Board of Directors Meeting December 10, 2015 • 1 pm – 5 pm

Mt. Bachelor Village Resort 19717 Mt. Bachelor Dr.

Bend, OR 97701

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Deschutes River Conservancy Board of Directors – June 2015

John Allen – Forest Supervisor USFS – Deschutes National Forest 63095 Deschutes Market Road Bend, OR 97701 (541) 383-5512 fax-(541) 383-5531 jpallen@fs.fed.us Rick Allen - Jefferson County RL Allen Group, LLC, President 384 SW 5th Street Madras, OR 97741 (541) 475-2220 fax-(541) 475-5662 (541) 815-4380 cell rlallen@rlallengroup.com Ron Angell – At Large 18160 Cottonwood Rd. #721 Sunriver, OR 97707 (541) 593-3242 Ron.Angell42@gmail.com Arya Behbehani – Hydro Portland General Electric 121 SW Salmon St. Portland, OR 97204 Arya.Bahbahani@pgn.com Bob Bell - At Large 56245 Twin Rivers Dr. Bend, OR 97707 (541) 593-1143 bobbonbell@msn.com Bruce Bischof – At Large 747 SW Mill View Way Bend, OR 97702 (541) 389-1292 cell-(541) 480-7560 laborlaw@managementlaw.net Nathan Boddie – Central Cities Organization 52 NW McKay Ave Bend, OR 97701 nboddie@bendoregon.gov Linda (Bo) Bonotto – At Large 885 NW Chelsea Loop Bend, OR 97701 Lbonotto@bendbroadband.com Mike Britton – Irrigation 2024 NW Beech Street Madras, OR 97741 mbritton@northunit.com

Robert A. Brunoe – Confederated Tribes of the Warm Springs P.O. Box C Warm Springs, OR 97761 (541) 553-2051 fax-(541) 553-1994 (541) 980-2898 cell Robert.Brunoe@ctwsbnr.org Doug DeFlitch – Department of the Interior Bureau of Reclamation 1375 SE Wilson Ave., Ste 100 Bend, OR 97702 (541)389-6541 Ext. 226 ddeflitch@usbr.gov Phil Fine - Irrigation North Unit Irrigation Phil Fine Farms 6921 NW Columbia Dr. Madras, OR 97741 (541) 325-1151 plfine34@hotmail.com Chris Gannon – Crook County Crooked River Watershed Council 498 SE Lynn Blvd. Prineville, OR 97754 chris@crwc.info Nancy Gilbert US Fish and Wildlife Service 63095 Deschutes Market Road Bend, OR 97701 (541) 383-7146 nancy_gilbert@fws.gov Kyle Gorman – State of Oregon Oregon Water Resources Dept. 1128 NW Harriman Street Bend, OR 97701 (541) 388-6669 Kyle.G.Gorman@wrd.state.or.us Ellen Grover – Secretary, Non Voting Karnopp, Petersen LLP 360 SW Bond St., Ste 400 Bend, OR 97702 (541) 382-3011 fax-(541) 388-5410 ehg@karnopp.com Jay Henry – Vice Chair (541) 460-0460 cell jay_henry@hotmail.com Craig Horrell – Irrigation Central Oregon Irrigation District 1055 SW Lake Ct. Redmond, OR 97756 (541) 548-6047 cell (541) 788-2003 chorrell@coid.org

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mailto:jpallen@fs.fed.usmailto:rlallen@rlallengroup.commailto:Arya.Bahbahani@pgn.commailto:laborlaw@managementlaw.netmailto:nboddie@bendoregon.govmailto:mbritton@northunit.commailto:Robert.Brunoe@ctwsbnr.orgmailto:ddeflitch@usbr.govmailto:richard.macy@yahoo.commailto:chris@crwc.infomailto:Kyle.G.Gorman@wrd.state.or.usmailto:ehg@karnopp.commailto:chorrell@coid.org

Julie A. Keil - Chair (503) 703-7033 cell Julie.Keil@davincid.com Michael LaLonde – At Large Deschutes Brewery, Inc. 901 SW Simpson Ave. Bend, OR 97702 (541) 385-8606 mlalonde@deschutesbrewery.com Jim Manion– Tribal Warm Springs Power Enterprises P.O. Box 960 Warm Springs, OR 97761 (541) 553-1046 fax-(541) 553-3436 (541) 325-1464 cell j_manion@wspower.com Jade Mayer (Treasurer) – At Large Brooks Resources 409 NW Franklin Ave. Bend, OR 97701 (541) 382-1662 fax-(541) 385-3285 jade@brooksresources.com Gregory McClarren - Environment 65491 Bay Breeze Rd North Bend, OR 97459 (541) 923-6670 cell (541) 633-0228 grmacmail@gmail.com Damien Nurre - Recreation & Tourism 906 NE 11th St. Bend, OR 97701 (541) 323-3007 (541) 390-6697 cell damien@deschutesflyfish.com John Shelk – Timber Ochoco Lumber Company P.O. Box 668 NE Combs Flat Rd. Prineville, OR 97754 (541) 447-6296 fax-(541) 447-8992 (541) 410-4316 cell john.shelk@ochocolumber.com William Smith – Land Development William Smith Properties Inc. 15 SW Colorado Ave. Bend, OR 97702 (541) 382-6691 fax-(541) 388-5414 (541) 480-0357 cell bill@wspi.net Mike Tripp 1020 NW Foxwood Bend, OR 97701 (541)312-2193 mtripp@bendcable.com

Ted Wise – ODFW Oregon Dept. of Fish & Wildlife 61374 Parrell Rd. Bend, OR 97702 (541) 388-6363 ted.g.wise@state.or.us Alan Unger – Deschutes County 1300 NW Wall St., Suite 200 Bend, OR 97701 (541) 388-6569 (541) 419-0556 cell alanu@co.deschutes.or.us

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mailto:Julie.Keil@davincid.commailto:mlalonde@deschutesbrewery.commailto:j_manion@wspower.commailto:jade@brooksresources.commailto:grmacmail.@gmail.commailto:damien@deschutesflyfish.commailto:john.shelk@ochocolumber.commailto:bill@wspi.netmailto:mtripp@bendcable.commailto:ted.g.wise@state.or.us

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DRC Board and Committee Dates for 2016

Thursday, February 11th: Communications 11AM – 12:45PM, Program 1 – 4PM Friday, February 12th: EXEC 9 – 11AM, F&A 11AM – 12PM Wednesday, March 2nd: Board Retreat 8:30AM – 5PM, Board Dinner: 5:30PM - 7:30PM Thursday, March 3rd: Board Meeting 9AM – 12PM Thursday, May 12th: Communications 11AM – 12:45PM, Program 1 – 4PM Friday, May 13th: EXEC 9 – 11AM, F&A 11AM – 12PM Wednesday, June 8th: Board 1 – 5PM Thursday, August 11th: Communications 11AM – 12:45PM, Program 1 – 4PM Friday, August 12th: EXEC 9 – 11AM, F&A 11AM – 12PM Wednesday, September 7th: Board 9AM – 2PM Thursday, November 10th: Communications 11AM – 12:45PM, Program 1 – 4PM Friday, November 11th: EXEC 9 – 11AM, F&A 11AM – 12PM Wednesday, December 7th: Board 1 – 5PM

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AGENDA Board of Directors Meeting

1:00 PM – 5:00 PM, Thursday, December 10, 2015 Mt. Bachelor Village, Bend

1:00 1. Introductions (Julie) a. Approve Board Meeting Minutes (Tab 1) b. Board elections:

i. Craig Horrell, At Large

1:15 2. Finance & Audit (Hoyt) (Tab 2)

a. Review FY15 Financials, unaudited

1:45 3. Strategic Issues (Bea, Tod, Kate) (Tab 3) a. Deschutes River Campaign b. DRC Role in Basin Processes

i. Potential Litigation ii. Habitat Conservation Plan

iii. DRC Strategic Plan iv. Deschutes Basin Study

3:00 BREAK 3:15 4. Initiative Updates (Tab 4)

a. Leasing and Groundwater Mitigation Bank (Gen) (Action Item: 2016 Program Approvals)

b. Crooked (Brett) i. NUID Water Supply (COID West F Lateral)

ii. Crooked River Collaborative Water Security and Jobs Act c. Whychus (Zach)

i. TSID Piping d. Deschutes (Kate)

i. Basin Study ii. TID Feed Canal piping

4:30 5. Development Report (Bea) (Tab 5) 5:00 ADJOURN

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Meeting Notes

Board of Directors Meeting 9:00 AM – 2:00 PM, Thursday, September 10, 2015

Sisters Fire Hall

Board Members Attending: John Allen, Ron Angell, Arya Behbehani, Bruce Bischof, Linda (Bo) Bonotto,

Bobby Brunoe, Suzanne Butterfield (proxy for Mike Britton), Douglas DeFlitch, , Phil Fine, Chris Gannon,

Kyle Gorman, Ellen Grover, Jay Henry, Julie Keil, Jim Manion, Gregory McClarren, Michael Tripp, Alan

Unger, Ted Wise

Board Members Absent: Rick Allen, Bob Bell, Nathan Boddie, Nancy Gilbert, Craig Horrel (Ex Officio),

Michael LaLonde, Jade Mayer, Damien Nurre, John Shelk

Staff Attending: Bea Armstrong, Kate Fitzpatrick, Brett Golden, Tod Heisler, Marisa Hossick, Gen Hubert,

Zachary Tillman, Hoyt Wilson, Kelsey Wymore

Guests Attending: Carolyn Chad, Jeremy Giffin, John Horvick (DHM), Adam Sussman, Pamela Thalacker,

Owen McMurtrey, Jeff Weiland, Shon Rae

1 Introductions

Board members, staff and guests introduced themselves.

