. Walden Press Release -

K.I.D. Outlines How District Will Distribute O&M Reimbursements

Klamath Irrigation District (KID) on March 1^st received a check for reimbursement of the 2001 Operation and Maintenance (O&M) charges, as a result of passage of the Klamath Basin Emergency Operation and Maintenance Refund Act of 2001 (HR 2828). The Board of Directors of KID has outlined the following process to refund the amount billed, less $5/acre already credited or refunded by KID in 2001. Because KID is refunding owners from three years ago, it recognizes there will be some questions, and asks for its members’ cooperation and patience.

1. Refunds will be mailed March 8, 2004 to the owner shown on KID’s March 8, 2001 records. Disputes concerning payment by someone other than the owner should be directed to the owner receiving the refund.

2. Refunds will be based on the rate of $20.50 per acre (or it may be a portion of one acre). KID refunded $5 per acre in June, 2001. The total refund will equal the total amount initially billed in 2001.

3. Checks will be issued to each owner. KID will not be crediting accounts in lieu of issuing checks.

4. Some owners from 2001 sold land, moved, and may be difficult to locate. A process to try to locate these owners has been developed by KID. These owners may contact KID with current address information. Any un-cashed or unclaimed checks will be turned over to the Oregon Division of State Lands as unclaimed property after 2 years.

5. Klamath Basin Improvement District members, individual Warren Act and Group E contractors will also receive refunds from the KID office, in a process similar to KID’s.

If you have any questions, please stop by KID or call 882-6661 between 8:00 A.M. and 4:30 P.M.

Klamath Basin Efforts Noted as Walden Receives Private

Property Rights Award

U.S. Congressman Greg Walden (R-OR) has been honored as a “Champion of Private Property Rights” by the League of Private Property Voters (LPPV) for his votes in the U.S. House of Representatives during the first session of the 108th Congress. Lawmakers with an 80 percent or higher rating received the award of the LPPV, which evaluated 12 key votes related to the property rights of American citizens. Walden, who scored 100%, has received the award each year he has served in Congress.

Votes scored by the League of Private Property Voters included supporting the Healthy Forests Restoration Act (HR 1904), which Walden co-authored, and opposing an amendment to the Interior Appropriations bill that would have limited farming on wildlife refuges in the Klamath Basin of southern Oregon and northern California. For two years Walden – along with U.S. Reps. Doolittle and Herger - has led the opposition to this amendment, which has been soundly defeated each time.

“I’m always honored to be recognized by the League of Private Property Voters as a defender of the private property rights of the American people,” said Walden. “Safeguarding property rights is a responsibility that I take extremely seriously. Private property ownership is one of the most fundamental rights we enjoy as citizens, and private property owners are some of the most responsible and conscientious stewards of our land. Several of the votes used as the basis of this award – such as the Healthy Forests bill and the assault on farming in the Klamath Basin – were critical to the livelihood and safety of so many rural Oregonians, so this is a special honor.”

- Source: Rep. Walden Press Release -

Hoopa Valley Tribe Reacts Coolly to U.S. Trinity Settlement Proposal

A proposal offered up this week by federal officials to settle contentious flow issues on the Trinity River – the largest Klamath River tributary – received an initially cool reception from downstream tribal interests. The Hoopa Valley Tribe – which believes more water should be returned to the Trinity River by Central Valley Project irrigators – said the package favored farmers and was similar to a settlement proposed by the Westlands Water District last year, which the tribe rejected.

"The proposal was essentially another regurgitation of a similar proposal from Westlands," Mike Orcutt of the Hoopa Valley Tribe told the New York Times.

The plan – announced Wednesday by U.S. Interior Assistant Secretary Bennett Raley – is built upon the premise of “adaptive management”, where actual hydrologic conditions would allow flow levels to be managed accordingly. It would also establish a 20,000 acre-ft water bank and set aside an emergency fall reserve of up to 50,000 acre-feet of water, which could be sent downstream to assist with fish migration, if need be.

“We give a lot of credit to Interior for pushing this forward,” said Tupper Hull, spokesman for Westlands, to KWUA yesterday. “The focus appears to be on flexibility and science-based management, which the Klamath watershed and the entire West desperately need. It looks at a range of science-driven actions – not just flows - that will benefit fish. We have some concerns about the specifics of the adaptive management criteria, but we look forward to learning more about Interior’s plan.”

ODA Offers Detailed Help on Pesticide Buffer Ruling: No Klamath Implications

A federal court decision earlier this year to mandate pesticide buffer zones for waterways that bear threatened and endangered fish species was initially met with a lot more questions than answers. Gradually, the details of the judge's ruling are being worked out, and the Oregon Department of Agriculture is doing what it can to provide those
answers.

