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Wash. Water Ruling Could Have Far-Reaching Effects, Including Dropping Property Values

Skagit County, Western Wash.

Wash. Dept. of Ecology to hold water rights workshop on Dec. 2 in Mount Vernon.

By Rachel Lerman/Posted: Sunday, December 1, 2013 9:00 am

Potential builders and landowners face a state of limbo as the state Department of Ecology searches for solutions in a water rights battle that has lasted decades.

The battle over water rights in the Skagit River basin reached a plateau Oct. 3 with the state Supreme Court’s ruling against Ecology in a case brought by the Swinomish Indian Tribal Community. The court ruled Ecology had overstepped its authority in establishing water reservations for rural wells in a 2006 amendment to an original 2001 rule that affected water rights.

Now, Ecology says, the solution lies in mitigation. New wells may be used if the loss of water can be successfully mitigated to completely offset current and future water usage.

When the court issued its 6-3 decision, 475 homes and eight businesses that had obtained building permits using rural wells since April 14, 2001, were left without the uninterruptible water source they thought they had acquired. Ecology and the tribe agreed not to curtail the affected landowners’water use while mitigation solutions were sought.

But those 475 homes are not the only ones affected; Ecology’s ruling has the potential to affect the entire county. The ruling reverts current law back to the 2001 Instream Flow Rule, which essentially established a water right for fish. Any water rights created after that are subject to interruption when the water level drops below a certain level established by the rule.

Effects across the county, state

The rule applies to every sub-basin in the Skagit River basin. Any landowner with a parcel that cannot get public water will have to find a way to offset well water usage before a building permit can be issued. That includes about 5,700 buildable lots, according to a 2007 Skagit County analysis.

County Assessor Don Munks said if all the tributaries identified in the instream flow rule are affected, it would be far-reaching.

“You would basically see development outside of urbanized areas come to a halt,” he said.

The October court decision affects three counties and thousands of potential landowners.

“That in itself is a big issue,” Klug said.

But it also could affect similar agreements statewide. The heart of the litigation, which says Ecology overstepped its authority when establishing water reservations, is broad.

“We’re still kind of digesting all of the court’s decision and the ramifications, not only in the Skagit but also elsewhere in the state,” Klug said.

Basins across the state have similar frameworks, with reservations of water set aside for exempt wells. It is unclear after the court’s ruling if those reservations are still lawful.

No such provision for exemption exists in the Skagit River Instream Flow Rule. Some say it was in the final draft and disappeared. Others say it was never brought up. Still others think it was left out because they thought rural wells could be handled on a local level.

It’s the lack of this element that has led to more than a decade of legal battles between Skagit County, Ecology and the Swinomish tribe. A 1996 agreement between the city of Anacortes, PUD, Ecology and the county allocated water to the city of Anacortes and the PUD in exchange for funding a study to establish an instream flow rule, which created a water right for fish.

The agreement was meant to bring peace to the many factions, but it resulted in numerous court cases, years of fruitless settlement negotiations and public figures personally attacking each other.

It all culminated in the state Supreme Court decision in October: The 2001 rule holds water.

Skagit County commissioners previously accused the Swinomish of trying to control growth.

“The tribe has never said it wanted to control growth,” said Larry Wasserman, environmental policy manager for the Swinomish tribe.

Instead, the tribe wants to ensure there are still fish available for future generations, he said.

Put simply, he said, “No water, no fish.”

Not everyone believes it’s that simple. Some county officials and landowners still contend that the river has enough water to support both development and fish.

Possible solutions

Ecology regulates water in the state. The answer for getting water to existing well users and ensuring it for future development comes down to mitigation, said Ecology’s water resources section manager Jacque Klug.

“The intention is to mitigate for existing users as well as provide for growth,” she said.

Several options to mitigate, or offset, water use are being explored, including storing excess water during the rainy season, buying up senior (priority) water rights and extending public water pipelines. Ecology received $2.2 million from the Legislature in 2012 to find solutions for the basin. About $2 million remains.

But relief for frustrated landowners will not come quickly. All the options need to be explored, interested stakeholders need to be consulted and legal hurdles need to be overcome.

How long will it take before rural landowners will be able to build?

“It’s hard to answer because of all the complications with the process,” Klug said. “The law itself is very process-heavy.”

But these mitigation tactics, which could easily take more than a year to implement, are not helping those who own land and are ready to break ground now. The county isn’t issuing building permits for land that uses exempt wells as a water source without the go-ahead from Ecology.

Ecology is working with people on individual mitigation plans, but they often are lengthy and expensive processes that require a great deal of technical know-how.

Skagit County commissioners have said Ecology needs to take the lead on the issue. The county spent a lot of money to get the 2006 amendment, Commissioner Ron Wesen said, and “it just kind of went away.”

“This is what we have now,” he said.

Commissioner Ken Dahlstedt said the instream flow level often cannot be achieved naturally. Fisheries must remain unharmed, he said, but mitigation tactics need to be “reasonable and achievable.”

Dropping property values

Mount Vernon real estate agent Kyle Brown, a former builder who owns an affected well, said he expects the decision to affect all property values in the area. He has to disclose to potential buyers the drill date of the well for properties he tries to sell, and local banks he has talked with say they will not loan on homes without legal access to water until the issue is resolved.

Brown said when he obtained a permit for an exempt well in 2003, he was never told it could possibly be treated as a junior water right to the instream flow. Water rights work on a first-come, first-served basis. If instream water levels drop, junior water rights — those established later — get shut off in favor of senior rights.

“How do you sell something at full price that can now be interrupted?” Brown asked. “They can’t sell something and then go backward.”

County Assessor Munks said his office has already lowered the property values of 106 vacant lots considered to be buildable in the Carpenter-Fisher sub-basin.

He doesn’t doubt that more values will drop because of the court ruling. The office will wait until the effects are known and enough people have filed appeals.

Lowering property values results in a shift for property taxes: Landowners in urban areas and non-affected rural areas will have to pay more to make up the difference.

Ecology will hold a work session with Skagit County about the instream flow rule and mitigation tactics at 10:30 a.m. Tuesday, Dec. 3, at the county commissioners hearing room, 1800 Continental Place, Mount Vernon.

— Reporter Rachel Lerman: 360-416-2145, rlerman@skagitpublishing.com, Twitter: @Rachel_SVH, facebook.com/RachelReports

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