September 2, 2015: Managing your water rights
Spencer Williams
Managing your water rights

You may have just acquired a ranch property, or maybe you’ve been working the homestead from the end of a shovel for as long as you can remember. Either way, in the arid West your water rights are a critical component of the land where you live, work, and play.

While most landowners understand the importance of their water rights, many do not know how to effectively manage and protect them for themselves or for future generations.

The bottom line is that you are the best person to manage your water rights assets. No one is more familiar with your operations and how water makes it all possible. Our three-part series of blog posts will walk you through basic management best practices, equipping you to protect your water rights and enhance their value:

1. Know your decrees;
2. Keep good records; and
3. Review the water court resume.

Part 1: Where to start? Know your decrees.
It may come as a surprise to some, but we frequently meet water rights owners who aren’t familiar with their water rights decrees.  Simply put, a water right decree is the single most important document having to do with your water right.

A water right decree is a document issued by the state’s Water Courts that serves as the final order of a water appropriation, change of water rights, or other water-related legal proceeding (for more on the Colorado Water Courts, and water rights in general, see my last post, What is a Colorado Water Right?).

Water rights decrees explain the “boundaries” of a water right.  Generally, decrees describe water rights by where and how a person can use a specific amount of water. Under a water right, water use is limited to specified points of diversion, places of use, types of use, amounts of use, and periods of use described in the decree.  These limitations are effectively the boundaries of the water right.
Understanding your water right decree is critically important because of the potential ramifications of using water outside the water right boundaries.

First and foremost, water used outside the boundaries of a water right is not protected by the water right’s priority (seniority). When a call is placed in Colorado, before curtailing junior water rights, water commissioners will shut off all un-decreed uses to make water available for the calling right.  A landowner may have come to rely on a ditch that delivers direct flow irrigation water to his property to fill or replenish a recreational pond. But, if the decree for the irrigation water right does not specifically approve storage and recreational use, then in a call scenario the water commissioner will at least shut off diversions into the pond and may even require releasing the water stored in the pond back to the stream.  This will be the result even if the irrigation right is senior to the calling water right.

Second, water use outside the boundaries of a water right may expose the right to a presumption of abandonment.  Every ten years, the Division Engineer for each water division in Colorado publishes a list of water rights that it presumes to be abandoned because of prolonged non-use. Once a water right is listed on this abandonment list, the burden shifts to the water right owner to prove that he has not abandoned the water right.  Earlier this year, the Colorado Supreme Court ruled that using an un-decreed point of diversion for a water right for more than ten years is sufficient for the Division Engineer to include the water right on the abandonment list.  See Wolfe v. Jim Hutton Educational Foundation, Case No. 14SA38, March 16, 2015. This ruling could justify including water rights on the abandonment list based on any prolonged water use outside the water right boundaries.  Appearing on the abandonment list can be a serious headache, sometimes requiring expensive legal advice and representation.

Last, using water outside the boundaries set by a decree may significantly diminish the yield and value of a water right changed to a new use. As mentioned earlier, the water courts approve changes of water rights, and as a part of this legal proceeding, ensure that changes will not injure other existing water rights.  A major component of the non-injury review is ensuring that only the portion of the water right that was consumptively used (i.e. consumed by crops, evaporated, or otherwise lost to the system) is changed to the new use.  This ensures that downstream water rights will continue to receive the benefit of non-consumptively used water that returns to the stream system as return flow.

When reviewing the historical consumptive use (“HCU”), courts will not consider un-decreed enlargements of the water right, for example, diversions irrigating lands not specified in the decreed place of use. See Burlington Ditch Reservoir & Land Co. v. Metro Wastewater Reclamation Dist., 256 P.3d 645 (Colo. 2011). The result is exclusion of diversion amounts that otherwise may help raise the average HCU available under a change of water rights, meaning you could end up with less water to change.  In some cases, courts have even assigned zeroes to un-decreed uses, significantly impairing the yield of HCU in change cases.  These reductions in HCU yield mean reduced value for your water right.

The good news is that each of these scenarios can easily be avoided, simply by reading and understanding the decrees for your water rights.  So, when was the last time you looked at your water right decree?  Maybe it’s time to go dig through the old filing cabinet and find it.

When you do, take a close look and focus on these questions:

  1. What are the approved uses, places of use, times of use, and amounts of use, or “boundaries” of my water right?
  2. Am I using my water right within these boundaries?

If you can’t find your decree, don’t know if you have one, or need help making sense of it, give us a call! With Water Sage you can search and find water rights decrees, and other valuable information to enhance your water rights management.

Now you know where to start, keep an eye out for future posts on keeping good records and reviewing the water court resume.