Moving Forward to the Future

1. Moving Forward to the Future Flathead Water Use Agreement and the Flathead Indian Reservation Compact

2. What do we want the future to look like? Do we want FIIP to receive tens of millions of dollars to construct projects like this …

5. Or … Do we want irrigators to pay tens of millions* of dollars in litigation costs and continue to have this?*Dr. Kate Vandemoer, WMWUA meeting, Ronan, MT, January 21, 2013

7. Jocko K Canal Broken Lining

8. Benefits of Settlement vs. Costs of Litigation • Certainty--Irrigators will secure a legally enforceable right to receive water from FIIP. • Water--Irrigators on single duty land will receive 10percent to20percent more than they have historically received for the past 25 years. Irrigators on extra duty land will be allowed to receive their extra duty as they prove their need. • Uncertainty—irrigators won’t know what their future will look like for decades • Water—the CSKT will seek significantly higher instream flows in litigation. They certainly will not receive less than they have now. The FJBC has already litigated instream flows and lost (1987). Will a second litigation have a better result—especially with current ESA issues?

9. Benefits of Settlement vs. Costs of Litigation • Land—in this settlement, all land, both allotted and homesteaded will be treated the same. Both will enjoy an 1855 priority date. Project Rehabilitation—settlement provides for tens of millions of dollars in state and federal funding to rehabilitate the FIIP. Some of this money will be available for on-farm efficiency improvements and stockwater mitigation. • Land--In litigation, the Court may likely apply Walton. That means allotted lands receive a senior priority date over homestead lands. • No Rehabilitation--Litigation will provide no funds for Project rehabilitation. Litigation will cost irrigators tens of millions of dollars and 20-30 years of continued deterioration of FIIP.

10. Benefits of Settlement vs. Costs of Litigation • Flathead River Pumping Plant—settlement provides for $300,000 per year to fund pumping and other Project purposes. • Low Cost Block of Power—settlement provides that it will be continued for as long as the CSKT hold the FERC license for Kerr Dam. • Net Power Revenues—settlement provides for net power revenues in the amount of $100,000 per year to accrue to the Project. • Pumping--Litigation will provide no funds for pumping and other Project purposes. • Power--Litigation will mean that the LCB for pumping at the Flathead River Pumping Plant will expire. Pumping costs will increase 200 percent to 300 percent, depending on BPA rates. • Power Revenues--There will be no further accumulation of net power revenues to FIIP with litigation.

11. Benefits of Settlement vs. Costs of Litigation • Extra Water—settlement provides a mechanism for irrigators to obtain water above their FTA, up to 2 af/ac, plus purchased water above that, where available. • Saved Water—settlement provides a mechanism to divide saved water between irrigation and fisheries purposes. • Cooperative Management Entity—will continue to function under settlement. The CME will be implementing major portions of the settlement. • No Extra Water—litigation will provide no mechanism for irrigators to obtain extra water. • No Saved Water—with litigation, there will be no saved water to be divided between irrigation and fisheries. Litigation provides that the winner takes all. Is that a risk irrigators are prepared to take? • No CME--The CME may cease to exist in litigation. Management of the Project will go from local control back to federal control under BIA.

12. All Water Users Are Protected • The Flathead Reservation Compact:The Flathead Project Water Use Agreement must be approved by the Montana Legislature. No changes can be made by any single party to the Compact, without approval of all parties. The CSKT will not have unilateral control over anything in the Compact or FWUA. • The Compact calls for the CSKT to appoint 2 people to the Unitary Management Board and the Governor of Montana to appoint two people to the UMB, after consulting with water users. Those four people then choose a fifth member. The CSKT do not control water use. A true partnership of all parties exists to administer water rights. • The CME will continue to manage and administer all FIIP water use. • By legal definition and court ruling, instream flows can only be used for fisheries purposes. The CSKT will have no ability to lease or sell water from instream flows to any entity or person.

13. CSKT support irrigation: • $100 million to date in Safety of Dams program—non-reimbursable. • Renewable Resource Grant & Loan program participation • CME emergency reserve came from Indian deferred construction costs • Net power revenues & Low Cost Block of Power continue if water use agreement signed. • Net power revenues paid off all irrigation construction debt, including early debt retirement for Jocko & Camas

14. Change is coming … • There is a misperception. Defeat of the Compact and WUA will not protect the status quo. That is totally erroneous. The status quo is not an option in this situation. • The state of Montana is bound by law to adjudicate the water rights of this area. That means quantifying both tribal and all other rights. If all these rights cannot be quantified by negotiation, they will be litigated through an adjudication process. There are no other options. • The question is: How can some irrigators believe they can get more through litigation?

15. Stevens Treaty Tribes • Have strong fishery language • Stevens treaty tribes have prevailed in every fishery (instream flow) case they have litigated • This includes the Yakama, Warm Springs, Umatilla, Nez Perce, Colville and Klamath tribes, as well as the CSKT in litigation with the FJBC inthe late 1980’s and early 90’s • Will more litigation produce a different outcome?

