Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II DISTRICT COURT, WATER DIVISION 2 Pueblo County, Colorado 320 West 10th Street Pueblo, CO 81003 Case No. 09CW142 Division 2 ________________________________________________ TRANSCRIPT OF PROCEEDINGS Volume II July 24, 2013 ________________________________________________ CONCERNING THE APPLICATION OF: BUSK-IVANHOE, INC., A COLORADO CORPORATION, IN ADAMS, ARAPAHOE, CHAFFEE, DOUGLAS, JEFFERSON, LAKE, PARK, PITKIN, AND WELD COUNTIES, COLORADO _________________________________________________ PURSUANT TO AGREEMENT and the Colorado Rules of Civil Procedure, the Trial of the within proceedings was taken on Wednesday, July 24, 2013, commencing at 9:04 a.m. at the Pueblo County Courthouse, 320 West 10th Street, Pueblo, Colorado 81003, Courtroom G, before The Honorable Larry Schwartz, District Court Judge, and Mary Susan Parker, Registered Merit Reporter, Certified Realtime Reporter, and Colorado Notary Public. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 257 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES: ON BEHALF OF THE APPLICANT: JOHN M. DINGESS, ESQ. AUSTIN HAMRE, ESQ. RYAN P. McLANE, ESQ. Duncan, Ostrander & Dingess, P.C. 3600 South Yosemite Street, Suite 500 Denver, CO 80237 ON BEHALF OF OPPOSER HIGH LINE CANAL COMPANY: ROBERT F.T. KRASSA, ESQ. Krassa & Miller, LLC 2737 Mapleton Avenue, Suite 103 Boulder, CO 80304 ON BEHALF OF OPPOSERS COLORADO RIVER WATER CONSERVANCY DISTRICT, BASALT WATER CONSERVANCY DISTRICT, AND EAGLE COUNTY BOARD OF COUNTY COMMISSIONERS: DAVID C. HALLFORD, ESQ. SCOTT A. GROSSCUP, ESQ. Balcomb & Green, P.C. P.O. Drawer 790 Glenwood Springs, CO 81601 ON BEHALF OF OPPOSER BOARD OF COUNTY COMMISSIONERS OF PITKIN COUNTY: PATRICIA M. DeCHRISTOPHER, ESQ. ANNE D. BENSARD, ESQ. Moses, Wittemyer, Harrison & Woodruff, PC 1002 Walnut Street, Suite 300 Boulder, CO 80306 ON BEHALF OF OPPOSERS GRAND VALLEY WATER USERS ASSOCIATION, ORCHARD MESA IRRIGATION DISTRICT, AND UTE WATER CONSERVANCY DISTRICT: KIRSTEN KURATH, ESQ. Williams, Turner & Holmes, P.C. 200 North 6th Street, P.O. Box 338 Grand Junction, CO 81502 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 258 1 APPEARANCES (Continued): 2 ON BEHALF OF THE STATE OF COLORADO AND DIVISION ENGINEERS: 3 4 5 6 7 8 9 10 11 KATHERINE A.D. RYAN, ESQ. Assistant Attorney General State of Colorado Department of Law Natural Resources and Environment Water Resources Ralph L. Carr Colorado Judicial Center 1300 Broadway, 7th Floor Denver, CO 80203 ON BEHALF OF THE COLORADO RIVER DISTRICT: JASON V. TURNER, ESQ. Associate Counsel 201 Centennial Street, Suite 200 Glenwood Springs, CO 81602 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 259 1 I N D E X 2 EXAMINATION OF G. ROSS BETHEL: PAGE 3 Continued direct by Mr. Hamre 262 4 Cross by Mr. Krassa 327 5 Cross by Mr. Hallford 333 6 Redirect by Mr. Hamre 409 7 EXAMINATION OF STEVE WITTE: 8 Direct by Mr. Grosscup 442 9 Cross by Mr. Krassa 458 10 Cross by Mr. Hamre 462 11 Redirect by Mr. Grosscup 465 12 By the Court 466 13 By Mr. Hamre 467 14 15 16 17 18 19 20 21 22 23 24 25 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 260 1 INDEX OF EXHIBITS 2 EXHIBIT INITIAL REFERENCE ADMITTED 3 A-8 320 324 4 A-19 447 449 5 A-20 369 372 6 A-55 363 7 82-A 440 8 82-B 440 9 82-C 440 10 A-121 316 11 A-122 318 12 A-136 275 13 A-145 304 14 A-149 282 15 A-150 270 16 A-152 296 17 A-156 279 280 18 A-157 280 281 19 A-162 367 372 20 A-163 414 21 A-223 411 22 A-225 411 23 A-240 354 24 A-347 294 326 315 274 295 25 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 261 1 INDEX (Continued) 2 EXHIBIT INITIAL REFERENCE ADMITTED 3 A-348 294 295 4 A-349 294 295 5 A-350 294 295 6 A-351 294 295 7 A-352 293 295 8 A-353 294 295 9 A-354 294 295 10 A-355 294 295 11 A-356 294 295 12 A-364 281 282 13 14 15 16 17 18 19 20 21 22 23 24 25 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 262 1 2 WHEREUPON, the following proceedings were taken: 3 4 THE COURT: Please be seated. Good morning, Counsel. 5 MR. DINGESS: Good morning, Your Honor. 6 MR. HALLFORD: 7 THE COURT: Good morning. The Court calls 2009CW142, 8 the Application of Busk-Ivanhoe, Inc. 9 and counsel are present. All parties I believe we had 10 Mr. Bethel, if you would come back up, sir, and 11 you're still under oath. 12 THE WITNESS: 13 THE COURT: 14 I assume everyone is prepared to 15 proceed? Yes, sir, thank you. And Mr. Hamre? Okay. 16 MR. HAMRE: 17 DIRECT EXAMINATION (Continued) 18 Good morning, Your Honor. BY MR. HAMRE: 19 Q. Good morning, Mr. Bethel. 20 A. Good morning. 21 Q. In our last episode, we had pretty much 22 finished up the discussion of various issues 23 relating to east-slope storage. 24 change gears a little bit. 25 the no-injury rule for changes of water rights? Now we're going to Are you familiar with Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 263 1 A. Yes, I am. I've applied it over 2 30 years' -- 35 years' worth of involvement in water 3 court cases. 4 5 6 Q. And do you have an understanding of how the no-injury rule developed? A. Yes. Generally some of the initial 7 appropriators on the stream system relied upon the 8 natural amounts and timing of flow. 9 appropriators existed and developed on that stream As additional 10 system, the competition for the water resource 11 increased and they were actually relying upon return 12 flows from some of the earlier uses of water. 13 Once the understanding became a little 14 bit more prevalent of the relationship between 15 return flows from the system and the subsequent 16 diversions of those by other diverters and 17 appropriators, then the concept of basically a 18 no-injury basis, that basically the maintenance of 19 stream conditions, at the time of the appropriation 20 of the junior appropriators, became well known and 21 demanded by those junior appropriators. 22 So this is not a firm, set-in-stone type 23 of situation. You have, of course, the ability of 24 those senior appropriators to change their 25 operations, say, with the cropping patterns. You Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 264 1 also have the junior, you know -- senior conditions 2 that are underway that can be also developed. 3 But generally that no-injury term and 4 clause and stuff relates to the maintenance of 5 stream conditions for the junior appropriators. 6 THE COURT: Mr. Hamre, just a second. 7 If you're here for a criminal case, 8 they're in Division D, third floor, okay? 9 you. 10 11 that. Thank There should be a sign on the door telling you Good. Q. (By Mr. Hamre) Mr. Bethel, did you 12 prepare a report in connection with Busk-Ivanhoe's 13 initial expert disclosures in November of 2012? 14 A. I did. 15 Q. And in preparing your opinions for that 16 report, did you rely in part on the decree from the 17 90CW340 case? 18 A. Yes, I did. 19 Q. And what water rights was the Board of 20 21 Water Works changing in that case? A. The Board of Water Works were changing 22 their undivided 50 percent ownership of the 23 Busk-Ivanhoe water rights. 24 25 Q. And were there other rights they were changing as well? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 265 1 A. They were also changing their water 2 rights in the Ewing system, the Columbine Ditch, 3 and -- I can't recall if there's another system. 4 believe there was. I I just can't recall that. 5 Q. The Wertz? 6 A. Oh, the Wertz Ditch, yes. 7 Q. As those were all transmountain ditches? 8 A. They were transmountain ditches into the 9 10 upper Arkansas Basin. Q. With regard to the portion of Busk- 11 Ivanhoe being changed by the Board of Water Works, 12 how did the Board of Water Works acquire their half 13 of Busk-Ivanhoe? 14 A. Well, it was a little bit of a complex 15 arrangement. 16 Animas town ditch by the Pueblo Board of Water 17 Works, and this is a fairly senior, 32-and-a-half- 18 cfs water right on the lower Arkansas, and once that 19 acquisition occurred by the Board of Water Works, 20 then that was traded, basically, to the Rocky Ford 21 High Line Ditch Company for 50 percent interest in 22 the Busk-Ivanhoe water rights and also the ownership 23 of the Busk-Ivanhoe facilities. 24 25 Q. It involved the acquisition of the Las Approximately how did the yield of the town ditch compare to half of the Busk-Ivanhoe Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 266 1 2 system? A. The historic yield of the town ditch -- 3 the diversions are probably in the neighborhood of 4 8,000 acre feet and the one-half yield of the 5 Busk-Ivanhoe Tunnel water rights or Busk-Ivanhoe 6 system water rights were approximately 2500, 2600 7 acre feet. 8 Q. And when did that transaction occur? 9 A. These transactions occurred basically at 10 the end of 1971, late in '71, making that water 11 available in 1972. 12 Q. Yesterday Mr. Simpson gave his 13 understanding of how the half -- Pueblo's half of 14 the Busk-Ivanhoe system was used between 1971 and 15 the filing of 90CW340. 16 with your understanding? 17 Is that generally consistent MR. HALLFORD: Your Honor, at this 18 point, I'll object. 19 but, one, it's not relevant to this change of water 20 rights, what Pueblo did, and it gets into the 21 Court's order that determined that there was no 22 preclusive effect from the Pueblo activities and 23 change case. 24 25 I've kind of let this go on, And, second, we're getting into undisclosed opinions. Mr. Bethel did not disclose Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 267 1 opinions about the town ditch, the value of the town 2 ditch or its yield, or his knowledge and opinions 3 about what Pueblo did with its water rights after 4 acquisition. 5 So we're really into an area that's not 6 needed for the Court to determine this change of 7 water rights. 8 rights. They should talk about their water 9 THE COURT: Okay. 10 MR. HAMRE: Well, I suspect we're going 11 to have more discussion about the relevance of 12 various aspects of the 90-340 case. 13 however, Mr. Bethel was just talking about facts, 14 not opinions, but just historical facts about the 15 use of water under the Rocky Ford High Line, and 16 they all relate to the extent to which that system 17 was water short. 18 MR. HALLFORD: At the moment, He was actually going to 19 talk about Pueblo's use of the water post 20 acquisition. 21 THE COURT: That's what I was 22 questioning, so I'm going to sustain the objection, 23 Mr. Hamre. 24 you just said you were trying to get to, but that's 25 not the question I heard. You can certainly ask the question that Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 268 1 MR. HAMRE: I'll try to. 2 THE COURT: Okay. 3 Q. (By Mr. Hamre) Mr. Bethel, on some 4 occasions, was Pueblo's half of the Busk-Ivanhoe 5 system leased back to the Rocky Ford High Line? 6 A. Yes. 7 Q. So the Rocky Ford High Line, then, had 8 the half of Busk-Ivanhoe that they owned. They had 9 the town ditch that they had just acquired, and, on 10 occasion, they were paying Pueblo to lease back the 11 water that they had just conveyed to Pueblo; is that 12 correct? 13 A. That's correct. 14 Q. Is that because they were water short? 15 A. Yes. They had those sources plus others 16 that they -- the winter water program, the 17 Fryingpan-Arkansas Project water, and there were a 18 number of sources that they continually basically 19 acquired during their life because they were 20 generally water short. 21 22 23 Q. And when water engineers talk about water short, what is it that they mean? A. Typically water-short conditions are 24 when there's insufficient water being provided by 25 the system to fully satisfy the irrigation needs Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 269 1 under that system. 2 Q. Did you rely to some degree for your 3 report on the same data used by Rocky Mountain 4 Consultants and the report that they prepared for 5 90CW340? 6 A. Yes, I did. I relied upon the same 7 diversion base and the seasons of diversion 8 information that Rocky Mountain Consultants had 9 compiled that I verified. 10 Q. Did you do an analysis of historical use 11 at any specific location for your November 2012 12 report? 13 A. The historical-use location in the 2012 14 report was basically the east portal of the 15 Busk-Ivanhoe Tunnel. 16 17 18 Q. And why was that your approach in that A. Well, the underlying engineering report? 19 judgment and assumption in that analysis was that 20 water imported into the Arkansas River Basin through 21 the Busk-Ivanhoe Tunnel was basically fully used and 22 that this is -- underlying that is basically a 23 theory here that the Arkansas River is a very highly 24 appropriated system. 25 Q. Okay. Did the decree in 90CW340 play a Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 270 1 part in your November 2012 opinions? 2 A. Yes. The premise on using the decree 3 was that it was a systemwide analysis of the 4 Busk-Ivanhoe system. 5 Q. Is there any engineering reason why a 6 court might equate diversions into the basin with 7 beneficial use? 8 9 A. Yes. As I indicated, I think, in a heavily appropriated basin, there can be an 10 engineering presumption that the water is 11 effectively used by someone, that it basically is, 12 you know -- it may not be used all the time by the 13 designated party but, in a heavily appropriated 14 system, it's used by someone. 15 16 Q. Exhibit A-150 and identify that for the Court. 17 18 A. I seem to have a blank section in this notebook for Exhibit 150. 19 20 Mr. Bethel, I would ask you to pull out Q. It does, indeed. For some reason it seems to have been put behind 151. 21 A. Okay. 22 Q. Okay, we've located 150. 23 A. Yes. 24 Q. Can you identify that for the Court, 25 please. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 271 1 A. Yes. This is the decree in the District 2 Court, Water Division Number 5, in Case No. 90CW340. 3 It's in the Matter of Application of Water Rights of 4 the Board of Water Works of Pueblo, Colorado, and it 5 relates to the change of water rights that we talked 6 about on the Busk-Ivanhoe system, the Columbine, 7 Ewing, and Wertz Ditches, by the Pueblo Board of 8 Water Works. 9 Q. What was the study period used by RMC 10 in -- let me rephrase the question. 11 study period adopted by the Court for the decree in 12 90CW340? 13 A. What was the The study period adopted by the Court 14 was 1925 through 1989, even though, in some of their 15 consideration of volumetric -- long-term volumetric 16 limits, we did update some of that information up 17 through 1992. 18 19 Q. And did you rely on that study period for your November 2012 report? 20 A. I did. 21 Q. Was that a representative study period? 22 A. It was representative -- 23 MR. HALLFORD: Your Honor, I object. 24 The facts and conclusions regarding Pueblo's change 25 of water rights are not preclusive under the Court's Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 272 1 order. The representative study period for the 2 Pueblo Board of Water Works change is not relevant 3 in this matter either, so an opinion about that 4 change of water rights and whether it was 5 representative is not relevant to the Court's 6 consideration. 7 The Court has specifically ruled that 8 this has no preclusive effect so it has really no 9 evidentiary value to this Court. 10 THE COURT: Mr. Hamre? 11 MR. HAMRE: Well, Your Honor, we 12 understand that the Court has ruled on the 13 preclusive and that the Court's ruling was that 14 neither the Court or the parties to this proceeding 15 are bound by the systemwide analysis in the decree 16 in 90CW340, but that's a long way from saying that 17 it's not even relevant. 18 THE COURT: The objection is overruled. 19 401 defines relevance as any tendency to make the 20 existence of any fact a consequence to the 21 determination more probable or less probable. 22 finding that it is relevant for consideration. 23 ahead, Mr. Hamre. 24 25 MR. HAMRE: I'm Go Just so the Court has an idea of where we're going, Mr. Bethel gave a set of Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 273 1 opinions in his initial report. 2 the Rule 56 motion. 3 and we just want to be clear about how those were 4 different and why they were different. 5 6 7 8 9 He had to do different opinions THE COURT: Q. The Court ruled on Go ahead. (By Mr. Hamre) Do you remember the question, Mr. Bethel? A. I believe I do. You asked whether the study period of 1925 through 1989 that was adopted 10 in the RMC analysis was representative, and that 11 period, I believe, was representative for the 12 purposes it was intended, which was to look at the 13 tunnel flows that are a representative time of 14 period for the tunnel-flow conditions as the measure 15 of use in that analysis. 16 It does not necessarily mean that it's 17 representative in other areas where the point of 18 focus may be different, where the point basically of 19 use may be determined differently. 20 Q. And did you consider the terms and 21 conditions in the 90-340 decree in your preparation 22 of your report and in formulating your opinions on 23 what necessary and appropriate terms and conditions 24 would be for this case? 25 A. Yes, I did. Since I believe that that Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 274 1 was a systemwide quantification and of which the 2 Board of Water Works received half of that 3 quantification, then I basically accepted the 4 non-injury provisions and the volumetric limits from 5 that case. 6 7 MR. HAMRE: Your Honor, we would offer Exhibit A-150. 8 MS. RYAN: 9 MR. HALLFORD: 10 Same objection as to its relevance, Your Honor. 11 MR. KRASSA: 12 THE COURT: 13 No objection. No objection, Your Honor. Exhibit 150 is admitted, A-150. 14 Q. (By Mr. Hamre) Mr. Bethel, are you 15 aware of any factors that went into the operation of 16 the Busk-Ivanhoe system that caused a change in the 17 amount of water available to junior water rights in 18 Division 5 after the entry of the 90-340 decree as 19 compared to before the entry of that decree? 20 A. I'm not aware of any factors that caused 21 a change in the conditions to the Division 5 water 22 rights. 23 Q. Did you state an opinion in your 24 November 2012 report regarding whether continued use 25 of the numbers in the 90-340 decree would prevent Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 275 1 injury? 2 A. Yes, I did. 3 Q. And generally can you describe the basis 4 for that opinion? 5 A. The basis for that opinion was, first of 6 all, the no-injury declaration in the decree in 90- 7 340 -- 90CW340 -- excuse me -- relating to the 8 conditions that existed at the time of the decree, 9 basically the pre-1989 or pre-1990 period, and 10 basically the comparison that I performed of the 11 flow conditions through the tunnel in a post-1990 -- 12 excuse me -- a post-1989 period compared to the flow 13 conditions in the tunnel that were prior to the 1990 14 period. 15 16 17 Q. And so what was your conclusion from that analysis? A. My conclusion was that the flow 18 conditions were very similar and that they were 19 basically representative of a no-injury environment, 20 similar to the environment decreed by the water 21 court in 90CW340. 22 23 24 25 Q. Could you turn to Exhibit A-136, please. Can you identify this for the Court. A. This is labeled as "Table 7, B-I System Diversion Comparisons," and it's a table that comes Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 276 1 out of my April -- I'm sorry -- out of my November 2 2012 engineering report. 3 several tunnel-flow conditions that existed for 4 various study periods, including the study period of 5 '25 through '89, which was the period used in the 6 90CW340 decree. 7 It reflects my analysis of And that's the basis that's kind of the 8 100 percent value, if you will. It reflects what 9 the diversions were in the later period of 1990 10 through 2009, which was a 20-year period, which were 11 95 percent of that base-period numbers, so -- and 12 that's part of the information that I used to have 13 an opinion about the similarity of the decree 14 period, the study period used in the decree, versus 15 the period after 1989. 16 17 18 Q. And in the last row, what is the significance of using 1950 as a starting date? A. Well, 1950 is an interesting starting 19 date because it's a 60-year period up through the 20 current time the application was filed in 2009, and 21 the 60-year volumetric limit was one of the 22 important controlling volumetric limits in the 23 90CW340 decree. 24 25 And, therefore, since I'd adopted those volumetric limits, it was an important limit in my Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 277 1 opinions. 2 Q. 3 Is the 1950 date also significant in regard to ownership of the Busk-Ivanhoe water right? 4 A. It is. As you may recall from my words 5 earlier yesterday, the 1950 is the first year of use 6 of the system -- I'm sorry -- not the first year of 7 use -- but first year of full ownership of the 8 Busk-Ivanhoe system and water rights by the Rocky 9 Ford High Line Company. 10 Q. Thank you. Did opposing parties in the 11 90CW340 case raise issues related to prevention of 12 injury? 13 MR. HALLFORD: Your Honor, I object 14 based on, initially, foundation, that he has any 15 knowledge about that. 16 there's no preclusion evolved from that case 17 regarding what people did or did not assert and what 18 was or was not litigated. 19 Second, I would object that So it's not relevant under your prior 20 order and it's, I guess, third, you could say it's a 21 legal opinion. 22 discussions, but I don't have a client here that's 23 asserting that. It may well get into settlement 24 THE COURT: 25 Mr. Hamre? Thank you. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 278 1 MR. HAMRE: Your Honor, where I'm going 2 with this is I would like to put into evidence three 3 statements of opposition by that case, one by the 4 Colorado River District, one by Pitkin County, and 5 one by Eagle County, all opposing parties in this 6 case. 7 Mr. Bethel is not going to be giving 8 opinions about those. He's just going to be 9 highlighting what is in those statements of 10 opposition, but in all three of those -- I mean, the 11 river district raised injury. 12 13 MR. HALLFORD: They said -- Your Honor, we're getting into testimony by counsel. 14 THE COURT: Mr. Hamre, as I understand 15 what you're trying to do, you're trying to establish 16 if there's opposition to the '90 decree. 17 MR. HAMRE: That's not exactly right, 19 THE COURT: Okay. 20 MR. HAMRE: The point here is that it 18 Your Honor. 21 goes to the credibility of the positions being taken 22 by some of the opposing parties, particularly with 23 respect to storage on the east slope, because they 24 raised injury, they raised expansion of use, and 25 then they consented to a decree that allowed -- Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 279 1 I mean, that was based on past storage 2 and that allowed Pueblo to store water in any 3 reservoir on the east slope in the future. 4 THE COURT: Okay. 5 MR. HALLFORD: Your Honor, credibility 6 goes to truthfulness and honesty, not similarity of 7 legal positions. 8 here. 9 against our clients for what they did in prior 10 You've said there's no preclusion This is a back-door attempt to get preclusion unrelated litigation. 11 I appreciate the argument. It's 12 creative. But that's what it is, plain and simple, 13 a back door of preclusion. 14 is not relevant to what's before the Court now. What we did or didn't do 15 THE COURT: 16 Proceed, Mr. Hamre. 17 18 Q. The objection is overruled. (By Mr. Hamre) Mr. Bethel, would you turn to Exhibit 156, please. 19 A. Yes, I have it. 20 Q. Can you identify that for the Court. 21 A. Exhibit 156 is a Statement of Opposition 22 in Case Number 90CW340, the name of the objector the 23 Colorado River Water Conservation District. 24 25 Q. And the bases for opposition are basically set forth primarily in paragraphs 3-B, C, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 280 1 and D? 2 A. 3 4 MR. HAMRE: We'd move for admission of Exhibit A-156. 5 6 That's correct. THE COURT: Same objection, Mr. Hallford? 7 MR. HALLFORD: Yes, Your Honor, and 8 these aren't documents that relate to any opinions 9 that he's given. 10 allegedly preclusive information. 11 12 It's just a presentation of THE COURT: Mr. Hallford. 13 Ms. Ryan? 14 MS. RYAN: 15 THE COURT: 16 MR. KRASSA: 17 THE COURT: 18 admitted. 19 Q. 20 I understand your objection, No objection. Mr. Krassa? No objection, Your Honor. And Exhibit A-156 is (By Mr. Hamre) Mr. Bethel, can you turn to Exhibit 157. 21 A. Yes. 22 Q. Can you identify that for the Court, A. Yes, this is a Statement of Opposition 23 24 25 please. in Case Number 90CW340, the objector indicated as Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 281 1 the Board of County Commissioners of Pitkin County. 2 Q. And, again, paragraph 3 is the where the 3 Statements of Opposition -- or the bases for the 4 opposition are stated? 5 A. That's correct. 6 MR. HAMRE: 7 MR. HALLFORD: 8 I would offer Exhibit 157. Same objection, Your Honor. 9 MS. RYAN: 10 MR. KRASSA: 11 THE COURT: 12 Q. No objection. No objection. Exhibit 157 is admitted. (By Mr. Hamre) And, finally, 13 Mr. Bethel, would you pull out Exhibit A-364, 14 please. 15 A. Yes. 16 Q. Would you identify that, please. 17 A. Yes. This is also a Statement of 18 Opposition in Case Number 90CW340 and the name of 19 the objector is the County of Eagle. 20 21 Q. Thank you. And, as usual, paragraph 3 is the bases for the opposition? 22 A. That is correct. 23 MR. HAMRE: 24 MR. HALLFORD: 25 I would offer Exhibit A-364. Same objection, Your Honor. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 282 1 MS. RYAN: 2 MR. KRASSA: 3 THE COURT: 4 Q. No objection. No objection. Exhibit A-364 is admitted. (By Mr. Hamre) Mr. Bethel, back to the 5 notebook that you had been using, can you turn to 6 Exhibit A-149, please. 7 A. Yes, I have it in front of me. 8 Q. Can you identify Exhibit A-149? 9 A. Exhibit A-149 is a portion of the 10 December 1990 resume in Water Division 5 and Entry 11 No. 94 on that page of this exhibit -- it relates to 12 90CW340, so it's the application in that case as 13 published in the monthly resume. 14 Q. This is the information available for 15 people upon which to base the Statement of 16 Opposition? 17 A. I believe so, yes. 18 19 MR. HAMRE: I would offer Exhibit A-149, Your Honor. 20 MR. HALLFORD: Your Honor, I object, and 21 this is a little different. There's no attack here 22 or question about the reliability of the decree 23 that's entered that you've taken into evidence in 24 90CW340. 25 that information would seem to be cumulative, not The resume publication that just repeats Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 283 1 relevant, and offered only for preclusion. 2 Our clients have not disavowed knowledge 3 of the case. Their Statements of Opposition have 4 been received by the Court over objection. 5 again, the back-door effort to make a preclusion 6 argument and make a record for a preclusion 7 argument. This is, 8 This is probably already in the record 9 as an attachment for the briefing that led to your 10 April motion. 11 relevant. 12 you've entered, Your Honor. 13 14 15 It's not necessary. It's not And it's contrary to the order that THE COURT: Mr. Hamre, why do we need the resume notice? MR. HAMRE: For the reason that I asked 16 Mr. Bethel about this, the information upon which 17 the Statements of Opposition are based, and I don't 18 believe the fact that having -- this having been 19 attached to a brief filed before trial necessarily 20 makes it part of the record. 21 THE COURT: Okay. I've admitted these 22 Statements of Opposition. The resume notice, as I 23 understand it, is for the purpose of giving notice 24 to anyone to come into court and object or oppose 25 the relief requested in a water case, and you've Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 284 1 already established that there was opposition by 2 introducing the Statements of Opposition. 3 So I don't see that the resume notice is 4 adding anything to what you're trying to get at here 5 so I'm going to sustain the objection. 6 Q. (By Mr. Hamre) Moving on, Mr. Bethel, 7 are you familiar with the historical use evaluation 8 of the Busk-Ivanhoe system -- oops, I may have 9 gotten ahead of myself. Have you reviewed the 10 Court's April 18th ruling on the Applicant's Rule 11 56-H Motion? 12 13 14 A. Yes, I believe that's April 2013 and I have reviewed that ruling. Q. And are you also familiar with an 15 historical use evaluation of the Busk-Ivanhoe system 16 by the West Slope Opposers' expert? 17 A. I am. 18 Q. Did they -- or perhaps I should say did 19 he take a different approach than you did in your 20 November 2012? 