Specifically, ODA has set up a special web page that lists the pesticide products affected by the ruling, the buffer requirements, the fish species included in the court order, and county maps that show the affected streams and rivers. With forestry and agricultural activity starting up, the information can be a valuable tool for producers.

"Forestry operations- particularly those in the western part of the state-are currently asking the most questions," says Chris Kirby, administrator of ODA's Pesticides Division. "This is a very busy time for them to be applying herbicides on forest lands. We are trying to provide information that identifies which streams and rivers are of concern."

The complex court order was handed down January 22 of this year and became effective February 5. The four fish species in question include the Oregon coastal coho salmon, Chinook salmon, steelhead, and Columbia River chum. Those fish are found in a wide number of streams and rivers in Oregon. In fact, 30 of the state's 36 counties are impacted by at least one of the species. Only Baker, Deschutes, Harney, Klamath, Lake, and Malheur counties are untouched by the judge's ruling.

-Source: ODA “Story of the Week”-

KWUA Addresses Water Allocation Briefs Prepared by OSU

The Klamath Water Users Association (KWUA) earlier this week sent a letter to Oregon State University (OSU) that outlines the association’s concerns with two briefs recently prepared by OSU’s College of Agricultural Sciences. The letter is printed in its entirety below.

Mr. Bill Braunworth

Assistant Extension Agriculture Program Leader

College of Agricultural Sciences

138 D Strand Ag Hall

Corvallis, Oregon 97331-2201

Dear Mr. Braunworth:

On behalf of the Klamath Water Users Association (KWUA), I would like to thank you for Oregon State University’s (OSU) continued attention to the water resources challenges we face here in the Klamath Basin. In particular, we are grateful for the efforts of local university extension officials like Ron Hathaway, Ken Rykbost, and Rodney Todd, who understand the dynamics of the local community and truly want to make our agricultural economy stronger and more viable. I am writing today in regards to two recent “briefs” published by William Jaeger, associate professor of agricultural and resource economics at OSU.

Background

KWUA is a non-profit corporation that has represented Klamath Irrigation Project farmers and ranchers since 1953. Our members include rural irrigation districts and other public agencies, as well as private concerns operating on both sides of the California-Oregon border. Last January 27^th, we were surprised to learn that Mr. Jaeger and his staff had published two new briefs on the economic value of irrigation water and the potential benefits of water markets in the Upper Klamath Basin. While we support OSU’s willingness to investigate opportunities to solve Basin challenges, Mr. Jaeger’s recent work, unfortunately, is only the latest in a series of actions that have emanated from Corvallis, with virtually no opportunities for those most affected by these activities – the ranchers and farmers of the Klamath Project – to provide meaningful input. In the case of Mr. Jaeger’s two briefs, we were disappointed that our association – which spent thousands of dollars and over 1,000 man-hours in 2002 preparing a water bank proposal – was not contacted to provide assistance or review on this subject topic.

We know that your efforts are well intended, but, as we repeatedly predicted to you in 2002, selective material pulled from several recent OSU reports has provided the most vocal critics of Klamath Project agriculture with ammunition that has materialized in hostile press releases and in litigation driven by these critics. Despite meeting directly with you and your staff in 2002 on this very issue, we continue to feel that we may be working at cross- purposes with your department, a concern that we would like to soon remedy.

For the present, this letter outlines concerns we have with the two briefs prepared by Mr. Jaeger.

Brief #1: The Value of Irrigation Water Varies Enormously Across the Upper Klamath Basin

We agree with the following general conclusions made in Brief #1: The value of water per acre (or per acre-foot) is far greater for growers on high value land, and more economically optimum decisions can be made if all irrigated lands in the watershed are included in the program. The brief correctly states that the value of water varies enormously across the Upper Klamath Basin and infers that irrigation water is the primary source of land value. While generally correct, this assumption does not take into consideration such things as recreation value, lifestyle choices, proximity to Klamath Falls, scenic value, wildlife, and other uses.

Water Value Assumptions

We question the brief’s implication that the figures used represent the actual value of water. The methods employed in this brief are much too simplistic to be taken seriously as actual values or even relative values. The brief’s primary premise appears to be one where everything boils down to the dollar value of the land, and all other findings and conclusions are inferred from that. While this may be useful in drawing general relative conclusions, we do not believe terms like “net revenue per acre” are actually identical to value of water. Rather, it is an estimate of implied productivity from the land values.

The water user will ultimately determine the actual value of water. For example, a livestock operation could have a very high profitability that is totally tied to the availability of water. If land prices on that operation are low (class 4 soils), then, using the premise inherent in the brief, Mr. Jaeger might therefore predict low returns per acre. However, our ranch manager would disagree. He would argue that most of the expenses might actually lie in operations like moving cows, or purchasing calves, rather than in capital land costs. But the whole operation may hinge on cheap pasture when grazing allotments run out. Our own theoretical example is presented to suggest that the approach employed in the brief is too simplistic to justify statements suggesting that the value of water is 85% lower in one region or another.