1.1 Approve Board Meeting Minutes

Action Item: Gregory McClarren moved to approve the June Board Meeting minutes, Jay Henry

seconded. Passed unanimously

1.2 Board Elections

The following Board Members were up for election or re-election.

John Shelk (Timber) Bill Smith (Land Development) Phil Fine (Irrigated Agriculture) Damien Nurre (Recreation/Tourism) Gregory McClarren (Environment) Jim Manion (Confederated Tribes of Warm Springs) Rick Allen (Jefferson County)

Action Item: Arya moved to elect all seven DRC positions as a slate, Kyle second. Passed

unanimously

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2 Whychus Initiative

2.1 2015 Activities Update

Zach updated the Board on the status of the Whychus Initiative. He reviewed longitudinal stream flows

in Whychus Creek and the tools that DRC uses to restore stream flows in the creek.

Zach updated the Board on activities and conditions in Whychus Creek, including a fish salvage

associated with our partners’ floodplain restoration project, numerous tours, and drought conditions.

This year had a very low snowpack but relatively normal precipitation. Zach commented on the diurnal

fluctuations in the creek and the potential to shift from focusing on maintaining daily average flows to

maintaining instantaneous flows.

Zach commented that staff are advocating with Three Sisters Irrigation District for a minimum

instantaneous flow agreement of 33 cfs during a normal year and 20 cfs during a dry year.

The Board discussed the potential for the installation of automated system to eliminate extreme low

flow events associated with management difficulties presented by diurnal fluctuations. The district and

the DRC are exploring this opportunity. The Board discussed whether diurnal fluctuations provide for

stream function. To some extent, they do, but extreme low flow events are harmful and extend beyond

natural diurnal fluctuations.

2.2 TSID Piping Phase 7 (Proposal)

Zach reviewed the Three Sisters Irrigation District Main Canal Phase 7 piping project. The project will

restore 564 acre feet of 1895 water rights at a rate of 1.33 cfs. The project will cost $1.8M with the

irrigation district contributing approximately 40% of those costs from in-kind contributions. The Board

discussed the reliability of 1895 water rights. Zach commented that stream flows typically decline

enough late June that 1895 water rights are less than 100% met instream. Zach highlighted the water

rights reliability table included in the Board packet.

The Board discussed the priority dates of water conservation projects with Three Sisters Irrigation

District. Our projects yield 1895 water rights, but the district retains junior, 1895, and senior water

rights. A blend of junior, 1895, and senior water rights would yield slightly less wet water instream than

the same rate and volume of 1895 rights.

The Board asked about opportunities to acquire additional senior water rights from non-district parties.

Out of the 20 cfs of senior water rights in the creek, the district retains 10 cfs, the DRC has acquired 4

cfs, and private parties hold 6 cfs. The DRC expects that the City of Sisters, one of those private parties,

will ultimately transfer those water rights instream for mitigation.

The Board reviewed the Program Committee’s recommendations and concerns. A Committee member

commented on the concern that we measure our progress based on legally protected stream flow

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rather than water present instream due to current voluntary management practices. A Board member

asked staff to be clear about how reliable 1895 (or other) water rights are when communicating with

funders and other parties. A Board member suggested that DRC create a chart showing seasonal

reliability of 1895 water rights under various stream flow conditions to help demonstrate the remaining

work in Whychus Creek.

The Board discussed the costs of developing and installing an automated SCADA system on TSID’s

diversion. They suggested that it could be a cost effective restoration tool.

Action Item: Bobby Brunoe moved to approve the Three Sisters Irrigation District’s Main Canal

Piping Phase 7. Bo Bonotto seconded. Passed unanimously.

3 Deschutes River Campaign Project

Bea reminded the Board of the desired outcomes of the Deschutes River Campaign. She presented a list

of potential funders. She explained how the Campaign will contribute towards the DRC’s ongoing

viability and its ability to achieve its mission.

Bea reviewed the projected timeline and outcomes of Basin Study. In particular, one of the likely

outcomes is an action plan with a large unmet need for funding (2018). Bea explained how opinion

research (phase 1) will strategically situate the stakeholders to communicate with, and enroll the public,

potentially for an eventual bond measure.

DHM representative introduced himself and DHM’s public opinion research bona fides. He explained the

tools and methodology used by DHM to measure public opinion. He referred to DHM’s work with the

Willamette Partnership to illustrate their experience in working on water related issues.

A board member asked about timeframe for public opinion research – Fall/Winter 2016-17

A board member asked how sampling would be conducted – it was explained that margin of error is not

determined by sample size. Current plan is to sample 600 people.

A board member asked about how potential Endangered Species Act litigation would affect public

opinion research; it wouldn’t necessarily influence timing of opinion research, but would influence the

kinds of questions that would be asked.

A board member asked who determines the questions to be asked – it would be an iterative process in

collaboration with the stakeholder group. The ultimate decision lies with the Basin Study

Communications sub-group.

A board member expressed discomfort that the DRC would be determining the direction of the public

opinion research, and that perhaps a broader group should be in charge. It was clarified that the specific

questions would be shared

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A board member asked how stakeholders outside of Deschutes, Crook & Jefferson counties would be

incorporated into the research – initial research would focus on existing research/knowledge, and then

expand outwards.

A board member expressed skepticism in both the Mirror Pond stakeholder involvement & OSU

Cascades stakeholder involvement processes and asked how DHM’s research would be different. DHM’s

representative noted that those surveys were not representative/scientific/random.

A board member noted that surveys can be limited in that they are a snapshot in time. Conversely,

water politics in CO are very dynamic right now. How can DHM’s work be useful in real time – values

tend to be very stable, even when opinions change. DHM has also used online engagement tools.

A board member expressed concern about lack of understanding of the DRC Board’s role in the process.

Is DHM’s work subject to DRC Board approval? Bea was asked to present more clarity on the process,

and how decisions would be made.

Bea listed the members of the DRC’s Communications Committee to illustrate the diversity of opinions.

She presented the timeline for DHM’s research.

A board member asked if the timeline could be sped up (i.e. faster than 6 months) – Bea explained the

need for diligence to ensure accurate results and community buy-in.

A board member noted that the DRC Board & sub-committee meeting cycles are not timed

appropriately to ensure the opinion research is conducted in an efficient manner – Bea proposed that

the Communications Committee be the venue for approval of various parts of the opinion research

process. A board member suggested that both the Communications and Executive Committee be

involved.

A board member suggested that we let DHM “do what they do”, without being micro-managed by

various DRC interests. Other participants concurred, but also suggested how local input would be

incorporated.

A board member noted that if results are not made public, then the value/relevance of those results

might be compromised.

4 Crooked Initiative

4.1 Crooked River Collaborative Water Security and Jobs Act

Doug DeFlitch (Reclamation) gave an update on the Act. He noted that:

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Movement of the Wild & Scenic Boundary is expected to be released by early 2016. This summer, Reclamation released 50 cfs from Prineville Reservoir (as measured at the gage in

Prineville) for fisheries purposes.

Water accounting scenarios are being developed in cooperation with USFWS & NMFS, BOR for reservoir management and fish releases. Reclamation expects to release these scenarios in

October of 2015.

Reclamation is also working with OWRD to add additional characters of use (fisheries and mitigation) to their permit to store water in Prineville Reservoir.

4.2 North Unit Water Supply Program

Brett Golden reviewed the North Unit Water Supply Program and the 1:1 wet water exchange principle

espoused by the program. Brett reviewed progress to date in the program. Phases 1 and 2 of the

program have restored approximately 9,000 acre-feet out of a total of 22,250 acre-feet to be restored

through the program.

Brett reviewed progress of Phase 4 of the program, piping Central Oregon Irrigation District’s West F

lateral. He reviewed the financing plan for Phase 4, with the Pelton Water Fund contributing up-front

bridge capital and the Oregon Watershed Enhancement Board and National Fish and Wildlife Program

investing in the project upon Final Order.

The program protects the conserved water restored to the Crooked River through each phase of the

program in addition to the water that would have been present in the river the absence of the program.

The implementation of the Crooked River Collaborative Water Security and Jobs Act will change the

amount of water flowing upstream from North Unit Irrigation District’s pumps. The Act will affect the

amount of water present in the river and potentially affect the management agreement required to

ensure 1:1 exchange of wet water

Brett explained that DRC and North Unit Irrigation District have signed a Memorandum of

Understanding stating that the management agreement would be changed to maintain the principles of

the program.