21 MR. HALLFORD: Your Honor, I'm going to 22 object, and this is a different objection, similar 23 to what we made in the motion in limine, but we have 24 not presented any evidence of this nature. 25 a rebuttal before we even put on our evidence. This is This Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 285 1 is a reliance on evidence that's not in evidence. 2 THE COURT: Okay. 3 MR. HALLFORD: And to that extent we 4 certainly have the horses well behind the cart and 5 so for this witness to, one, rely on what our 6 experts did before they even say what they did, if 7 they say what they did, and, and two, to criticize 8 what they did before they even say what they did, is 9 completely procedurally inappropriate. 10 And so this is what we foresaw and why 11 we filed the motion in limine, but this is the 12 fruits of it bearing out, which I don't think the 13 Court intended or allowed by its order. 14 the Applicant to present its analysis of historical 15 use notwithstanding that it was not initially 16 disclosed. 17 It allowed It did not allow the Court -- I mean the 18 Applicant yet to preemptively strike against and 19 utilize our evidence which is not before the Court. 20 THE COURT: Objection sustained. 21 MR. HAMRE: Your Honor, for 22 23 clarification -THE COURT: So what will have to happen 24 is the Western Slope will have to put on their 25 expert to testify and then you'll have to bring Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 286 1 Mr. Bethel back. 2 MR. HAMRE: In their motion in limine, 3 they cited case law that basically goes to the case 4 law to the effect that, if you know about evidence 5 they're going to put on, then you don't want to 6 sandbag them. 7 case in chief and not sit on it until your case in 8 rebuttal. 9 You ought to deal with that in your THE COURT: Yeah, I don't think you're 10 sandbagging them. 11 and they know what it says, so they're prepared for 12 it. 13 I'm assuming they have the report MR. HAMRE: As long as we don't get hung 14 up on a mid-trial motion, a Rule 41-B motion, 15 because we haven't put on evidence in accordance 16 with your Rule 56 motion, then we can wait until 17 after their experts have testified and then have 18 Mr. Bethel come back. 19 THE COURT: Well, I can't anticipate 20 what the mid-trial motion will be at some point. 21 I'll have to wait until I hear that from 22 Mr. Hallford or other representatives over there, 23 but you just need to present and proceed with your 24 case and we'll deal with it when we get to mid- 25 trial, whenever that may be. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 287 1 MR. HALLFORD: Your Honor, your April 2 order did not modify the burden of proof in this 3 case. 4 THE COURT: That's true. 5 MR. HALLFORD: It dealt with what kind 6 of nature of proof they can put in their direct 7 case, but it did not shift the burden of proof to 8 the Opposers. 9 THE COURT: 10 11 I understand. Go ahead. Q. (By Mr. Hamre) Mr. Bethel, did you 12 perform your own analysis of transferable yield of 13 the Busk-Ivanhoe system for your rebuttal report? 14 A. Yes, I did. 15 Q. And you called that your reanalysis? 16 A. That's correct. 17 Q. And what was the purpose of your 18 19 reanalysis? A. The purpose of my reanalysis was to 20 shift my focus to the historic use, you know, 21 beneficial use of water in the Arkansas River Basin, 22 to conform basically to the judge's April 2013 23 order, or I should say Court's order. 24 25 Q. I'm sorry. What in particular did you find in the Court's ruling that impacted your analysis? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 288 1 A. Well, my understanding of the Court's 2 ruling was that beneficial use was a measure of use 3 of the Busk-Ivanhoe system and to be considered in 4 this case. 5 Q. Generally speaking, when in your 6 analysis of historical use do you select the study 7 period? 8 9 A. A study period is generally selected fairly early in the analysis once you have done your 10 initial collection and review of data for the 11 project, but, yeah, within, you know -- it's one of 12 the early tasks usually in an analysis of historic 13 use. 14 15 Q. And what are you trying to accomplish in picking the study period? 16 A. Well, you're trying to accomplish that 17 you have a representative period that is of 18 sufficient length that it has different types of 19 hydrologic conditions in it such as wet and dry and 20 average periods, and you're also trying to select a 21 period that has reliable and accurate records of 22 use. 23 24 25 Q. And why do you look to all those considerations? A. What's your goal? The goal is to properly quantify the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 289 1 historic use of the system that's being analyzed. 2 Q. So from an engineering standpoint, why 3 is a combination of wet, dry, and average years 4 important? 5 A. Well, different water rights operate 6 differently under different hydrologic conditions. 7 For example, a senior water right may actually take 8 more water in a drier year, whereas, in a wet year, 9 the senior water right might take less water, and, 10 of course, the junior water right may try to take 11 more water, but it does not. 12 Different water rights have a different 13 way of operating depending upon the river stage in 14 different types of years, and that's all important 15 to consider in the historical use analysis. 16 17 Q. And what issues were there with availability of records in this case? 18 A. There were some years of non-record, 19 particularly 1925, 1927. 20 information about how the Busk-Ivanhoe system was 21 used. 22 period advanced. 23 better quality of records. 24 25 We just don't have We have knowledge about that as the time You basically got better and For example, when the High Line took over their system and were in charge of records, we Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 290 1 had a much better understanding of that system. 2 Also, part of the equation is that we had to 3 interpret lease agreements to understand how 4 basically the water was moving to the High Line. 5 Q. And so I think you just indicated that 6 there were some years that you had to exclude 7 because of issues with records? 8 A. Yes. When you don't have a record of 9 the distribution or use of the Busk-Ivanhoe 10 system -- and, again, we're coming from the 11 perspective of, not the tunnel flows, but we're 12 coming from an historical user perspective in the 13 Arkansas River Basin. 14 When we don't have that information, we 15 basically need to exclude those years, and we start 16 our analysis in 1928, which was the year that we 17 felt comfortable that we had a good track record of 18 water use by entities and, in particular, the entity 19 Rocky Ford High Line in the Arkansas River Basin. 20 Q. And are there considerations that 21 operate as a counterbalance to the concerns about 22 availability of records? 23 A. Well, you're always weighing the length 24 of the study period and inclusion of records with 25 the accuracy and reliability of those records, and Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 291 1 so you have to always strike a balance there when 2 you're defining the study period. 3 Q. And without giving a legal opinion, do 4 you have an understanding regarding other legal 5 considerations that need to be taken into account in 6 selecting a study period? 7 A. 8 9 Yeah, as a -MR. HALLFORD: Your Honor, I guess I would ask for clarification. It may not be 10 objectionable, but he wants to state the assumptions 11 that he employed from a legal framework but not give 12 an opinion about those legal assumptions. 13 I think for him to identify the legal 14 assumptions that he utilized in selecting his 15 representative period -- that that is not 16 objectionable, but that's a broad question that may 17 lead to opinions about the appropriateness of legal 18 assumptions. 19 20 THE COURT: cross-examination, sir. 21 22 You can inquire on Proceed, Mr. Hamre. Q. (By Mr. Hamre) Mr. Bethel, Mr. Hallford 23 may have stated my question better than I did. I 24 think the legal assumptions or the assumptions that 25 you used regarding legal limitations is basically Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 292 1 what I was after. 2 A. In the selection of the study period? 3 Q. Yes. 4 A. And, yes, basically what I have done is 5 excluded periods of expanded use and excluded 6 periods of non-decreed use, or un-decreed use. 7 Also, I've looked at -- and one of my consistent 8 manner of selecting study periods is the exclusion 9 of a period in which I felt a municipality had 10 influence over an irrigation system, if, in fact, 11 I'm changing or I'm involved in a change of 12 agricultural water rights. 13 I do not really want a municipality to 14 have an influence over the operation of that system. 15 I want to move back to more of the traditional 16 decreed use of the agricultural system. 17 Q. Did you draw a distinction between 18 nonuse -- or do you draw a distinguish between 19 nonuse and un-decreed use? 20 A. Yes. 21 Q. And what is the engineering basis for 22 23 that distinction? A. The engineering basis is really an 24 effect on the stream conditions. In a period of 25 nonuse of a water right, that water would not have Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 293 1 been deferred. It would have become a part of the 2 stream system, which then was available for other 3 appropriators, downstream users, if you will. 4 And that's part of their existing 5 conditions that they may have relied upon at the 6 time of their appropriation. 7 un-decreed use, diversions were still occurring. 8 They were still part of the historical basis of 9 stream flows that the downstream appropriators saw 10 During a period of and had available to them. 11 So, I mean, that reduction in flow is 12 what the downstream appropriators saw and did not 13 have available to them, and so it's a different 14 setting in terms of the stream conditions. 15 Definitely I consider periods of nonuse in a change 16 of water use as a basis for -- to be included in the 17 change. 18 But, in fact, if it's a period of 19 un-decreed use, then I do not include that in the 20 study period for a change of water rights. 21 Q. Are you familiar with the Division 1 22 Water Court ruling, rulings and decree, in what has 23 been referred to as the Burlington case? 24 A. Yes. 25 Q. Can you turn to Exhibit A-352, please. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 294 1 A. (Witness complied.) 2 Q. Can you identify that for the Court. 3 A. Yes. 4 Findings of Fact in Case Number -- 5 6 Exhibit A-352 is a portion of the Q. Look at the stamp in the very upper, right corner. 7 A. It looks better in the red than it does 8 in the black on top of the black, "2002CW403." 9 would have been Water Division 1. 10 That This is a portion of the Findings of Fact in that case. 11 MR. HAMRE: Your Honor, the parties have 12 stipulated to the admissibility of several portions 13 of the Court's ruling and also the decree as entered 14 by the Court in that case. 15 parties would like, we could put all of those in 16 evidence for completeness. 17 If the Court or the But the first segment of that has a 18 Table of Contents that functions as an index. 19 can put all those in evidence or just this in the 20 decree. 21 THE COURT: 22 MR. HALLFORD: 23 the document be admitted. 24 25 THE COURT: We Mr. Hallford? We prefer the entirety of So Exhibit A-347 through A- 356? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 295 1 MR. HALLFORD: 2 THE COURT: 3 Yes, Your Honor. Okay. A-347 through A-356 is admitted. 4 Q. (By Mr. Hamre) Mr. Bethel, in A-352, 5 are there portions of this that you find significant 6 with regard to the criteria for selecting a study 7 period? 8 9 A. Yes. I believe that there's portions of this document in this case, these Findings of Fact, 10 that relate to the selection of a study period for 11 both the matter at hand, which was a change of use 12 of a direct-flow water right of the Burlington 13 Ditch, and also a change of a storage right. 14 15 16 Q. What did you find informative with regard to the change of direct-flow rights? A. Well, I believe one of the findings that 17 I found significant was Finding No. 383 on page 13 18 of 25 of Exhibit A-352, and that finding basically 19 limits the historical consumptive use for the 1885 20 Burlington water right -- now, this is the 21 direct-flow water right -- to the amount consistent 22 with the right prior to FRICO's involvement 23 beginning around 1909, which expanded the 1885 24 Burlington right. 25 So basically that tells you that they Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 296 1 were accepting historical use for a period before 2 what the Court found was an expansion of use in 3 1909. 4 we have a Finding of Fact which is No. 419 on page 5 19 of 25. Also related to that direct-flow water right 6 And that basically indicates that the 7 Court determined that it turns out the Englewood 8 study period is representative of the actual lawful 9 historic use and is appropriate to be used in that 10 matter, and for the 1885 direct-flow water right, 11 the study period that was defined and accepted by 12 this Court was 1885 through 1909. 13 Q. Similarly, were there any findings you 14 thought important with regard to changing storage 15 rights? 16 A. Yes. I believe Finding 408 -- this is 17 on page 17 of 25 in this same Exhibit A-152 -- was 18 significant in my selection of the study period, and 19 this basically related to the storage water right 20 and the study period that Englewood, which was a 21 primary objector in this case, had suggested was the 22 1927-through-2004 period for the storage right. 23 And they basically were suggesting that, 24 based upon its similarity to an historical period of 25 1897 through 1909, basically that period of Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 297 1 pre-FRICO involvement, they recognized that that 2 storage period that they were suggesting was much 3 longer. 4 This is the 1927 through 2004, but 5 because it was similar -- and they recognized that 6 it was a period of expanded uses, but because it was 7 similar to an earlier period, it was accepted. 8 9 MR. HALLFORD: Your Honor, I guess I would object to that last answer and ask that it be 10 stricken. 11 what the Court understood, what the Court decided, 12 that's a legal opinion. 13 for itself. 14 To the extent that he is interpreting I mean, the document speaks He can certainly tell you what his 15 understanding was of what's in black and white, but 16 his understanding of what the Court considered and 17 why it did it is a legal opinion for which he's not 18 qualified. 19 20 21 THE COURT: The objection is sustained. The last comment is stricken from the record. Q. (By Mr. Hamre) Perhaps I can ask you 22 this, Mr. Bethel: Do you see a distinction between 23 un-decreed uses and expanded uses? 24 A. Yes. 25 Q. And what is that distinction in your Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 298 1 view? 2 A. Well, I believe that un-decreed uses can 3 occur without an expansion of use. 4 can basically be conducted at the same rate of flow, 5 the rate of use, as a decreed use can be. 6 expansion of use typically refers to an increased 7 level of use by an upstream appropriator, perhaps, 8 that would then translate into a change in regime of 9 the maintenance-of-flow conditions for the down- 10 Un-decreed uses An stream appropriator. 11 Q. And in your understanding, was a similar 12 distinction made in these findings in the Burlington 13 case? 14 MR. HALLFORD: Your Honor, I think 15 that's, again, a decree interpretation that we would 16 object to. 17 18 19 20 21 THE COURT: A. Overruled. Yes, I believe the Court -- or I believe that was reflected in this decree. Q. (By Mr. Hamre) That's your understanding? 22 A. Yes. 23 Q. Have you been able to determine from 24 your review of the findings in that case whether a 25 study period was employed that substituted zeroes Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 299 1 for -- that included years of non-decreed use but 2 substituted zeroes for the diversions during that 3 period of un-decreed use? 4 A. I have reviewed summaries of the 5 engineering of the case and as well as Findings of 6 Fact and the decree and do not find any evidence 7 that zeroes were substituted for a period of 8 un-decreed use. 9 10 Q. Would you turn to Exhibit A-356 and identify that, please. 11 A. Yes. This is the Findings of Fact, 12 Conclusions of Law, and Decree in Case No. 02CW403, 13 which is the case we've just been discussing. 14 Q. And it's your understanding that this is 15 the decree that was entered based on the earlier 16 findings? 17 A. 18 19 That's correct. MR. HAMRE: stipulated as far as in this building. 20 THE COURT: 21 already been admitted. 22 record. 23 24 25 This exhibit also has been MR. HAMRE: That's correct. It's We just didn't put it on the My apologies. I thought we only admitted the Findings. THE COURT: Okay. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 300 1 Q. (By Mr. Hamre) Mr. Bethel, what would 2 have been the effect on the Burlington direct-flow 3 right if the Court in that case would have included 4 zeroes for all the years of un-decreed use? 5 MR. HALLFORD: Your Honor, I have a 6 couple of objections. 7 speculation. 8 opinion about an unrelated case. 9 10 Second, this is an undisclosed expert THE COURT: Objection sustained, calls for speculation. 11 12 I think it calls for MR. HAMRE: Your Honor, what I was trying to elicit was simply a calculation. 13 THE COURT: I understand, and you can 14 certainly ask him about what the effect would be in 15 this case of zeroes. 16 Q. (By Mr. Hamre) Generally speaking, 17 Mr. Bethel, when you have a period of time, a period 18 of years -- well, scratch that. 19 about it, the more I like the Court's question. 20 What would be the effect in this case of 21 substituting zeroes for the years of un-decreed use 22 of the Busk-Ivanhoe, Inc., water? 23 A. The more I think Well, in this case, we are discussing 24 the use of the Busk-Ivanhoe, Inc., portion of the 25 water rights, and so, basically, if you would go Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 301 1 ahead and -- we have approximately 50 -- well, you 2 have about 60 years of records generally before 3 Aurora started to acquire the Busk-Ivanhoe interest. 4 And if that value is something similar 5 to what we've talked about, maybe 2500 acre feet of 6 every January yield, then if you go ahead and add to 7 it years that are subsequent to Aurora's purchase as 8 a zero level of use and include that in the 9 transferable yield basis, then you're including 10 basically years from maybe 1986 through 2009 as 11 approximately 33 years, 34 years of zeroes. 12 So generally you would only get perhaps 13 around 60 percent of the yield because you would be 14 including those zeroes for the period of non-decreed 15 use and it makes a very significant reduction in 16 yield. 17 Q. So the amount of lawful use quantified 18 in that situation would then get reduced by 19 40 percent? 20 A. Approximately. 21 Q. In your view from an engineering 22 23 perspective, is that appropriate? MR. HALLFORD: Your Honor, this is not 24 an expert opinion. It's a legal opinion, may be 25 opinions about general fairness and water policy. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 302 1 He's told you what the mathematical result would be, 2 the assumptions that lead to that mathematical 3 result. 4 But his personal opinion -- it's not 5 even a professional opinion about what is fair and 6 what should be the right outcome in this case, which 7 is the Court's decision. 8 9 THE COURT: He's an expert. The objection is overruled. The question was asked as an expert 10 opinion and, Mr. Hallford, you can certainly 11 cross-examine. 12 Go ahead. 13 A. 14 question. 15 Q. I'm sorry. Could you restate the (By Mr. Hamre) I was asking if your 16 view from an engineering standpoint, meaning the 17 effect on the stream, is it appropriate to include a 18 period of zeroes such as you just described in the 19 calculation? 20 A. Yeah, in this particular case, the 21 inclusion of zeroes in that period does not at all 22 reflect the usage of the system on the stream and, 23 therefore, I don't believe, you know -- it's 24 basically a false setting. 25 appropriate to include that false setting in the I do not believe it's Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 303 1 2 determination of transferable-yield water rights. Q. Is that sort of study period that 3 includes a period of zeroes for un-decreed use 4 representative of the use of water, of the water 5 right, for its decreed purpose? 6 A. I do not believe it's representative of 7 the use of the water right for decreed purposes 8 because it's a period of un-decreed use. 9 Q. So what study period did you select for 10 your reanalysis? 11 A. 12 13 For my reanalysis, I selected a period of 1928 through 1986. Q. And you've touched on this just briefly. 14 Could you recap the facts that resulted in that 15 study period as opposed to the study period you had 16 previously used? 17 A. Well, I excluded the first three years 18 of the life, if you will, of the Busk-Ivanhoe 19 system, 1925, '26, and '27, because of the 20 reliability of records and the knowledge of how that 21 water was used, or basically the lack of knowledge 22 of how the water was used in that period, and I 23 excluded the post-1986 period as a period of 24 un-decreed use. 25 Q. And is it your opinion that the study Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 304 1 period you just described, that you selected, is 2 representative of the use of the water right for its 3 decreed purposes? 4 A. Yes, it is my opinion that that is 5 representative of the use of that water right for 6 decreed purposes. 7 8 Q. Having selected your study period, what specifically did you evaluate? 9 A. We evaluated the historic use and 10 beneficial use of the water under the Rocky Ford 11 High Line system, canal system, and equated that 12 into the amount of water which would be required at 13 the tunnel to support that beneficial use. 14 Q. In this analysis, did you draw a 15 distinction between an official use and consumptive 16 use? 17 A. Yes. We were not focused on consumptive 18 use. 19 were looking at basically water that was applied to 20 beneficial use under the system. 21 22 23 We had not determined consumptive use. Q. We Can you turn to Exhibit A-145 and identify that, please. A. Exhibit A-145 is an extracted table from 24 my April 2003 reanalysis of the Busk-Ivanhoe system, 25 and it's a summary table labeled "Table 1, Estimated Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 305 1 Rocky Ford High Line Use of B-I System." 2 3 MR. KRASSA: "2003." THE WITNESS: 5 MR. KRASSA: 6 THE WITNESS: 10 11 I'm sorry. It was 2013. Thank you. Thank you for the correction. 8 9 You said You meant '13? 4 7 Excuse me. THE COURT: Q. Yeah, it's 2013. (By Mr. Hamre) Using Exhibit A-145, can you step the Court through your analysis? A. Yes. The first primary elements of the 12 analysis occurred in Columns 2 and 3 of this table 13 and this reflected the records that we had of the 14 Busk-Ivanhoe water use by the Rocky Ford High Line 15 system, Column 2 being sometimes the record would 16 indicate that the water was delivered -- the amounts 17 of water delivered from the reservoir system, from 18 Sugar Loaf Reservoir. 19 And Column 3 -- sometimes the record 20 would indicate actually water delivered into the 21 head-gate system of the High Line, so those were two 22 different locations in which there were records that 23 were documented of use by the Rocky Ford High Line. 24 And so it's just a matter of, you know, 25 different locations of delivery into the system, and Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 306 1 you can use both of those to get a record of the 2 delivery at the head gate. 3 take the delivery that was specified as coming from 4 the reservoir and basically convey it down with 5 conveyance losses and storage losses down to the 6 head gate. 7 8 9 Q. Sometimes you had to Sometimes you had both? Sometimes you only had one or the other? A. Exactly, and basically the result of 10 that calculation was in Column 4, which was the 11 estimated B-I delivery to the Rocky Ford High Line 12 head gate. 13 diverted on an annual basis. 14 1928 and all the way down to 1986. 15 This is the water we believe was This period goes from That was the water that we believed was 16 delivered into the Rocky Ford High Line of the 17 Busk-Ivanhoe water, so Column 5 is the result of a 18 water budget analysis, application of a water budget 19 analysis that was done by Bishop-Brogden, and that 20 analysis -- 21 MR. HALLFORD: Your Honor, at this 22 point, I object on the basis of what we previously 23 asserted. 24 by and not yet presented by our experts, not created 25 by Mr. Bethel, and so, again, this is -- This is in reliance on material produced Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 307 1 THE COURT: So are you telling me it's 2 getting to rebuttal of your expert's report at this 3 point? 4 5 MR. HALLFORD: Yes, or the information we should present. 6 THE COURT: Okay. 7 MR. HALLFORD: This was not created for 8 either the original or the April report by 9 Mr. Bethel. 10 It's information from BBA that he has chosen to rely upon. 11 THE COURT: Mr. Hamre? 12 MR. HAMRE: Well, I agree it is a 13 different objection because here this is not 14 Mr. Bethel attacking the work of BBA. 15 Mr. Bethel having reviewed their work and said, 16 "This analysis looks adequate and, rather than 17 duplicating it, I'm just going to accept their 18 calculations of use for agricultural purposes under 19 the High Line system." 20 This is So I don't see why -- I mean, this is 21 just a -- this is one step in Mr. Bethel's analysis. 22 It's an important step, but we're not taking shots 23 at -- 24 25 THE COURT: You're not offering it to rebut any of the opinions of the Western Slope's Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 308 1 expert? 2 MR. HAMRE: Well, Column -- 3 THE COURT: 5? 4 MR. HAMRE: Column 5 is not a -- Column 5 5 is one of the things that Mr. Bethel and the 6 engineers from BBA agree upon. 7 8 THE COURT: So you're telling me it's not rebuttal? 9 MR. HAMRE: It is not rebuttal. 10 THE COURT: Based upon that 11 representation, I'll overrule the objection. 12 Q. (By Mr. Hamre) 13 A. Thank you. Continue, Mr. Bethel. Column 5 was a result of 14 initial use of the Bishop-Brogden analysis, the 15 water-budget analysis under the Rocky Ford High Line 16 Canal of total deliveries into the system and 17 whether those total deliveries were beneficially 18 used by the Rocky Ford High Line system. 19 They prepared a table and produced that 20 in their report, and I reviewed that and I thought 21 it was a reasonable analysis of the time periods in 22 which I think they determined -- they defined it as 23 excess water being delivered into the Rocky Ford 24 High Line, which was in excess to the amount that 25 could be beneficially used. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 309 1 I have accepted that in my analysis and 2 then I subsequently compared that with the timing of 3 the Busk-Ivanhoe delivery information that I had 4 within a given year, if I had that record, and 5 defined, you know, what periods of time I thought 6 that the Busk-Ivanhoe water might be attributed to 7 that excess delivery. 8 9 And it's fairly rare, but you can see in Column 5 we don't have very many instances -- 10 there's only one instance in 1943 and then we drop 11 down, of course, into that very wet period of the 12 mid '80s, '83-'84, '84-'85, '86, that we were 13 talking about earlier yesterday. 14 And so these are the time periods that I 15 believe that the Busk-Ivanhoe Tunnel deliveries of 16 water to the Rocky Ford High Line were -- can be 17 characterized as excess for the beneficial use under 18 that system. 19 20 21 22 Q. That reflects water that you as well as BBA excluded from your beneficial use? A. Well, BBA took a little different approach on that. 23 Q. 24 analysis. 25 A. I'm sure we're getting to that. Correct. Okay. Let's continue on with your Next is Column 6, which is Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 310 1 basically the result of taking Column 4, the 2 estimated water at the head gate of the Busk-Ivanhoe 3 system, and reducing it for Column 5, which was the 4 non-beneficial-use characterization, so then we have 5 an estimate, of course, in Column 6 of the estimated 6 Busk-Ivanhoe water. 