North Shore Well Permit: Did the State Ignore Water Law?

The writer settled in Whatcom County in 1969. He remains a student of the law and worldly philosopher who loves this place — and is of the genus irratibile vatum.

Part 1

The right to fish in our state, specifically reserved to the descendants of the earliest inhabitants of these lands, the people who accommodated our predecessors, is a right we share in common with them. And to preserve the value of that right, the Supreme Court of the United States upheld the rule that water must be guaranteed for the fish that have relied on it from time immemorial. This is unequivocally a duty and the public interest. Any discussion of water rights must start from this point.

According to the laws of our state, all water belongs to the people and no use of water should conflict with the public interest. Though this has been a central tenet of the water law for over a century, what will it matter if the law is not respected or enforced?

A latecomer’s “right” to water is a very limited right. If available at all, water is only to use, not to own. You may not waste it, or take it from earlier users. When there isn’t enough water to go around, the earliest right to its use is guaranteed in full before latecomers are considered. And if water goes unused, it again becomes the public’s to offer to others or to preserve their interests.

Let me tell you a story. Actually, it’s recent history. Let me tell you how the public’s interests were ignored and subverted, how the public’s water is being taken from their salmon. Let me tell you how the people we rely on are failing us.

In 1974, Duane Johnson and his wife put in a little well above Lake Whatcom to get water for a mobile home. The water came from an aquifer feeding the lake precious dissolved oxygen in the cycle of rains that fall on the nearby mountains and then seep through the soil and flow under Squalicum Valley. Even though it was a very good well, they needed and used very little water, even later when a second mobile home hooked up to the well. They were exempt from applying for a permit before drilling the well because their use was to be so small.

Then, they were approached by the Lake Whatcom Water & Sewer District (LWW&SD) who offered to buy their well. The Johnson’s were happy to sell a small portion of their land that included the well and at the same time continue to get water from it.

In November of 1976, the water district applied to the Department of Ecology (Ecology) for a water right to supply an estimated 2,080 new residents they predicted would be living along the north shore of the lake by 1996. In October of 1977 Ecology issued the water district a permit to withdraw 360 gallons per minute and 466 acre-feet per year.

Now a permit is not a right, but only permission, in the interim, to withdraw water, put it to good use, and after documenting that use, vest an actual right to continue that use. Only then is a certificate of water right granted, and that right attaches to the land where it has been used.

Any permit holder has a reasonable time to accomplish this, usually five years, longer for municipalities. If the holder fails to put the water to good use, the permit expires and only a right to the amount actually put to use may be granted. This system is primarily to preclude speculation in water and assure that water is fairly allocated to people who can use it.

Time passed, and the development anticipated by the water district didn’t take place. In October of 1984 the water district made its first of many requests for an extension of time to put the water to use. Their rationale was in large part due to the district’s reluctance to, “incur indebtedness because of economic uncertainties surrounding the housing market.” Clearly confidence in their prediction was failing.

Ecology allowed them until October 14, 1987, to complete construction of the water works, and until October 14, 1990, to put the water to full utilization.

In 1987 the Legislature found it necessary to go further than they had in the Water Act of 1971 and not just encourage but mandate protection of rivers, lakes and streams for the protection of fish habitat. The legislation is known as the Minimum Water Flows and Levels Act.

They said, “By December 31, 1993, the Department of Ecology shall, in cooperation with the Indian tribes, and the department of fish and wildlife, establish a statewide list of priorities for evaluation of instream flows. In establishing these priorities, the department shall consider the achievement of wild salmonid production as its primary goal.” [RCW 90.22.060]

In 1988, over in eastern Washington, the Hubbard brothers applied for permission to withdraw groundwater to irrigate an orchard they intended to plant. Ecology undertook to investigate their request, and in the interim gave them a temporary permit.

In April of 1989, some 18 months after the extended deadline, LWW&SD again requested more time and Ecology again allowed them more time, until October 14, 1990, to finish construction and three years beyond that date to put the water to beneficial use.

Even though the public interest was by then unambiguously clear — to protect our lakes and streams and provide water for our fish — Ecology, under Director Christine Gregoire, again amended the permit to allow the water district more time to intercept water feeding the lake.

And the laws weren’t so unclear — Ecology’s discretion to grant an applicant’s request to change a permit required they determine the proposed change would not impair existing rights or be detrimental to the public interest before amending a permit.

At about this time, LWW&SD was in discussions with a number of potential developers with holdings in the watershed on the north shore of Lake Whatcom and Squalicum Mountain. They included David Syre and his Trillium Corporation, Peter Watts of Evergreen View Ventures and Dr. Richard Giesbrecht, who was developing Opal Terrace. [See related agreement from 1990 in LWW&SD Comprehensive Plan.]

Soon the North Shore Water Users Group was established to plan and promote residential development in what the water district called its North Shore Service Area. The group ultimately determined to create a centrally located well that would then be used to service their several projects. The developers would construct the works and transfer them to the water district. In return, LWW&SD would supply water for their projects.