Tod asked what needs to happen to give DRC’s funders the needed certainty to continue funding the

program. Brett indicated that Reclamation’s Management plan would provide that certainty, and that

he hoped the plan would be completed within the next 6 months.

Brett clarified that the West F project is fully funded by the Pelton Water Fund right now, and that the

Pelton Water Fund bears the risks associated with the Act and the program.

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4.3 McKay Creek Water Rights Exchange

Kate reviewed the McKay Exchange concept. She also reviewed why McKay is prioritized under the

reintroduction effort and where the flow-related needs on McKay Creek are. She reviewed project

status (renewed MOU with Ochoco Irrigation District updating engineering, financing plan coming soon).

She indicated phase 1 could be implemented within either 1 or 2 years, with 3-5 phases total

($5,000,000 total cost).

A Board Member asked who the engineering contractor was – Newton Consultants.

1. Deschutes River Initiative a. Oregon Spotted Frog (OSF) b. 60-day Notices of Intent to Sue c. Habitat Conservation Plan

Kate reviewed the OSF’s listing on the Endangered Species List and subsequent Notices of Intent to Sue

(from Center for Biological Diversity & Water Watch of Oregon). Kate reviewed the DBBC/Prineville HCP

process. A DBBC representative passed out a Fact Sheet related to the DBBC’s proposed OSF

Conservation Measures.

Tod talked about the strategic risk to DRC related to potential ESA litigation and how this could disrupt

the parallel Basin Study process and erode the trust of stakeholders. He recalled that the DRC was

founded to avoid the kind of conflict that litigation would cause.

A board member asked if litigation could be delayed to allow collaborative solutions to play out. Another

board member suggested that local environmental interests would have to have a seat at the table (in

the HCP process) as an intervener. DRC Board legal counsel explained that the DRC Board would need to

determine whether DRC would take a formal role in the litigation process and suggested that informal

collaboration is the role DRC is best suited for. Brett asked about the timeframe in which a party may

choose to intervene. Phil Fine laid out the dates by which a formal lawsuit might be filed. A board

member suggested DRC Board action at this meeting, given that the timing of litigation will occur prior

to the next DRC Board Meeting. Another board member asked whether DRC could intervene on behalf

of the defendants. DRC Board legal counsel expressed concern about DRC participating in an official

capacity in the HCP process, either as an intervener or amicus. A board member asked if Karnopp-

Peterson could advise DRC Board on how the likely timing of litigation would fit into the DRC Board

cycle. A board member suggested that DRC be the liaison between local stakeholders and the litigants. A

board member advocated that DRC be present at legal proceedings to make sure the court is aware that

collaborative interests are on the ground. Gregory McClarren recalled when conservation groups

intervened on behalf of the federal government in the Metolius. It was clarified that an amicus role does

not make you a ‘party of interest’ in litigation. Kyle Gorman noted that OWRD is in consultation with

Department of Justice on the potential role and risks of State involvement in the litigation. A board

member pointed out that judges in federal proceedings have absolute authority to make decisions, so

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DRC should be pro-active in understanding risks and opportunities of involvement, and lay out options.

Tod suggested forming a sub-committee of the DRC Board (Ellen Grover, Bruce Bischoff, Ron Angell,

Julie Keil) be convened to address this issue. Bobby Brunoe agreed that a hand-picked team from the

DRC Board be convened to ensure that the DRC’s work not be eroded by third party litigation.

5 Cross Basin Initiatives

5.1 Upper Deschutes Basin Study

Kate reviewed the four elements of the Basin Study and listed the 36 members of the Work Group. Kate

reviewed the study elements and presented the conceptual model for modeling water management

practices. Kate introduced the study team. Kate stressed that the goal of the Basin Study is to develop a

water management plan that is fundable and aligns with other basin processes.

It was clarified that a long term water management plan is not a discreet deliverable of the Basin Study.

6 Finance & Audit

6.1 Review 3rd Qtr FY15 Financial Statements

Hoyt reviewed the June 30, 2015 Balance Sheet. He explained that DRC has a strong cash or working

capital position and noted in the change accounts receivable from year-end 2014 due to funds received

for the Sokol Conserved Water acquisition. Hoyt explained that the DRC is meeting its target for

unrestricted reserves of 90% of annual fixed costs.

Hoyt reviewed the June 30, 2015 Financial Statement noting that the combined NUID phase 4 and TSID

phase 6 projects came in $150,000 under budget.

Hoyt reviewed and compared DRC revenue sources (2013-15). Hoyt noted that Pelton’s contributions

may be offset in the future by retroactive investments by NFWF & OWEB in both TSID phase 6 and NUID

phase 4.

6.2 Review and approval of FY16 Budget

Hoyt explained that staffing would remain at 10.3 FTE’s, with a 2.5% increase in wages. It is anticipated

that health insurance costs will increase roughly 5%.

Hoyt noted that the FY16 budget is significantly lower than the FY15 budget, largely due to fewer large

conservation projects.

Hoyt reviewed the Program, Marketing/Development and Administration budgets separately.

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A board member asked about why the FY16 budget is smaller than previous years, and what is the

explanation -DRC is moving gradually away from major, one-off capital projects towards planning etc.

Action Item: Gregory McClarren moved to approve FY16 budget, Jay Henry second – passed

unanimously

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Meeting Notes

DRC Program Committee Meeting

November 5, 2015, 1:00 to 4:00 PM

Bend Park and Recreation District Administrative Office Riverbend Community Room 799 SW Columbia, Bend, OR

Board Members Attending: Mike Britton, Nancy Gilbert, Craig Horrell, Gregory McClarren, Mike Tripp, Kyle Gorman, Ted Wise, Julie Keil, Guests Attending: Jeremy Giffin, Mike Kasberger, Owen McMurtrey, Jeff Perreault, Kenneth Rieck, Staff Attending: Brett Golden, Tod Heisler, Gen Hubert, Zach Tillman, Bea Armstrong, Kate Fitzpatrick, Kelsey Wymore

1. Introductions

2. Cross-Initiative Programs a. Annual Water Leasing Program (action item - 2016 proposal)

• Gen introduced the AWLP by reach, cfs leased and Program budget. Staff is recommending continuation of the Program for FY16. Gen showed what portions of the program are funded through groundwater mitigation. Gen introduced the AWLP budget by line item and by funding source.

• A board member asked if the Avion Blue Water portion of the proposed budget was fixed or variable. It is variable.

• Gen highlighted some of the challenges to leasing (e.g. drought, property sales, HCP politics, in-district acreage limits), and strategies for meeting those challenges (e.g. long term leasing, keeping cost below $10/acre-foot). Gen also highlighted the years when less than 5,000 acres were leasing instream.

• A board member asked if low payments (to landowners) were limiting leased acreage. Gen pointed out the in-district acreage limits. Craig Horrell (COID) pointed out that in 2012, a very large account that had previously been leased was transferred permanently instream, making it difficult to boost leased acreages since then.

• A board member asked if in-district acreage limits were based on geographical or operational difficulties of delivering water on different canals/laterals.

• A board member asked which district do not have in-district acreage limits – TSID, TID • A board member pointed out that the AWLP is extremely cost effective at less than one

hundredth the cost of large scale conservation projects.

Board Book Page 19

http://www.bendparksandrec.org/Parks__Trails/Facility__Park_Reservations/Riverbend_Community_Room/

• Craig Horrell (COID) mentioned that there has been a resurgence of urbanizing water rights and that the district is interested in resuming permanent instream transfers (for mitigation). A board member suggested that there be more permanent instream transfers.

Action: Recommend taking DRC AWLP to DRC Board for approval of FY16 AWLP Program, pricing and budget – The Committee so recommended.

b. Groundwater Mitigation Bank (update - 2015 review; action item - 2016 price proposal)

• Gen introduced the Groundwater Mitigation Program and the DRC’s Groundwater Mitigation Bank (GMB). Gen provided information on mitigation demand (90% municipal and quasi-municipal), however 40% DRC temporary credit sales are for irrigation. The DRC sells 600-700 credits/year, which provide approximately 35% of the AWLP budget, but only utilizes 15% of acres.

• Gen explained how temporary mitigation credits are priced to cover landowner payments, mapping, fees, staffing etc. Gen proposed to raise the price of credits from $105 to $120 per credit. Gen also proposed to establish a $250 reinstatement fee for buyers who have been non-compliant.

• A board member asked how often non-compliant groundwater users require enforcement. Kyle Gorman (OWRD) explained that it is rare, but that OWRD follows enforcement protocol when necessary.

• A board member asked if aquifer recharge has ever been used to generate mitigation credits – not yet.

• A board member asked if there is a pathway for temporary credit buyers to purchase permanent credits – there has been in the past through the DWA Bank, but not currently.

Action: Recommend taking to DRC Board for approval of the GMB and pricing changes for FY16 – The Committee so recommended

c. Basin Study (update)

3. Deschutes Initiative a. Upper Deschutes River

i. Basin Study – Upper Deschutes River pieces (update) • Kate introduced the purpose, history and timeline of the Basin Study. She mentioned

that restoring Upper Deschutes flows and generating municipal supply, while maintaining or increasing reliability for agriculture, will be areas of focus. She outlined elements of the work plan and the contractors that are under contract to complete them.