7 It's beneficially used by the Rocky Ford 8 High Line. Up until this point, we've been talking 9 about the full Busk-Ivanhoe system water, so that 10 would include portions of the Busk-Ivanhoe system 11 that were subsequently transferred to the Board of 12 Water Works and include the part that was 13 subsequently transferred into Busk-Ivanhoe, Inc. 14 And so Column 7 basically takes that 15 full amount of Column 6 and it goes ahead and 16 defines a portion of that for Busk-Ivanhoe, Inc., 17 ownership, if you will, or associated with the water 18 rights that Busk-Ivanhoe Inc., currently owns. 19 And then, from Column 7 to Column 8, I 20 have translated that amount of water that's shown in 21 Column 7 back up to the tunnel, the required flows 22 at the tunnel, to basically derive the amounts shown 23 in Column 7 at the river head gate of the Rocky Ford 24 High Line. 25 And that means the translation is Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 311 1 basically you go ahead and you consider both 2 conveyance losses in moving that water down the 3 river system and also storage fees and losses as 4 it's been placed in Sugar Loaf Reservoir. 5 And so Column 8 is the result of our 6 analysis, shows a 1928-through-1986 average of 2416, 7 and then under that there's a 1970-through-1971 8 average of 2374. 9 of water we believed of the Busk-Ivanhoe system that 10 11 That's an average annual acre feet was beneficially used in Division 2. Q. And while we're down at the bottom end 12 of that chart -- I'm not sure I caught what you 13 said -- the significance of 1950 through 1971 -- why 14 did you choose to look at those particular years? 15 A. 1970 through -- I'm sorry, 1950 through 16 1971 was what I referred to as a very clean period, 17 time period of historic use of Busk-Ivanhoe water, 18 because it was owned fully by the Rocky Ford High 19 Line Company. 20 water to the Board of Water Works, before they 21 transferred any water to Busk-Ivanhoe, Inc., and 22 subsequently to Aurora. 23 It was before they transferred any And so this is a period in which we have 24 good records from the minutes of the High Line 25 Company of their use of the Busk-Ivanhoe water, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 312 1 which they had sole control and authority over, and 2 so it's just a very clean period. 3 quite sometimes the interpretation exercise that was 4 performed prior to that point. 5 Q. Okay. It doesn't have And backing up a little bit, I'm 6 not sure I caught everything you identified when you 7 were talking about the losses that occurred between 8 Sugar Loaf Reservoir -- well, actually, I guess the 9 losses that occurred between the east portal of the 10 Ivanhoe Tunnel, the Carlton Tunnel, and the Rocky 11 Ford head gate. 12 types of losses did you consider there? 13 A. What were those areas, or what The types of losses -- we, first of all, 14 from the east portal of the Ivanhoe Tunnel, which is 15 also known as the Carlton Tunnel, there's a 16 conveyance loss in delivering that water from the 17 tunnel portal down Busk Creek to Sugar Loaf 18 Reservoir. 19 It's a very small loss, but there is a 20 loss there. Once the water becomes available to 21 Sugar Loaf Reservoir or, in fact, Turquoise 22 Reservoir, after 1969, there was a storage fee, if 23 you will, of 20 percent of the water delivered to 24 the reservoir provided to the owner of the reservoir 25 facility for the use of his storage space. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 313 1 Then, once a release was made from the 2 reservoir system -- I'm sorry -- the Sugar Loaf or 3 Turquoise Reservoir down to the Rocky Ford High 4 Line -- you incur additional river losses, transit 5 losses, in delivering that water, so those are the 6 three components of losses that this table 7 reflected. 8 9 10 Q. And why do you believe it's appropriate to treat that rental charge, storage rental charge, as a loss? 11 A. Well, I believe that storage charge was 12 basically a cost of developing the water supply, 13 cost of doing business. 14 not rented, then the water would be of little value, 15 I believe, to other users, to users on the Arkansas 16 River. 17 Q. If that storage space was From your standpoint, is there any 18 meaningful distinction between that kind of a loss 19 and a reservoir evaporation of loss? 20 A. I don't believe so. I believe that 21 those are both basically costs of doing business, of 22 developing a water supply that comes out of the 23 reservoir. 24 MR. HAMRE: I would offer Exhibit A-145. 25 MR. HALLFORD: Our objection was Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 314 1 previously noted and ruled on, Your Honor. 2 MS. RYAN: 3 MR. KRASSA: No objection. Your Honor, I object to the 4 use of the BBA report. 5 be a procedure to cross-examine Mr. Bethel later in 6 the trial after BBA presents their report, but I'm 7 very familiar with the idea of one expert adopting 8 the report of another expert. 9 It may be that there would We were prepared to do that in that H20 10 Ranch case, but I don't think that one can just do 11 that by a blanket adoption. 12 an obligation upon the testifying expert to go into 13 it in some detail and show that he vetted the data 14 that was used by the other expert, that he agrees 15 with the methodology used by the other expert, that 16 he agrees with the assumptions of the other expert. 17 I think that there is And so the reasons to adopt another 18 expert report is that you don't have to repeat the 19 parade but you do have to put your perimeter as an 20 independent expert upon it and Mr. Bethel hasn't 21 done that yet, and I don't know that the Court wants 22 him to do that at this point because the BBA report 23 hasn't been presented yet. 24 25 So perhaps the Court would want to admit this exhibit conditionally upon our right to cross- Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 315 1 examine Mr. Sayler and Ms. Wynne and then 2 cross-examine Mr. Bethel further about the 3 legitimacy of his adoption of the report, but just 4 allowing it to come in at this point is 5 objectionable, Your Honor. 6 THE COURT: All right. Accordingly, 7 we'll admit Exhibit A-145 and we'll give it the 8 weight we determine it is entitled to based upon the 9 nature of the report, given the circumstances of 10 how, as Mr. Krassa has stated, Mr. Bethel's numbers 11 were established in Table 1 and Column 5. 12 13 Proceed. Q. (By Mr. Hamre) Just for clarification, 14 Mr. Bethel, you did not adopt all of the BBA 15 analyses, correct? 16 A. I did not. 17 Q. This was just one that they performed? 18 A. Yes. 19 20 21 This is the one and only analysis that I did adopt. THE COURT: Mr. Hamre, is this a good place for the morning recess? 22 MR. HAMRE: I believe it is, Your Honor. 23 THE COURT: All right, we'll be in 24 25 recess until about 10:45. Thank you. (Recess taken.) Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 316 1 THE COURT: 2 the record on 09CV142. 3 present. 4 5 Please be seated. Back on Counsel and parties are Mr. Hamre? Q. (By Mr. Hamre) Mr. Bethel, did you 6 describe terms and conditions that you thought were 7 necessary in your November 2012 report? 8 9 10 11 12 13 A. I did describe terms and conditions I thought were necessary to prevent injury to other water rights from the change, yes. Q. And can you pull out Exhibit A-121 and identify that, please. A. Exhibit A-121 is my draft engineering 14 report for the Busk-Ivanhoe system change of use in 15 Case Number 09CW142. 16 is dated November of 2012. 17 18 19 Q. It was prepared by myself and And I believe your proposed terms and conditions were on about page 21? A. Yes, this is page 21 of 70 of the 20 exhibit, A-121, and does include a section called 21 "Proposed Terms and Conditions." 22 Q. And I note that the first one listed, 23 the item numbered 1, says, "Season of Use." 24 did you mean by "Season of Use"? 25 A. What I believe that should have been "Season Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 317 1 of Diversion" instead of "Season of Use." 2 I think, an error on my part, that nomenclature, 3 but, yeah, the intent here is basically the season 4 of diversion that would be allowed for the water to 5 make. 6 Q. That was, Once the water is exported from Division 7 5 and stored, I mean, in the future, it can be used 8 by Aurora at any time of year? 9 A. Yes. Once the water is stored, 10 basically -- it doesn't have a season of use -- it 11 can be used any time of the year. 12 13 14 Q. So what did you propose for the diversion-season limitation? A. The diversion-season limitation was 15 proposed to be consistent with the first change and 16 it's consistent with the historic record of the 17 Busk-Ivanhoe system prior to 1989, which was 18 March 24th through November 25th of each year. 19 diversion would be limited to that period through 20 the Busk-Ivanhoe Tunnel. 21 22 23 Q. The And what other terms and conditions are listed here that you still believe are appropriate? A. Well, we do these volumetric limits. 24 Those volumetric limits have changed since my 25 reanalysis. I mean, a new set has been proposed Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 318 1 since the reanalysis. 2 of use proposed here, so that's basically the 3 storage component of the use of the water. 4 We do have an alternate time The stream losses -- of course, that's 5 kind of a standard term for changes of use, that the 6 water-right owner involved in the change will 7 subscribe to any administrative stream losses that 8 are imposed on his delivery of water using a natural 9 stream channel. 10 We, of course, have one that says that 11 the priority -- that the water rights will be 12 exercised in their priority. 13 term in change of water rights. 14 accounting provisions, of course, as will be 15 dictated by the administrators, by the opposers. 16 That's a very common We have some And "Measuring Device" is just a 17 standard clause, but, yeah -- and, also, the last 18 term that we had proposed related to the use of 19 non-owned storage facilities and requiring basically 20 that we get permission to use those facilities 21 before we use them. 22 23 24 25 Q. Thank you. Can you turn to Exhibit A-122 and identify that. A. Exhibit A-122 is my April 23rd, 2013, engineering report. It's actually a response to the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 319 1 objectors' disclosures in Case Number 09CW142, which 2 is this case, and it does include my comments on 3 those disclosures and my reanalysis results. 4 5 Q. And does it also contain your revisions to terms and conditions you think are necessary? 6 A. It does. 7 Q. And where are those? 8 A. Those are contained -- the revisions 9 that I thought were appropriate to the terms and 10 conditions are to the volumetric limits and those 11 are contained in paragraph 3.4 on page 17 of 21 of 12 this exhibit. 13 14 Q. Can you describe the volumetric limits that you propose? 15 A. We have proposed three different 16 volumetric limits with three different time periods, 17 from three different time periods. 18 limit, and that limit is proposed to be 4,064 acre 19 feet. 20 tunnel diversions, maximum tunnel diversions in any 21 one year during the study period. 22 One is an annual It's based upon basically one-half of the The second limit is a 20-year cumulative 23 diversion limit, and this is proposed to be 63,845 24 acre feet, and that, again, reflects the max amount 25 of water that is proposed to be diverted in any Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 320 1 20-year period, and then we have a 60-year 2 volumetric limit which is the amount of water that 3 can be delivered and diverted in any 60-year period 4 in the future, and that limit is proposed to be 5 144,960 acre feet. 6 7 8 9 Q. And why is it necessary to have both a 20- and a 60-year volumetric limit? A. Well, those longer-term volumetric limits reflect that you have different hydrologic 10 conditions that are driving the available water to 11 the system. 12 period, like it did historically. 13 may have a wetter period, like it did historically. 14 Some years it may have an extended dry Some periods it So you want to have an extended period 15 of time that allows you to basically capture the 16 same amount of water that you did historically 17 through those periods, and these limits here are 18 reflective of those kinds of limits that would allow 19 you to replicate historical levels of diversions. 20 21 Q. And do you believe these volumetric limits are adequate to prevent injury? 22 A. Yes, I do. 23 Q. Can you please turn to Exhibit A-8. 24 A. Yes. 25 Q. Can you identify that, please. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 321 1 A. Exhibit A-8 is the Findings of Fact and 2 Conclusions of Law and Judgment Decree. 3 proposed by the Applicant in Case Number 09CW142, 4 which is the case at hand. 5 July 2nd, 2013. 6 Q. These are These are dated Would you look at paragraph 15.3. 7 There's a paragraph with legal descriptions. 8 those the legal descriptions for the Busk-Ivanhoe 9 system facilities? 10 A. Yes, they are. 11 Q. Could you look at paragraph 15.6, 12 please, and in particular 15.6.1. 13 inaccuracy in that paragraph? 14 A. Yes. Are Did you find an In 15.6.1, the values that are 15 referenced for the Pan Ditch and the Hidden Lake 16 Creek Ditch, I believe, are incorrect, that those 17 should be, instead, limited to the same values as 18 shown in 15.6.2, basically that I believe that the 19 2621 decree and subsequent decrees limited the use 20 for direct flow as the same as to storage on those 21 Pan Ditch and Hidden Lake Creek Ditch water rights. 22 Q. The numbers for Pan and Hidden Lake 23 Ditch in 15.6.1 were the conditionally decreed 24 amounts rather than what was ultimately decreed 25 absolutely? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 322 1 A. That's correct. After the Pan Ditch, it 2 should be 25 cfs in 15.6.1. 3 Creek Ditch, it should be 70 cfs instead of the 4 hundred. 5 6 7 Q. For the Hidden Lake If we turn to paragraph 16.5, what is the thrust of that paragraph? A. The thrust of this paragraph is 8 basically that Aurora and the Applicant, which is 9 basically Aurora, have the right to recapture and 10 store water in additional facilities other than 11 those specified if, in fact, they receive permission 12 from the Division Engineer's office, I believe. 13 14 Q. Is that, in fact, notification to the Division Engineer? 15 A. Yes, it is notification. 16 Q. Okay. 17 And if you could turn to paragraph 19 -- 18 A. Okay. 19 Q. -- what does that allow and require with 20 21 regard to use of the Boustead Tunnel? A. Paragraph 19, which is on page 19 of 22, 22 acknowledges basically that water stored in Ivanhoe 23 Reservoir under these water rights can be delivered 24 downstream into the Fryingpan-Arkansas facilities, 25 the Nast Tunnel, without a subsequent change of use. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 323 1 But it also acknowledges that if, in 2 fact, you're using direct-flow water rights, that 3 that same operation may require a change of use in 4 the future. 5 6 Q. And that's due to a distinction between storage releases versus direct flow? 7 A. Yes. 8 Q. Does this decree contain all the terms 9 10 and conditions that you previously indicated were necessary to prevent injury? 11 A. I believe it does. 12 Q. And there are several terms and 13 conditions included that were based on stipulations 14 with other parties? 15 A. That's correct. 16 Q. Were there any terms and conditions 17 added based on stipulations that you found were 18 inconsistent with preventing injury? 19 A. No. 20 Q. And are there any terms and conditions 21 that are not in this decree that are necessary to 22 prevent injury? 23 A. I do not believe so. 24 MR. HAMRE: I would offer Exhibit A-8. 25 MR. HALLFORD: No objection, Your Honor. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 324 1 MS. RYAN: 2 MR. KRASSA: 3 THE COURT: A-8 is admitted. 4 MR. HAMRE: I believe that is all of my 5 No objection. No objection. questions for Mr. Bethel on direct. 6 MR. DINGESS: 7 MR. HAMRE: 8 (Pause in the proceedings.) 9 MR. HAMRE: 10 A-122, Your Honor. Austin? Perhaps not. I would also offer Exhibit That was Mr. Bethel's -- 11 THE COURT: April of 2013 report? 12 MR. HAMRE: Yes. 13 MR. HALLFORD: Your Honor, I think it's 14 appropriate to introduce or accept Section 3.4 at 15 page 17 of that report. 16 explained by the witness. 17 of the -- that there's a foundation -- there may 18 have been scattered reference to the analysis he did 19 in it. 20 That was specifically I don't think the balance But the entirety of the report -- I 21 don't remember it tying together from a presentation 22 to the Court as being an accurate summary of various 23 things. 24 but what he specifically reviewed for the Court was 25 Section 3.4, "Terms and Conditions," and that we He testified certainly from his analysis, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 325 1 would find acceptable. 2 But the balance of it -- we would object 3 at this time that there's not a foundation for it 4 and it's hearsay. 5 THE COURT: The objection to hearsay is 6 overruled. 7 starting at Section 3, pages 14 through 21. 8 9 The Court will admit Exhibit A-122 MR. HAMRE: Would you like us to submit an Exhibit A-8-A or something, Your Honor? 10 THE COURT: A-8-A? 11 MR. HAMRE: A subset of what has been 12 disclosed as Exhibit A just to keep it -- 13 THE WITNESS: 14 MR. HAMRE: This is 122. I'm not sure if that reduces 15 confusion or makes more confusion, but to have an 16 exhibit that is only the portion that Mr. Hallford 17 referred to -- 18 THE COURT: Okay. 19 about two different exhibits. 20 is the proposed decree. I think we're talking You said A-8, which 21 MR. HAMRE: You're right. I did. 22 THE COURT: And you're talking about 23 122, the expert's report. I'm admitting Section 3 24 of that report that starts on page 14 and goes 25 through 21. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 326 1 MR. HAMRE: I misspoke. 2 THE COURT: No, that's okay. 3 MR. HAMRE: Would you like us to -- 4 THE COURT: No, that's okay, and then, 5 depending on what happens later on, you may want to 6 go back to this issue. 7 MR. HAMRE: 8 Your Honor. 9 11 THE COURT: THE COURT: That we're going to admit A-122 starting at Section 3, pages 14 through 21. MR. HALLFORD: That's acceptable, Your Honor. THE COURT: 21 MS. RYAN: 22 MR. KRASSA: 23 THE COURT: 25 What did the Court decide? 20 24 Did you understand what I MR. HALLFORD: 18 19 I was ruled? 16 17 I'm sorry. distracted by my co-counsel. 14 15 Mr. Hallford? MR. HALLFORD: 12 13 Thank you, I have no further questions. THE COURT: 10 I understand. Ms. Ryan? No objection. No objection, Your Honor. All right. Mr. Hamre, anything else? MR. HAMRE: No further questions for Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 327 1 now, Your Honor. 2 THE COURT: 3 MR. KRASSA: 4 5 6 All right. Mr. Krassa? Yes, Your Honor. CROSS EXAMINATION BY MR. KRASSA: Q. Mr. Bethel, I am Bob Krassa for the High 7 Line Canal Company, and you testified this morning 8 about the development of the law concerning injury. 9 Do you recall that testimony? 10 A. Yes, I do. 11 Q. And in that testimony, you mentioned 12 that, as irrigation developed, junior water rights 13 became accustomed or dependent on return flows and 14 that was part of the development of the law of 15 non-injury? 16 A. Yes, I did. 17 Q. Is it also your understanding that that 18 is not applicable in a transmountain water-rights 19 change case because of the law that people in the 20 basin of delivery are not entitled to return flows? 21 22 23 A. That is my understanding and has been for quite a while, yes. Q. And do you also understand that people 24 in the basin of delivery are not even entitled to a 25 continuation of the importation? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 328 1 A. That's correct. 2 Q. All right. You testified a little while 3 ago that using zeroes for years of un-decreed use 4 would reduce the yield of the B-I water rights by 5 about 40 percent? 6 A. Yes, I did. 7 Q. And if I recall, the approximate number 8 of the yield is about 2500 acre feet per year on the 9 average? 10 A. That's correct for the one-half of the 11 system, approximately the amount that's being 12 claimed by Busk-Ivanhoe, Inc. 13 Q. The amount that's the subject in this 15 A. Yes. 16 Q. About 2500 acre feet a year? 17 A. That's correct. 18 Q. So 40 percent of that would be about a 14 19 case? thousand acre feet? 20 A. That's correct. 21 Q. If the Court were to adopt the view that 22 zeroes should be used, resulting in that reduction 23 of 40 percent, would that result also in an increase 24 in water on the western slope of about the same 25 amount, a thousand acre feet? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 329 1 MR. HALLFORD: Your Honor, I think this 2 is beyond the scope of the direct. 3 THE COURT: 4 MR. HALLFORD: 5 And it's not disclosed opinion, sir. 6 7 Overruled. THE COURT: Overruled. It's cross-examination of an expert. 8 Proceed, Mr. Krassa. 9 A. Yes, I believe that, you know, you have 10 basically a pile of water availability to the 11 system. 12 be diverted through the tunnel to the importing 13 water basin, then it would be staying in and become 14 available to the downstream appropriators in the 15 originating water basin. 16 If, in fact, that water is not allowed to Q. (By Mr. Krassa) Now, based upon your 17 review of the diversion records of the Busk-Ivanhoe 18 system, is that thousand acre feet essentially water 19 that has not been available to the western slope 20 since about 1928? 21 A. That's correct. 22 Q. Jumping around just a little bit in the 23 sequence, can you testify to some extent about your 24 November 2012 report? 25 A. Yes. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 330 1 Q. Is it correct that that report did not 2 discuss either return flows or consumptive use under 3 the High Line Canal? 4 A. That is correct. 5 Q. All right. You expressed the opinion 6 that, in a water-short basin, importation of water 7 was equivalent to beneficial use; is that right? 8 9 10 11 A. That was, I believe, a general premise that was used in the first change of Busk-Ivanhoe water and one that I've subscribed to, yes. Q. The elements of that beneficial use -- 12 and I may need to take a moment and grab my other 13 notes here. 14 Excuse me, Your Honor. 15 Would that beneficial use start by the 16 diversion of water through the tunnel? 17 A. I believe so, yes. 18 Q. You have to divert it through the tunnel 19 to get it into the basin of use? 20 A. Yes. 21 Q. There has been testimony that, either 22 from you or from Mr. Simpson, that storage, until 23 the time that the supplemental water is needed, is a 24 part of that system of use of the water. 25 subscribe to that? Do you Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 331 1 A. For the Busk-Ivanhoe system? 2 Q. Yes. 3 A. Yes, I do. 4 Q. All right. And then would you agree 5 that the next component of that beneficial use is 6 routing the water down the river to the diversion 7 facilities of the High Line Canal? 8 A. I would agree with that, yes. 9 Q. Excuse me. This is in regard to use 10 under the High Line, of course, not the municipal 11 use. 12 A. Yes. 13 Q. And then the water has to be diverted at 14 the High Line Canal head gate and carried down the 15 High Line Canal to the farm lateral; is that right? 16 A. Yes, I believe that's correct. 17 Q. And the High Line Canal is about what, 18 19 20 21 90 miles long? A. My understanding is that the canal is about 90 miles long, yes. Q. And then the water comes out of the 22 canal through the farm-lateral head gate for 23 distribution, right? 24 A. That's correct. 25 Q. And at that point, it's applied to the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 332 1 irrigated fields either by flood or sprinkler 2 system; is that right? 3 A. That's my understanding, yes. 4 Q. And then, as a result of that use, 5 depending on the method of application, whether it's 6 flood or sprinkler, some proportion of return flow 7 gets back to the river? 8 9 10 11 A. Yes, some portion is consumed and, conversely, some portion is actually returned to the river. Q. Are all of those steps that we've just 12 recounted essential and inherent to the beneficial 13 use that you were testifying to? 14 A. I believe they're all inherent in the 15 reanalysis of the analysis -- I'm sorry -- the 16 reanalysis that I performed and to our component of 17 the historic use, yes. 18 19 20 21 22 Q. Could any of them be omitted and still enjoy the historic use under the High Line Canal? A. I don't believe so. MR. KRASSA: All right, I have no further questions, Your Honor. 23 THE COURT: 24 Ms. Ryan? 25 MS. RYAN: Thank you, Mr. Krassa. I have no questions, Your Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 333 1 Honor. 2 THE COURT: All right, I guess you're 3 up, Mr. Hallford, unless you don't have any 4 questions. 5 MR. HALLFORD: 6 A few. CROSS EXAMINATION 7 BY MR. HALLFORD: 8 Q. Good morning, Mr. Bethel. 9 A. Good morning. 10 Q. You worked for the City of Aurora on 11 water-right matters for several years, correct? 12 A. I'd say for quite a few years, yes. 13 Since 1984 I've worked, off and on, on different 14 water-right matters for the City of Aurora. 15 Q. Many of them in Water Division 2? 16 A. Quite a few of them in Water Division 2, Q. Your work on the Busk-Ivanhoe change-of- 17 18 yes. 19 water-rights case we're here for began somewhat 20 recently, though, right? 21 A. Yes. I believe it began shortly before 22 the application of the water rights in 2009 for the 23 change of water rights -- excuse me -- in 2009. 24 25 Q. It's true, isn't it, that prior to this change of use, you've not previously had a client Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 334 1 acquire a water right for change and wait in excess 2 of 20 years to seek a judicial approval for change; 3 isn't that true? 4 A. I can't recall having a client in that 5 situation you described. 6 true. 7 Q. As far as I know, that's And you said that, in regard to the 8 effect of a zero calculation for the un-decreed-use 9 period in this case, that that would limit the water 10 right by about 40 percent of what you had otherwise 11 determined should be an average annual yield? 12 A. I believe what I said was that, if there 13 are zeroes assigned to the use of un-decreed uses, a 14 period of un-decreed uses, that would be the 15 approximate outcome of that assignment. 16 Q. This period of 40 percent of the study 17 period you were referencing did not involve nonuse, 18 though, did it? 19 A. I'm sorry. We're talking about the 20 post-1986 period for the Busk-Ivanhoe system and 21 whether, in fact, nonuse occurred in that period? 22 23 Q. Yes, sir, that that was a period of un-decreed use rather than nonuse in your view. 24 A. That's my understanding, yes. 25 Q. And, therefore, the diversions continued Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 335 1 as they had prior to Aurora's acquisition, in your 2 view? 3 A. Yes. I believe, prior to the 4 acquisition, that they basically commanded a full 5 flow that was available to that system and they 6 continued to do that after Aurora's acquisition of 7 those water rights. 8 Q. There was no tunnel impairment or loss- 9 of-storage excess or other thing beyond the control 10 of Aurora, for example, that limited the ability to 11 divert after they acquired their interest, was 12 there? 13 A. I'm sure that there were tunnel 14 impairment issues. I think that's been the history 15 of the system, that, you know, there basically had 16 been cave-ins that impaired the capacity of delivery 17 at some times, and those were subsequently repaired 18 or whatever. 19 I think recently the system has not been 20 maintained up to that full capacity that we saw back 21 in the early days. 22 Q. But any impairments after Aurora's 23 acquisition were not material enough to cause, by 24 themselves, a reduction in the diversion through the 25 tunnel because of physical limitations, correct? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 336 1 2 A. I don't know that. I'm sorry. I don't have that information in front of me. 3 Q. But you testified that the amount of 4 diversions after Aurora's acquisition continued to 5 be similar to those prior to Aurora's acquisition, 6 correct? 7 A. Yes. 8 Q. So the period of use after Aurora's 9 10 acquisition and the fact that it was un-decreed was an election by the City of Aurora, correct? 11 A. You're talking about the election being 12 that it was un-decreed and that use as an un-decreed 13 status? 