Bellingham’s Natal Stream

The writer settled in Whatcom County in 1969. He is an entrepreneur, student of the law and worldly philosopher who loves this place.

Most have heard, or read, about the struggle to save Squalicum Mountain from development. A critical portion of the Lake Whatcom Reservoir’s watershed, it is threatened by a number of proposals that taken together would ultimately put thousands of new residences on the mountain with a substantial impact on the drinking water supply of Bellingham and others relying on the reservoir. Perhaps even more critically, this development will surely mean the end for our cherished and threatened salmon and their habitat in Whatcom Creek.

Leading the push for development, and offering to supply water to the developers, are Whatcom County and the Lake Whatcom and Sewer District. The county executive, whose duty is to protect this land, is even one of the potential developers thirsting for water to build. The county mis-zoned much of the forestlands on the mountain, creating the pressure to develop and dramatically increasing its value for the landowners.

The county is content to allow development to proceed relying on illegal wells that will fail and require public water service. The water district is ready to offer that service even before this happens, though the law bars them from doing so, and the right they claim to the water they would provide was gained unlawfully.

At first only a small group of citizens intent on protecting the lake, the mountain and the rural character of the area responded. They were steamrolled by a county government fully intent on having its way. Unbowed, with the support of neighbors and others equally intent on conserving these critical resources, they are now fighting the county government and the water district in the Superior Court of Whatcom County. The court has wrestled with these issues and the significance of this creek before.

On August 8, 1889, the Fairhaven Land Company brought an action in the district court for the County of Whatcom, in then the Territory of Washington, against the Bellingham Bay Water Company. The object of that action was to restrain the company, which was in the business of providing water to the town of New Whatcom for general and municipal use, from intercepting the waters of Whatcom Creek. The creek was the only outlet of Lake Whatcom and provided a clean pure natal habitat to huge salmon the settlers had come to know as “chinook.”

In the descent of the creek to Bellingham Bay, there were a series of falls. Just before the last, which fell some 25 feet to tidewater, the Fairhaven Land Company had a mill dam that propelled a water wheel that drove their sawmill. The natural flow of the creek was insufficient during the dry season to otherwise provide sufficient water to operate the mill.

During the early pendency of the lawsuit, the Bellingham Bay Water Company, nonetheless, laid pipes and mains out on the streets of New Whatcom, and ran its lines up Whatcom Creek to a point about one-half mile from Lake Whatcom, above the mill pond and the lands where the mill was situated, and began taking water for New Whatcom.

At the time New Whatcom, with a population of about 7,000, was a fast growing and important city on Puget Sound. The water provided power to many businesses, as well as being the motive force for electric utilities and satisfying the domestic needs of an ever-increasing number of residents. In 1893, New Whatcom purchased the water system from the Bellingham Bay Water Company and relocated the intakes about one quarter mile into Lake Whatcom, above the head of the creek, about six feet below the surface.

After the city acquired the water system from the Bellingham Bay Water Company, and was substituted as defendant, and the Whatcom County court found for the mill owner, on appeal to the Supreme Court the case became known as The City of New Whatcom v. Fairhaven Land Co. The court record recounts how, subsequent to the city’s purchase of the water company, “each year the necessities of the public and of the inhabitants of the city for supply of water are becoming more important and exacting.”

New Whatcom’s appeal was necessitated by the ruling of the county court that the mill owner, as the earlier water rights holder, and holder of a riparian right at the lowest point in the creek bed, be granted a permanent injunction enjoining the city from diverting any water from the creek without compensating the plaintiff mill owners for any damages that were caused by interruption of the mill’s operation.

On April 8, 1901, the Supreme Court of what was by then the state of Washington affirmed the lower court decision, and, in spite of the potential consequences to the growing city on the shores of Bellingham Bay, asserted that the established principles of water law need to be followed. Some hundred years later, the needs of the city remain, as do those principles of water law.

After New Whatcom acquired the water rights of the Fairhaven Land Company, and as the city by the bay’s growth has continued, new development inside and outside its city limits in the watershed of its reservoir has become the threat to its water supply the mill owners once were. But water law that once constrained the city will now protect its source of water.

It may shock a few (but by now probably very few) to learn that for many, many years Lake Whatcom Water and Sewer District has been providing water to new residential development in the Lake Whatcom Reservoir watershed illegally. They have employed several means. And they have been doing so with a wink and a nod from city and county government and the blind eye of the state.

