Town threatens lawsuit in ongoing water fight

 By Michael Tucker, staff writer

Manhattan officials have fired a new volley in an ongoing battle to procure water to serve the growing community, issuing an ultimatum to a nearby ditch company: Sign off on a proposed mitigation plan or prepare for a lawsuit.

In a letter sent Thursday to Baker Ditch Company attorney Mike Cusick, Manhattan Town Attorney Jane Mersen outlined the town's need for Baker Ditch to sign off on a mitigation plan that calls for using irrigation water from the ditch to offset ground water pumped by a well to serve a pair of new Manhattan subdivisions.

"Time is of the essence" and "the town has few options left," Mersen said in her letter to Cusick.

Without a mitigation plan, the town can't get a permit to use the well and thus can't deliver on a promise to provide water to Pioneer Crossing and Centennial Village, subdivisions constructed on the town's northwest side by developer Ken Vidar.

Vidar drilled the well with the town's blessing in 2006, but it has never pumped water because, absent a mitigation plan, the state Department of Natural Resources and Conservation has refused to issue a permit.

The mitigation plan is one component of the town's quest to secure a water permit from the DNRC. Under the plan, Vidar's shares on the ditch would be transferred to the town, which would take water from Baker Ditch and deposit it in an infiltration gallery -- a sort of septic system. The water would trickle out of the gallery and back into the ground to offset the effects of Vidar's well on surface flows in the nearby West Gallatin River.

In order to get the plan on the books, though, the ditch company, not the town, has to go through the formal process with the state. That's because while Vidar owns shares in the ditch, the ditch company owns the actual water rights.

But the ditch company has several concerns about the town's request, Cusick said. One of the main concerns lies with how business is conducted with everyone who owns water in the Baker Ditch.

Baker Ditch, like a lot of other canals in the Gallatin Valley, has an informal agreement among its water users, Cusick said. The water is used for agricultural needs and ditch users share the water with each other as individual needs come into play.

For instance, if one farmer is cutting hay, his need for water is less, and it can be used by somebody else on the ditch, Cusick said.

"It's give and take, basically," he said.

But Manhattan's needs are different, calling for shares to be in use for 100 days during the height of the irrigation season -- between May 15 and Sept. 30, according to ditch records. Vidar's shares fall under the ditch's 1912 water right, under which water can be pulled from the river from April to November.

If Manhattan takes its share of water during the height of the irrigation season, the rest of the ditch users will have less water to go around, Cusick said. Not only that, but the plan doesn't take into account dry years, when upstream use by superior rights holders could leave too little water in Baker Ditch to go around. Montana's law of water appropriation spells out "first in time, first in right."

"Dedicating a specific flow rate to a specific shareholder for a specific period does not account for unpredictable changes in water availability," Cusick said in a recent letter to Manhattan. "Changes in water availability require flexibility in managing water between shareholders so that all shareholders are treated equitably in accordance with their shares."

Rather than compromise the long-standing relationship between shareholders on the ditch, the company wants the town to use its shares before or after the main irrigation season, Cusick said.

But the town must follow state rules, Mersen wrote. It has to use the water in the same time period it has always been used.

"As a consequence of this basic structure to the DNRC's decision-making authority over changes of the water right, the town is not disposed to simply ignore them," she wrote in her Nov. 19 letter.

Mersen said Thursday the town is asking for less water from the ditch than Vidar is entitled to.

"All we are asking for is the water we are entitled to under Vidar's shares and we aren't asking for any more," she said. "If you look at the application closely, we are asking for less water.

"Regardless of what we do with it, it's still going to come down the ditch," she added. "Instead of sprinkling it on a field, we are going to put into a recharge basin. How that's going to adversely affect (Baker Ditch users) is beyond me."

The town is looking to use the water the way it has always been used, Mersen added.

"I understand (the ditch's concerns), but why do we have to do it later in the year when we have the right to use it the same time they do?" she said. "And if we could do it later in the year, then fine, but I don't think DNRC will let us."

Also, she said, if water availability becomes a problem during a dry year, that will be Manhattan's problem and not a ditch company issue, Mersen said.

"If the river commissioner calls the rights, then we don't get the water," she said. "We're not putting Baker Ditch in the position of obligating them to give us water that they don't have the right to give us or that we don't have the right to request. We are just saying, 'look, Baker Ditch, we want you to agree that the water that was historically used to irrigate these fields can now be used in the recharge basin.'"

And the town is willing to sue Baker Ditch to secure that right, Merson told Cusick.

The ultimatum, though, has the ditch company a little confused, Cusick said.

"The problem is that the company has to look out for the interests of all of its shareholders and we can't agree to system of delivery of water for one shareholder that creates a preference of delivery above the other shareholders," he said. "We need flexibility. The company has been willing to assist the town with a mitigation plan so long as it does not compromise the company's water rights."

The valley is part of the Upper Missouri River Basin, which is closed to all new surface water rights appropriation. In other words, existing water rights around these parts are an important commodity.

And ditch shareholders want to ensure that everything about the deal is on the up-and-up to protect that commodity, Cusick said. It costs money make sure the legal work is done properly, and the company wants Manhattan to pick up its tab for that legal work.

The town is willing to pay the ditch's expenses, but that guarantee is written into the agreement that includes the mitigation plan, Mayor Tony Haag said.

"This is taxpayer money and I don't want this to go on forever," he said. "I desperately want to work with Baker Ditch and come to an agreement on this."

The rub, Haag said, is that the town can't risk changing the permit application to accommodate the ditch company's request to change the water-use dates.

"We would do it in a heartbeat," he said. "But I can ill afford, as the mayor of Manhattan, to make any change to our application and risk (the state) using it as an excuse to throw our application back at us and tell us to start over."

As it stands, Cusick said the ditch company board will consider the issue.

"We're still sort of shell shocked," he said. "We have offered to help and now they are taking this to, 'You do it our way or we're suing you.'"