14 Q. More specifically, that it was for 15 municipal purposes rather than irrigation after they 16 acquired it; that was their choice, correct? 17 18 19 A. That was their choice and their election, to apply for municipal use, yes. Q. I'll kind of go through your testimony 20 without jumping around a bunch because that's kind 21 of the way I prepare, so going back somewhat to the 22 top of your testimony, you related to us a history 23 of the development of the Busk-Ivanhoe system and 24 you talked about, during the 1920s, that there were 25 surveys of facilities, including Ivanhoe Reservoir, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 337 1 and I'm sure you recall that history and testimony? 2 A. Yes, I do. 3 Q. You did not mention that there were, at 4 that time, any surveys of reservoirs on the Front 5 Range like Sugar Loaf, Turquoise, Spinney Mountain, 6 correct? 7 A. Okay, that's correct. 8 Q. In that testimony, or maybe later, you 9 talked about the cost that was incurred for various 10 facilities' developments. 11 testimony? Do you remember that 12 A. Yes, I do. 13 Q. And you did not mention any costs for 14 storage on the east side of the Continental Divide 15 in that calculation, did you? 16 A. That's correct. 17 Q. Because you know of none, right? 18 A. I didn't tabulate that value. I'm not 19 sure if that exists or not. 20 identified on the east slope, like the Lake Fork 21 Reservoir, that we had an indication that that water 22 source of the Busk-Ivanhoe system was to be provided 23 to that facility, was not constructed, so I didn't 24 itemize any storage costs on the east slope. 25 Q. The structures that we Now, the Lake Fork Reservoir was the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 338 1 subject of a map and filing statement prepared by 2 the Busk-Ivanhoe people, correct? 3 A. That's correct. 4 Q. And that was done in the 1920s, right? 5 A. That's correct. 6 Q. Contemporaneous with the Busk-Ivanhoe 7 8 9 10 11 1925, I believe. system adjudication, let's say? A. Similar; I mean, basically it was before the Statement of Claim was offered and before the decree was offered to the Busk-Ivanhoe system. Q. But that Lake Fork Reservoir was never, 12 to your knowledge, made the subject of a claim in 13 any court of jurisdiction to award it a storage 14 right, correct? 15 A. That's my understanding, yes. 16 Q. So the statement of -- map and filing 17 statement was essentially abandoned by the 18 Busk-Ivanhoe people at some point, right? 19 20 MR. HAMRE: he's calling for a legal conclusion. 21 22 I would object to the extent THE COURT: Q. Sustained. (By Mr. Hallford) Well, the Lake Fork 23 Reservoir Project, as presented in the map and 24 filing statement, was never continued to fruition by 25 the Busk-Ivanhoe people, correct? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 339 1 A. I believe that's correct. 2 Q. But apparently the filing of maps and 3 filing statements for facilities such as the 4 Busk-Ivanhoe system and the Lake Fork Reservoir was 5 the custom in the 1920 period, correct? 6 A. 7 question? 8 Q. I'm sorry. Can you rephrase that Well, you've discussed what was 9 customary in the 1920s regarding water rights. In 10 this instance, the Busk-Ivanhoe system was the 11 subject of map and filing statements with the State 12 Engineer's office, correct? 13 A. Yes. 14 Q. So was Lake Fork Reservoir, correct? 15 A. Yes. 16 Q. So that was customary in the 1920s, to 17 18 file a map and filing statements, wasn't it? A. I believe so. I'm not sure how 19 widespread that was. 20 topic to know the extent of filings of maps and 21 statements for a lot of the water rights filed in 22 that period. 23 Q. I haven't researched that But the Busk-Ivanhoe system developers 24 were knowledgeable enough to create and file maps 25 and filing statements for their facilities, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 340 1 including those that didn't get decreed, correct? 2 A. I believe that's correct. 3 Q. And at that time, isn't it correct that 4 filing a map and filing statement was legally 5 required? 6 A. 7 I don't know that. MR. KRASSA: Your Honor, that is a 8 misstatement of the law. 9 effect during the entire era of the Map and Filing 10 There was no statute in Statute that required such a filing be made. 11 THE COURT: I'm not sure what the 12 objection is. 13 would be that it assumes facts not in evidence? 14 I guess, under the rules, I guess it MR. KRASSA: It probably is based on the 15 idea that he's eliciting a legal opinion but it's 16 made worse by the fact that the legal assumption 17 Mr. Hallford made is simply incorrect. 18 make a statute broader than it was through a 19 nonexpert witness. 20 THE COURT: He can't I'll sustain the objection. 21 This witness doesn't have the legal basis to answer 22 the question. 23 Q. (By Mr. Hallford) In your history of 24 the Busk-Ivanhoe development, you did mention the 25 1958, approximate, development of Turquoise Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 341 1 Reservoir, or the enlargement of Sugar Loaf into the 2 Turquoise Reservoir, correct? 3 A. That's correct. 4 Q. And you would agree that the 5 availability of Turquoise Reservoir as an 6 enlargement of Sugar Loaf Reservoir allowed the 7 Busk-Ivanhoe system to divert more water than it had 8 previously? 9 A. I have not investigated that as a point 10 of storage, whether, in fact, you know, the exercise 11 of storage space under the CF & I ownership of Sugar 12 Loaf was much different than, say, a Bureau contract 13 in Turquoise Reservoir and the timing of those, 14 whether they actually did allow additional storage. 15 I just haven't investigated that. 16 Q. Well, in your analysis of Busk-Ivanhoe 17 diversions from 1928 forward, you did not evaluate 18 whether there was an effect from the availability of 19 storage in Turquoise as opposed to prior conditions? 20 A. I have identified certain years where I 21 believe the storage and the filling of that storage 22 by natural rights curtailed some of the storage 23 available to the Busk-Ivanhoe system, both in years 24 prior to 1968 and after 1968. 25 Q. Now, you were here for basically all of Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 342 1 the testimony in this case prior to your testimony, 2 right? 3 A. Yes, I was. 4 Q. And you heard testimony from -- I 5 believe it was Mr. Simpson -- about the so-called 6 CF & I account? 7 A. Yes, I did. 8 Q. You're aware of that account and its 9 history? 10 11 A. typically as described by Mr. Simpson. 12 13 I'm aware of portions of its history Q. And you're familiar with the so-called one-fill rule for a water storage right, aren't you? 14 A. Yes, for natural -- I believe that 15 applies to basically water rights for the natural 16 flow of the stream system. 17 Q. And Mr. Simpson characterized the CF & I 18 account held now by Aurora as an account or pool 19 rather than a water right. 20 A. Do you remember that? Yeah, I believe he characterized it as 21 kind of a bucket area where storage could occur, 22 yes. 23 Q. So storage of any flavor of water that 24 was contractually allowed to be put in the space can 25 be stored there, right? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 343 1 A. I believe so, yes. 2 Q. And it's not based on a priority in 3 terms of storing that water in that account, right? 4 A. That's correct, because these are 5 principally, you know, diversions, transmountain 6 diversions from the western slope that the storage 7 is related to. 8 9 Q. And I assume that you, therefore, believe that there's no need for a volumetric limit 10 on the accumulation of storage in such accounts? 11 There may be a contract limit but there's not a 12 reservoir-water-right limit? 13 MR. HAMRE: Pardon me. Could I ask 14 Mr. Hallford to clarify whether he is talking about 15 post decree in this case or historically. 16 THE COURT: Post decree in? 17 MR. HAMRE: In this case; as to the 18 limit that he's referring to, is he talking about 19 looking back historically or looking forward to the 20 future? 21 22 23 THE COURT: Clarify your question, Mr. Hallford. Q. (By Mr. Hallford) We're talking about 24 history, Mr. Bethel, and, prior to the entry of any 25 decree in this case, the use of accounts instead of Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 344 1 storage water rights on the Front Range. 2 an understood context? 3 4 A. Do we have For whether there should be a volumetric limit placed on the use of east-slope storage? 5 Q. Yes, sir. 6 A. In this case? 7 Q. No. 8 A. Historically one exists through the 9 Does one exist is what I'm asking. contractual agreements for the use of that space in 10 terms of, not a volume that can be stored in any one 11 year, but an amount of space that was available for 12 the storage of one's water, and so you could fill it 13 up and release water from it and fill it back up and 14 release water. 15 So there wasn't, I don't believe, a 16 volume limitation on the amount of water placed in 17 storage but there was, for sure, a contractual limit 18 to the amount of storage space that became 19 available. 20 21 Q. There was a contractual limit in Turquoise Reservoir, correct? 22 A. I believe there was, yes. 23 Q. And from that account, if you're Aurora, 24 you can deliver your water through your system to, 25 say, Spinney Mountain Reservoir, which you own in Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 345 1 2 3 4 its entirety, correct? A. The City of Aurora, I believe, owns that reservoir in its entirety, yes. Q. And then you can even deliver water 5 through that facility and on over to Aurora 6 Reservoir near the city, correct, and you own that? 7 A. Own the city? 8 Q. The City -- 9 A. I'm sorry. 10 11 12 The last sentence, that "You own that," I'm not sure what that was referring to. Q. The City of Aurora owns Aurora Reservoir, right? 13 A. Okay, yes. 14 Q. And they can deliver Busk-Ivanhoe water 15 to Aurora Reservoir? 16 A. I believe so, yes. 17 Q. And they can deliver it to other 18 reservoirs on the Front Range, correct? 19 A. That's correct. 20 Q. And they have done so? 21 A. I believe that's true. 22 Q. And there is no carryover limitation on 23 how much Busk-Ivanhoe water they can have in all of 24 their reservoirs at any one time at this time? 25 A. I believe that's true, yes. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 346 1 Q. So they can accumulate years of 2 diversions in Front Range facilities at this time 3 without a water-right limitation on volume? 4 A. I believe that's true, but I believe 5 that's also consistent with their historic 6 operation. 7 up water during the wetter periods so that it's 8 available, you know, to be used in the drier 9 periods. 10 The purpose of storage is often to save That's just the concept of storage in a 11 prudent municipal use, and so I think that's an 12 historical fact as well as the current fact. 13 Q. Now, storage water rights almost 14 universally are subject to the one-fill rule, one 15 fill per season, right? 16 17 A. of natural flow in the river basin, yes. 18 19 20 If it involves the diversion and storage Q. Is transmountain diversion unnatural A. Well, it's not part of the natural flow. flow? 21 It's an imported flow to the basin, different than 22 the diversion of natural flow in a basin. 23 Q. Storage water rights are typically 24 subject to the carryover principle in calculating 25 the one fill, aren't they? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 347 1 A. Yes, I believe so. 2 Q. Yet it's your theory that the CA 2621 3 degree has a right of storage silently written into 4 it on the Front Range, isn't it? 5 A. I believe that the decree was silent on 6 that issue, which is a little different than what 7 you just indicated to me. 8 9 10 Q. So you don't believe that there's a storage entitlement written into the decree or assumed because of silence? 11 A. I believe it was silent, the decree was. 12 I believe that the intent that has been demonstrated 13 is a factor in the use of that water. 14 15 Q. That the intent was that storage would A. The intent was that storage was a help? 16 17 critical element, I believe, in the productive use 18 of this water. 19 Q. So storage was a critical element and, 20 at the time of the decree, a Front Range reservoir 21 was identified by a map and filing statement, wasn't 22 it? 23 24 25 A. I assume you're referring to the Lake Fork Reservoir? Q. Yes, sir. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 348 1 A. That was one of the reservoirs that we 2 believe that, yeah, was explicitly mentioned as the 3 source of supply from the Busk-Ivanhoe system, yes. 4 Q. The Statement of Claim for the 5 Busk-Ivanhoe system does not mention Front Range 6 storage but mentions Ivanhoe Reservoir on the west 7 slope, correct? 8 A. That's correct. 9 Q. And the decree that followed is 10 similar -- 11 A. That's correct. 12 Q. -- in its mention of Ivanhoe Reservoir 13 14 15 16 but no other structure? A. I agree it was silent on the use of other structures, yes. Q. So the Busk-Ivanhoe people were 17 sophisticated enough to file a map and filing 18 statement for a Lake County Reservoir but not to 19 make a claim for it in the water court case; isn't 20 that true? 21 A. And I don't know the intent and the 22 process of thought for that owner of the Lake Fork 23 Reservoir site. 24 25 Q. Well, you testified all about intent from minutes and other documents, Mr. Bethel, and Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 349 1 I'm just trying to get at that. 2 a bunch of historical documents and saying that 3 there was intent. 4 MR. HAMRE: You were looking at Mr. Bethel did not testify 5 about whether the Carltons were legally able to file 6 a -- to add a claim in for -- my apologies -- to put 7 a claim or whether they -- he did not say that they 8 could have put a claim for Lake Fork Reservoir in 9 the decree that they obtained for the Busk-Ivanhoe 10 system. 11 To the extent he testified about that, 12 he said they would -- his understanding was that 13 they would not have been able to do so. 14 THE COURT: The question, I believe, is 15 argumentative, Mr. Hallford, so it will be sustained 16 on that objection. 17 Q. (By Mr. Hallford) Now, do you have any 18 knowledge whether there was a court of competent 19 jurisdiction to confirm water rights and storage 20 water rights within Lake County in 1925? 21 A. Well, I can't comment on their 22 competence, but I do believe there was a court that 23 did exist for the decreeing of direct-flow and 24 storage rights in Lake County. 25 Q. In fact, your work on behalf of Aurora Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 350 1 has involved water rights that divert and store 2 within Lake County that were adjudicated previous to 3 1925, correct? 4 A. My previous work for Aurora has involved 5 water rights for direct flow for sure prior to 1925. 6 I don't recall about whether, in fact, there have 7 been decrees for storage water that predate 1925 8 that I've worked on. 9 Q. Are there decrees existent with rights 10 that are used still within Water Division 2 that 11 predate 1925? 12 A. Yes. 13 Q. Storage water rights? 14 A. Yes. 15 Q. For example? 16 A. Well, you have storage systems under the Give us an example. 17 Fort Lyon storage canal that predate 1925. 18 the Lake Meredith, Lake Henry systems under the 19 Colorado canal system that I believe predate 1925, 20 but I would have to research that to confirm that. 21 Q. You have And some of those decrees for storage 22 from the Arkansas main stem were entered in the 23 1890s, correct? 24 A. I believe that's correct. 25 Q. So let's turn to the decree or decrees Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 351 1 in this Civil Action 2621 original decree, the 2 Busk-Ivanhoe water rights, and then the follow-along 3 diligence decree that you referred to. 4 3082. I think it's 5 A. Yes. 6 Q. You don't have to get the documents. 7 I just want to turn the subject to that. 8 A. Okay. 9 Q. And you talked about what they meant or 10 your opinions of what they meant. 11 that testimony? Do you remember 12 A. Yes. 13 Q. You specifically talked about the 14 concept of supplemental irrigation. 15 that? Do you remember 16 A. Yes, I do. 17 Q. With testimony to the effect that 18 supplemental irrigation involves delivering water 19 for finishing crops, for example? 20 A. I believe that the finishing-crop 21 statement was Mr. Simpson's, but I may have also 22 used that, yes. 23 Q. But that basically it's a later- 24 season -- irrigation-season use when you have 25 supplemental water involved? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 352 1 A. I believe I indicated that it was in use 2 outside the normal peak hydrograph of the river 3 system, can be an early use to start the crops or a 4 later use to mature the crops. 5 Q. The Busk-Ivanhoe system was adjudicated 6 for supplemental irrigation on approximately 80,000 7 acres in the Arkansas River Basin. 8 isn't it? 9 A. I believe that's correct. 10 Q. And not specifically for the High Line 11 12 That's correct, Canal system, right? A. I believe the High Line Canal system was 13 mentioned as one of the systems that was added up to 14 that 80,000 feet of acreage. 15 Q. The actual end use turned out to be the 16 20-plus thousand acres under the Rocky Ford High 17 Line Canal, right? 18 A. I believe that was the primary use that 19 we've identified, yes. 20 22,500, that type of range, but something that 21 exceeds 20,000. 22 Q. It's approximately 25,000, But there's no additional substantial 23 acreage out there, 10, 20, 30 thousand acres, beyond 24 the High Line Canal system that have been identified 25 as the end use for the Busk-Ivanhoe water, right? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 353 1 A. Well, the minutes of the High Line 2 Company also identified there were times in which 3 that Busk-Ivanhoe water was delivered to the Oxford 4 Canal and to the Excelsior Canal systems. 5 not tried to identify that and take credit for that, 6 but there were other systems that did use that water 7 in addition to the High Line. 8 9 Q. We have But essentially the best of the specific documentation illustrates that a water-right system 10 plan for 80,000 acres ended up getting regularly 11 used on 25,000 acres, right? 12 A. I believe that's a fair statement, yes. 13 Q. Now, you presented no real direct 14 evidence of what the Court meant by the use of the 15 word "supplemental" in its decree, did you? 16 A. I thought I'd indicated that my opinion 17 of the word "supplemental" was that it was a 18 storage-based, reservoir-system manner of delivery. 19 Q. But you presented no evidence directly 20 as to what the Court meant by that word; only your 21 opinion of what you think it meant? 22 A. That's correct. 23 Q. Now, if we could -- and we're going to 24 talk about High Line Company -- Canal Company 25 minutes later, but if we could look at Exhibit Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 354 1 2 3 4 A-240, in which you did -- it's one of the minutes. A. Yes, I have that in front of me. It's the redacted minutes from 1943. Q. By the way, just a question about these 5 minutes, while I'm looking for what I want to ask 6 you about: 7 8 A. Do you know who redacted these? Yes. They were a staff of Duncan, Ostrander & Dingess that redacted the minutes. 9 Q. During this litigation? 10 A. I believe it was during the litigation. 11 I mean, I don't have an exact time, but . . . 12 Q. You never saw the non-redacted minutes? 13 A. No. I did see the redacted -- the non- 14 redacted minutes and then identified certain, I 15 believe, relevant portions which were then redacted. 16 Q. 17 redacted? 18 You reviewed relevant portions that were MR. HAMRE: Would it be appropriate to 19 make a clarification here since there's been some 20 indication that our firm did that? 21 Canal Company did make their minutes available to 22 Mr. Bethel for review. 23 parts that he thought were relevant. The High Line Mr. Bethel identified the 24 The High Line Canal Company did not want 25 to have its financial affairs widely distributed and Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 355 1 asked that, if these were going to be produced, that 2 references to personnel and employment matters and 3 financial matters be redacted. 4 firm made those redactions. 5 Our attorneys at our The redacted versions of the minutes are 6 what were produced to the West Slope Opposers and 7 they were also informed that, if they desired to go 8 review the minutes of the High Line Canal Company at 9 High Line Canal Company's offices to see, you know, 10 or to make sure that we didn't get a little too 11 carried away with our redacting, they were able to 12 do that. 13 I have not heard whether they took that 14 opportunity, but that's why the redacting thing 15 was -- that's why it was done. 16 THE COURT: 17 trying to get at here? 18 Mr. Hallford, what are you MR. HALLFORD: I was just curious to 19 know how it was done, whether he had seen them 20 before and whether any of the statements that are 21 redacted say anything about the Busk-Ivanhoe system 22 water use and storage. 23 THE COURT: 24 25 Why don't you ask that question then. Q. (By Mr. Hallford) Do you know? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 356 1 A. I believe that the instructions given in 2 the redaction process were not to redact portions 3 that related to the Busk-Ivanhoe system or the other 4 water sources, you know. 5 minutes basically for information that related to 6 water sources that Farmers High Line were basically 7 thinking of acquiring, were thinking of leasing, 8 that kind of thing, to shed light on their 9 water-short nature. 10 I was looking at these And that included the Busk-Ivanhoe 11 system, so I believe those portions were left intact 12 in these redacted minutes. 13 MR. HALLFORD: I was just curious to 14 know if there was relevant material that was 15 removed, Your Honor. 16 17 THE COURT: Q. All right. (By Mr. Hallford) But if we look at the 18 exhibit I referenced, A-240 -- and what I'm looking 19 at is at page 17 of that document. 20 that, Mr. Bethel? Do you have 21 A. Yes, I do. 22 Q. This is a set of minutes that you 23 testified about, right? 24 A. Yes. 25 Q. And you relied on in making opinions or Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 357 1 conclusions about storage? 2 3 A. I would have to reorient myself to know exactly what I testified to on this document. 4 Q. But if you look at, I guess, at the 5 fourth full paragraph on that page, that says it may 6 be possible to use the Busk-Ivanhoe water without 7 storage, doesn't it? 8 9 A. Doesn't it say that? Well, I'm not sure it does say that. does talk about one plan being the straight charge, 10 the three-cent plan, wherein there was a charge of 11 three cents on each check drawn. 12 correct paragraph? 13 THE COURT: 14 MR. HALLFORD: 15 16 17 18 It Am I reading the What page are you on, sir? I'm on page 17 of Exhibit A-240. A. Now, are you referring to the fourth paragraph of that page? Q. (By Mr. Hallford) Yes. It says, "While 19 it may be possible to use the transmountain water by 20 direct run if it could not be stored," and do you 21 see that paragraph? 22 23 24 25 A. I'm sorry. I'm missing that. This is page 17 of Exhibit 240, A-240? Q. Yes, sir. MR. HAMRE: We might have a -- Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 358 1 2 MR. HALLFORD: May I approach and see if we have the same document, Your Honor? 3 THE COURT: Sure. You might as well 4 look and see if I have the same one too because I 5 don't see that either. 6 A. I'm sorry. 7 Q. (By Mr. Hallford) 8 It doesn't look the same. Oh, that's because -- why don't we use the Bates number, 2136. I'm sorry. 9 A. Okay. 10 Q. There are apparently numbers that 11 restart within this document. 12 Bates No. 2136 within this exhibit, the fourth 13 paragraph, Mr. Bethel. 14 15 A. Q. Okay, now I do see the paragraph you're And it states that it may be possible to use this water without storage, doesn't it? 18 19 So referring to. 16 17 I apologize. A. That's correct, but it does have a qualifier after that. 20 Q. It's related to the value, right? 21 A. Well, yes. The value of the 22 transmountain water would lie in being able to store 23 it. 24 25 Q. And it doesn't further explain what it means by value. That could be financial? That Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 359 1 could be water supply? But it just says "the 2 value," correct? 3 A. That's correct. 4 Q. Skipping -- well, going back to the 5 concept of supplemental supply, well, this was from 6 1943 and a document of the High Line Canal Company, 7 right? 8 A. That's correct. 9 Q. This was within the period of time when 10 the Busk-Ivanhoe principles were endeavoring to sell 11 the system to High Line Canal Company, right? 12 A. This is one of those times that they 13 were endeavoring to sell the system to the High Line 14 Company, yes. 15 Q. And since High Line Canal Company was 16 not the appropriator and owner of the water rights, 17 the Busk-Ivanhoe Company made numerous efforts to 18 promote the water right to them for acquisition, 19 right? 20 A. I believe that's correct. 21 Q. But back to the concept of supplemental 22 supply, isn't it true that, without talking about a 23 specific water right or system, a supplemental 24 supply in Colorado water practice can include adding 25 water to an existing inadequate supply for any Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 360 1 number of reasons, right? 2 A. I'm sorry. You're saying the 3 supplemental supply can be considered to be adding 4 to an adequate supply? 5 Q. An inadequate supply. 6 A. Inadequate. 7 that. 8 I'm sorry. I misheard Yes. Q. I mean, one example would be, if you 9 have a junior water right that's not got a reliable 10 priority, you might find a supply to supplement it, 11 right? 12 A. That's correct. 13 Q. From storage or otherwise? 14 A. I believe generally from storage, but Q. Another example would be, if you have or 15 16 yes. 17 desire to irrigate more acres than your existing 18 water rights can provide a full supply to, you might 19 seek a supply to supplement those water rights, 20 correct? 21 A. That's correct. 22 Q. And that would be an example of 23 supplementing your existing inadequate supply? 24 A. That's correct. 25 Q. So junior water rights or acreage could Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 361 1 2 be reasons for a supplemental supply? A. And I believe there are other reasons 3 too, but those are two reasons that I guess you 4 could have a supplemental supply. 5 Q. So the need for a supplemental supply is 6 not universally tied to the notion that water should 7 be stored for delivery in the late irrigation 8 season, is it? 9 A. I believe -- I mean, you're trying to 10 ask for a general statement and not related to this 11 particular environment that this system was used in 12 and decreed for? 13 Q. I'm asking for the reason why people, 14 including courts, use the word "supplemental," in 15 your experience. 16 A. In my experience, it has related to 17 reservoir water being used outside of the peak of 18 the hydrograph. 19 Q. I am not arguing with you about that. 20 It has also been used for conditions that you and I 21 just discussed, too many acres, too junior of water 22 rights, correct? 23 A. That's possible, yes. 24 Q. Possible? 25 Haven't you ever run into that situation with clients? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 362 1 A. Well, at the time the supplemental 2 source is developed, strictly it's supplemental to 3 an existing water right, and typically that perhaps 4 is a junior water right that has water already 5 available to it during the peak of the hydrograph 6 because of its priority. 7 So I believe that, you know, like I've 8 said before, I believe that the supplemental nature 9 of this water is tied to the reservoir system and 10 tied to delivery of water outside the peak of the 11 hydrograph. 12 Q. I understand that, but I'm focusing on 13 the use of the word "supplemental" in a water-right 14 context because that's the word you latched onto in 15 this decree without really knowing why the Court 16 used it. 17 junior and inadequate for what they wanted to do, 18 correct? You have had clients whose rights were 19 A. That's correct. 20 Q. And you have had some of those clients 21 go and find a water supply to supplement what they 22 do have, right? 23 A. That's correct. 24 Q. And you have had clients who wanted to 25 irrigate more acres than their water rights could Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 363 1 supply and, similarly, went and got additional 2 supplies, right? 