Giesbrecht had a modest well in the area they’d chosen to center their water system. But the well was too small, and the permit that had been granted for the well was insufficient to even begin to support all their potential needs, only 60 gallons per minute and 32 acre feet a year.

With direction from local land use attorneys, Giesbrecht’s application and permit would be assigned to the water district and moved to a replacement well that could be drilled on Giesbrecht’s property without having to amend his permit.

But this did not solve the biggest problem for the developers and the water district. Here was the rub — it had become almost impossible to gain a new right to water in the area because of protections for Lake Whatcom and Whatcom Creek.

Somehow they needed to move the permit from the Johnson’s well, where the water district had a huge opportunity to withdraw water, but still had yet to put any significant amount to use, to the new well. The difficulty in doing this was the several restrictions the Legislature included in the laws governing moving and changing the permits Ecology managed.

Foremost amongst those restrictions was the prohibition in RCW 90.03.380 on moving more than the amount of water already put to use to a well in a different legal subdivision. Though the permit could be moved to the new well and maintain its priority in time, only the amount actually put to beneficial use could be moved. At that point, the two mobile homes had never used more that about a half an acre-foot of water in any year.

And some also felt that an application to amend a permit triggered a new investigation to determine water availability based on current circumstances, not those that obtained at the time the original permit was granted.

In October of 1990, now some 14 years since Ecology first granted permission to begin putting water to use from the Johnson’s well, LWW&SD requested another three months to complete construction of their well and reservoir. In their letter of October 3, the district proposed to move the point of withdrawal from the Johnson’s well to the North Shore Water Users’ new well.

Given the confusing application and a lack of clarity in regards which well it related to, the application was not processed and did not go to public notice. Ecology allowed the water district until January 14, 1991, to complete construction. No extension of time to put the water to use was recorded.

On January 11, 1991, the water district again wrote Ecology to request yet another extension. While claiming “substantial progress” to perfecting this water right, it is clear that the developers responsible for the construction of the water works had not followed through, and an extension to October 14, 1991, was needed. And of course Ecology again amended the permit with no consideration to changed circumstances affecting the request.

On October 9, 1991, LWW&SD submitted a formal application to change the place of diversion for the Johnson’s well to the North Shore Water Users new well.

On October 10, the water district again wrote Ecology, this time to explain that they needed yet another extension of time to complete construction. It seems that the developers had not made the necessary payments to Puget Power to run power to the well. Nonetheless Ecology made yet another accommodation, to February 15, 1992, again with no evidence of any review.

Nonetheless, on October 14, the water district forwarded a commitment letter from Puget Power, and on the basis of that commitment, sought a water right certificate from Ecology without any demonstration that water was being put to beneficial use.

Of almost equal concern to the North Shore Water Users was their ability to perfect a right in any reasonable amount of time. Ecology’s actions around the state, in its efforts to apply the Legislature’s mandate to protect surface waters, was making it abundantly clear that groundwater would be subject to the same restrictions as the surface waters they fed. If challenged, Ecology would be hard pressed to rationalize more time to allow these prospective water users to impair surface waters relied on by fish.

In 1992, after extensive hydrology and establishment of minimum allowable flows in the nearby Okanogan River, Ecology restricted the Hubbard brothers’ use of groundwater tributary to the river. Ecology reasoned that the use of water in hydraulic continuity with the river must be subject to the same restrictions as use of water from the river itself. Whenever instream flow in the river was unmet, the Hubbards could not withdraw groundwater. They appealed Ecology’s ruling to the Pollution Control Hearings Board.

In April of 1994, the board upheld Ecology and the Hubbards appealed again to the Superior Court of Okanogan County.

Having by now found much better land use attorneys in Seattle, the North Shore Water Users were trying to find a crack in the restrictions placed on changing permits. Important to circumventing the public’s interest in protecting the fish was the difference between the federal and state positions regarding the priority in time of the fish’s right.

State law had only set the priority date at the time of adoption of the instream flow rules. It was critical to avoid starting the application process from the beginning and enduring the long delay that would almost certainly result in a denial of a new application that was later than the adoption of instream flows. It was equally important to ignore the ruling of the U.S. Supreme Court. And there were still those who argued that, when amending a permit, new statutory protections of the public interest need be considered.

On July 14, 1994, The Bellingham Herald carried an erroneous notice that Whatcom County Water District 10 (aka LWW&SD) had, in April, applied to change the permit for the Johnson’s well to add an additional point of withdrawal. Now, an additional point of withdrawal is statutorily permitted. Public notice of the same is gratuitous. A change in the point of diversion can be challenged if it impairs earlier rights or is contrary to the public interest.

In the middle of September, 1995, the Superior Court in Okanogan County upheld the ruling appealed by the Hubbard brothers, and they appealed again. Finally in May of 1997 the Court of Appeals upheld Ecology’s rule, and the law was settled. Where there is hydrologic continuity, the use of groundwaters of the state are subject to the same restrictions placed on the use of the associated surface waters. If new withdrawals from Lake Whatcom and Whatcom Creek were prohibited to meet instream flow needs, so were new withdrawals from wells in hydraulic continuity.