• Craig Horrell (COID) said that COID will spend $450k on its district improvement plan through match funding.

• Kate mentioned that outreach activities are underway to inform stakeholders around the basin.

Board Book Page 20

• A board member asked about the timing of climate change projections – Kate explained that there will be three different climate scenarios.

• Kate outlined the Upper Deschutes Ecological Assessment, including goals, metrics, progress and timeline. Kate said the Final Report is expected in October, 2016.

• Kate outlined the water supply options that are/will be explored through the Basin Study (e.g. conservation assessment, reservoir optimization, transactions, moving water between uses etc.)

ii. Potential litigation & Habitat Conservation Plan (discussion)

• Tod pointed out the competing processes currently underway (Basin Study, Habitat Conservation Plan, potential litigation and DRC Strategic Plan) and how they could potentially disrupt DRC activities and overall relevance to managing water in the Deschutes Basin.

• Tod listed the DRC’s options for level of involvement in the HCP/litigation process (do-nothing, influence parties, amicus status, intervener status). A board member pointed out that DRC represents both the conservation and out-of-stream interests and as such, involvement could likely alienate certain DRC board members. A board member discussed the inherent conflict of involvement in the HCP process, to DRC board members who represent public agencies. A board member discussed how involvement could affect support for the DRC from the broader public. A board member suggested that the DRC’s role is to “educate without harm”. A board member asked if there are informal channels for DRC staff to be more informed on the HCP/litigation process.

b. Tumalo Creek

i. Tumalo Feed Canal piping (update) • Ken Rieck(TID) introduced TID’s history, infrastructure, water sources, water rights and

agricultural production. Ken showed 2015 instream flows, during which TID was able to leave 15 cfs instream through the drought.

• Ken showed an aerial photograph in which you could see the effects of canal seepage from the Tumalo Feed Canal (TFC). Ken said the TFC originally leaked 40-60 cfs.

• Ken said Bend Feed Canal (BFC) is completely piped and phases 1-3 of the Tumalo Feed Canal (TFC) are complete. Phase 4 is fully funded and construction will begin in December, 2015 ($1.1M for 3,400 feet of pipe – total cost of $2.1M – it will conserve 1.25 cfs in Tumalo Creek and 333.8 AF in Crescent Creek). There will be 3.8 miles of open canal left once phase 4 is complete. Ken said if TID is 100% piped, they could protect as much as 35 cfs instream in Tumalo Creek.

• Ken said TID is applying for BOR Water Smart, SB:839 and OWEB grants for phase 5. TID would be interested in partnering with the DRC to complete TFC piping.

• Ken and Tod discussed the efficiencies of becoming 100% piped: complete elimination of unneeded diversions, which will result in greater amounts of water instream through the elimination of not only seepage, but overflows. A participant asked if TID’s board/patrons were opposed to voluntarily giving up water – they understand that it’s unacceptable to waste Tumalo Creek water when they can become more efficient.

Board Book Page 21

ii. Mediation (update)

• Tod described DRC’s involvement in the City of Bend/TID/Tumalo Creek mediation process. He said no settlement was reached, but that remaining involved was more helpful than doing nothing.

4. Crooked Initiative

a. Crooked River Collaborative Water Security and Jobs Act (discussion) • Kate reviewed the history and outcomes of the legislation. She outlined the remaining

uncertainties/disagreement around exactly how un-contracted storage in Prineville Reservoir will be put to new uses. A board member asked about the nature of DRC’s interactions specifically with Water Watch. A participant asked if there are other environmental interests that are involved – Mike Tripp (Trout Unlimited) is in discussions with TU’s legal representation to develop an official position.

• A board member suggested involving the legislative staff who were involved in the passing of the legislation – perhaps Merkeley/Walden could facilitate a mediation. Another board member agreed.

b. North Unit Water Supply Program (update)

• Brett updated the Committee on the NUID Water Supply Program. He said the West F has been constructed. He explained the original intent of the program to protect conserved water in the lower Crooked River, in addition to the flows that would have been instream if the Program were not in place (i.e. base flows). He explained that the legislation changed base flows, creating challenges to the minimum flow agreement for the West F conserved water application. Brett highlighted the need to preserve the 1-to-1 wet water exchange concept that underpins the investment of conservation funds in the Program. Tod & Brett plan to attend the next NUID board meeting (11/17) to discuss this issue.

c. McKay Creek Water Rights Exchange (update)

• Kate explained that the engineering is in the process of being updated and that landowner outreach will be continued in the future. OID and BOR are working out the details of expanding the district’s boundary to include the McKay lands.

5. Deschutes River Campaign Project (discussion) • Bea informed the Committee that the PR firm hired is working to establish a baseline for

public sentiment with regard to water management. • Bea explained that the scope is being revised to focus specifically on Deschutes County. • Bea plans to work with DBBC to survey opinion within the irrigation community. • A board member voiced support for the reduced scope. Another board member said

that Jefferson County should be included. Another board member said Crook County should be included.

Board Book Page 22

• A board member expressed concern that the reduced scope has the potential to result in a prescription that is directive, as opposed to collaborative.

• The Committee discussed to what extent the DRC’s goals require influencing public opinion in areas other than the main stem Deschutes River. Tod suggested including NUID, since they are a major user of Deschutes River water.Bea confirmed that NUID should be included.

• Bea said that the decision to narrow the scope should be revisited and that she would discuss it the next day with the Executive Committee.

Board Book Page 23

Board Book Page 24

MEMORANDUM DESCHUTES RIVER CONSERVANCY

To: DRC Board of Directors From: Finance & Audit Committee

Attending: Bill Smith, Jade Mayer, Tod Heisler, Bea Armstrong, and Hoyt Wilson.

Date: November 6, 2015, 11:00 a.m. to 12:00 p.m. Re: Finance & Audit Committee Meeting The Committee discussed the following agenda items and any action item is noted within the agenda item:

1. Review of 4th Quarter Financial Statements 11:00 – 11:15 Hoyt presented the 3rd Quarter financial Statement beginning with a review of the balance sheet, noting that both assets and liabilities are very close to prior year numbers. The only notable difference is the decrease in accounts receivable and accrued expenses due to fewer year end water transactions. There is one pending water transaction on the Three Sisters Irrigation District’s Phase 5 piping project that could bring those numbers closer together and will be posted as a year end adjustment as soon as the transaction is finalized. The Financials demonstrate the organization is at 80% of budgeted expenditures at year end. Hoyt explained that the shortfall is due to projects coming in under budget for the year.

2. Marketing and Development 11:15– 11:30 Bea discussed the final marketing and developing performance for the fiscal year, noting that she was under her revenue goal but also under her budgeted expenditures. She reviewed her list of prospects with the committee and explained her strategy in achieving her fiscal year 2016 goals which include fundraising for the Deschutes River Campaign.

3. Unrestricted Reserves/Fixed Cost Coverage 11:30– 11:40 The organization has been able to maintain a consistent reserve balance that complies with the DRC’s Unrestricted Net Asset Balance Policy. The target for reserves is $865,000 using fiscal year 2016 budgeted expenditures. Current reserves are $980,000 providing a projected $115,000 surplus in reserves next year.

4. Deschutes River Campaign Project 11:40– 11:55 Bea discussed the status of the DRC’s contract negotiations with DHM to provide market intelligence services for the Deschutes River Campaign Project. She expressed her concern in committing the organization to a large contract while relying on future fundraising to pay for the project. The committee discussed the option of using reserves to provide bridge funding of the project. Bill Smith moved to authorize DRC management to enter into a contract with DHM with the goal of raising the necessary funds next year. He proposed authorizing the use of reserves to fund the contract and any gap in annual fundraising. The committee approved the motion unanimously.