3 A. I'm trying to recall if that situation 4 has existed for clients and I can't recall that I've 5 had clients expand their acreage, if you will, and 6 then go seek a supplemental supply for that acreage. 7 I recognize that it's a possibility but I just can't 8 recall having clients that are in that situation. 9 10 Q. Maybe not in your personal practice, correct? 11 A. That's correct. 12 Q. But both of these kinds of conditions 13 have occurred in the Arkansas River, right, people 14 not having an adequate supply for full irrigation 15 and finding additional or supplemental supplies? 16 A. Yes, I believe that's a common situation 17 that's occurring on the Lower Arkansas River with 18 many of the junior-water-right systems. 19 reasons that the High Line was continually 20 attempting to acquire more water was the situation 21 you described about its existing rights were 22 inadequate to provide a full measure of water to the 23 irrigation systems. 24 25 Q. One of the Now, looking at the decree in Civil Action 2621, Exhibit A-55 -- and you don't need to Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 364 1 get the document unless you want to after my 2 question -- you have attached some significance to 3 strike-outs and interlineations. 4 that? Do you remember 5 A. Yes, I did. 6 Q. But you have no direct knowledge why 7 those interlineations -- those were made, do you? 8 9 A. Well, we have reviewed other cases offered from the Garfield County Court that had 10 similar language that tended to help our opinion, 11 but I believe that discussion of other cases 12 actually was disallowed by the Court in the direct 13 testimony today -- or yesterday. 14 Q. For this specific case, though, you do 15 not have any direct knowledge why the judge did 16 that? 17 A. Well, I believe that -- 18 Q. I'm not asking for your belief. 19 I'm asking for your knowledge. 20 MR. HAMRE: I think Mr. Bethel has 21 answered the question. He said that he has no 22 direct but he had other inferential knowledge from 23 other exhibits that were excluded based on 24 objections by Mr. Hallford. 25 THE COURT: I believe that's correct. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 365 1 MR. HALLFORD: And I would expect that 2 there would be belief associated with those too, but 3 we're not going there. 4 THE COURT: 5 Okay. Is this a good time for the lunch recess, Mr. Hallford? 6 MR. HALLFORD: 7 THE COURT: Sure. Okay. We'll take the lunch 8 recess at this point. 9 1:15 or 1:20, we'll get started as quickly as we can 10 after that. If you would be back about Have a good lunch. 11 (Recess taken.) 12 THE COURT: Please be seated. 13 back on the record on 2009CW142. 14 counsel are present, and I think we were on 15 cross-examination, Mr. Hallford. 16 MR. HALLFORD: 17 THE COURT: 18 Yes, sir. under oath. THE WITNESS: 20 MR. HALLFORD: 22 All parties and Mr. Bethel, you are still 19 21 We're Q. Yes, sir. Thank you. Thank you, Your Honor. (By Mr. Hallford) Good afternoon, Mr. Bethel. 23 A. Good afternoon, Mr. Hallford. 24 Q. When we left, we had talked about 25 supplemental irrigations and why that might occur. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 366 1 You talked about the decrees in these cases, the 2 original decree and the strike-outs. 3 about that. 4 talked about the subsequent case, 3082. 5 We talked In your direct testimony, you also That was, as I understand it, a 6 diligence and an absolute-use case for the 7 Busk-Ivanhoe water rights, correct? 8 9 10 A. Yes, for several of those water rights, the Pan and Hidden Lake Creek Ditch, yes. Q. So we talked about the original decree, 11 the CA 2621 case, which is A-55, being silent about 12 storage, right? 13 A. That's correct. 14 Q. The decree in 3082 is likewise silent as 15 to Front Range storage, correct? 16 A. I believe that's correct. 17 Q. You're aware of the legal distinction 18 between a direct-flow water right and a storage 19 water right, correct? 20 A. Yes. 21 Q. When you examine a water right for a 22 client, a court process or otherwise, if you see a 23 decree, for example, the ABC Ditch, decreed for 24 irrigation at a rate of 10 cfs, don't you 25 immediately relate that to being a direct-flow water Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 367 1 right if nothing else is stated about storage? 2 A. I think, if nothing else is stated, then 3 I would assume that it would be a direct-flow water 4 right, yes. 5 Q. And typically the rule is that you can't 6 store a direct-floor water right for later use; 7 isn't that correct? 8 practice? 9 A. And you've applied that in your That is typically the rule, I believe, 10 and I have applied that in my practice but it 11 doesn't apply, I don't believe, to transmountain 12 diversion water. 13 Q. In terms of how this water right matured 14 to absolute, there was evidence presented in the 15 Civil Action 3082 case, correct? 16 A. Yes, there was. 17 Q. And you talked about Exhibit A-162. 18 you look at that document. 19 determined or figured out how to project from his 20 computer. 21 you? Can Mr. Grosscup has So do you have that exhibit in front of 22 A. Yes, I do. I'm sorry. 23 Q. So this is a transcript of testimony 24 about how the water right had been used up through 25 that date in support of a claim to make part of it Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 368 1 absolute, right? 2 A. That's correct. 3 Q. And, of course, it's relating to the 4 Busk-Ivanhoe water rights we've talked about here, 5 correct? 6 A. That's correct. 7 Q. If you look at page 6 of this document 8 and you look down to the third answer, please, that 9 describes how the water is delivered from the west 10 slope into the Arkansas River for irrigation, 11 doesn't it? 12 13 A. Is this the question that starts with "State whether or not this water"? 14 15 I'm sorry. Q. It says, "Now state what happens to this water after it is put in the ditch." 16 A. Answer? I believe there is a statement there 17 about how it was used after going through the 18 tunnel. 19 20 Q. And it says first that it discharges into Ivanhoe Reservoir, correct? 21 A. That's correct. 22 Q. And then, from the reservoir, it goes 23 through the tunnel and then is discharged into Lake 24 Fork Creek, right? 25 A. That's correct. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 369 1 2 Q. And then it says "and it then runs down the Arkansas River to ditches," right? 3 A. That's correct. 4 Q. It doesn't mention any intervening 5 storage, does it? 6 A. It's silent on intervening storage, yes. 7 Q. So the witness did not relate that the 8 beneficial use for which this claim was made 9 involved a storage delivery, did he? 10 A. He did not. 11 Q. Now I would like to look at Exhibit A. Would you like me to retrieve that 12 13 14 15 16 A-20. exhibit? Q. Unless you wish to look at it projected, which is your choice. 17 A. 18 work from there. 19 Q. 20 21 22 23 I'm not sure if you testified about this document, 20. A. Do you recognize this document? Could you go and page through the first couple pages of this? Q. 24 25 Okay, let's see it projected and we'll Sure. (Pause in the proceedings.) A. I believe I have seen it before. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 370 1 Q. Isn't it true that this is a request for 2 a right-of-way made to the federal government on 3 behalf of Mr. Carlton for a reservoir site and for 4 the Lyle Ditch? 5 A. As I recall, that's correct, yes. 6 Q. And attached to it -- we should maybe 7 move down to page 4, the first specific reference. 8 On this page, there is a statement to the federal 9 government of the land that would be irrigated by 10 the Ivanhoe Reservoir Project, correct? 11 A. That is correct. 12 Q. And it's presented by Mr. A.E. Carlton, A. Yes, that's what the top caption says, 13 14 15 right? "I, A.E. Carlton, apply for a reservoir site." 16 Q. "Appropriator of these water rights"? 17 A. I'm sorry. 18 Q. Yes, sir. 19 A. That is the appropriator of the Was that a question? 20 Busk-Ivanhoe. 21 Busk-Ivanhoe water rights was his brother, which was 22 L.G. Carlton, but he was involved in that, I 23 believe. 24 25 Q. Actually, the appropriator of the Well, in this initial paragraph where he states his name and makes a certification about how Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 371 1 he's going to use the water, he says that he's going 2 to transport the water through the tunnel to Lake 3 Fork Creek and, thence, through the Arkansas River 4 to irrigation systems. 5 to do? 6 7 8 9 10 A. Isn't that what he is going I believe that's a correct restatement of those words, yes. Q. And then he identifies principal systems and lists five of them that may be delivered to, correct? 11 A. I believe that's correct. 12 Q. And he does not identify any storage in 13 any named or unnamed reservoirs in his delivery 14 plan, does he? 15 16 17 A. Are you referring to this as his delivery plan? Q. Well, this is his statement about what 18 he calls his proposal to use the water. 19 state in that proposal any identified storage either 20 named or unnamed, does he? 21 A. Excuse me. He doesn't He does not indicate 22 east-slope storage in this statement. I believe 23 that the type on the document we're looking at is 24 called "Statement of Land to be Irrigated by Ivanhoe 25 Reservoir Project." Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 372 1 Q. That's correct, and it does not identify 2 any storage that would deliver it, that would 3 deliver the water, does it? 4 A. On the east slope, that's correct. 5 Q. But it does identify that the water 6 would come from Ivanhoe Reservoir through the 7 tunnel, down Lake Creek, down the Arkansas, to the 8 ditches? 9 A. 10 It describes that delivery, doesn't it? It does describe that delivery. MR. HALLFORD: Your Honor, I would move, 11 if we don't believe they've been admitted, to admit 12 Exhibits A-162 and A-20. 13 14 THE COURT: A-162 has been admitted. A-20 has not been offered. 15 I assume you have no objections? 16 MR. HAMRE: 17 MS. RYAN: 18 MR. KRASSA: 19 THE COURT: 20 Q. No objection, Your Honor. No objection. No objection. Then A-20 is admitted. (By Mr. Hallford) In your discussion 21 about the possible meaning of "supplemental" in the 22 decree, Mr. Bethel, you generally described a 23 differing, in your view, season of run-off at 24 Ivanhoe Reservoir Basin, if you will, in comparison 25 with high run-off in the Arkansas River Basin Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 373 1 generally. Do you recall that discussion? 2 A. Yes, I do. 3 Q. You did not present any evidence that 4 that distinction was brought to the attention of the 5 Garfield County Court, District Court, for when it 6 adjudicated these Busk-Ivanhoe system water rights, 7 did you? 8 A. I did not. 9 Q. And you're not aware that any such 10 evidence was presented to the Garfield County 11 District Court for that purpose? 12 A. That's correct. 13 Q. Now, the actual Busk-Ivanhoe season of 14 diversion is generally March through November, isn't 15 it? 16 A. For the extent of the tunnel deliveries 17 on the east portal, that's correct. Perhaps I 18 should qualify that that the designated season of 19 use, I believe, is from March 25th to November 24th. 20 I believe there's something a little bit more 21 limited than March through November based upon the 22 historic record. 23 Q. We should look at Exhibit A-240, which 24 you referenced in your direct, at page 17, which is 25 what you focused the Court on in direct examination. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 374 1 Either look at the document or look at the 2 projector, your choice. 3 4 THE COURT: What page did you refer him to? 5 MR. HALLFORD: A-240, page 17. Oh, this 6 was the one that was curious because we had to look 7 at the Bates number. 8 9 THE COURT: So you want page 2113, the one that's up there? 10 MR. HALLFORD: 11 THE COURT: 12 MR. HALLFORD: 13 14 15 No, sir. Okay. I think it was 2136, if I recall. Q. (By Mr. Hallford) So you recall this document and this page, don't you, Mr. Bethel? 16 A. Yes, I do. 17 Q. In fact, earlier in my examination, we 18 looked at it about the possibility of using the 19 water by direct run, it says, correct? 20 A. Yes, and it has a supplemental statement 21 about the value of the transmountain water with the 22 line being stored. 23 Q. Right. Now, above that -- and you 24 pointed this out in your direct -- it points out in 25 the paragraph above, in the middle, that the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 375 1 Busk-Ivanhoe Company has no reservoirs east of the 2 Continental Divide and uses the CF & I Sugar Loaf 3 Reservoir, correct? 4 A. Yes, that's correct. 5 Q. Now, this is the High Line Canal Company 6 7 minutes, right, to bring us back to context? A. That is the general report by the 8 superintendent of the High Line Company, which is 9 attached to the minutes, yes. 10 Q. And in that description, it says paying, 11 as a rental, one-fifth of the water to CF & I, 12 correct? 13 A. That's correct. 14 Q. So basically the arrangement was that 15 Busk-Ivanhoe would deliver water to Sugar Loaf 16 Reservoir and one-fifth of it would be booked over, 17 if you want to call it that, to CF & I's account or 18 use, right? 19 A. I'm not sure the Court understands what 20 you mean by "booked over." 21 that that's water that would then be given to CF & I 22 in storage for their use. 23 Q. 24 occurred, right? 25 A. I agree with the concept And you've assumed that that actually Yes. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 376 1 Q. And you, in fact, deducted that 2 20 percent in certain circumstances in making your 3 historical use analysis as water that would have 4 been available to the Rocky Ford High Line? 5 A. I deducted the 20 percent from the 6 Busk-Ivanhoe Tunnel deliveries in calculating the 7 amount of the remaining amount that would be 8 available to the Rocky Ford High Line. 9 10 11 12 13 Q. But you do not know how CF & I used that water, or if it used that water, do you? A. We have been unable to determine how that water was used by CF & I. Q. But you do know that CF & I was an 14 industrial operation and industrial-water user 15 during this time frame, correct? 16 A. I know that was their principal aspect 17 of their business, but they also had irrigated 18 fields down by Pueblo and I just don't know how this 19 water was used by that company. 20 Q. It's not water for which you have 21 determined a specific, identified historical use for 22 irrigation? 23 A. That's correct. 24 Q. Now, in your direct, you next turned to 25 administration of the B-I, Busk-Ivanhoe, system Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 377 1 water as transmountain. 2 transition or testimony? Do you recall that 3 A. I'm sorry. Could you restate that. 4 Q. Well, you talked about the State 5 Engineer's, in your view, knowledge that the 6 Busk-Ivanhoe system water was stored. 7 A. Yes, I do remember that. 8 Q. You are familiar with the so-called 9 Burlington Ditch case? In fact, you reviewed 10 portions of the Trial Court Findings of Fact and 11 Decree with us this morning, right? 12 A. That's correct. 13 Q. Are you familiar with the Water Court's 14 treatment of the so-called metro-pumps diversion in 15 that case? 16 A. I am familiar on an overview-type level. 17 I haven't done any detailed review or analysis of 18 it. 19 Q. Did you do a detailed review and 20 analysis of the Court's treatment of the 1885 water 21 right in the Burlington case? 22 A. I did a detailed review of the selection 23 of the study period as presented by the Findings of 24 Fact and the Decree, so I didn't do a detailed 25 review of the change-of-use analysis for the 1885 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 378 1 right or the storage right. 2 metropolitan pump was excluded from the, if you 3 will, transferable yield that was assigned to the 4 storage right. 5 Q. I do know that the On the 1885 right, though, you did a 6 fairly detailed analysis of the implications of the 7 Court's selection of a representative period for 8 that change, didn't you? 9 A. I guess I'd ask you implications for 10 what? 11 of the study period as I interpreted them from the 12 Findings of Fact and the Decree. 13 I mean, I did make comments on the selection Q. Well, and did you evaluate and try to 14 understand what the result on the water-right change 15 was from the Court's study-period determination? 16 A. Not numerically, no. It was a 17 conceptual review of the approach that that District 18 Court took in the setting of the study period. 19 Q. Now, you've probably had clients who 20 have made un-decreed use of their water rights in 21 other cases than this, right? 22 A. I'm sure I have. 23 Q. Have any of them ever had a cease-and- 24 desist order brought against them by the Division 25 Engineer? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 379 1 A. I suspect I've seen a few cease- 2 and-desist orders but I can't really recall 3 individual clients, individual matters that they 4 were applied in. 5 Q. I'm not going to ask you for names. 6 This morning you talked about the no-injury rule and 7 then the history of somewhat of the Pueblo Board of 8 Water Works activities before that was truncated, 9 but in terms of what you did relate, you talked 10 about a trade of town-ditch water rights to Rocky 11 Ford High Line -- or High Line Canal Company -- for 12 one-half of the Busk-Ivanhoe system. 13 remember that transaction? Do you 14 A. Yes, I do. 15 Q. And that was basically a swap of a 16 native basin that supplied the town ditch for a 17 trans-basin supply, the Busk-Ivanhoe system, right? 18 19 20 21 A. That's right, with the High Line being the recipient of the Las Animas town ditch. Q. And you talked about the different yields for the two systems, right? 22 A. That's correct. 23 Q. The town-ditch water would have had a 24 25 return-flow obligation, wouldn't it? A. I believe that would be determined in Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 380 1 the change case for the town ditch, yes. 2 Q. But as a native basin water right, it is 3 not fully consumable if it had been used for 4 irrigation, right? 5 6 A. That's generally the manner in which those are treated, yes. 7 Q. And, of course, we agree that the 8 Busk-Ivanhoe water is fully consumable in the 9 Arkansas Basin, don't we? 10 A. I do, yes. Maybe we do. 11 Q. In your description of how you began 12 your analysis, looking at what Pueblo had done and 13 then how you would approach the change here, you 14 equated tunnel diversions with beneficial use, 15 right? 16 A. I equated tunnel diversions with the 17 measure of use and my presumption was that it was 18 also beneficial use. 19 Q. And you assumed that, because the 20 Arkansas River Basin generally was water short, the 21 water would be used by someone? 22 of almost your words. I think that's kind 23 A. That's correct. 24 Q. But you didn't necessarily tie that it 25 would be used by the High Line Canal Company? You Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 381 1 2 didn't state that, did you? A. At the time that my analysis was being 3 performed for that November 2012 report, I did not 4 look any further than the tunnel flows. 5 Q. Now, just to clarify, because you did 6 say that or mention the Pueblo change case as a 7 systemwide change -- didn't you? 8 A. Yes. 9 Q. And Applicant's counsel referred to it 10 11 as that, didn't he? A. 12 I can't recall. MR. HAMRE: Just for clarification, I 13 think we referred to it as a systemwide analysis 14 and, in connection with the Rule 28 and Rule 56 15 motion, we referred to it as a systemwide 16 quantification. 17 that it was a systemwide quantification. 18 19 I think the Court has disagreed THE COURT: Q. The objection is sustained. (By Mr. Hallford) Now, finally, 20 regarding Pueblo's change case, 90CW340, and your 21 identification of opposers in that case, that case 22 was settled, wasn't it? 23 A. I believe that's true. 24 Q. It didn't go to a trial like we're 25 having here, did it? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 382 1 2 3 A. I believe that's true, but I don't have intimate knowledge of that. Q. You're not aware of any trial in which 4 the Colorado River District opposed Pueblo Board of 5 Water Works on its change, are you? 6 A. I'm not aware of that. 7 Q. Let's move to your distinction between 8 the nonuse of a water right and the un-decreed use 9 of a water right in historical use analysis, 10 Mr. Bethel. You initially explained an engineering 11 basis for a distinction as being an effect on the 12 stream condition between the two conditions, right? 13 A. That's correct. 14 Q. Now, an un-decreed use perpetuates or 15 continues an effect that's been on the stream? 16 just has an un-decreed purpose related to its 17 ultimate use, right? It 18 A. It can. 19 Q. Now, is your distinction applied in both 20 in-basin and trans-basin situations? 21 A. I believe so. 22 Q. So if a native Arkansas River irrigation 23 right were used for municipal purposes without 24 getting a substitute supply plan approved by the 25 State Engineer or getting a court approval for a Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 383 1 change of use, that period of municipal use would 2 not be within what you consider relevant in an 3 historical use analysis, correct? 4 A. It would not be representative of the 5 decreed uses of that water right or a period that I 6 would include in the study period. 7 Q. And for that reason you would consider 8 it irrelevant in a change-of-water-rights case, 9 correct? 10 A. "Irrelevant" is a big term. I think 11 it's relevant in terms of it's part of the history 12 of the system, but I would not consider it an 13 element to be considered in the transferable-yield 14 determination of that water right. 15 Q. It would not be -- the municipal use in 16 that instance would not be something to be brought 17 to the Court's attention as a matter of quantitative 18 significance? 19 A. I believe that's true. 20 Q. Now, a change of an irrigation right 21 from an irrigated field to diversion into a 22 municipal system with, I guess, return flow from a 23 wastewater treatment plant can modify the location 24 and amount of return flow, can't it? 25 A. I'm sorry. Can you restate that. I Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 384 1 2 lost my concentration in the middle of the sentence. Q. The change of an irrigation diversion 3 from a supply in an irrigated field from a ditch to 4 diversion to a municipal water supply system with 5 subsequent wastewater treatment and delivery through 6 a wastewater treatment outfall to the system can 7 change the location and timing of return flows from 8 the water right, can't it? 9 A. Physically, that same water can be -- 10 will perhaps alter the pattern of return flows and 11 location of those return flows from that which 12 occurred under the irrigation system, so I believe 13 the answer is yes. 14 Q. And for native-basin irrigation rights, 15 the location and amount of return flows can be 16 significant, right? 17 A. It can be significant, yes. 18 Q. In fact, in your explanation of the 19 development of water rights in the Arkansas River 20 Basin, you pointed out that more junior rights 21 became reliant upon senior-water-right return flows, 22 didn't you? 23 A. That's correct. 24 Q. So in many change cases you've been 25 involved with the question of the amount, timing, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 385 1 and location of irrigation return flows when changed 2 to another use, right? 3 4 5 A. I have been for native water rights, Q. And, for those kinds of water rights, yes. 6 you've certainly been involved probably on both 7 sides with the approval of or concerns about 8 substitute supply plans for such water rights 9 preliminary to a water-court process? 10 A. Yes, I have. 11 Q. Now, Aurora or Busk-Ivanhoe, Inc. -- 12 neither one obtained a substitute water supply plan 13 for its municipal operation of Busk-Ivanhoe water 14 rights, did they? 15 A. They did not, but I do not understand, I 16 guess, in which court you would even apply to for a 17 substitute water supply plan. 18 19 20 Q. Aren't substitute supply plans approved by the State Engineer's office, Mr. Bethel? A. I'm sorry. They are, basically. 21 They're approved at the State Engineer's office, 22 often submitted to the Division Engineer's level 23 first for approval, but yes. 24 25 Q. And you've been in -- you've created such temporary plans for your clients, haven't you? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 386 1 A. Yes, I have. 2 Q. And sometimes they can be interim and 3 4 not go to a court process? A. One of the statutes allows you to have 5 filing statements or substitute water supply plans 6 without the application of a water-court change of 7 use or augmentation plan. 8 years typically. 9 Q. You can do that for five And then often a substitute supply plan 10 is followed by or companioned with a water-court 11 application, correct? 12 A. It can be, yes. 13 Q. Focusing back on your distinction 14 between nonuse and un-decreed use, is any period of 15 nonuse appropriately considered in a representative 16 period for a change of water right? 17 A. Well, I believe there are always 18 exceptions to every rule, and sometimes I believe, 19 if you can document that the nonuse was outside the 20 control of the irrigator or with the water user, 21 then you can make an argument, and, again, it 22 depends on particular circumstances. 23 But you might be able to make an 24 argument saying that that's an appropriate period 25 perhaps to exclude from your study period. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 387 1 Q. So, for example, applying your 2 experience, if a ditch owner's head gate washed out 3 because of a flood and there was one year of 4 inability to divert and, therefore, nonuse, how 5 would you view the inclusion of that year in an 6 analysis of the water right? 7 A. Again, it's all individual circumstance 8 but I think that, if the water-right user was trying 9 to make diligent efforts to restore the operation of 10 his system, but, for whatever reason, was unable to 11 do that, then that would be a year which I would 12 argue that you do not need to include in a study 13 period. 14 situation. 15 It was kind of an Act-of-God-type Q. Do you think of it as sort of a 16 reasonable-man standard? 17 man do to restore diversion capability? 18 A. What would a reasonable I'm not familiar with whether that term 19 has a legal definition or whether that's your term, 20 but I think it is a question of a reasonable miss of 21 the actions of the water user. 22 Q. So, for example, maybe more extreme, say 23 a 10 cfs ditch head gate goes out in a flood and the 24 user waits 30 years to repair the head gate. 25 would be your view of that period of nonuse being What Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 388 1 2 included in historical use analysis? A. I would consider that to be a long 3 period of time that typically should be included. 4 That period of nonuse should be included in the 5 study period if you're looking at the historic use 6 of that system. 7 Q. So your distinction isn't hard and fast 8 but allows some flexibility in looking at individual 9 situations? 10 A. Exactly. 11 Q. Now, on un-decreed use, which you do not 12 include in an analysis -- correct? 13 A. That is correct. 14 Q. Can there be an increase in un-decreed 15 16 use of water rights? A. You're asking about a physical situation 17 when they might have an un-decreed use and expand or 18 enlarge their diversion over what it was prior to 19 the un-decreed use? 20 Q. Yes. 21 A. That can happen, yes. 22 Q. Because you based your distinction, as 23 we've agreed, on the fact that an un-decreed use can 24 continue the effect on the stream condition, while a 25 nonuse reduces or, you know, eliminates an effect on Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 389 1 a stream condition? That's your distinction, right? 2 A. I believe that's correct. 3 Q. Now, in your going back to the 4 Burlington case that you talked about and presented 5 from the water-court documents, the 1885 right was 6 used for a period from 1885 to 1909 on certain lands 7 above Barr Lake, correct? 8 A. That's my understanding, correct. 9 Q. And the Water Court found that to be a 10 decreed use, right? 11 A. That's correct. 12 Q. And after 1909, the right was used for 13 the same type of use, irrigation, but below Barr 14 Lake on additional lands, correct? 15 A. That's my understanding. 16 Q. And the Water-Court case, as you pointed 17 out, eliminated historical use associated with the 18 lands below Barr Lake, right? 