16. Why shouldn’t we just wait for two years? • What would change? • There have been 12 years of negotiation between the U.S., Montana and the CSKT • There have been 6 years of negotiation between the FJBC and CSKT • The U.S. has indicated they will not accept the status quo • Settlement means instream flows will be adopted as projects are completed with settlement dollars. Until that happens, flows stay the same as they are today. • Lack of settlement means higher instream flows immediately, irrigators liable for Project fish improvements through O&M dollars

17. What can we conclude? • Litigation can only mean less water and greater costs for irrigators • Settlement has only positive benefits for irrigators, more water and more money from state and federal sources • Litigation brings less water and greater costs

18. The Bottom Line is This: • In the Water Use Agreement, irrigators secure a legally enforceable right to use FIIP water • Up to 2af/ac, plus more if available in the system • The Water Use Agreement provides that tens of millions of dollars will be spent to benefit the FIIP • Settlement provides certainty • Litigation provides for uncertainty for decades, no money for FIIP rehabilitation, pumping or anything else. • What will happen to property values with a cloud of uncertainty hanging over them? • What will FIIP look like after 30 years of litigation? • What will the future look like? You decide. • But know the facts when you make your decision

19. The Future—What do you want? An irrigation project rebuilt to modern standards… Or what we have now?

20. The Future—What do you want? A secure and legally enforceable water right? Or an irrigation project that cannot deliver water?

22. Stevens Treaty rulings have also said: • American Indian Law Casebook, pp. 415-416: • In several cases, courts have held that federal laws reserving lands for Indians entitle tribes to instream flows. The Washington Supreme Court ruled that the Yakama Nation’s treaty secures an off-reservation instream flow right. This right has been quantified in the Yakima River Basin general stream adjudication.

23. Stevens Treaty Cases Include: • U.S. v. Winans, 1905. Off reservation fishing rights • U.S. v. Washington, 1979. Federal Court took jurisdiction over state fisheries management • Washington v.  Washington State Commercial Passenger Fishing Vessel Association, 1979. Off reservation, 50% of fish in total • U.S. v. Adair, 1983. Aboriginal, off reservation instream flow rights with a time immemorial priority date • Joint Board of Control v. U.S. Above cases apply to Hellgate Treaty. Also, just & equitable question only applies to water remaining after instream flows.

24. Opponents claim the CSKT are anti-irrigation: Not True! • The river diversion allowances for the Upper Jocko are 3.975 af/ac, and 3.33 af/ac for the Moiese area, while the RDA's for the Lower Jocko area are slightly less than 3.0 af/ac.  • Mission H canal (Dixon Agency area), which is listed for an RDA of 3.7 af/ac

25. Klamath Tribes & Feds Exercise Water Rights • By JEFF BARNARD Associated Press • GRANTS PASS, Ore. June 11, 2013 (AP) • Tens of thousands of acres in Oregon's drought-stricken Klamath Basin will have to go without irrigation water this summer after the Klamath Tribes and the federal government exercised newly confirmed powers that put the tribes in the driver's seat over water use — a move ranchers fear will be economically disastrous.

26. What Happens If We Litigate? • Both the FJBC and the U.S. have filed claims for the FIIP water right in the Montana Adjudication process. • Both of those claims have significant technical problems* that would be identified by DNRC during claims examination, leading to the need for amendments to the claim filings (which would cost money in terms of hiring consultants and lawyers to clean up the filings) • The CSKT would inevitably file claims for FIIP water it uses as well (at least for trust lands and fee lands that they own and probably for more), in addition to all its other claims for instream flows, municipal, industrial, and consumptive uses.

27. The FJBC and CSKT would object to each others claims: • -the burden of proof (and thus the burden of paying for lawyers, hydrologists and other experts) would fall on the party objecting to a claim, not the party asserting the claim (all claims filed in the Adjudication are presumed to be valid as a matter of Montana law unless and until an objector introduces sufficient evidence to overcome the presumption)—think pay for attorneys! • -the role of the U.S. in this process is unclear (it would likely defend its own claim), but it is somewhat uncertain what role it might play in an objection process—though it’s fair to say that it is more likely the U.S. would object to the FJBC claim than the CSKT claim—so the FJBC would be fighting both the U.S. and CSKT claims—again, think pay for attorneys!

28. February 19, 2013, the U.S. issued a warning: • …”failure or delay of the negotiations should not be equated with a long term extension of the status quo for irrigation water deliveries”… • …”[current] interim flows…were not intended as a full measure of…Tribes instream flow water rights”… • …”recent consultations under the ESA focused on the need for improvements in flows and in FIIP operations to reduce impact of flows on fish.”

29. Failure to settle claims will chart alternative course (U.S.): • …”such as considering increasing instream flows as early as this year”… • …”increasing flows will have an impact on the water supply available to FIIP” • …”BIA would need to consider adjusting Project water supplies and water duties (including the elimination of extra-duty deliveries)”… • Failure of settlement means…”there…would be no federal or state funding…to meet these new requirements…requiring that [these] costs be met by operation and maintenance assessments.”

30. On June 6, 2013, U.S. issues followup letter. • Due to lack of agreement on water use, the U.S. has obligations. • Must comply with ESA • Must protect resources as a trustee for the Tribes • Proposes to increase ISF in 2014. • Irrigators responsible for costs.