5. Final Comments 11:55– 12:00 Bea discussed her philanthropic strategies and some insights she has gained in seminars.

The meeting was adjourned at 12:00 p.m. Board Book Page 25

Sep30,2015 Sept30,2014 $ChangeASSETS

CurrentAssetsChecking/Savings

CASH 1,046,087 1,053,229 ‐7,141TreasuryCashAccount‐ASAP 0 34,165 ‐34,165

TotalChecking/Savings 1,046,087 1,087,393 ‐41,306

AccountsReceivableAccountsReceivable 314,300 647,143 ‐332,843

TotalAccountsReceivable 314,300 647,143 ‐332,843OtherCurrentAssets

AccruedRevenues 9,864 61,786 ‐51,922PrepaidExpense 18,269 17,636 633

TotalOtherCurrentAssets 28,133 79,422 ‐51,290TotalCurrentAssets 1,388,520 1,813,958 ‐425,438FixedAssets

NetFixedAssets 7,725 9,257 ‐1,532TotalFixedAssets 7,725 9,257 ‐1,532OtherAssets

InventoryAsset 219,020 219,020 0OtherAssets‐long‐term 5,269 5,269 0

TotalOtherAssets 224,289 224,289 0

TOTALASSETS 1,620,534 2,047,505 ‐426,971

LIABILITIES&EQUITYLiabilities

CurrentLiabilitiesAccountsPayable

AccountsPayable 44,649 47,257 ‐2,607TotalAccountsPayable 44,649 47,257 ‐2,607OtherCurrentLiabilities

AccruedExpenses 14,580 457,275 ‐442,695Shorttermliab‐prepayments 38,122 38,122 0Accruedbenefittime 42,592 45,964 ‐3,372CurrentPortionofLTDebt 2,097 1,542 555PayrollLiabilities 60,035 59,779 256DeferredRevenue 332,476 231,839 100,637

TotalOtherCurrentLiabilities 489,903 834,521 ‐344,619TotalCurrentLiabilities 534,552 881,778 ‐347,226LongTermLiabilities

LoansPayable 105,118 107,215 ‐2,097TotalLongTermLiabilities 105,118 107,215 ‐2,097

TotalLiabilities 639,670 988,993 ‐349,323Equity

UnrestrictednetassetsOperating 674,570 741,380 ‐66,810BoardDesignated 232,861 232,861 0

Totalunrestricted 907,431 974,241 ‐66,810Temprestrictednetassets 73,433 84,270 ‐10,838

TotalEquity 980,864 1,058,512 ‐77,648

TOTALLIABILITIES&EQUITY 1,620,534 2,047,505 ‐426,971

DESCHUTESRIVERCONSERVANCYSeptember30,2015

BalanceSheet

Board Book Page 26

FY15

Budget

FY15‐YTD

9‐30‐2015

%to

Bud

FY15

Budget

FY15‐YTD

9‐30‐2015

%to

Bud

FY15

Budget

FY15‐YTD

9‐30‐2015

%to

Bud

FY15

Budget

FY15‐YTD

9‐30‐2015

%to

Bud

Income

Federal

307,1

37

303,7

51

99%

297,9

12

289,5

06

97%

‐

6,734

9,225

7,510

81%

State

1,025,17

4

563,8

29

55%

1,025,17

4

563,3

99

55%

‐

430

0%‐

‐

Foundation&corporation

1,194,97

8

949,7

80

79%

1,159,97

8

939,2

80

81%

35,00

0

10,50

0

30%

‐

‐

PrivateRevenue

475,3

18

511,7

03

108%

175,8

06

214,7

97

122%

250,0

00

247,7

91

99%

49,51

2

49,11

6

99%

In‐kind

‐

‐

‐

‐

TotalIncom

e3,0

02,60

7

2,329,06

3

78%

2,658,87

0

2,006,98

3

75%

285,0

00

265,4

55

93%

58,73

7

56,62

6

96%

Expense

Personnelcharges

867,7

42

838,0

97

97%

494,6

63

494,7

76

100%

211,9

80

192,5

69

91%

161,0

99

150,7

52

94%

Projects&TransExpenses

1,800,22

5

1,297,77

1

72%

1,800,22

5

1,297,77

1

72%

‐

‐

‐

‐

Subcontractors‐DRCprojects

108,0

90

108,3

19

100%

108,0

90

108,3

19

100%

‐

‐

‐

‐

WaterProjects‐otherdirect

34,98

9

15,44

2

44%

34,98

9

15,44

2

44%

‐

‐

‐

‐

Marketing&Dev

83,40

0

70,37

3

84%

‐

83,40

0

70,37

3

84%

‐

‐

In‐kind

‐

‐

‐

‐

‐

‐

‐

General&Adm

inistration

93,34

7

76,71

0

82%

‐

‐

‐

93,34

7

76,71

0

82%

Subtotalexpensesbeforeadm

in

allocation

2,987,79

3

2,406,71

1

81%

2,437,96

7

1,916,30

7

79%

295,3

80

262,9

42

89%

254,4

46

227,4

62

89%

AdminAllocationAccounts

‐

‐

206,7

09

170,9

88

83%

(11,00

0)

‐

0%(19

5,709)

(17

0,988)

87%

Totalexpenses

2,987,79

3

2,406,71

1

81%

2,644,67

6

2,087,29

6

79%

284,3

80

262,9

42

92%

‐

152

NetOrdinaryIncome

14,81

4

(77,64

8)

14,19

4

(80,31

3)

620

2,513

‐

152

‐

RestrictedAssetsOffsetting

Expenses

126,0

26

123,4

34

2,592

‐

‐

NetIncomePlusRestrictedOffset

48,37

8

43,12

0

5,105

152

LessReleaseofRestrictedNetAssets

(126,0

26)

YTDChangeinNetAssets

(77,64

8)

NetAssetsBO

Y1,0

58,51

2

NetAssetsEOY

980,8

64

Total

Programs

Marketing/Development

DESCHUTESRIVERCONSERVAN

CYSeptem

ber30,2015

Statem

entofActivities

Administration

Board Book Page 27

DESCHUTESRIVERCONSERVAN

CYSeptem

ber30,2015

 $‐

 $500

 $1,00

0

 $1,50

0

 $2,00

0

 $2,50

0

Sept 201

3Sept 201

4Sept 201

5

$221

 $3

19 

$304

 

$607

 $2

91 

$564

 

$987

 

$842

 

$885

 

$200

 

$160

 

$189

 

$99 

$50 

$65 

$162

 

$244

 

$323

 

Year to

 Date Re

venu

e Source Com

parison

Individu

als &

 Corpo

ratio

ns

Foun

datio

n

Other (includes c

onsulting

 & leasing trans rev)

Pelto

n

State

Fede

ral

in $1,000

Board Book Page 28

DESCHUTESRIVERCONSERVAN

CYSeptem

ber30,2015

$2,068

,621

 

$1,764

,377

 $1

,916

,307

 

 $‐

 $50

0,000

 $1,00

0,00

0

 $1,50

0,00

0

 $2,00

0,00

0

 $2,50

0,00

0

Sept 2013

Sept 2014

Sept 2015

Year to

 Date

Prog

ram Expen

seCo

mpa

rison

Board Book Page 29

DESCHUTESRIVERCONSERVAN

CYSeptem

ber30,2015

$260,764

 $257,434

 

$227,462

 

 $‐

 $50

,000

 $10

0,000

 $15

0,000

 $20

0,000

 $25

0,000

 $30

0,000

Sept 2013

Sept 2014

Sept 2015

Year to

 Date

Administrativ

e Expe

nse

Compa

rison

Board Book Page 30

November 2, 2015

To: Deschutes River Conservancy

From: Davis, Hibbitts & Midghall, Inc. (DHM Research)

Re: Research Review, Executive Summary

Introduction

This fall DHM Research conducted a review of existing social data and opinion research on

behalf of the Deschutes River Conservancy (DRC). This review explores the values and beliefs

of Central Oregon residents and is intended to inform future opinion research, planning, and

communications efforts. The review utilizes the following studies:

Bend Park & Recreation District, District Bond Survey (March, 2012), Fairbank, Maslin, Maullin, Metz & Associates (FM3)

City of Bend, Community Survey (January, 2015), DHM Research Oregon Forest Resources Institute, Deschutes County Survey (November, 2013), DHM

Research

Oregon Values and Beliefs Study (April, 2013), DHM Research Oregon Regional Solutions Outcomes Related to Central Oregon Trust for Public Land, Deschutes Stakeholder and Voter Survey (February-March, 2010) Visit Bend, Area Visitor Survey (Summer, 2013), RRC Associates

For more detailed sourcing information, including sample sizes and methodologies, please see

the full report. Following are the three primary Central Oregon regions used throughout the

report.

Deschutes (Deschutes County) South Central (Crook, Deschutes, and Jefferson counties) North Central (Hood River, Sherman, and Wasco counties)

Key Findings/Takeaways

Central Oregonians are positive about the future. They want to come together to

address the critical issues we face as a state, but they do not believe this is likely to

happen in the next 10 years.

A strong majority of Central Oregon residents feel positive about Oregon and feel their community will be about the same as today or a better place to live in 10 years.

Respondents were asked to consider the desirability, and then probability, of the following statement happening in the next 10 years: ‘Oregonians from diverse

backgrounds will find common ground and work together to make progress addressing

the critical issues we face as a state.’

Board Book Page 31

o A strong majority (81%) of South Central residents feel this outcome would be desirable, compared to 4% who feel this would be an undesirable outcome.

Tellingly, only 34% of South Central residents believe that this outcome is likely

to occur in the next 10 years.

The environment is absolutely essential to Central Oregonians’ sense of place. For

many, it seems to be the foundation of what they love about the state, and also their

communities.

The natural environment and environmental quality, including the Deschutes River Basin, are defining features of Central Oregonians’ sense of place, suggesting that these

values are a constitutive part of their relationship to themselves, their communities, and

their built landscape.

When respondents are asked to indicate what they personally value about living in Oregon, they are most likely to report valuing ‘beauty/scenery’ (21%) and

‘weather/climate’ (19%). However, no matter how they are coded, the vast majority of

responses to this question are related to the natural environment.

o Residents living in South Central (22%) are significantly more likely than their Statewide (11%) and North Central (13%) counterparts to personally value the

‘outdoors and outdoor activities.’ As well, residents of South Central (9%) are

also more likely than North Central (1%) to personally value ‘open space.’