Other Factors to Consider When Assessing Value of Water

The brief states, “We can infer that the difference between the purchase price of similar irrigated and nonirrigated land reflects the benefits from irrigation.” This is only one of the factors impacting the value of the land, as further detailed below:

· The brief discusses the value of the water but does not address the impact on other businesses, suppliers, dealers, tax revenue, loss of employees, restaurants, grocery stores, etc.

· The brief does not address the impact on the value of land if there is a one-year contract vs. a multiple year contract. The farmer may have a personal right to the funds; thus, this may impact the owner/lender relationship due to an adverse impact on the land value. A one-year contract would have a smaller impact than a longer-term contract. A property with a contract in place may be more difficult to finance depending on the assignability of the contract.

It does appear from the graphs presented in the brief that to idle x-number of acre-feet of water outside of the Klamath Project would be less expensive. However, this assumption only relies on the general value of the land, and does not consider the efficiency of delivery of this water. In other words, would idling 50,000 acre-feet near the town of Sprague River deliver more water to the lake or river than idling 50,000 acre feet within the Klamath Project? Other factors could include ease of monitoring, cost of enforcement, impact on the current crop (i.e. drying up permanent pasture vs. grain land), measurement of water idled, and impact on the Klamath Project delivery system.

For such a preliminary assessment, a broad-brush approach may need to be taken. However, the reader should be warned that this approach does not consider the financial situation of various producers. The study brief suggests that a 6% return on the difference in value between irrigated and nonirrigated land may be fair. However, the situation of the individual producers is not taken into consideration. Some are better managers, and therefore able to consistently produce a larger, higher quality crop and, most likely, more profit. Others have a higher debt to service, and a capitalization rate approach may not cover their fixed expenses. Still an irrigation district that has a higher cost to deliver the water may serve others. All of these - and many more - factors make it difficult to determine the economic impact that the loss of irrigation water will have on each individual and the community as a whole.

Again, Brief #1 has merit because it illustrates that the value of water is likely to vary within the Basin. However, the conclusions derived from this brief appear to go too far by estimating the range of values, or more critically, by implying that these figures reflect the actual value of water in one region or on a given soil type. The bottom line to us is this: Our current agricultural systems in the Basin cannot work without water. Only the operator – based on the nature of his / her unique position - can determine the value of continuing an operation.

Brief #2: Potential Benefits of Water Banks and Water Transfers

We have some serious concerns with Brief #2, entitled “Potential Benefits of Water Banks and Water Transfers”. While the topic of this brief is “water banking”, the discussion does not focus in detail on the actual water bank programs that have been implemented in the Klamath Basin for the past two years. Instead, it proposes what appears to be a theoretic exchange program occurring between Project irrigators and water users above Upper Klamath Lake. As correctly noted in this brief, such a paradigm cannot exist until the water rights certification process if completed, which many legal experts believe will not occur for ten years or more.

The description of the 2003 Klamath Project water bank presented in this brief is also not entirely accurate, as noted further below.

KWUA Role in 2003 Pilot Water Bank

The 2003 Klamath Project water bank was initiated by the U.S. Bureau of Reclamation (Reclamation), not the Klamath Water Users Association, as noted in the brief. KWUA in March 2003 announced it would support, and assist the Department of Interior in the implementation of, a Klamath Project Pilot Environmental Water Bank in 2003 to provide over 50,000 acre-feet of additional water for environmental purposes. While noting that Reclamation’s pilot program does not closely resemble KWUA’s vision for a long-term bank, water users agreed last year to continue to work with Reclamation and Interior to complete a long-term water bank proposal.

Reclamation’s 10-year Biological Assessment (BA) developed in February 2002 proposed an environmental water bank through which willing buyers and sellers will provide additional water supplies for fish and wildlife purposes and to enhance tribal trust resources. Reclamation’s BA estimated the size of the water bank to be up to 100,000 acre feet – depending on water year type - with “deposits” coming from a variety of sources, including on-farm storage, temporary crop idling, and groundwater substitution.

Water users committed to pursue developing a bank with Reclamation in January 2002. At that time, KWUA was asked by Reclamation to develop a Project-wide water bank to assist with meeting environmental water demands in drier years. KWUA’s Water Bank and Supply Enhancement Committee (Committee), chaired by Malin farmer Dave Cacka, held over 30 meetings in 2002-03 to develop the 65-page report/proposal for a long-term water bank, which differs substantially from the pilot water bank implemented by Reclamation in 2003. Reclamation chose not to implement our recommended proposal, primarily due to concerns regarding supply certainty.