19 MR. HAMRE: Objection. I don't believe 20 that's what the document says and I don't believe 21 that was Mr. Bethel's testimony. 22 THE COURT: But he can certainly answer 23 the question. If that's not his testimony, he can 24 deny that's what was said. 25 the question to be. That's what I understand Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 390 1 Go ahead. 2 A. Yeah, I don't believe that they, I 3 guess -- could I ask you to restate the question? 4 Because I did have some issue with it. 5 to make sure I understand the question before I 6 respond to it. 7 Q. (By Mr. Hallford) I just want Well, the Court found 8 that irrigation above Barr Lake was decreed, 9 correct? 10 A. That's correct, and represented by a 11 pre-1909 study period, or a study period up through 12 1909 before FRICO was involved in it. 13 Q. And after 1909, FRICO had actually used 14 the water on the decreed land and below Barr Lake on 15 un-decreed land, correct? 16 A. That's correct. 17 Q. And so, therefore, it had expanded the 18 irrigation to an un-decreed area? 19 A. That's my understanding, yes. 20 Q. And it came into court and it sought to 21 change water rights based on historical use on both 22 the decreed and the un-decreed areas, right? 23 24 25 A. That was the application in that case, Q. And the Court used a study period only yes. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 391 1 for the decreed area, the smaller decreed area, 2 right? 3 A. Yes. 4 Q. And as a consequence, FRICO obtained 5 less water-right quantification than it had sought, 6 correct? 7 A. That's correct. 8 Q. Would you agree that the un-decreed use 9 that has occurred with the Busk-Ivanhoe water rights 10 is factually distinguishable from the un-decreed use 11 that had occurred in the 1885 water right in the 12 Burlington case? 13 A. I believe that there are individual 14 circumstances in each case that probably 15 differentiate the water use of individual systems. 16 Q. Well, for the Busk-Ivanhoe water rights, 17 it's your opinion that the use of the Aurora or 18 Busk-Ivanhoe, Inc., share commencing in 1986 and 19 forward, for municipal purposes, an un-decreed type 20 of use, did not increase the diversion amount, 21 right? 22 23 24 25 A. That was my analysis and, yes, that's correct. Q. Now, in Burlington, the supply of water after 1909 below Barr Lake involved the decreed type Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 392 1 of use? Irrigation, didn't it? 2 A. That's correct. 3 Q. It was not an un-decreed type-of-use 4 change that they made? 5 A. That's correct. 6 Q. It was an un-decreed area of use that 7 occurred, right? 8 A. 9 I'm just going back to your previous question about it's not an un-decreed type of use 10 that they made, but they were trying to quantify and 11 change the Burlington water rights, and part of the 12 applicant was a non-irrigation entity with the Union 13 Water Company. 14 So I think the change that was applied 15 was not necessarily, you know, to irrigation, if 16 that's what you're implying. 17 Q. Yes. The type of use that was at issue 18 above and below Barr Lake was irrigation use, wasn't 19 it? 20 A. Yes. 21 Q. And so it was the same type of use in 22 23 24 25 that sense? A. That occurred during the history of the water right? Q. Yes, sir. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 393 1 A. Yes, that's correct. 2 Q. But below Barr Lake the irrigation had 3 not been judicially allowed, right? 4 A. That's correct. 5 Q. There was an expanded acreage for 6 irrigation, right? 7 A. I believe that's correct. 8 Q. And as a result, the diversion amount by 9 FRICO on the 1885 water right was greater after 1909 10 than it had been when they were only irrigating 11 above Barr Lake, correct? 12 A. I believe that's correct. 13 Q. In this situation, the diversion 14 amount -- the Busk-Ivanhoe situation -- the 15 diversion amount did not increase, did it, after 16 municipal use? 17 18 19 A. On a long-term-average basis, I believe that's correct, yes. Q. But, in the Burlington situation, after 20 1909, the diversions went up because of the 21 additional acreage, right? 22 A. I believe that's true. 23 Q. Do you believe -- you indicated that the 24 use of no credit or zeroes in this case would not be 25 appropriate, but have you formed an opinion whether Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 394 1 the result of the Court's analysis and limitations 2 in the Burlington case was appropriate for the 1885 3 water-right change? 4 A. I have not made that determination, 5 whether it was appropriate. 6 a court-entered ruling on the case. 7 Q. I take it basically as Well, you're generally aware that, in 8 the same case, the use of an un-decreed alternate 9 point of diversion at the metro pumps resulted in a 10 reduction in historical-use credit? 11 that, right? You're aware of 12 A. Yes, I am. 13 Q. So that was also a conclusion endorsed 14 and adopted by the Colorado Supreme Court, right? 15 A. Yes, it was. 16 Q. So you would also accept that principle 17 as being applicable to situations you face, 18 including this case, right? 19 20 21 22 A. As an un-decreed point of diversion, that's correct. Q. You did not study that aspect of the case, though, in any detail, did you? 23 A. No. 24 Q. Did someone tell you not to? 25 A. No, no, I was -- Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 395 1 Q. You didn't find -- 2 THE COURT: 3 MR. HALLFORD: 4 THE COURT: 5 Finish your answer, sir. 6 A. Wait, wait, wait. I'm sorry. Let him finish. I was primarily focused on those 7 portions of the case that related to the selection 8 of the study period, and that was not an issue -- I 9 mean, for sure it was referenced but it was not an 10 issue that I felt was directly relevant to my 11 criteria for the selection of the study period. 12 Q. (By Mr. Hallford) Well, a study period 13 was selected by the Court for the metro pumps, 14 right? 15 A. A study period was selected by the Court 16 for the analysis of the storage right. 17 study period they had gone ahead and disallowed the 18 importation of the water into the system from the 19 metro pumps as an illegal point of diversion, is my 20 understanding. 21 Q. Within that Well, isn't it true that the metro pumps 22 were operated by an agreement to replace a diversion 23 at the Burlington Canal that had previously been 24 supplied from an upstream wastewater treatment 25 plant? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 396 1 A. I believe that's true, that that was an 2 agreement between the Burlington Ditch and the metro 3 wastewater folks. 4 Q. And isn't it true -- or unless you don't 5 know because you didn't study it -- that there was 6 not an increase in diversion at the alternate point 7 of -- the un-decreed alternate point of diversion? 8 9 10 A. I'm not sure I understand your question. Increase in diversions of the metro pumps? Q. That the metro pumps did not increase 11 the diversion beyond what had previously occurred; 12 it simply took a portion of the Burlington rights at 13 that new point? 14 A. I haven't investigated that to know any 15 quantities of water. 16 on that matter. I just know the Court's ruling 17 Q. And what was the Court's ruling? 18 A. Well, again, basically the metro pumps 19 consisted of an illegal, unlawful point of diversion 20 and that those diversions do not constitute a valid 21 contribution to the system for the purposes of 22 transferable-yield determination. 23 Q. And are you aware that the evidence 24 indicated the State and Division Engineers knew of 25 the metro-pumps diversion? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 397 1 A. I haven't seen that in the evidence, but 2 I don't think it was part of the Findings of Fact. 3 I would not be surprised. 4 Q. Could we look at Exhibit A-348? 5 THE COURT: 6 MR. HALLFORD: 7 THE COURT: 8 Q. Did you say "340"? 348. (By Mr. Hallford) 9 document, Mr. Bethel. 10 beginning at page 40. You have this Could you look at page 40, 11 THE COURT: 12 MR. HALLFORD: 13 348. What page? Page 40, and let's look at paragraph 166. 14 A. We have 25 pages, I believe, in this. 15 Or are you talking about the caption, page 40? 16 sorry. 17 So which is page 15 of 25 of the exhibit? Q. (By Mr. Hallford) Yes, sir. I'm sorry. 18 Too many page numbers and Bates numbers. 19 reviewed this section of this document before? 20 21 A. Have you I have reviewed it before but not in recent times for this case. 22 Q. You did not review it for this case? 23 A. Not this particular segment of the 24 25 I'm Findings of Fact. Q. You are aware, as stated in paragraph Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 398 1 166, that the metro pumps were an un-decreed point, 2 though, right? 3 A. Yes, I am. 4 Q. And then I think you did not know -- but 5 you can clarify -- were you aware from this document 6 or otherwise what's stated in 168, essentially that 7 the metro pumps do not increase the amount of water 8 historically taken? Were you aware of that? 9 A. I believe I've heard that before. 10 Q. And that's what this court is finding, 11 correct, in 168? 12 A. That's correct. Q. The historical diversions were not 13 Fact. 14 15 That's a Finding of enlarged at the metro pumps, correct? 16 A. That's correct. 17 Q. Similar to the Busk-Ivanhoe diversion 18 through the tunnel was not enlarged by municipal 19 use, correct? 20 A. I believe that's correct. 21 Q. Now, in paragraph 170, the Court 22 addresses the fact that the metro pumps' use by 23 agreement doesn't substitute for judicial approval, 24 right? 25 A. I believe that's true. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 399 1 Q. In paragraph 172, the Court addresses an 2 applicant's position about continuing stream 3 conditions from an un-decreed use and the Court 4 finds that this would be an undesirable incentive to 5 act outside the law, right? 6 A. If you'll let me read this over -- 7 Q. Yes, sir. 8 A. -- just a minute. 9 (Pause in the proceedings.) 10 A. 11 question. 12 Q. Okay, I'm sorry. Could you restate your It's been a while. Well, in paragraph 172, you would agree 13 that the Court rejected the proposition that 14 maintaining stream conditions that resulted from an 15 un-decreed alternate point would create an 16 undesirable incentive to avoid legal process in 17 changing a water right, right? 18 A. That's correct. 19 Q. And then, in 173, the Court addresses 20 the point that whether the Division Engineer and 21 State Engineer knew of this un-decreed point didn't 22 matter because only courts can approve changes, 23 right? 24 25 A. statement. I think that's the basic context of this I'm not sure it says only courts can Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 400 1 approve changes of water rights. 2 Q. It says, "The authority to approve 3 changes of a water right, a function which is 4 expressly reserved for the Courts"? 5 doesn't it? It says that, 6 A. Yes, it does. 7 Q. It doesn't say it's shared with the 8 engineers? 9 right? It's expressly reserved to the courts, 10 A. That's right. 11 Q. And then, as the Court closed up the 12 analysis at page 178 -- or paragraph 178 -- at the 13 conclusion of that paragraph, the Court finds that 14 the use of the metro pumps as an un-decreed and 15 alternate point of diversion enlarges the use of the 16 company's decreed water rights that were decreed to 17 the Burlington head gate. 18 finding that was made, correct, or penultimate? That's the ultimate 19 A. I believe that's correct. 20 Q. And it doesn't say the storage water 21 rights? It says the water rights decreed to the 22 Burlington head gate? 23 A. I believe that's correct, yes. 24 Q. So the Court finds an enlargement. 25 Yet, it had also found that the metro pumps did not Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 401 1 increase the diverted amount beyond what had 2 historically occurred at the head gate, right? 3 A. I believe that's correct, but I think 4 that you have to qualify it further and say that 5 that continued diversion at the head gate was the 6 result of the agreement between the Burlington Ditch 7 and Metro which the Court had indicated was an 8 unlawful point of diversion. 9 I think that's the reason that they're 10 setting aside that amount of water that was 11 associated with the metro pumps. 12 Q. The Court said the agreement didn't 13 matter ultimately in qualifying the water right, 14 correct? 15 A. That the agreement didn't matter? 16 Q. Yeah; I mean, it had no legal 17 significance in terms of validating the change, 18 right? 19 A. Well, I agree with that, yes. 20 Q. In this instance with Busk-Ivanhoe, 21 Aurora didn't need anybody's agreement to start 22 using it for municipal, did they? 23 A. No, they did not. 24 Q. Even this Court's, right? 25 A. That's correct. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 402 1 Q. Why are they in court? 2 A. Well, I think that the perception of the 3 full and basically changed uses that you can make of 4 water, transmountain water imported into a basin, I 5 think that that concept has been maintained through 6 history up until fairly recently, and I think now 7 there's more impetus on trying to get, if you will, 8 changes that conform the water rights to the types 9 of uses that they're being applied to. 10 Q. You're talking about the State Engineer 11 understanding a policy that was never noticed, or a 12 rule made? 13 14 A. I believe that -- I'm sorry. quite understand your last question. 15 Q. I'll withdraw it. Now let's get to the 16 ultimate conclusion in paragraph 180. 17 that -- 18 I don't MR. KRASSA: Having found Your Honor, Your Honor, I 19 object to this entire line of questioning. 20 since we've come back from lunch what we've been 21 listening to is essentially a monologue by 22 Mr. Hallford. 23 testimony that Mr. Bethel gave during his direct. 24 25 Ever I can't identify it with any It is essentially asking for legal opinions from Mr. Hallford and it seems to me that, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 403 1 in addition, it's repetitive. 2 something that Mr. Hallford could be talking about 3 in a closing argument, and if, in the context, it is 4 helpful to the Court in any way, I'll withdraw my 5 objection. 6 Now, it certainly is But I think it is not related to -- if 7 Mr. Hallford were able to identify exactly what 8 testimony it's related to on the direct, then it 9 would be different, but to me this is just kind of a 10 socratic debate with Socrates doing all the talking. 11 12 MR. HALLFORD: Your Honor, this is completely appropriate. 13 THE COURT: The objection is overruled. 14 It goes to the weight of the opinion and we should 15 get Mr. Bethel's opinions concerning the historic 16 consumptive diversions in use. 17 Q. (By Mr. Hallford) Go ahead. So let's get to maybe 18 the ultimate conclusion in paragraph 180, 19 Mr. Bethel. 20 knowledge of metro pumps didn't matter, that the 21 1969 agreement didn't matter in what could be 22 changed, and that there was an enlargement -- we've 23 been through that. 24 25 Having found that the engineer's In paragraph 180, the Court reduces the amount of the Burlington diversions under the change Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 404 1 by 9600 acre feet a year, correct? 2 A. That's correct. 3 Q. Now, in applying un-decreed use in this 4 case, you talked about 60 years of 2500 acre foot 5 average annual diversion. 6 testimony? Do you recall that 7 A. Yes, I do. 8 Q. You also talked with Mr. Krassa about 9 this subject on his cross, right? 10 A. Yes, I believe so. 11 Q. You identified that 40 percent of the 12 period of record, I think, from 1928 through 2009, 13 approximately, involved this un-decreed municipal 14 use, right? 15 16 A. I believe that was my brief analysis, Q. Have you ever dealt before, for an yes. 17 18 applicant or a client, with changing their water 19 right where the last 40 percent of the known 20 diversion record was for an un-decreed use? 21 A. I don't believe so. 22 Q. You've certainly probably dealt with 23 clients who have had a 40 percent period of nonuse, 24 right? 25 A. I can't recall that I would have had a Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 405 1 client who would have had a 40 percent period of 2 nonuse. 3 clients. 4 I don't believe that's appropriate for my Q. Now, you did propose terms and 5 conditions and discussed that with Mr. Hamre. 6 Essentially the terms and conditions you discussed 7 from your November report and then from your April 8 report, as revised, were modeled after those that 9 were in the Pueblo change case, right? 10 A. That's correct. 11 Q. And I would imagine that that's for 12 some -- serves some purpose in terms of 13 administrative -- I say "convenience," and I don't 14 mean to be derogatory in that manner, but to have 15 the water rights on a parallel kind of regimen, that 16 that would be beneficial? 17 A. I believe that would be beneficial, yes. 18 Q. You talked about the season-of- 19 diversion-versus-season-of-use distinction and 20 clarified that you believe the use could occur any 21 time of year under this decree, right? 22 A. That's correct. 23 Q. That assumes that the change is 24 approved, right? 25 A. That's correct. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 406 1 Q. And that the water then can be delivered 2 from storage around the year, when Aurora wishes, 3 correct? 4 A. That would be correct. 5 Q. If we could look now at Exhibit A-8, the 6 proposed decree, you recall talking about this 7 document with Mr. Hamre, don't you? 8 A. Yes, I do. 9 Q. Look at paragraph 15 which you discussed 10 with Mr. Hamre. Now, this paragraph 15 describes 11 the water rights that are being changed in the case 12 we're here for, right? 13 A. That's correct. 14 Q. And you were kind enough to point out a 15 couple of things that need to be corrected, as I 16 recall, right? 17 A. That's correct. 18 Q. But if you look through this list, the 19 only storage water right identified is Ivanhoe 20 Reservoir, correct? 21 A. That's correct. 22 Q. So, for the water rights to be changed, 23 there's no statement that there are other reservoirs 24 that are part of the water-right package, like 25 Turquoise Reservoir? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 407 1 2 A. That's correct. They're not included Q. They're included in the section where here. 3 4 change is approved to allow them to be stored, 5 right? 6 A. Yes. That structure and a number of 7 other reservoirs are added to the change of use 8 basically to allow storage in those vessels. 9 Q. And in this respect, the description of 10 the water rights to be changed in your proposed 11 decree is similar to the description of the water 12 rights to be changed that was in the application 13 filed for the case, right? 14 A. I believe that's correct. 15 Q. And, similarly, the description of the 16 future storage or additional storage locations in 17 your proposed decree here, A-8, mirrors kind of the 18 description of storage of a similar nature in the 19 application that was filed, right? 20 A. I believe that it does, similar to. I 21 know that, for example, Chatfield Reservoir is no 22 longer included in the draft decree but was included 23 in the application, I believe, as a point of 24 additional storage, but they are similar. 25 MR. HALLFORD: Your Honor, I'm almost Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 408 1 completed, if I could confer with my co-counsel 2 momentarily. 3 THE COURT: 4 (Pause in the proceedings.) 5 Q. Certainly, go ahead. (By Mr. Hallford) Mr. Bethel, you 6 responded briefly to some questions from Mr. Krassa 7 and you agreed with him that the basin of use of a 8 transmountain supply can't rely on it, essentially, 9 imported or return-flowed, right? 10 A. Yes. 11 Q. And you talked about a thousand acre 12 feet, perhaps, if there was a 40 percent reduction 13 in future diversions for Busk-Ivanhoe, Inc.'s share 14 in this case that would return to the basin of 15 origin -- you recall that -- per year? 16 17 18 A. Yes, if we, in fact, were assessed zeroes for the period of non- or un-decreed uses. Q. And you agreed with Mr. Krassa that that 19 water has not been available on the west slope for 20 junior users since approximately 1928, right? 21 A. I did agree with Mr. Krassa on that. 22 Q. Now, in comparison, going back to the 23 Burlington case that you did evaluate, at least the 24 1885 analysis of representative period, in that 25 case, the amount diverted by the Burlington system Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 409 1 for irrigation below Barr Lake had not been 2 available in the South Platte River for other users 3 since 1909, had it? 4 A. I believe that's true. 5 Q. And the result of the Court's ruling was 6 that that diversion was restored into the South 7 Platte River going forward, wasn't it? 8 9 A. Court's ruling, yes. 10 11 I believe that's the result of the MR. HALLFORD: No further questions, Your Honor. 12 THE COURT: 13 Redirect, Mr. Hamre? 14 MR. HAMRE: 15 (Pause in the proceedings.) 16 17 18 Thank you, sir. Yes, Your Honor, one moment. REDIRECT EXAMINATION BY MR. HAMRE: Q. Mr. Bethel, in your cross-examination by 19 Mr. Krassa, I believe you made a statement to the 20 effect that storage was part of the beneficial use 21 of these water rights? 22 A. Yes, I believe I did. 23 Q. Would it be equally accurate to say that 24 storage was necessary for the beneficial use that 25 these water rights were put to? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 410 1 A. 2 accurate. 3 Q. Yes, I believe that would be equally Mr. Hallford asked you a number of 4 questions about storage of the Busk-Ivanhoe water in 5 Sugar Loaf Reservoir and other reservoirs and 6 whether there would effectively be any limit on the 7 amount of water that could be diverted and stored. 8 9 In your direct testimony and also on cross-examination, you referred some to the 10 testimony in Civil Action 3082 that was the first 11 diligence case. 12 limit on the amount of water that the Carltons 13 intended to divert? 14 A. Does that testimony suggest any That testimony indicated that they would 15 be collecting all available flow above the 16 collection system and be enlarging the tunnel to, 17 now, the diversion of that, so the limits on the 18 flow would basically be the natural hydrologic 19 limits on the flow produced above the system. 20 21 22 Q. And is the tunnel also a bottleneck, for lack of a better term? A. It has been a bottleneck, yes, and is a 23 bottleneck for the diversion of supplies that are 24 available to the collection system. 25 Q. And in the testimony in that case, did Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 411 1 they refer to the fact that they might need to 2 enlarge the tunnel? 3 A. Yes. 4 Q. I believe Mr. Hallford asked a question 5 that suggested that the intent of the Carltons to 6 store water was limited to only Lake Fork Reservoir. 7 Were there references prior to the entry of the 2621 8 decree to storage -- I'm sorry -- references in the 9 High Line minutes prior to the entry of the decree 10 for the Busk-Ivanhoe system to storage in other 11 reservoirs? 12 A. Yes. I believe we previously pointed 13 out that, in the 1926 annual meeting minutes, that 14 there was a reference to, not only Sugar Loaf 15 Reservoir -- or that there was a reference basically 16 to Sugar Loaf and Clear Creek, Mount Pischka, as 17 places of storage of this water. 18 Q. Did you perhaps mean the 1928 minutes? 19 It was Exhibit A-225. 20 look at it if you would like. 21 22 23 A. Well, I think I was referring to 1926 minutes, but let me check. Q. 24 25 You can pull that out and Yes. (Pause in the proceedings.) A. Yes, I was referring to Exhibit A-223 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 412 1 and the paragraph there starting on page 1 at the 2 top that indicates that Mr. McKenzie represented -- 3 representing Mr. Carlton, appeared at the meeting, 4 and then later on in there he talked about this 5 water. 6 "The water was continuously diverted 7 from this reservoir," and he's referring to Ivanhoe 8 Reservoir, "on the west side of the range through 9 the tunnel and stored in Sugar Loaf Reservoir, Clear 10 Creek Reservoir. 11 in Holbrook." 12 Also some of the water is stored And then he goes on to talk about the 13 capacities of part of the system, but that's the 14 reference from one of the, you know, agents of the 15 appropriators of the system prior to the Statement 16 of Claim and prior to the decree in this case. 17 Q. Okay. Mr. Hallford also asked you about 18 whether or not storage decrees had been entered 19 prior to 1925 for other reservoirs in Division 2. 20 Do you recall that? 21 A. Yes, I do. 22 Q. And you indicated that there had been? 23 A. Yes, I did. 24 Q. Were any of those decrees to which you 25 referred for storage of transmountain water that Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 413 1 2 originated in a different river system? A. I'm not aware of any storage decrees 3 prior to 1925 for water in Division 2 that 4 originated in a different drainage basin such as 5 Division 5. 6 Q. Mr. Hallford also asked you about some 7 language in the report that was appended to the 1943 8 minutes to the effect of regarding whether or not it 9 would be possible to use the Busk-Ivanhoe water 10 without storage, and you pointed out that language 11 to the effect that the value lies in being able to 12 store the water. 13 the yield of the water? 14 Is the value of the water tied to MR. HALLFORD: Your Honor, I think that 15 calls for speculation. 16 he knows what they intended by that use of water 17 and, again, he's not here as an historian or legal 18 expert for the interpretation of documents. 19 could look up value in the dictionary, and this is 20 going to be obviously an answer that goes with their 21 case theory as a possibility, a speculative 22 possibility. 23 24 25 THE COURT: There's no foundation that We The objection is overruled. He can answer the question if he can. Q. (By Mr. Hamre) If you can answer, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 414 1 Mr. Bethel. 2 A. Yeah, I believe, in the context of this 3 engineering report -- it comes from the 4 superintendent of the ditch company -- that he would 5 characterize value as the amount of water that you 6 obtain from a given system and at an appropriate 7 time for delivery. 8 9 10 11 12 Q. That you're able to put to beneficial A. That you're able to put to beneficial use? use, correct. Q. Mr. Hallford asked you a series of 13 questions about the term "supplemental supply," what 14 that meant, what that would have meant to the Court 15 that entered the 2621 decree. 16 series of questions? Do you recall that 17 A. Yes. 18 Q. Could you please turn to Exhibit A-163. 19 A. Yes, I'm there. 20 Q. And is page 2 of 21 -- is that part of 21 22 the petition filed by Mr. Carlton? A. Yes, the first six pages of this exhibit 23 are the petition, so page 2 of the exhibit would be 24 part of the petition. 25 Q. Could you please look at the language Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 415 1 starting in the last line of paragraph 2 and 2 continuing on to the top of the next page? 3 4 A. I'm sorry. When you say "paragraph 2," are you talking about page 2? 5 Q. Perhaps I misspoke. I meant to say the 6 last line of paragraph 2. 7 The last line of page 2 of the exhibit and 8 continuing on to the top of the next page. 9 Oh, I misspoke again. A. Yes. 11 Q. I think you can just read that to 12 yourself. 13 A. 10 You would like me to read that out loud? 14 Okay. (Pause in the proceedings.) 15 A. Yes. 16 Q. Does that indicate to you -- does that 17 give you an indication of whether the land that was 18 the subject of the petition was land that was 19 already under irrigation? 20 A. I believe it does indicate that the land 21 is already under irrigation. 22 now more than 80,000 acres to which said water has 23 been and can be beneficially used. 24 25 Q. It says that there are If you could then look at page 15 of 21, the same exhibit, which I believe is part of the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 416 1 2 3 4 Statement of Claim -A. Yes, it is the first page of the Statement of Claim, page 15 of 21. Q. I'm sorry. I misspoke. If you could 5 turn to page 18 of 21, which is still part of the 6 Statement of Claim -- 7 A. Yes, I've turned there. 8 Q. And looking at the language six lines 9 above paragraph 5, down at the beginning of 10 paragraph 5, does that also give you any indication 11 on whether the lands on which this water was 12 supposed to be used was land that was already being 13 irrigated? 