The natural environment and environmental quality are also important to visitors to Central Oregon and are indeed drivers of an important part of the region’s economy.

Protecting a beloved natural environment is a top-tier public policy priority, and

something that many Central Oregon residents are willing to pay, make lifestyle

changes, or reallocate funds, to maintain.

Central Oregon residents feel the protection of air and water, the protection of productive farm and forest land from development, and public facility infrastructure like

water and sewer are very important public services worth paying something more in

taxes for, or reallocating tax dollars away from other existing services to provide.

o South and North Central residents are more likely to feel that the ‘protection of air and water quality’ is ‘very important’ than any other public services priority,

other than ‘K-12 education services’ and ‘public safety like police fire protection.’

Central Oregonians want long-term sustainable management of their natural resources guided by professionals and scientists. Management should also involve public

involvement and the consideration of public values.

o Residents of Deschutes County were asked about a natural resource comparable to the Deschutes River, the Deschutes National Forest. Confirming a proclivity

for environmental protection and long-term sustainable management, residents’

top-two priorities are ‘manage forests to reduce high-severity wildfire risk’ (8.1

mean score; 68% ‘top-box’ rating of 8+9+10) and ‘restore forests to improve

forest health’ (8.0 mean score; 68% ‘top-box’ rating).

Board Book Page 32

A strong majority of Central Oregonians feel climate change requires us to change our way of life such as driving less or living more simply; less than a third feel we don’t have

to do anything and if climate change becomes a problem we can deal with it later.

Central Oregonians are divided when it comes to economic growth vs. environmental

protection.

A majority of Oregonians (57%) feel that the statement ‘protection of the environment should be given more priority even at the risk of slowing economic growth’ most closely

reflects their personal opinion, compared to about half of South Central (50%) and

North Central (48%) residents.

o An almost equal number of residents living in South Central (44%) and North Central (46%) feel that the statement ‘economic growth should be given priority

even if the environment suffers to some extent’ more closely reflected their

beliefs, compared to 35% of Oregonians statewide.

Respondents were asked to indicate the desirability of environmental protection becoming more important than economic growth in the next 10 years. A slight majority

(52%) of Oregonians feel that this trend is desirable (26% ‘very’; 26% ‘somewhat’),

while 24% feel this trend is undesirable (12% ‘very’; 13% ‘somewhat’) and 20% feel

neutral.

o Comparatively, four in ten (43%) South Central residents feel this trend is desirable (22% ‘very’; 20% ‘somewhat’), while three in ten (28%) feel this trend

is undesirable (19% ‘very’; 10% ‘somewhat’) and 22% feel neutral.

o Almost half (48%) of South Central residents feel that this trend is likely (14% ‘very’; 33% ‘somewhat’) to occur in the next 10 years, while 29% believe that it

is unlikely (8% ‘very’; 21% ‘somewhat’) and 11% remaining neutral.

Respondents were asked to indicate the desirability of economic growth being more important than addressing climate change in the next 10 years. About four in ten

respondents Statewide (37%) and in the South Central region (39%) feel that this would

be a desirable trend. Meanwhile, 40% of Oregonians and 33% of South Central

residents would find this trend undesirable, and about two in ten respondents in South

Central (20%) and Statewide (17%) feel neutral.

o Overall, six in ten Oregonians (59%) and South Central residents (63%) feel that it is likely that in the next 10 years, economic growth will be more important than

addressing climate change. Conversely, two in ten residents Statewide (22%)

and in South Central (23%) feel that this was an unlikely trend in the next 10

years.

In general, Central Oregonians want less taxes and fewer regulations. However,

some public services resonate deeply with Central Oregonians’ values and, depending

on the specifics, elicit backing for sustained or increased taxation.

Generally, a strong majority of Central Oregonians feel government is wasteful and inefficient and don’t support an increase in taxes to pay for public services. Still,

depending on the specifics, they will pass funding measures. These include: the

importance assigned by residents to the service being funded, the cost to a household,

Board Book Page 33

the inclusion of transparency and accountability provisions, and the funding mechanism.

The health of the economy is also a key consideration.

South Central residents are split when asked about the relationship between taxes and service provision, with a little over a third believing that ‘we spend about the right

amount on public services and taxes should remain the same’ (34%), followed by ‘we

spend too much on public services and taxes should be reduced’ (30%), then ‘we don’t

spend enough on public services and we should increase some taxes’ (21%), and 15%

do not know which statement most closely reflected their personal opinion.

Like with taxation, Central Oregonians are generally not supportive of more government regulation. But like with taxation, they may support new regulations which protect

things they greatly value and which include independent oversight and such provisions

as a sunset clause.

Gaps in Existing Research

The most recent information about Central Oregonians’ values and beliefs, including how they are thinking about water, is from the spring of 2013. The public discourse, and

consciousness, around infrastructure deficiencies, climate change, the drought, the

Oregon spotted frog, and other issues have changed in the last 3 years. Understanding

how recent developments have affected Central Oregonians’ feelings about water issues

may also help inform water management messaging and communications efforts.

There is little-to-no existing attitudinal or behavioral data that engages the motivations, values, and priorities of water usage and management practices specific to the

Deschutes River Basin. Questions remain over how certain individuals, communities,

and industries think about their water-related practices, and more broadly, how they

think about the management of water resources.

There remains to be a comprehensive study of how opinion-leaders think about water management in the Deschutes River Basin. Given that leaders of public, private, and

non-profit organizations push the conversation about important issues in particular

directions, it would be beneficial to know what their awareness levels and feelings are

about water management issues.

Starting an on-going media scan of the public discourse related to water in Central Oregon would give important context to survey data findings, and assist DRC with

communications.

Board Book Page 34

Deschutes Initiative Discussion Item Upper Deschutes Flow Restoration:

Competing Processes

Board Meeting December 10, 2015

The following four regulatory, legal and voluntary processes will directly affect streamflow outcomes in the Upper Deschutes River and affect the manner in which the Deschutes River Conservancy (DRC) can influence those outcomes:

1. Potential Litigation 2. Habitat Conservation Plan 3. DRC Strategic Plan 4. Deschutes Basin Study

Staff have included a list of questions related to the DRC’s role and these four processes at the end of

this memo.

Potential Litigation

Two parties have filed Notices of Intent to Sue with respect to the Oregon spotted frog in the Upper Deschutes. While submitting a Notice of Intent to Sue does no obligate either of these parties to file a complaint, DRC expects that at least one of those parties will file a complaint. On July 21, 2015, Advocates for the West, on behalf of the Center for Biological Diversity, submitted to the Bureau of Reclamation a “Sixty-Day Notice of Intent to Sue for Violations of the Endangered Species Act for the Operation and Maintenance of Crane Prairie and Wickiup Dams and Reservoirs Affecting Threatened Oregon Spotted Frog” (attached). Center for Biological Diversity is an advocacy group with an established track record in litigating issues related to the Endangered Species Act (ESA). The letter suggests that the Bureau of Reclamation (BOR) is violating the ESA by engaging in action that “may affect” the Oregon sported frog without consulting under the ESA over the impacts of that action on the spotted frog. “Relief Requested” in the letter is as follows: As set forth above, the Center for Biological Diversity may pursue litigation in

federal court following sixty days after this notice and may seek injunctive, declaratory, and other relief, including an award of fees and expenses incurred in investigating and prosecuting this action. To avoid such litigation, BOR should cease or restrict operation of the Crane Prairie Dam and Reservoir and Wickiup Dam and Reservoir to ensure protection of the Oregon spotted frogs until it completes consultation with FWS over the impacts of its actions on this species.

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On August 13th, Earth Justice, on behalf of WaterWatch, filed a 60-Day Notice of Intent to Sue to Bureau of Reclamation, Central Oregon Irrigation District, North Unit Irrigation District, and Tumalo Irrigation District related to frogs and reservoir management (attached). WaterWatch seeks relief including “maintain[ing] flows adequate to fully protect listed frogs, frog eggs, and frog habitat.”

At its September meeting, the Board of Directors tasked staff and an ad-hoc committee with evaluating potential roles for the DRC in any litigation over the Oregon spotted frog. Staff and committee members evaluated potential roles (attached) and contracted with Clyde Snow to evaluate legal requirements for participation in any litigation (attached).

Based on these evaluations, staff recommends that DRC not intervene in Oregon spotted frog litigation. Staff has not eliminated other potential options such as offering information that could influence the litigation.

Habitat Conservation Plan

The Deschutes Basin Board of Control (DBBC) and the City of Prineville (the applicants) are undertaking a

Habitat Conservation Planning Process with the US Fish and Wildlife Service and National Marine

Fisheries Service. The goal of a Habitat Conservation Plan (HCP) is to secure an Incidental Take Permit

from federal regulatory agencies that exempts the applicants from potential liabilities under the

Endangered Species Act (ESA). The main species of concern in the HCP process are recently-reintroduced

summer steelhead, listed as threatened under the ESA, the Oregon spotted frog (listed as threatened

under the ESA) and bull trout (listed as threatened under the ESA ) as well as other covered species. The

applicants seek protection to continue their water management activities in the presence of these listed

(or proposed to be listed) species.