Without growth, the tax base doesn’t grow. Without more taxes, government can’t continue to provide necessary services the public requires, meet the future financial obligations they have created and brag that they have not raised taxes. With no other basis on which to tax, we grow. It’s a vicious cycle. Growth is taxing the future.

Similarly, only a few will be startled to learn that this ever increasing residential development around the lake, and in its watershed, is the single largest threat to the reservoir and the cause of its listing as an impaired waterbody. The fact that this is still the primary source of drinking water for the city that became Bellingham, and others in Whatcom County, should give pause. It didn’t need to be.

In the 1980s the Department of Ecology (Ecology) closed Lake Whatcom and Whatcom Creek to any new withdrawals in large part to protect the aquatic habitat in the creek. So, you might ask, how is it that the water district was able to continue to provide water, which they withdraw from the lake, or from wells that draw water from the aquifers that feed the lake, and sell this water to new residents? The answer is simple: by ignoring the law. At best it relied on a self-serving interpretation of the law. But let’s not forget Winkin, Blinkin and Nod.

All water belongs to the public. A water right, unlike a property right, is a usufructuary right, that is, a right to use but not possess; somewhat analogous to a license to drive, though you don’t then own the road. And the cornerstone of all our water law is the concept of beneficial use. One cannot gain a right to use water that they have not, or will not reasonably soon, put to beneficial use.

Ecology is the state agency that determines who may use our water. Upon application, they will determine if water is available, that the proposed use will not likely impair existing rights and that it will be put to good use. Seems simple enough. And so it was, before an unabated demand for water made these determinations increasingly controversial. And where there’s controversy, you know there will be litigation.

In the Hubbard v. Ecology case the courts determined the rights to groundwater from an aquifer that fed the Okanagon River were junior to the minimum instream flow established earlier for the river. And in Postema et al v. The Pollution Control Hearings Board the Washington State Supreme Court concluded that where Ecology determines that surface water is not available for additional appropriation, a request to withdraw water from a closed stream or lake or their sources must be denied if the withdrawal would have any, even minimal, effect on the surface water.

Another very important case to understand in relation to these is Department of Ecology v. George Theodoratus, finally decided in July of 1998 by the Washington Supreme Court.

Mr. Theodoratus undertook to develop a residential subdivision near Concrete, Washington. He planned to include some 250 single-family lots and some recreational vehicle sites. Mr. Theodoratus received a preliminary permit from Ecology for the anticipated water needs of the development, which he intended to supply from several wells on the property. Such permits typically contain a deadline to submit proof of use before Ecology issues the final certificate. For a number of reasons, he requested and received several extensions of that deadline.

Theodoratus drilled the wells and laid all the pipes needed to supply the lots, but a depressed market severely slowed sales and construction. In the interim the Supreme Court repeatedly ruled (most notably in Ecology v. Grimes) that actual use, not system capacity, was the measure for determining beneficial use, and hence actual water rights.

And in keeping with these decisions, Ecology changed their practices accordingly. As a result, after numerous extensions, Mr. Theodoratus did not ultimately receive a right to water to serve lots upon which homes had not yet been built, even though the pipes had been laid.

Theodoratus appealed the issue to the Pollution Control Hearings Board, arguing that Ecology’s change in policy was arbitrary and capricious and violated laws governing administrative procedures. Supported by the Washington Association of Realtors, the Washington Water Utility Council and the Building Industry Association of Washington, they argued that public water systems put water to beneficial use differently than other water users, such as industry, farmers or ranchers.

They argued that the capacity standard for water right perfection, often called the “pipes and pumps” rule, was necessary to finance water systems and provide certainty that lot owners would be connected to public water systems. The board agreed and struck Ecology’s restriction, ruling that “pipes and pumps” satisfactorily demonstrated the application of water to beneficial use, even though not yet utilized.

The Superior Court of Thurston County heard the appeal and partially reversed, observing that Ecology had discretion to condition the final water right on the amount of water actually put to beneficial use. But the Superior Court ruled it reasonable, and equally within that discretion, to recognize that the capacity of a public water system’s completed delivery system may establish a right to water for a normal increase in population within a reasonable period of time. Everyone involved appealed.

At the Supreme Court, though the court acknowledged that Ecology had used the capacity standard for nearly 40 years, it ruled this a clearly unlawful means to measure a water right and that Ecology was right to adopt the stricter actual use standard. And the court noted that Ecology must retain the authority to amend water permits, where use was discontinued or otherwise not utilized.