14 A. I believe the phraseology here that says 15 there is -- "will be beneficially used in the 16 irrigation of lands lying under said ditches and 17 canals which are insufficiently supplied with water 18 under their priorities pertaining directly to said 19 ditches" -- 20 I believe that indicates that the water, 21 this water, is to be applied to lands that already 22 have existing water sources and, therefore, is a 23 supplemental nature. 24 25 Q. And if they are insufficiently supplied with water under their priorities, does that Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 417 1 2 indicate that they're being called out? A. At times, yes, I think they would be 3 called out, or else they would have a full water 4 supply, in all likelihood. 5 Q. Does that mean anything to you with 6 regard to when this water is needed as well as the 7 lands on which it is needed? 8 9 A. Well, I think that the periods of time that most of these systems that were addressed in 10 this decree, the 80,000 acres, as we previously 11 talked about, would have been a late season or an 12 early season type of need for supplemental water. 13 14 Q. If we then turn to the decree for the Busk-Ivanhoe system, A-55 -- 15 A. Yes, I have it. 16 Q. If you turn to page 6 of 10 of that 17 exhibit, and specifically if you look at the four 18 lines prior to paragraph 8, does that give you any 19 indication of whether the lands for which the water 20 was appropriated, in the understanding of the Court, 21 were lands that were already being irrigated? 22 A. I believe it does. In the 23 second-to-last line of that paragraph, it talks 24 about "but otherwise inadequately supplied with 25 water for the proper irrigation thereof." I think Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 418 1 you're talking about lands that have other water 2 sources and that you are to provide this 3 supplemental source to those lands. 4 Q. Thank you. Mr. Hallford asked you some 5 questions regarding what assumption you would make 6 if you were looking at a decree that was silent as 7 to whether or not storage was authorized and I 8 believe your response was that normally, in the 9 absence of a reference to storage, you would make 10 the assumption that it was for direct flow. 11 Was that statement made in the context 12 of native water rights or transmountain water rights 13 or both? 14 A. That statement was made in the context 15 of native water rights where we just have a native 16 flow decree for a given cfs amount. 17 Q. And would you make the same assumption 18 if you knew that the one right involved was a 19 transmountain diversion? 20 A. I would not. 21 Q. And I believe you discussed the reasons 22 23 24 25 for that in your direct testimony? A. Yes. THE COURT: Ma'am, if you're here for a criminal case, it's on the third floor, Division D. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 419 1 Q. (By Mr. Hamre) Mr. Hallford asked you 2 some questions about the Carltons' application to -- 3 I believe it was the government land office, but 4 applications for a federal right-of-way. 5 application in Exhibit A-20 was for rights-of-way 6 for the Busk-Ivanhoe facilities. 7 that? The Do you recall 8 A. Yes, I do. 9 Q. If Mr. Carlton was not asking for a 10 right-of-way for an east-slope reservoir, would 11 there have been any reason for him to discuss 12 east-slope reservoirs in that application? 13 MR. HALLFORD: Your Honor, I object, 14 that that would be speculation. 15 expertise here as to the 1920 -- 16 THE COURT: 17 Q. There's no The objection is sustained. (By Mr. Hamre) That application was 18 asking for a right-of-way for Ivanhoe Reservoir, 19 correct? 20 A. That's my understanding, yes. 21 Q. And I believe you testified that 22 Mr. Carlton did not own any reservoirs east of the 23 Continental Divide? 24 25 A. I believe that I did testify to that, yes. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 420 1 Q. Mr. Hallford asked you about a 2 distinction between the runoff season on the west 3 side, on the Ivanhoe side, as compared to the Busk 4 Creek side and whether that distinction had been 5 brought to the attention of the Court in Civil 6 Action 2621. 7 distinction or that they were the same? 8 9 A. Was it your testimony that there was a Well, I think generally they were very similar but you're going to find that, because of 10 the additional basins, different elevations of those 11 basins that contribute to the hydrograph and the 12 runoff in the Arkansas River, that you will find 13 some differences in terms of a more extended 14 hydrograph of runoff, but generally the peak is in 15 the same general time period. 16 17 18 Q. We're basically talking about snow melting on two sides of the same mountain, correct? A. Yes. I thought the question related to 19 the hydrograph on the -- available to the 20 Busk-Ivanhoe system related to, say, a hydrograph of 21 available flows that might be available down in the 22 lower Arkansas, more in the proximity, say, of the 23 High Line Canal. 24 25 And that's what my comparison I just described was made at, that down lower in the basin Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 421 1 you have a number of different contributing areas of 2 different elevations that would tend to have an 3 effect where the runoff would stay higher for a 4 longer period compared to a basin with 11,000 acre 5 feet of elevation. 6 Q. Is the time when the snow melts a matter 7 of common knowledge even to irrigators west of the 8 Divide? 9 A. I believe it is. 10 Q. Mr. Hallford asked you a couple of 11 questions regarding how or whether the water that 12 was paid to CF & I for use of Sugar Loaf Reservoir 13 would have been used. 14 that you did not know with any certainty where or 15 how it was used, or if; is that correct? I believe your testimony was 16 A. That is correct. 17 Q. In evaluating the historical use of 18 water rights, are there any assumptions that you 19 make about what water to apply to what uses when you 20 have water rights to create for different purposes? 21 A. I'm sorry. Are you referring to within 22 the same system of having water rights decreed for 23 different purposes? 24 25 Q. If you have water decreed for use on some lands and not other lands or for some purposes Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 422 1 and not other purposes, do you normally assume, 2 where possible, the water was applied in a lawful 3 manner? 4 A. I think, unless you find evidence 5 otherwise, that, yes, you would make that 6 assumption. 7 Q. Mr. Hallford asked you a few questions 8 about the Rocky Ford High Line's use of the Las 9 Animas town ditch and water diverted pursuant to the 10 Las Animas town ditch priority and also water 11 diverted under the Busk-Ivanhoe water rights, and he 12 was asking you about return flows and the 13 circumstances when return flows would or would not 14 be reusable, or, conversely, would be owed to other 15 water users. 16 A. Do you recall those questions? Yes, I believe he was asking about the 17 part that said owed to other water users more than 18 being reusable. 19 20 21 Q. Did the Rocky Ford High Line at the time have a means to reuse either source of water? A. Well, I think part of the irrigation 22 systems have historically involved tail water, but I 23 believe -- tail water ponds. 24 traditional manner of some efficiency, recouping on 25 the irrigated field, but once the water basically It's been a Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 423 1 becomes return flows to the stream, then I think the 2 irrigation systems did not have the opportunity to 3 reuse that water. 4 Q. Mr. Hallford asked you a question about 5 whether years of un-decreed use were relevant and 6 you had some hesitation in answering that question 7 due to the term "relevance." 8 water diverted during a period of un-decreed use be 9 considered when it comes to implementing a change Should the amounts of 10 decree and looking back for purposes of implementing 11 a volumetric limit to see how much water should be 12 diverted in the future in relation to how much water 13 has already been diverted in the past? 14 A. I believe, in terms of implementing 15 volumetric limits, that you do, especially for the 16 60-year limit, have a retrospective look at the 17 historic operation of the system and include those 18 in your basis for the application of volumetric 19 limit. 20 And, therefore, it is -- that period of 21 use would be relevant to the application of the 22 volumetric limit. 23 Q. Thank you. Mr. Hallford asked you some 24 questions about the times when nonuse of a water 25 right perhaps should be excluded from a study period Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 424 1 and there was some discussion of whether 2 circumstances outside the control of the 3 appropriator would justify exclusion of those years. 4 With regard to the distinction you made 5 between un-decreed uses and nonuse, is control of 6 the circumstances the basis for your decision or for 7 your distinction, or is it based on the stream 8 conditions that junior water rights are entitled to 9 have maintained? 10 A. It's based upon the stream conditions 11 the junior water rights are entitled to have 12 maintained. 13 Q. There was quite some extended discussion 14 about the Burlington case and FRICO's expansion. 15 you know whether FRICO appropriated additional 16 storage rights contemporaneously with the 17 enlargement of acreage that began around 1909? 18 A. I can't recall that. 19 Q. If you could turn back to Exhibit 20 Sorry. A-352 -- 21 A. Yes. 22 Q. -- in your direct testimony, I believe 23 Do you referred to Findings 408 and 419. 24 A. That's correct. 25 Q. And I believe Finding 419 is the one Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 425 1 most relevant to this discussion. 2 paragraph indicate that FRICO had appropriated 3 additional water rights contemporaneously with their 4 expansion of the system, particularly the 5 second-to-last sentence? 6 7 A. I don't see where it indicates that there's additional storage rights being acquired. 8 9 Does that Q. The reference to the 1908 and 1909 FRICO water rights? 10 A. Right, so those are water rights in 11 addition to the Burlington water right, storage 12 water right, yes. 13 other water rights that were appropriated by FRICO 14 in addition to the storage right of the Burlington. 15 Q. That's true. They do mention two Is it possible, then, that, if irrigated 16 acreage was expanded at the same time additional 17 water rights were expanded, that the use or that the 18 1885 storage right could have been applied to 19 un-decreed lands without having expanded the water 20 right? 21 MR. HALLFORD: Your Honor, I object to 22 that because it calls for speculation. The decree, 23 of course, speaks for itself. 24 finding in the case, I think counsel would direct 25 Mr. Bethel to it, but to speculate about what may If there's such a Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 426 1 have occurred but that was not written down in the 2 case is not appropriate and a mere possibility 3 really isn't relevant. 4 THE COURT: 5 Q. Sustained. (By Mr. Hamre) Mr. Bethel, does this 6 paragraph, to the extent it refers to the 1885 7 storage right, does this paragraph say and wasn't it 8 your testimony on direct that the reason the Court 9 found the 1927 to 1924 study period to be 10 representative was because it was very similar to 11 the amount of diversions in use between 18 -- 12 whatever year they started using that water right -- 13 and 1909? 14 A. Yes, I believe it is 1887 to 1909 that 15 the Court decided that -- or that the Court agreed 16 with the expert analysis in saying that this longer 17 study period was very similar to that period of 18 decreed use back in the 1897-through-1909 period. 19 Therefore, you can use this longer study period. 20 Q. And in some of the other provisions that 21 Mr. Hallford discussed with you, they talked about 22 having to exclude water diverted at the metro pumps, 23 the un-decreed point of diversion, and this reflects 24 a correlation between the pre-1909 study period and 25 the 1927-to-2004 study period after the metro-pumps Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 427 1 water had been excluded; is that correct? 2 3 A. Could you restate that. I'm sorry. I'm not quite tracking. 4 Q. The Court approved the use of the 5 1927-to-2004 study period after the -- found that to 6 be similar to the earlier study period once the 7 metro-pumps diversions had been excluded? 8 A. That's correct. 9 Q. So leaving the metro-pumps diversions 10 aside, the Court did give the Applicant credit for 11 what, 30 -- I'm sorry -- 60-some years of un-decreed 12 use, but only after it found that the diversions 13 during that period of time closely mimicked 14 diversions in use during the period of lawful use? 15 A. I believe that's true. I believe the 16 number of years would be approximately 70 -- let's 17 see. It would be about 78 years. 18 19 20 MR. HAMRE: These engineers are better at math than I am. Q. Mr. Hallford asked you some questions -- 21 I'm sorry. Let me back up before I get to that. 22 Could we look at Exhibit A-348. 23 A. Yes. 24 Q. And go back to Finding 172. 25 Do you know whether, in the Burlington case, there were any Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 428 1 opposing parties that were asking that stream 2 conditions based on un-decreed uses be maintained? 3 A. I don't recall. 4 Q. Do you read this finding to mean that 5 juniors are not entitled to maintenance-of-stream 6 conditions based on un-decreed uses? 7 A. I believe that's true, that I believe 8 this statement does say that the junior 9 appropriators are entitled to continuation and 10 maintenance of stream conditions at the time of 11 their appropriation and that basically would not 12 have existed -- that un-decreed use would not have 13 existed at that time. 14 Q. Do you have an understanding about 15 whether, in the Burlington case, whether the 16 un-decreed uses overall increased the amount of 17 diversions? 18 A. I'm sorry. Are you referring to the 19 un-decreed uses below the reservoir system or are 20 you referring to the metro pumps and that un-decreed 21 point of diversion? 22 Q. You and Mr. Hallford had some extended 23 discussion about whether or not the metro pumps did 24 or did not increase diversions. 25 rehash that. We don't need to Let's just leave that aside. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 429 1 Generally speaking, do you know whether FRICO's 2 expansion of the Burlington system resulted in 3 increased diversions and consumptive use of some of 4 the water rights being changed in that case? 5 MR. HALLFORD: Your Honor, I object to 6 this because the document obviously is lengthy but 7 it speaks for itself on any number of changes, the 8 storage change, the metro-pumps change, the 9 direct-flow change, and has very specific reasons 10 for representative periods for each and analyses of 11 each. 12 And I don't think that an opinion -- and 13 I don't know what he's going to say, but an opinion 14 at variance in a collateral attack on this document 15 is appropriate. 16 a collateral attack but the document speaks for 17 itself. 18 I don't know that it's going to be It's a document that was issued by a 19 court of jurisdiction and accepted by the Colorado 20 Supreme Court and so I think we can go through and 21 find things that are of interest and add them all 22 up, but an independent opinion about the facts and 23 the result that's not referenced to an understanding 24 of the document wouldn't seem to be helpful or 25 appropriate. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 430 1 THE COURT: Mr. Hamre, would you repeat 2 your question, or maybe we can have the court 3 reporter read it back. 4 MR. HAMRE: 5 may speak for itself. 6 way to ask my question. Well, I think the document I can probably find a better 7 THE COURT: All right. 8 MR. HAMRE: I would note that, even if 9 the document does speak for itself, that did not 10 restrain Mr. Hallford from debating it at some 11 length. 12 THE COURT: Well, that's why I need to 13 hear your question again, because I think it was 14 going to redirect on the cross. 15 16 MR. HAMRE: I can withdraw the question and move to -- and perhaps get more to my point. 17 Q. (By Mr. Hamre) Mr. Bethel, did the 18 municipal use of the Busk-Ivanhoe system by Aurora 19 result in a change to the depletions to the west 20 slope? 21 22 23 A. I think, on a long-term average annual basis, it did not. MR. HAMRE: Your Honor, I only have, I 24 think, a few more questions, but if now would be an 25 appropriate time, perhaps we could take our Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 431 1 afternoon break. 2 THE COURT: We'll do that. 3 MR. HAMRE: And be pretty close to 4 finishing up when we get back. 5 THE COURT: All right, we're going to 6 take the afternoon break. 7 3:40. We'll be in recess until Thank you, Counsel. 8 (Recess taken.) 9 THE COURT: Please be seated. Court is 10 in session on 09CW142 and all parties and counsel 11 are present. 12 Mr. Bethel is still on the stand. Mr. Hamre? 13 Q. (By Mr. Hamre) Mr. Bethel, towards the 14 end of his cross-examination, Mr. Hallford asked you 15 some questions about paragraph 15 of the Applicant's 16 proposed decree, paragraph 15 referring to prior 17 decrees for the Busk-Ivanhoe system, and he was 18 asking you whether any decrees providing for storage 19 on the east slope were listed among those decrees 20 identified in paragraph 15. 21 Is it your view that transmountain water 22 can be stored on the east slope because of a decree 23 or that that was allowed even in the absence of a 24 decree? 25 A. It is my view that the transmountain Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 432 1 water can be stored in the absence of a decree in 2 the receiving basin on the east slope. 3 Q. And is it your understanding that the 4 list of Division 1 and Division 2 storage facilities 5 listed in the Applicant's proposed decree is simply 6 to formalize the locations that are anticipated at 7 this time? 8 A. Yes. 9 Q. Mr. Krassa asked you a question 10 regarding stream conditions on the west slope since 11 1928 and the amount of water -- I think this was in 12 connection with your calculation of the amount of 13 reduction based on a study period that included a 14 number of zeroes and that kind of thing. 15 Mr. Krassa asked you a question about 16 that volume of water that would be -- the volume of 17 reduction of the yield of the water right, if a 18 number of zeroes were added, would leave an amount 19 of water on the west slope that had not been 20 available since 1928. 21 Mr. Hallford then made the comparison to 22 the Burlington case and asked about water that had 23 not been available to junior appropriators since 24 1909. 25 Burlington case, the change in stream conditions in Is it correct that the expanded use in the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 433 1 the Burlington case, happened 15 or so years after 2 the entry of the decree? 3 change in stream conditions, might be a simpler way 4 to put it. 5 A. It was a post-decree Yes, and I believe you're talking about 6 the change in stream conditions after the decree of 7 the 1885 direct-flow right? 8 Q. Yes. 9 A. And basically the changes in the stream 10 regime did not happen until 1909, which is 11 approximately 15 years after that decree date, the 12 priority date of the direct-flow Burlington right. 13 Q. And the stream conditions that 14 Mr. Krassa asked you about were looking at stream 15 conditions that had been in effect since the date of 16 appropriation of the Busk-Ivanhoe system prior to 17 its decree; is that true? 18 A. That's correct. 19 Q. Is it also true that all of the water 20 rights at issue in the Burlington case were native 21 water rights? 22 A. That is my understanding. 23 Q. None of them were transmountain water A. My understanding is that none of them 24 25 rights? Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 434 1 were transmountain water rights in the Burlington 2 case. 3 MR. HAMRE: I have no further questions, 4 Your Honor, and I believe that concludes the 5 Applicant's case in chief. 6 THE COURT: All right. May this witness 7 be released or are you going to re-call him for 8 rebuttal? 9 MR. HAMRE: Based on some rulings this 10 morning, I think we'll be calling him back for 11 rebuttal at some point. 12 13 THE COURT: Okay, you're excused for today then. 14 THE WITNESS: 15 THE COURT: 16 MR. HALLFORD: 17 Thank you. Mr. Hallford? prepared to begin our case. 18 THE COURT: 19 MR. HALLFORD: 20 Okay. We will make no mid-trial motion. 21 THE COURT: 22 MR. HALLFORD: 23 Yes, Your Honor, we're Okay. A couple of procedural matters? 24 THE COURT: Certainly. 25 MR. HALLFORD: If we could clarify -- Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 435 1 leave it to lawyers to be perplexed -- 2 THE COURT: Um-hum. 3 MR. HALLFORD: -- in regard to the 4 post-trial submission of the closing arguments, the 5 written closing arguments, and you called them 6 proposed orders -- 7 THE COURT: 8 MR. HALLFORD: 9 Yes. -- not as to the dates -- we're certain about that -- it's our understanding 10 on our side of the aisle that what the Court intends 11 is that we would make a closing argument, fact and 12 law, in a document, but then we could also -- or you 13 wish for us to provide you with a "Findings of Fact" 14 type document and related proposed decree based on 15 the trial and how we view the outcome and what it 16 should be. 17 THE COURT: Correct, and what I said was 18 you don't need to do both unless you want to. 19 could just do the Findings of Fact, Conclusions of 20 Law, and Decree and call that your closing argument. 21 For my purposes, it would be the same. 22 MR. HALLFORD: You Okay, and so that the 23 Applicant, on their date, would submit what they 24 wish to as a package. 25 on our date, do the same, and they would then reply? We, as Opposers, would then, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 436 1 THE COURT: Correct. 2 MR. HALLFORD: Okay. We were uncertain 3 about the entire package that would be submitted or 4 possible to submit. 5 THE COURT: And the way that I would 6 envision that -- maybe Counsel should talk about it 7 a little bit, how they want to do it, but, for 8 example, in cases of civil cases that I've done in 9 the past where we've done proposed orders, I try to 10 make them due the same day and time, basically, like 11 whatever date by 5 o'clock. 12 Because I've had attorneys come back and 13 assert that, well, the other side saw my proposed 14 findings of facts and conclusions of law first and 15 then they tailored theirs or changed theirs before 16 they submitted it, so if you want to submit them 17 simultaneously so nobody sees what the other has to 18 say, that's fine, however you want to address that, 19 if you think that's an issue. 20 If you don't think that's an issue, 21 fine. 22 what I've seen in the past from people. 23 I'm just trying to head off something from MR. HAMRE: I understand, Your Honor. 24 We have discussed that a little bit and if we were 25 doing oral -- I mean, we've agreed that, if we were Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 437 1 doing oral closing arguments, that it would be, you 2 know, an opening, response, and rebuttal kind of a 3 situation. 4 THE COURT: If you're just going to do 5 proposed orders and everybody agrees they just want 6 to do that, you can just do them simultaneously and 7 not do closing arguments. 8 9 MR. HAMRE: That's fine. I think the Applicant as well as the Opposers would like the opportunity to 10 provide written closing arguments that explain a 11 reasoning, but perhaps, I mean, one way to approach 12 it would be that we have a briefing schedule that we 13 discussed and then -- 14 THE COURT: At the end. 15 MR. HAMRE: -- have the findings 16 17 18 19 20 21 sometime shortly after that. THE COURT: That's fine. Why don't you all talk about this and then let me know tomorrow. MR. HAMRE: We'll figure it out on our own time and get back to you. THE COURT: I'm fine with any process or 22 procedure that you want to follow with it and I'm 23 fine with however you want to do it, and obviously, 24 generally, people want to get the transcript also 25 before they have to do it, so there's the timing and Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 438 1 so forth of all of that. 2 If you want to talk to the court 3 reporter and get all that figured out, that's fine 4 too. 5 6 7 8 9 MR. HALLFORD: We will work it out, Your Honor. THE COURT: Great, thank you. I appreciate that. MR. HALLFORD: One more query re the 10 balance of today: Mr. Kuhn, one of our preliminary 11 witnesses, was in a meeting in Denver until 3 and 12 will not be here until 6, and we're not, obviously, 13 going to be having court then. 14 THE COURT: 15 MR. HALLFORD: 16 Well -- It is your courtroom. 17 THE COURT: 18 MR. HALLFORD: 19 testify tomorrow. 20 call him now -- Okay. So he will be here to Mr. Witte is here. 21 THE COURT: 22 MR. HALLFORD: 23 THE COURT: 24 MR. HALLFORD: 25 If you wish, Your Honor. We intend to Okay. -- as our first witness. Okay. His testimony likely will not take the balance of the day. It may only take Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 439 1 until 4:30. 2 THE COURT: 3 MR. HALLFORD: 4 THE COURT: 5 MR. HALLFORD: 6 THE COURT: 7 MR. HALLFORD: 8 Sir? For direct? Maybe entirely. Okay. And you may have questions yourself. 9 THE COURT: 10 11 Okay, for direct? Um-hum. MR. HALLFORD: Which the Court can do with the Division Engineer. 12 THE COURT: Sure. 13 MR. HALLFORD: Or with any witness, but 14 we would prefer, because our expert-analysis 15 testimony is a story that we wish for you to hear 16 with continuity and that we wish to have in the 17 record with continuity in the event of an appeal, we 18 would prefer to and request whether we can put on 19 Mr. Witte. 20 And when he's done, he can be excused 21 and deal with stuff like the rain that's going on 22 outside. 23 THE COURT: 24 MR. HALLFORD: 25 Sure. If necessary, and then recess and begin tomorrow with Mr. Kuhn and then Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 440 1 with our experts, in that order, rather than trying 2 to cut up one of our experts for half an hour this 3 afternoon. 4 THE COURT: That's fine. 5 MR. HALLFORD: 6 THE COURT: Okay. I have no problem with that. 7 That's what we intend to do. 8 Mr. Grosscup will also -- I think he also has a 9 procedural question. 10 MR. GROSSCUP: Well, then, Just hopefully one quick 11 matter, and I believe this is part of the Trial 12 Management Order, but just so the record's clear, we 13 had identified a number of water rights that were 14 the West Slope Opposers' list of water rights. 15 And they're identified as Exhibits 37-A 16 through E in our notebook, and we had said that 17 they're admissible and so we just wanted to make 18 sure that they've been admitted without need for 19 providing further testimony. 20 MR. HAMRE: No objection, Your Honor. 21 THE COURT: I think that was stipulated 22 23 to. MR. GROSSCUP: Yeah, and just for 24 purposes of the record, that was the same also with 25 Exhibits 82-A, B, and C, which were the maps that Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 441 1 were attached to the Trial Management Order. 2 THE COURT: It's all part of the record. 3 The Trial Management Order -- all of those exhibits 4 are attached to it. 5 MR. DINGESS: Your Honor, not an 6 argument, but a clarification: 7 that there is an agreed to as admissible, that is 8 already in the record, by your ruling? 9 THE COURT: Yes. Then on everything Anything that you 10 submitted on your exhibit lists that's indicated as 11 admissible -- you've stipulated to admission. 12 13 MR. DINGESS: So the Court considers that admitted? 14 THE COURT: 15 MR. DINGESS: 16 MR. GROSSCUP: 17 Yes. Thank you. We'll call Mr. Steve Witte. 18 THE COURT: All right, Mr. Witte, if you 19 would come forward, raise your right hand, please, 20 sir. 21 that the testimony you're about to give in this 22 matter shall be the truth, the whole truth, and 23 nothing but the truth? Do you solemnly affirm under penalty of law 24 THE WITNESS: 25 THE COURT: I do. Thank you, sir. Please be Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 442 1 seated. 2 STEVE WITTE, 3 having been first duly sworn to state the whole 4 truth, was examined and testified as follows: 5 DIRECT EXAMINATION 6 BY MR. GROSSCUP: 7 Q. Good afternoon, Mr. Witte. 8 A. Good afternoon. 9 Q. My name's Scott Grosscup. I'm here 10 representing the West Slope Opposers' group. 