Habitat conservation plans vary to some degree in content; however, there are certain elements that are universally required. Inclusion of the following is required of every HCP:

HCP Elements 1. Analysis of impacts that are likely to occur as a result of the proposed taking of a threatened or

endangered species; 2. Steps to be taken by the applicant to “…monitor, minimize, and mitigate for such impacts;” 3. Sufficient funding for implementing these steps; 4. A plan of action for handling any changed circumstances; 5. A discussion of potential alternative actions taken into consideration by the applicant and basis

for not choosing these alternatives.

The HCP process began in 2010. The USFWS has contributed $1.9 million to-date (with an additional

grant forthcoming) in Section 6 Grant funding, and the HCP parties have provided an equal match in the

form of their own funds and in-kind work. The applicants have contracted with Biota Pacific to produce

fifteen priority studies. The applicants submitted proposed conservation measures in August 2014 and

have been working on additional measures that more fully integrate information on impacts to the

Oregon spotted frog.

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DRC Strategic Plan Implementation

In March 2015, the DRC Board adopted a strategic plan that identifies flow targets by reach and

approaches to reach those targets. In the Upper Deschutes River below Wickiup, the DRC selected 300

cfs as an achievable ten-year target (with higher flows up to 500 cfs when water availability allows) and

500 cfs as a longer-term target necessary to begin to restore a functioning system. The DRC strategy is

based on the declared priorities of the Board at its retreat in March 2012 and the subsequent analysis of

options and scenarios under the Deschutes Water Planning Initiative. The strategy offers a

collaborative, voluntary approach that is premised on meeting the needs of out- of-stream water users

as well as the river.

Deschutes Basin Study

The Basin Study is co-managed by the Bureau of Reclamation and the Basin Study Work Group (BSWG)

Steering Committee, a 30-plus member group of diverse interests. The Basin Study Work Group strives

to be inclusive, transparent, and collaborative by reaching consensus-based decisions, and

communicating with and seeking input from the public.

The DRC is one of many partners participating in the Basin Study Work Group to manage the $1.5 million

study to analyze a wide range of strategies to meet broad instream, agricultural and municipal goals in

the upper Deschutes Basin. The Basin Study will generate information useful for understanding how to

best employ water supply options and scenarios to benefit the Upper Deschutes watershed (including

additional water for the Oregon spotted frog) as well as meeting other needs. The Study began in 2015

and will wrap up in 2018.

Basin Study General Information 1. The Upper Deschutes Basin Study will extend, refine and add additional information to identify

specific options for resolving water supply and demand imbalances in the Deschutes Basin.

2. The study builds on over a decade of collaborative water planning efforts. 3. The Study focuses on developing options for responding to the imbalances in water supply and

demand for three major water uses over the next 50 years:

a. Instream flows for ecological health b. Reliable water supply for agriculture c. Secure municipal supplies

4. The Study includes projected impacts of climate change. 5. The Study covers the Upper Deschutes River basin, which includes the Deschutes River, Tumalo

Creek, Crescent Creek, and the Little Deschutes; the Crooked River, including McKay and Ochoco

Creeks; and the Whychus Creek systems.

6. The Study is a three-year, $1.5 million study funded by the Bureau of Reclamation and the State of Oregon Water Resources Department, in addition to in-kind support from many local partners

7. Options being evaluated include operational and on-farm conservation and efficiencies, reservoir optimization, enhanced or new storage, and moving water between uses and users

through voluntary short-term and long-term actions.

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8. Information from the study provides the base from which basin stakeholders can develop a long-term basin water management plan to guide sustainable water management actions into

the future.

Questions for Discussion

How can the basin (DRC and its partners) best manage risks associated with external legal action to ensure continued progress towards implementation of a collaborative approach to restoring flows in the Upper Deschutes River?

Legal action related to the Oregon spotted frog could have direct or indirect impacts on related processes that the DRC and/or its partners are engaged in. The most significant risk to the DRC mission is an interruption of collaborative efforts to restore the Upper Deschutes. How best to mitigate this risk?

In the strong presence of regulatory process and potential legal action, what should be the role of the DRC?

What courses of action would best strengthen the DRC’s organizational interest? How does the DRC avoid being marginalized by the other processes? How does the DRC maintain and strengthen its relationships that are so essential to the

collaborative process when confronted with this level of conflict?

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July 21, 2015 Via Certified Mail Return Receipt Requested Secretary Sally Jewell U.S. Department of Interior 1849 C Street, N.W. Washington, D.C. 20240 Commissioner Estevan López U.S. Bureau of Reclamation 1849 C Street NW Washington, D.C. 20240-0001 Dawn Wiedmeier, Area Manager U.S. Bureau of Reclamation Columbia-Cascades Area Office 1917 Marsh Road Yakima, WA 98901-2058

RE: Sixty-Day Notice of Intent to Sue for Violations of the Endangered Species Act From the Operation and Maintenance of Crane Prairie and Wickiup Dams and Reservoirs Affecting Threatened Oregon Spotted Frog

Dear Sir and Madams: In accordance with the 60-day notice requirement of the Endangered Species Act (“ESA”), 16 U.S.C. § 1540(g), the Center for Biological Diversity hereby provides notice that the U.S. Bureau of Reclamation (“BOR”) is in violation of Section 7 and Section 9 of the ESA, 16 U.S.C. § 1536 and § 1538, and the ESA’s consultation regulations, 50 C.F.R. Part 402.

Specifically, by operating and maintaining the Crane Prairie Dam and Reservoir and the Wickiup Dam and Reservoir in central Oregon to store, release, and divert water, BOR is violating § 7(a)(2) of the ESA by engaging in action that “may affect” the Oregon spotted frog, an ESA-listed species, without consulting under the ESA over the impacts of that action on the spotted frog. 16 U.S.C. § 1536(a)(2). The continued operation and maintenance of the reservoirs and dams before completing such consultation also constitutes a violation of § 7(d) of the ESA, which prohibits the “irretrievable commitment of resources” pending completion of consultation. 16 U.S.C. § 1536(d). Furthermore, BOR’s continued operation and maintenance of the reservoirs and dams harm Oregon spotted frog individuals and egg masses, constituting “take” of a listed species without any authorization under an Incidental Take Statement (“ITS”), in violation of § 9 of the ESA. 16 U.S.C. § 1538(a)(1)(B); 50 C.F.R. § 17.11(h).

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LEGAL FRAMEWORK Under § 7(a)(2) of the ESA, “[e]ach federal agency shall . . . insure that any action

authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical] habitat of such species.” 16 U.S.C. § 1536(a)(2) (emphasis added); Nat’l Wildlife Fed’n v. Nat’l Marine Fisheries Serv., 524 F.3d 917, 924 (9th Cir. 2008).

The ESA imposes a procedural consultation process “to ensure compliance with the [ESA’s] substantive provisions.” Thomas v. Peterson, 753 F.2d 754, 764 (9th Cir. 1985). To fulfill these procedural duties, federal agencies must consult with the appropriate federal fish and wildlife agency (U.S. Fish and Wildlife Service (“FWS”) in the case of amphibians) under § 7 whenever it takes an action that “may affect” a listed species. See 16 U.S.C. § 1536(a)(2); 50 C.F.R. § 402.14(a). Regulations implementing § 7 broadly define the scope of agency actions subject to consultation. See 50 C.F.R. § 402.02 (definition of “action”). The Ninth Circuit Court of Appeals has construed this term broadly, based on whether a federal agency affirmatively authorized, funded, or carried out the underlying activity and whether it retains some discretion to influence or change the activity for the benefit of a protected species. Karuk Tribe of Cal. v. U.S. Forest Serv., 681 F.3d 1006, 1021 (9th Cir. 2012); Natural Resources Defense Council v. Jewell, 749 F.3d 776, 784-85 (9th Cir. 2014).