Where instream flows have been established to preserve and protect fish, in particular salmonids, how can unperfected rights to groundwater for latecomers be put ahead of the right, from time immemorial, to the sustaining flows of our streams and rivers?

The LWW&SD application to change the point of diversion languished in Ecology’s backlog of water use requests until October 24, 1997, when an attorney for the water district wrote Ecology in an attempt to move things along. At about this same time the North Shore Water Users group was getting anxious to begin development and it was becoming critical that the group clarify the water availability and allocate it amongst their various projects.

In his letter to Ecology, Charles W. Lean of the Perkins Coie law firm (Seattle) acknowledged that the Johnson’s well and the group’s new well were in different legal areas, and lamented that “the happenstance of where a quarter/quarter section line is located should make that much difference in procedure.” But, by law, it did. As it’s said, a miss is as good as a mile. Changes to the permit had to go through the amendment process.

He went on to inform Ecology that, after the permit was moved from the Johnson’s well to the new well, the mobile homes would no longer be served under the permit, that the Johnson’s well would become a so-called exempt well and continue providing water without a permit. So much for the North Shore Water Users’ well being an “additional” point of withdrawal as had been published three years earlier.

The water district’s attorney closed by saying, “The file contains memos from the District to Ecology containing various proposals to move only parts of the permitted rights to the new location. Please disregard those proposals. The District wishes to change the points of withdrawal as outlined in this letter. These changes appear to be consistent with the application which went to public notice.” That’s lawyerese for we can make it “appear” consistent, even though it wasn’t at all what went to public notice in July of 1994.

Not mentioned in Mr. Lean’s letter was the fact that the deadline for demonstrating beneficial use of the water from the Johnson’s well (October 14, 1993) was then some four years past. Ecology has provided records of extensions granted, and there is no request for, or grant of, an extension in those records.

However, Ecology obviously contacted the water district in February of 1997 regarding their failure to demonstrate beneficial use, because the water district referenced that contact and requested and received another extension of time to October 14, 2002. Again, there was no new investigation of the impact of amending this permit to extend the time to perfect a right.

In 1998 the Department of Ecology noted a reduction in dissolved oxygen in the depths of Lake Whatcom and put the lake on its list of impaired water bodies.

In July of 1998, the State Supreme Court ruled that an inchoate right to put water to beneficial use does not entitle a permittee to vest a right under the original permit after application is made to amend the permit. When amending a permit, the entire permit is subject to scrutiny under public interest considerations added to statutes after the original permit was issued. [Ecology v. Theodoratus; 135 Wn.2d 598]

In January of 1999, the State Supreme Court, in R.D. Merrill Co. v. Pollution Control Hearings Board, ruled that beneficial use is not a prerequisite to all amendments of permits where unperfected rights are concerned. Thus, unlike the older water code, which requires beneficial use of water before changes may be approved, RCW 90.44.100 implies some amendments are permissible where water has not yet been applied to beneficial use.

The court however observed that this flexibility is not unlimited. Other statutes also govern appropriation, and the court pointed out that, in particular, RCW 90.03.250 through .340 were incorporated into the groundwater code at 90.44.060, and diligence is required in applying water to beneficial use; requiring accomplishment of the same within a reasonable time is necessary to avoid speculation in water rights.

RCW 90.03.290 clearly states that Ecology has a “duty to investigate the application, and determine what water, if any, is available for appropriation.” They may give permission to use the waters of the state only if water is available and if appropriation “will not impair existing rights or be detrimental to the public welfare.” This had also been affirmed by the Supreme Court the previous July. [Ecology v. Theodoratus; 135 Wn.2d 590] And obviously this included statutes added after the original permit was issued.

The water permit was apparently an important part of LWW&SD discussions with the North Shore Water Users at Trillium headquarters on May 11, 1999 [as noted in the water district’s copy of the Lean letter]. And it’s unlikely that the participants in that meeting weren’t well aware of the Ecology v. Theodoratus ruling. Mr. Lean had been the developer’s attorney. (Ecology was represented by then Attorney General, Christine Gregoire.)

After nearly 10 years since drilling a replacement well, after moving the permit from the adjacent well, a dozen years since the mandate to protect fish habitat in our streams, and now some 23 years without having made any real progress in putting water from the Johnson’s well to anything like the use the water district had proposed, the developers met to agree how water from the well would be allocated amongst them when and if the requested changes to the Johnson well permit were approved.

When an application to amend a permit is filed with Ecology, the department has a duty to investigate the application and determine if any water is available. And when considering amendment to a permit, Ecology is to apply new considerations of public interest that have become law subsequent to the original application for a right to water.

Ecology is to file written findings of fact concerning all things investigated, and if they find there is water available and the appropriation proposed will not impair existing rights or be detrimental to the public welfare, a permit (or a change to a permit) may be granted. These findings and a recommended decision are presented in a Report of Examination prepared by Ecology.

At this point Gregoire had matriculated to attorney general (on the move to run for governor); in that position she directed the attorneys who provided legal advice to her former department (Ecology) and to the permit writers who reviewed applications for water rights and made changes to permits. §

Next Month: 26 Years Later — Ecology Publishes Findings