11 guess you've given your name. 12 13 A. Q. 18 19 20 I'm the Division Engineer for Water And how many years have you been with the Division Engineer's office? 16 17 What's your position? Division 2. 14 15 I A. I started with Division 2 in October of Q. And prior to 1988 with Division 2, were 1988. you also with the State Engineer's office? A. Prior to 1988 I was the Division 21 Engineer for Water Division 6 for a period of about 22 three years, two and a half years. 23 was the Assistant Division Engineer for Division 3 24 in the Rio Grande Basin and, prior to that, I was a 25 staff engineer in the Denver office of the State Prior to that, I Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 443 1 Engineer. 2 Q. 3 You've testified, I assume, many times in water-court proceedings? 4 A. I have previously testified, yes. 5 Q. And you were given a subpoena to appear 6 here today? 7 A. I was. 8 Q. And I assume you've also been qualified 9 10 as an expert on many occasions to testify as to water administration? 11 A. Yes, sir. 12 Q. And water resources engineering and 13 other similar matters? 14 15 A. administration, um-hum. 16 17 Water resources engineering and Q. Are you generally familiar with the application that's here today? 18 A. Generally. 19 Q. And what's your knowledge of what this 20 application is seeking to do? 21 A. It's seeking to change the use of the 22 Busk -- the water rights associated with the 23 Busk-Ivanhoe system from irrigation purposes to 24 municipal purposes, and it's just half of the water 25 rights. The other half were previously changed. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 444 1 2 Q. Does it also identify new places of storage in Water Division 2? 3 A. I'm sorry. I don't recall. 4 Q. Did you have any discussions with the 5 Applicant or Applicant's Counsel prior to the filing 6 of this application? 7 A. Yes. 8 Q. And what did you say to the Applicant or 9 10 Applicant's Counsel? A. Do you recall? I recall generally having contacted 11 Mr. Dingess and asked him if he didn't agree that 12 the second half of the Busk-Ivanhoe system shouldn't 13 also be changed in a manner similar to the change 14 that had previously occurred that was initiated by 15 Pueblo Board of Water Works for the first half, if 16 you will, and encouraged him to do so. 17 18 19 Q. And what caused you to bring this to Mr. Dingess' attention? A. To the best of my recollection, the 20 Lower Arkansas Valley Conservancy District had begun 21 leasing another transmountain diversion, the 22 Larkspur system, and I think ultimately purchased 23 that system, but they were initiating new uses of 24 various types and they were leasing water to people 25 for these different uses. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 445 1 And in talking with the manager of the 2 Lower Arkansas Valley Water Conservancy District 3 about that fact, that these uses that they were 4 leasing water for were not decreed purposes, why 5 shouldn't he be changing those water rights, and he 6 responded that he would do it just as soon as Aurora 7 did, and so that prompted me to contact Mr. Dingess. 8 9 Q. Now, you said you encouraged Mr. Dingess to file? 10 A. I did. 11 Q. You didn't order him to do so, did you? 12 A. No. 13 Q. Did you issue a cease-and-desist order 14 to Aurora for its municipal use of these water 15 rights? 16 A. No. 17 Q. There's a notebook down here. 18 white one on the bottom, if I can get it. 19 have to get up. 20 21 It's the You don't (Pause in the proceedings.) Q. Actually, I don't want to use that one 22 after all this. Can I have Applicant's A-55. 23 believe it's in that one. 24 A. I have turned to A-55. 25 Q. Before we look at this, are you I Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 446 1 generally familiar with the Busk-Ivanhoe water 2 rights? 3 A. Generally, yes. 4 Q. Are you familiar -- have you reviewed 5 the decrees for the Busk-Ivanhoe water rights? 6 7 A. I don't know that I've ever read the decree all the way through. 8 9 I've only read portions. Q. Well, A-55 is the decree for the Busk-Ivanhoe water rights that's been admitted into 10 evidence. To your knowledge, does this decree state 11 that water may be put to municipal purposes? 12 A. That is not my understanding. 13 Q. Does it say that water can be used in 14 Water Division 1? 15 A. I do not believe so. 16 Q. I mean, is that partly why we're here A. Yes. 17 today? 18 I think those uses don't conform 19 with my understanding of what this decree provides 20 for. 21 Q. And the decree doesn't identify any -- 22 or does the decree identify any water storage 23 vessels on the Arkansas Basin where water may be 24 stored? 25 A. I don't believe so. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 447 1 Q. Does it say that water, once diverted 2 through the Ivanhoe Tunnel, will be stored in the 3 Arkansas Basin? 4 5 6 A. Not explicitly; there's language that may be interpreted to imply that. Q. Are you familiar with the decrees for 7 Turquoise Reservoir in general, Sugar Loaf 8 Reservoir? 9 10 11 12 A. Again, generally, yes; I didn't review them specifically prior to this testimony. Q. Now, if you can grab the white book and look at Exhibit 19 -- 13 A. I've turned to it. 14 Q. -- do you recognize what this is? 15 A. Yes. This is a decree for water rights 16 for purposes other than irrigation filed in -- it's 17 filed in Chaffee County District Court. 18 19 20 Q. And do you know what the water right is that is decreed there? A. I believe this is a decree for water 21 rights that -- they include water rights to be 22 stored in Sugar Loaf Reservoir, which is the name of 23 the reservoir at that time. 24 goes by the name of Turquoise Reservoir, subsequent 25 to the enlargement by the Fryingpan-Arkansas Today it more commonly Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 448 1 Project. 2 3 Q. And when was that decree for Sugar Loaf Reservoir entered? 4 A. March 18th, 1912. 5 Q. And can you turn to -- in the lower left 6 side of each page there's a page number, WSO, 7 dash -- 8 A. I see the numbering. 9 Q. Okay. 10 A. Okay. 11 Q. -- I believe, at the bottom of 337 on to 12 So if you can turn to page 337 -- 338, it describes the Sugar Loaf Reservoir. 13 A. Yeah, it does. 14 Q. What are the uses decreed for the Sugar 15 16 17 18 19 Loaf Reservoir? A. It is used for the supply of water for manufacturing purposes at the Minnequa Steel Plant. Q. There's no mention there of irrigation for the Sugar Loaf Reservoir, is there? 20 A. I don't see that, no. 21 Q. What are the sources of supply for Sugar 22 23 Loaf Reservoir? A. I see on what number it is, WSO 338, 24 that the reservoir is constructed across what is now 25 called -- or what is called Lake Fork of the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 449 1 Arkansas River, and then it gives a legal 2 description. 3 4 5 Q. Does it identify any sources from the west slope of the Continental Divide? A. I don't see anything to that effect. 6 MR. GROSSCUP: Your Honor, we'd ask that 7 Exhibit 19 be accepted into evidence. 8 THE COURT: Mr. Hamre, any objection? 9 MR. HAMRE: No objection, Your Honor. 10 THE COURT: Mr. Krassa? 11 MR. KRASSA: 12 MS. RYAN: 13 THE COURT: 14 Q. No objection, Your Honor. No objection. 19 is admitted. (By Mr. Grosscup) Mr. Witte, you're 15 generally familiar, are you not, with transmountain 16 diversions into Water Division 2? 17 A. Yes, sir. 18 Q. And, one, are you familiar with the 19 20 Fryingpan-Arkansas Project decree? A. Yes. 21 MR. HAMRE: Pardon me, Scott. 22 Your Honor, there were objections to us 23 going into other transmountain decrees and the Court 24 ruled that we didn't need to go there. 25 inquire as to where -- Can I Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 450 1 2 THE COURT: going with this? 3 4 MR. GROSSCUP: I can withdraw that question and move on to another question. 5 6 Mr. Grosscup, where are you THE COURT: Q. Okay, go ahead, sir. (By Mr. Grosscup) Are there trans- 7 mountain -- well, are there reservoirs in Water 8 Division 2 that have decrees that recognize 9 transmountain diversions as a source of supply? 10 A. Well, typically the decrees are entered 11 to confirm water rights associated with the 12 appropriation of native supplies, so there may be 13 some decrees that mention transmountain supplies, 14 but typically that's not the central focus or 15 subject of an adjudication decree. 16 Q. Okay. Moving on, I guess, with the 17 operations of Turquoise Reservoir now, are you 18 generally familiar with how water is accounted for 19 in Turquoise Reservoir? 20 A. Generally, yes. 21 Q. And who does that accounting? 22 A. Well, the Division Engineer is 23 responsible for measuring and making a reporting of 24 imported water into the basin, so my hydrographic 25 staff maintains a record of transmountain inflow to Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 451 1 the reservoir and that information then is shared 2 with the Bureau of Reclamation. 3 And I would say that most of the 4 accounting for Turquoise Reservoir is done by the 5 Bureau of Reclamation. 6 7 Q. And how, to your knowledge -- and is that information then reported to your office? 8 A. Yes, yes. There's a constant exchange 9 of information between my office and the Bureau of 10 Reclamation regarding calls for water, water being 11 exchanged into reservoirs, as well as the inflows. 12 Q. Do you know how water diverted through 13 the Ivanhoe Tunnel, Carlton Tunnel, was accounted 14 for in Turquoise Reservoir? 15 A. The accounting that we get from the 16 Bureau of Reclamation is not down to that level of 17 detail. 18 how much water, for example, is in the project 19 account, and there's a Home-Stake account. 20 are accounts for the City of Colorado Springs, an 21 account for the City of Aurora, and the City of 22 Pueblo. There is an accounting provided to us of There 23 Those accounts correspond to contracts 24 with the Bureau of Reclamation, so the information 25 we get is typically -- what we have at our Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 452 1 disposal -- pertains to the quantities in the 2 individual accounts, and those accounts could 3 contain water from several different sources. 4 So I assume -- I think there must be an 5 accounting, for example, between -- that we don't 6 typically see that's conducted by Aurora and City of 7 Pueblo to keep track of the respective amounts of 8 the Busk-Ivanhoe imports, but that's not a part of 9 the records maintained in my office. 10 Q. So I guess you don't track -- or do you 11 track Busk-Ivanhoe water by priority when it's 12 diverted into the reservoir or . . . 13 A. We track imports of Busk-Ivanhoe water 14 into the reservoir. 15 involved in the determination of whether or not it's 16 in priority. 17 Q. We're not, in Division 2, And do you know what happens to the 18 water after these -- well, let me back up. The City 19 of Aurora has acquired the Busk-Ivanhoe water 20 rights, correct? 21 A. Half of them, as I understand it. 22 Q. And do you know what City of Aurora does 23 with the water that it's acquired in the Busk- 24 Ivanhoe system? 25 A. Typically, they, I believe -- it's my Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 453 1 understanding -- that water is released from 2 Turquoise and put through the Otero pumps and moved 3 into the South Platte Basin. 4 Q. And once it's in the South Platte Basin? 5 A. I don't attempt to keep track of it. 6 Q. You've reviewed, I'm sure, hundreds, 7 thousands of applications for changes of water 8 rights in your role as Division Engineer? 9 fair statement? 10 A. I've reviewed a number, yes. 11 Q. You've reviewed a number. Is that a What do you 12 look for generally in applications for changes of 13 water rights? 14 A. Well, the overarching objective in 15 changes of water rights is to ensure or to determine 16 whether or not injury to other water users would 17 result and, if so, to determine what kinds of terms 18 and conditions might be fashioned to prevent injury. 19 20 Q. Do you consider the historical use of a water right? 21 A. Certainly. 22 Q. And what kind of things do you look at 23 24 25 when you're analyzing the historical use? A. Well, the period of available record, the types of use that were made of the water, the Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 454 1 extent of use, those kinds of things. 2 Q. You mentioned the period of available 3 record. Sometimes there's not a full record 4 available? 5 A. Sometimes. 6 Q. And sometimes there's many years? Is 7 that true? Are there -- I mean, maybe there's 8 records from the date of first use until the date of 9 the application. Is that possible? 10 A. Rare. 11 Q. Rare? 12 A. But possible. 13 Q. What is the preferred route? 14 15 To have a longer record? A. Sure. I mean, my understanding of the 16 objective is ascertaining what the extent or the 17 measure of the water right is, and that's defined by 18 how the water right has been, as they say, ripened 19 through historical use from the point when the water 20 right was conferred by the Court, or right up to the 21 present time, if possible. 22 The more records, we feel, better 23 establish the history. All of the time, all of the 24 records, better establish the history than a portion 25 of the record, typically. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 455 1 Q. You mentioned also the types of use. 2 you consider whether the decreed use or the actual 3 use was a lawful use? 4 A. Certainly. Do The recent -- I say "recent" 5 but, for some time now, actually, the courts have 6 made it plain that the use that can be recognized in 7 determining consumptive use needs to be lawful, and 8 that typically is defined by the description in the 9 decree. 10 Q. And what do you do with unlawful use? 11 A. And normally we take the position that 12 such use should not be included numerically other 13 than zeroes in the period that's utilized, so, in 14 other words, unlawful use would be recorded as zero 15 use. 16 MR. HAMRE: Your Honor, I need to object 17 at this point. We did not take the deposition of 18 Mr. Witte because no opinions were disclosed, 19 neither -- none of the West Slope Opposers and the 20 State, as a part of this litigation, did not 21 disclose that Mr. Witte would be offering any 22 opinions other than the opinion which we viewed as 23 really more a statement of fact, that there had been 24 a period during which Busk-Ivanhoe water rights 25 owned by B-I, Inc., had been used for decreed Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 456 1 purposes, so I did not object to the questions about 2 simply what -- 3 4 THE COURT: Mr. Grosscup, do you have a MR. HAMRE: But I would object to these response? 5 6 opinions and I would ask that the last opinion be 7 stricken. 8 9 MR. GROSSCUP: We've not offered Mr. Witte as an expert witness. These are his 10 opinions based on his role as Division Engineer and 11 the actions of the Division Engineer and how they 12 interpret decrees and historical use, which, as I 13 believe he indicated, is something that he does on a 14 daily basis. 15 THE COURT: I'm going to overrule the 16 objection on the limited basis that the Division 17 Engineer's position is set forth in the statement of 18 the Trial Management Order, so you're not surprised, 19 Mr. Hamre, that the Division Engineer takes this 20 position about zeroes. 21 were going to assert. 22 23 MR. HAMRE: You knew that was what they We knew that that was the legal argument they were going to make. 24 THE COURT: Okay. 25 MR. HAMRE: But they did not, I mean, in Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 457 1 opening statements, as recently as that, state that 2 they were going to be calling any witnesses, and as 3 I said, they did not disclose any expert opinions 4 on -- well, any expert opinions, period. 5 6 THE COURT: The objection is overruled. 7 Go ahead, sir. 8 9 I understand. Q. (By Mr. Grosscup) Mr. Witte, I believe you were saying, as you were in mid sentence, that 10 the position is to include zeroes for an unlawful 11 use. Am I paraphrasing you appropriately? 12 A. Yes. 13 Q. And with those zeroes, are they then 14 averaged into the overall record? 15 A. Yeah, that's what I was speaking to, was 16 determining what the average historical use has 17 been. 18 possible unless there are special exceptions or 19 reasons that records should be excluded that make 20 sense. It ought to encompass as much time as 21 22 MR. GROSSCUP: Can I have a moment, Your Honor? 23 THE COURT: 24 (Pause in the proceedings.) 25 Q. Yes. (By Mr. Grosscup) Just a follow-up Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 458 1 question, Mr. Witte: 2 be? 3 A. What may a special exception Well, a special exception might include 4 a period of time following a flood where a diversion 5 works was obliterated and the owners of the water 6 rights, as much as they wanted to, simply couldn't 7 make diversions until they were able to repair the 8 diversion facilities, for example. 9 That would be at least one example where 10 I would be sympathetic or receptive to a removal of 11 a certain period of record. 12 13 MR. GROSSCUP: further. 14 THE COURT: 15 MS. RYAN: 16 THE COURT: 17 18 Okay, I have nothing Thank you. No questions. Thank you. Mr. Krassa? CROSS EXAMINATION BY MR. KRASSA: 19 Q. Good afternoon, Mr. Witte. 20 A. Good afternoon, Mr. Krassa. 21 Q. I'm Bob Krassa, representing the High 22 Line Canal, and I've just got a couple questions for 23 you. 24 Mr. Grosscup about what led up to your encouragement 25 of Mr. Dingess to file the application in this case. You testified a little bit in response to Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 459 1 A. Yes. 2 Q. And I wanted to ask whether -- and you 3 mentioned that it followed your discussion with the 4 manager of the Lower Arkansas District? 5 A. Yes. 6 Q. Were there any questions or comments 7 regarding the Busk-Ivanhoe system that you received 8 from the Division 5 office that led up to that 9 discussion with Mr. Dingess? 10 A. Mr. Krassa, as I recall the series of 11 events, it seems like I contacted Mr. Dingess in 12 about 2007 and he -- without contacting anyone in 13 Division 5. 14 change perhaps next year," or something to that 15 effect. 16 At that point, he said, "We intend to I set a tickler and a year later I 17 called back and asked Mr. Dingess how progress was 18 moving towards getting an application filed and I 19 think, on that occasion, I copied in the Division 20 Engineer for Water Division 5 and then Mr. Marlaro 21 and I had some exchange, e-mail exchange, perhaps 22 telephone exchange also, following that, in which he 23 agreed that a change should be filed. 24 25 And I probably -- well, I believe I did say at that time that I didn't intend to order Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 460 1 Aurora to file a change, that it seemed to me that, 2 if there was potential injury, it was to the folks 3 on the western slope and that it was his 4 responsibility to take that more aggressive action 5 if he thought it appropriate. 6 7 Q. Division Engineer in Water Division 5? 8 9 10 I take it Mr. Marlaro is or was the A. He was at that time and he still is, Q. Okay. yes. The same question in regard to 11 questions or comments from any water providers on 12 the western slope: 13 with Mr. Dingess, did you receive any complaints 14 from the river district or anybody else on the 15 western slope about the Busk-Ivanhoe? Prior to your initial discussion 16 A. No. 17 Q. As far as you know, prior to the 18 commencement of your service as Division Engineer 19 here in Division 2, were there any such complaints 20 or contacts either from the Division 5 office or 21 from west-slope water providers that might be 22 reflected in the records of your office? 23 A. No, not that I recall. 24 Q. Okay. 25 My next question springs from testimony yesterday by Mr. Tom Simpson, who Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 461 1 testified in regard to annual reports by the 2 Division Engineer's office. 3 A. Um-hum. 4 Q. And am I correct that those annual 5 reports go from the division office to the Denver 6 office? 7 A. Yes, that is correct. 8 Q. And then are those division reports 9 10 circulated to all the other divisions, as a rule? A. The rule has changed over time. The 11 practice has changed over time. 12 Division Engineer's meeting I ever went to -- each 13 Division Engineer read his report to the others and 14 so that information was passed along in that 15 fashion. 16 I think the first That practice was soon discontinued and 17 I remember a time when we all brought one copy for 18 the State Engineer and six others for fellow 19 Division Engineers, but in more recent years, 20 sometimes people bring extra copies and they're 21 passed out on a request basis. 22 So the practice has changed over time 23 from a time when everyone got a copy to only upon 24 request now. 25 Q. So if the Division 5 folks wanted a copy Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 462 1 of your annual report or you wanted a copy of their 2 annual report, it would be provided on request? 3 A. 4 5 Yes. MR. KRASSA: Thank you. 6 THE COURT: 7 Mr. Hamre? 8 9 That covers it, Your Honor. Thank you. CROSS EXAMINATION BY MR. HAMRE: 10 Q. Good afternoon, Mr. Witte. 11 A. Good afternoon. 12 Q. My name is Austin Hamre. I'm one of the 13 attorneys for Busk-Ivanhoe, Inc. In response to 14 some of Mr. Grosscup's questions, when you were 15 talking about the accounting that you get from the 16 Bureau of Reclamation relating to Turquoise 17 Reservoir -- 18 A. Yes, sir. 19 Q. -- you indicated that there were some 20 things that you saw, and I think you said that there 21 probably was an accounting that you don't see? 22 A. Yes. 23 Q. You can request that accounting from 24 Aurora or presumably other people that have contract 25 storage space in Turquoise Reservoir if you want to Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 463 1 see it, correct? 2 A. Yes. 3 Q. In response to Mr. Krassa's question 4 just a moment ago, I think you said that, with 5 regard to these annual reports -- 6 A. Yes, sir. 7 Q. -- that the first one -- that the 8 practice -- that the first one you went to -- you 9 actually met and read the reports to each other? 10 A. That's my recollection, yes. 11 Q. And when was that? 12 A. I believe that must have been in 1982. 13 Q. And any recollection of how long that 14 practice continued? 15 16 A. I'm sure that was the only time in my experience. 17 Q. You gave an opinion that, as I 18 understand it, you gave the opinion that, in looking 19 at the historical use of a water right for which 20 there had been a period of un-decreed use, you 21 thought the years of un-decreed use should be 22 included but the diversion should be treated as 23 zeroes. 24 you said? 25 A. Is that an accurate representation of what Probably better stated than I stated it, Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 464 1 but that was my intention, yes. 2 Q. Isn't it true that there are no Supreme 3 Court opinions on water-rights changes saying that 4 that is an appropriate practice? 5 A. I'm not aware of any Supreme Court 6 decisions that state that is the appropriate 7 procedure for analyzing historical use. 8 9 10 Q. Did the Division Engineer's office stipulate to a change of Bessemer Ditch shares by the St. Charles Mesa? 11 A. The second part of your question related 12 to the St. Charles Mesa Water District? 13 correct? 14 Q. Is that Yes, and I believe there was a case in 15 which the Division Engineer's office stipulated to a 16 change in the last, I believe, five to ten years. 17 A. I believe that's correct. 18 Q. Was there not an extended time period of 19 municipal use prior to that change? 20 A. Yes. 21 Q. And isn't it true that, in that case, 22 the study period ended with the period of decreed 23 use and completely excluded the period of un-decreed 24 use? 25 A. I'm sorry, Mr. Hamre. I don't remember. Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 465 1 It could be true. 2 MR. HAMRE: 3 questions, Your Honor. 4 THE COURT: 5 Okay, I have no further Redirect? REDIRECT EXAMINATION 6 BY MR. GROSSCUP: 7 Q. Just quickly, Mr. Hamre asked you if you 8 were aware of any Supreme Court opinions that 9 require use of zeroes or that you discount for 10 un-decreed use. Do you remember that? 11 A. I remember the question, yes. 12 Q. And I believe your answer was no. 13 Is that correct? 14 A. I believe that was my answer. 15 Q. Are you aware of any Supreme Court 16 opinions that support the position that un-decreed 17 use should be excluded or not looked at? 18 A. I believe that was the holding in the 19 Santa Fe Trails Ranches case, that un-decreed uses 20 should not be used for the purposes of determining 21 historical consumptive use. 22 23 Q. But it didn't say -- or did it say, "Don't look at these"? 24 A. No. 25 Q. Are you aware of the recent Supreme Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 466 1 Court case of the Farmers Reservoir and Irrigation 2 Company versus Burlington Ditch Company out of 3 Division 1? 4 A. Generally, yes. 5 Q. Generally? 6 7 8 the specifics of that case? A. Not to the extent that Mr. Bethel was being asked. 9 10 Are you familiar much with MR. GROSSCUP: All right, I'll be done. Thank you very much. 11 THE COURT: Thank you, Mr. Grosscup. 12 Mr. Witte, I think I need to understand 13 what your theory is or why you think it should be 14 zeroes that should be included, that the years 15 should be included and it should be at zeroes. 16 is that? 17 Why What's your authority for that? THE WITNESS: Well, it is an 18 interpretation of the Santa Fe Trails decision, 19 perhaps combined with the fact that the law has been 20 pretty clear since 1969 that changes in use are to 21 be adjudicated, and so, although it does, indeed, 22 seem harsh to put zeroes in, there is a, I guess, a 23 risk inherent in not following the law in 24 prosecuting a change case promptly. 25 And that is there's a discount that is Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 467 1 associated in the quantification of the right, so 2 this seems like a consistent interpretation of Santa 3 Fe Trails and an appropriate way to motivate folks 4 to prosecute changes when needed. 5 THE COURT: 6 Any questions based upon the Court's? 7 Mr. Hamre? 8 MR. HAMRE: 9 10 11 Okay. Yes, Your Honor. EXAMINATION BY MR. HAMRE: Q. Mr. Witte, as I understand it, your 12 response to the judge's question was that people -- 13 if zeroes are not included in a study period, people 14 may not be motivated to change their water rights? 15 Is that -- 16 A. That's a fair restatement. 17 Q. Isn't it true that your office has the 18 authority to stop people from diverting water if 19 they're putting water to un-decreed uses? 20 A. Yes, that's true. 21 Q. Your office is basically the water cops, 22 23 is it not? A. Yes. 24 MR. HAMRE: No further questions. 25 MR. GROSSCUP: I have nothing, Your Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk-Ivanhoe, Inc. July 24, 2013 - Volume II 468 1 Honor. 2 THE COURT: 3 MR. KRASSA: 4 THE COURT: 6 MS. RYAN: 7 THE COURT: 9 Ms. Ryan? No questions, Your Honor. All right. May this witness be released? MR. GROSSCUP: 10 MR. KRASSA: 11 MS. RYAN: 12 THE COURT: 13 No further questions, Your Honor. 5 8 Mr. Krassa? Yes, he may. Yes. Yes. You may be released from your subpoena. 14 THE WITNESS: 15 THE COURT: Thank you. Counsel, we'll take the 16 evening recess at this point and we'll start again 17 tomorrow morning at 8:30. 18 criminal matters starting at 8, 8:15. 19 they won't take as long as they did this morning, so 20 we'll see you in the morning. 21 Court's in recess. I do have, again, some Hopefully Thank you. The 22 ************************* 23 (Proceedings concluded at 4:45 p.m.) 24 25 Mile High Court Reporting and Video, Inc. 303-202-0210 contact@milehighreporting.com Concerning the Application of: Busk?Ivanhoe, Inc. July 24, 2013 Volume Mary Susan Parker, Registered 4 Professional Reporter, Registered Merit Reporter, 5 and Certified Realtime Reporter, certify that the 6 above proceedings were had; then reduced to 7 typewritten form, by means of computer?aided 8 transcription. 9 I further certify that I am not related 10 to any party herein or their counsel and have no 11 interest in the result of this matter. 12 IN WITNESS WHEREOF, I hereunto set my 13 hand. My commission expires: August 9, 2018. 14 15 Paula/t Mary Susa Parker 16 Notary No. 19874154446 Registered Professional Reporter 17 Registered Merit Reporter Certified Realtime Reporter Mile High Court Reporting and Video, Inc. contact@milehighreporting.com 303?202?0210