To fulfill its Section 7(a)(2) mandate, the action agency prepares a biological assessment (“BA”) to evaluate potential effects to listed species and determine whether a species is “likely to be adversely affected” or “not likely to be adversely affected” by the action. 50 C.F.R. § 402.12. If the BA concludes that an action is not likely to adversely affect a listed species or its critical habitat, and FWS concurs, FWS issues a written letter of concurrence (“LOC”). Id. § 402.13(a); id. § 402.14(b). If the action agency and/or FWS determines that the proposed action is likely to adversely affect a listed species or its critical habitat, FWS prepares a biological opinion (“BiOp”). Id. § 402.14(a), (g). In a BiOp, FWS must review all relevant information, evaluate the current status of the species or critical habitat, and evaluate the effects and cumulative effects of the proposed action on the listed species and their critical habitat. Id. § 402.14(g)(1)−(3); (h)(1)−(2). A BiOp determines whether the action, taken together with cumulative effects, is likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of critical habitat. Id. § 402.14(g)(4); (h)(3). If a “jeopardy” opinion is issued, FWS shall include reasonable and prudent alternatives that will avoid jeopardy and will allow the agency to proceed with the action. 16 U.S.C. § 1536(b); 50 C.F.R. § 402.14(h)(3). Separately, § 7(d) of the ESA prohibits federal agencies, after the initiation of consultation under § 7(a)(2) of the ESA, from making any irreversible or irretrievable commitment of resources if doing so would foreclose the implementation of reasonable and prudent alternatives. 16 U.S.C. § 1536(d). The duties to comply with § 7(d) and to avoid jeopardy to a species, adverse modification of critical habitat, and take of a species during the consultation process generally require prohibition or restriction of the action until consultation is completed. See Natural Res. Def, Council v. Houston, 146 F.3d 1118, 1128 (9th Cir. 1998) (§

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7(d) was violated where Bureau of Reclamation executed water service contracts prior to completion of formal consultation). Pac. Rivers Council v. Thomas, 30 F.3d 1050, 1056-57 (9th Cir. 1994) (timber sales constituted irreversible and irretrievable commitments of resources under § 7(d), and thus could not go forward during the consultation process); Pac. Coast Fed’n of Fishermen’s Ass’ns v. U.S. Bureau of Reclamation, 138 F. Supp. 2d 1228, 1250 (N.D. Cal. 2001) (enjoining delivery of Klamath project water to irrigators until a valid consultation was complete); Washington Toxics Coal. v. U.S.E.P.A., 413 F.3d 1024, 1034-36 (9th Cir. 2005) (affirming district court injunction of EPA pending compliance with consultation requirements); Defenders of Wildlife v. Martin, 454 F. Supp. 2d 1085, 1098-99 (E.D. Wash. 2006) (enjoining Forest Service authorization of snowmobiling pending completion of consultation regarding impacts to woodland caribou).

After consultation is completed, federal agencies have a continuing duty under section 7 of the ESA to insure that their actions will not jeopardize the continued existence of listed species or adversely modify designated critical habitat. An agency must re-initiate consultation when “a new species is listed or critical habitat designated that may be affected by the identified action.” 50 C.F.R. § 402.16(d). The duty to reinitiate consultation lies with the action agency and the consulting agency. 50 C.F.R. § 402.16; Envtl. Protection Info. Ctr. v. Simpson Timber Co., 255 F.3d 1073, 1076 (9th Cir. 2001).

Section 9 of the ESA prohibits “take” of an endangered species by any person. 16 U.S.C. § 1538(a). This prohibition has generally been applied to species listed as “threatened” through regulations promulgated under section 4(d) of the ESA, 16 U.S.C. § 1533(d). Section 9 of the ESA prohibits violations of those regulations. Id. § 1538(a)(1)(G). Section 9 of the ESA also makes it unlawful to “solicit another to commit or cause to be committed” a violation of that section of the statute. Id. § 1538(g). “Take” includes actions that harass, harm, pursue, wound, kill, trap, capture, or collect a protected species. Id. § 1532(19). “Harm” includes significant habitat modification or degradation that kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering. 50 C.F.R. § 17.3.

FWS may issue an incidental take statement (“ITS”) when take incidental to – but not the main purpose of – a federal agency action will not jeopardize the continued existence of listed species or destroy or adversely modify their critical habitat. 16 U.S.C. § 1536(b)(4). An ITS must specify (1) the impact of take on the species, (2) reasonable and prudent measures necessary or appropriate to minimize that impact; (3) terms and conditions required to implement those measures; and (4) procedures to handle “taken” individuals, among other requirements. 50 C.F.R. § 402.14(i). The ITS allows the agency, if in compliance with the terms and conditions of the ITS, to “take” listed species without facing § 9 liability. Id. § 402.14 (i)(5); 16 U.S.C. § 1538(a)(1)(B); id. §§ 136(b)(4), (o)(2).

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FACTUAL BACKGROUND

1. The Oregon Spotted Frog and Its Aquatic Habitat.

The U.S. Fish and Wildlife Service (“FWS”) listed the Oregon spotted frog as threatened under the ESA on August 29, 2014, and the rule went into effect on September 29, 2014. 79 Fed. Reg. 51658 (Aug. 29, 2014); see also 50 C.F.R. § 17.11(h). Factors leading to federal listing include continued destruction or elimination of habitat through human activities such as operation of water diversions or other manipulation structures, predation by nonnative species, small and isolated breeding locations, low connectivity, low genetic diversity within occupied sub-basins, and genetic differentiation between sub-basins. Id. at 51658. Scientific studies suggest that the species is lost from 70-90% of its historic range. K. A. Cushman and C. A. Pearl, A Conservation Assessment for the Oregon Spotted Frog, U.S.D.A. Forest Service Region 6 and U.S.D.I. Bureau of Land Management, Oregon and Washington, at 3 (Mar. 2007).

Inhabiting emergent wetland habitats in forested landscapes, the Oregon spotted frog is

the most aquatic of all native frog species in the Pacific Northwest. Id. at 51661. Spotted frogs rely on different water conditions for all life stages: they require “shallow water areas for egg and tadpole survival; perennially deep, moderately vegetated pools for adult and juvenile survival in the dry season; and perennial water for protecting all age classes during cold wet weather.” Id. FWS has noted that “[c]hanging water levels at critical periods in the Oregon spotted frog’s life cycle” negatively affects the species due to its heavy reliance upon water. Id. at 51669. In the listing rule, FWS stated that lowered water levels can “expose[] individuals to predation by reducing cover and confining them to smaller areas where they are more vulnerable to predators.” Id. Furthermore, water level reduction during the breeding season1 can result “in the loss of the entire reproductive effort for the year due to stranding and desiccation of the egg masses.” Id. Conversely, “[e]xcessive seasonal flooding at critical periods” can result in the “loss of shallow wetlands needed for egg-laying and development” or the “flooding of egg masses.” Id. at 51669, 51672.

2. Crane Prairie Dam and Reservoir and Wickiup Dam and Reservoir. The BOR owns the Crane Prairie Dam and Reservoir (“Crane Prairie”) and the Wickiup

Dam and Reservoir (“Wickiup”), both of which are located on the upper Deschutes River in the central Oregon Cascades. Crane Prairie and Wickiup are part of the Deschutes Project, which supplies irrigation water to approximately 50,000-98,000 acres of land in central Oregon, and are operated together as a combined system. Crane Prairie Dam, a 36-foot-high earthfill structure, impounds the waters of the upper Deschutes River into Crane Prairie Reservoir, which has a total capacity of 55,300 acre-feet. Crane Prairie Reservoir has approximately 24 miles of shoreline. Water in Crane Prairie Reservoir is released into downstream Wickiup Reservoir, and also 1 Spotted frog breeding generally occurs in February and March at lower elevations and between early April and early June at higher elevations. Id. at 51659.

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diverted through privately owned and operated diversion facilities. Wickiup Reservoir, approximately two miles downstream from Crane Prairie, has a total capacity of 200,000 acre-feet, and stores waters of the Deschutes River for irrigation of lands in the North Unit Irrigation District. Wickiup Reservoir, created by the 100-foot-high Wickiup Dam, has approximately 48 miles of shoreline.

Reservoir operations greatly reduce winter stream flows and greatly increase spring,

summer and fall stream flows in the Deschutes River. Irrigation releases from Crane Prairie Reservoir typically begin by mid-to-late April and peak in June and July. River levels are then reduced to minimum flows in late October and early November as the reservoir fills. The Wickiup irrigation season extends from April 1 to October 31, with releases typically stopping and the Reservoir beginning to refill by mid-October.

As the owner of Crane Prairie and Wickiup dams and reservoirs, BOR has discretion over water storage and release from those reservoirs. BOR is also responsible for conducting regular inspection, maintenance, and repairs of these facilities. Because of its responsibilities over these facilities, as well as other water storage and diversion facilities in the Deschutes River Basin, BOR consulted with FWS and NOAA Fisheries over the impacts of the continued operation and maintenance of Deschutes River Basin Projects on ESA listed species in 2003-2005. This consultation specifically included within the proposed action the continued operation and maintenance of Crane Prairie Dam and Reservoir and Wickiup Dam and Reservoir for storage and release of water, and diversion of Wickiup Reservoir storage water by North Unit Headworks and Main Canal. See Biological Assessment on Continued Operation and Maintenance of the Deschutes River Basin Projects and Effects on Essential Fish Habitat under the Magnuson-Stevens Act (Sept. 2003). The consultation covered several listed fish and wildlife species but did not cover Oregon spotted frog because that species had not yet been listed as threatened. BOR has not reinitiated consultation with FWS since the Oregon spotted frog was listed to assess the impacts to the frog of its continued operation and maintenance of Crane Prairie and Wickiup dams and reservoirs and North Unit Headworks and Main Canal.

3. Effects of Crane Prairie and Wickiup on the Oregon Spotted Frog.

Oregon spotted frog breeding locations occur in the wetland margins of the Crane Prairie

and Wickiup Reservoirs. 79 Fed. Reg. at 51666. There are also at least five known breeding locations downstream of Wickiup Reservoir in riverine wetlands along the Deschutes River. Id. These multiple breeding locations near and downstream of the reservoirs are significant because there are fewer than twenty known breeding loc