Certainty of water supplies is a key principle imbedded in KWUA’s draft long-term water bank proposal. Endangered Species Act - driven limits on Upper Klamath Lake mean there are no guarantees that water banked or transferred will in fact be available should hydrologic conditions or high down stream flow requirements “bust” the lake limits. This is similar in concept to a bank giving out money until it is gone, and then sending customers home when they try to withdraw their savings. Local water users in 2002 insisted that, in exchange for voluntary participation in a Project water bank, 100% of the irrigation demand for remaining Project acreage would be satisfied, season-long.

While we expressed cautious support for Reclamation’s 2003 pilot program, we still see the Project water bank as one element in a package. Other measures – like development of new, permanent storage facilities and acknowledgement of restoration benefits - will assist in minimizing, and ultimately eliminating the need for - water bank requirements in the future. Water users also believe that the water bank concept proposed in the coho salmon biological opinion must be modified before a long-term water bank can be finalized. The concept of providing flexibility in operations management by relaxing rigid lake levels or stream flow requirements is one that has long been pushed by local water users.

2003 Klamath Project Pilot Water Bank Key Facts

We have questions about some of the statements – as well as important omissions - made in this brief. For example, based on information provided to us from Reclamation, more than 14,000 acres of idled land were enrolled in the water bank, not 12,000 acres, as noted in the brief. Also, we saw no mention made of the groundwater substitution component of the water bank, which essentially resulted in forbearance of Klamath Project water on over 11,000 acres of additional land. We have prepared the following information for your consideration in the event that further briefs are planned on Klamath Project water banking issues.

Contracts were entered into Reclamation and Klamath Project landowners for the 2003 Project Pilot Water Bank. The following figures, provided by Reclamation, summarize the program that was implemented. The pilot project water bank was intended to help meet the environmental water targets specified in the 2002-2012 Klamath Project Operations Plan.

Crop Idling

Contracts Signed…………………………..… 223

Acreage Enrolled (Total)……………….…14,456

Acreage Enrolled (California)…...…………2,316

Acreage Enrolled (Oregon)..……………...12,140

Groundwater Substitution

Contracts Signed………..………………..……92

Acreage Enrolled (Total)…..……………...11,133

Acreage Enrolled (California)………..…….5,133

Acreage Enrolled (Oregon)………….……..6,000

We believe the current brief should be withdrawn and modified to explain that the concept proposed by Mr. Jaeger appears to be based on economic theory, rather than a summary of what actually happened with the 2003 pilot water bank. While his approach to the water bank appears to be driven by his assumptions for pricing irrigated land (see Brief #1) and the theory that a Klamath Basin water market can be driven by competitive market forces, it simply does not address what actually happened in 2003 in the Upper Klamath Basin. In that case, a price per unit of environmental water was developed, based on similar programs developed in the western United States.

Assessment of Similar Programs in the West

KWUA in 2002-03 evaluated and assessed similar water purchase programs conducted in the West in order to use those experiences to benefit the 2003 pilot water bank program. Various experiences included the following:

Sacramento R. Contractors 2001 Forbearance Agreement with Westlands Water District
Palos Verde to Metropolitan Water District transfer initiated and beginning in 2003.
Various water transfers to the Department of Water Resources through CALFED’s Environmental Water Account (California).
The Klamath Basin Rangeland Trust to USBR transfer in 2002 (Oregon).
The Klamath Water Users demand reduction program of 2001 (Oregon / CA).
The CVPIA transfer of water from Orange Cove Irrigation District to the Bureau of Reclamation proposed for 2003 (Sacramento Valley, California).

Based on our assessment of these similar programs, it was clear that unique and individual circumstances drive the overall water pricing for the various programs, but that a price of $75 per acre-ft was justified, and agreed upon in 2003.

Future Coordination Between OSU and KWUA

We remain perplexed by your department’s apparent hesitation to work directly with the individuals who best understand demand reduction programs in the Klamath Basin – the board members, producers and district managers that comprise the membership of our association. Further, our engineering consultant – MBK Engineers of Sacramento – has on-the-ground experience with actual administration of water banking programs in California. I personally was also involved with some of these programs when I was working in Sacramento for Reclamation and Sacramento Valley irrigation districts. While theoretical exercises are interesting to ponder, we have found that empirical results derived from working with people who are actually involved with project implementation provides an invaluable means of applying “lessons learned” to future endeavors.

Again, we view the water bank as one element of an overall approach. A part of that approach must also

be the re-introduction of flexibility in annual operating procedures to ensure that water supply

certainty requirement is met. The biological opinions and Project operations plans must

recognize variability, and incorporate flexibility. As previously stated, local water users view the

environmental Water Bank as an interim measure that can be employed to compensate irrigators in drier years. Ultimately, the legitimate water