But most importantly the Supreme Court, citing the overwhelming body of case law, ruled seven to two that water rights are only perfected by actual beneficial use, and found no reason to view public water systems any differently than others. They refused to make a distinction between residential development and other uses. They overturned the lower court’s finding that build-out capacity evidenced an even prospective beneficial use.

While the court did not directly address the issue as it applies to municipal water suppliers, its ruling offers little support to the argument that municipal water rights are subject to a different rule. Hence, there have been attempts since to write new law that favors municipalities (and create new loopholes for the growth industry that lobbied them through). They are now matriculating to the court.

But, at this time, cities, water districts and other public water systems with existing water rights will have to continue seeking extensions of the construction deadlines, or risk losing the ability to expand. Read literally, every community’s water right is capped at current usage and it must apply for another permit to add any additional users to the system. If in the interim Ecology should determine that water is not available for appropriation, these requests must be turned down.

Beneficial use is the basis, measure and limit of a water right. Beneficial use ineluctably entails that water, to be beneficially used, be used. This is often characterized as the “use it or lose it” principle, and is often applied in relinquishment actions. Paper water rights deprive others, who may actually be able to put available water to a beneficial use. Paper water rights hardly give anyone the right to drive a species to extinction.

The importance of Theodoratus for those who would prevent the further impairment of Lake Whatcom, and understand our duty to preserve our common wealth for those who will follow, is that, taken with other court rulings, it establishes that paper water right holders may not expand their actual use where associated surface waters are closed, or instream flows are inadequate to sustain fish populations.

Public water systems and water districts are not allowed to increase their withdrawals where they will adversely affect a closed stream or lake, even minimally. This, along with the prohibition of more illegal wells, should be enough to stop residential development in the watershed and protect the lake

Now obviously Ecology must answer — where new withdrawals are not allowed and where permits and certificates they earlier issued unlawfully are not yet put to actual use — why they are not addressing their inappropriate actions.

Whatcom Creek was closed year-round to withdrawal by Ecology (see WAC 173-501) in order to maintain “natural flow” in the creek and provide for the preservation of fish and wildlife.

Requests to use water from the creek, or sources in hydraulic continuity with it, thereafter were to be considered on a case by case basis in consultation with the Washington Department of Fish and Game and local tribes. In other streams in the county some exemptions were allowed, but none were allowed for Whatcom Creek, “including otherwise exempted single domestic use” (including so called “exempt wells.”)

This administrative requirement on Ecology resulted from passage of the Water Resources Act of 1971. The purpose of the requirement is to preserve rivers, lakes and streams “substantially in their natural state. Withdrawals of water which would conflict therewith shall be authorized only in those situations where it is clear that overriding considerations of the public interest will be served.”

We know from the ruling in Hubbard v. Ecology that where waters are tributary to surface waters that have been restricted by Ecology rule, withdrawals from the tributary waters must be subject to the same restrictions. The administrative code requires that when a withdrawal is proposed on a stream that is closed to further appropriations, the department shall deny it unless it can be adequately demonstrated that the proposed withdrawal does not conflict with the intent of the closure.

In following the conclusions of law in Ecology v. Theodoratus, Ecology should inform Lake Whatcom Water and Sewer District, Whatcom County and the city of Bellingham that, because no water is available for increased withdrawal from Whatcom Creek, even though the water district may have unused paper water rights, those rights may not be used until the closure of Lake Whatcom and Whatcom Creek is lifted.

Consequently, neither the city nor the county should accept a letter of intent to serve from the water district as evidence of water availability for a permit to build, or approval to subdivide, because they have no right to withdraw water for new uses. And obviously, no new withdrawal from an existing or proposed well in the watershed can be accepted as proof of water for construction or subdivision.

The water flowing into Whatcom Creek is necessary to provide a healthy habitat for chinook salmon and other fish using the stream. Puget Sound chinook are already listed as threatened. Just as New Whatcom came up against the Fairhaven Land Company’s senior right to water, so too has Lake Whatcom Water and Sewer District come up against the senior right of these fish — “from time immemorial” according to the ruling affirmed by the United States Supreme Court.

It is ironic that these fish, by stopping residential development in the watershed that feeds their natal stream, will preserve the water that spawned Bellingham. If you can appreciate this fact, please help in the legal fight against the county and the water district who choose to ignore this earliest right to Whatcom Creek’s water once again in the Superior Court of Whatcom County.

Please send contributions to finance litigation to protect the mountain, the lake and the creek to: Squalicum Valley Community Association, c/o Darlene Rethlefsen, Treasurer, 2300 Queen Street, Bellingham, WA, 98225. §