SUPREME COURT:. Panel rules Department of Ecology must
issue water-rights certificates on basis of actual use
By Hunter T. George, The Associated Press
OLYMPIA - Washington's building industry has blasted a state Supreme Court ruling on water rights, saying it could send housing prices outside municipal limits skyrocketing.
In a 7-2 ruling, the state's high court on Thursday said the Department of Ecology's previous 40-year practice of issuing water-rights certificates based on the capacity of water systems was illegal. Instead, the court said permits should be based on actual water use.
The agency recognized its long standing error and reversed the policy in the early 1990s. The court case stemmed from a challenge to that reversal by a Skagit County developer.
In a dissenting opinion, Justices Richard Sanders and Charles Johnson argued that the majority's decision will lead to an "absurd result" that threatens existing water-rights certificates and the future of residential development in Washington.
Developers and Realtors agreed.
"We think the opinion is very significant and will drastically harm legitimate building activity outside of areas served by municipal water systems," said Greg Overstreet, general counsel for the Building Industry Association of Washington, which filed a joint brief with the Washington Association of Realtors.
Under the ruling, developers would have to build houses first and then hope the Department of Ecology issues water permits, a process that generally takes years, Overstreet said.
"So there won't be nearly as much building activity outside city Iimits. And if there is, the price of these homes is going to cost a great deal more," he said.
Ken Slattery, supervisor of Ecology's water policy section, acknowledged the court decision authorized the agency to amend developers' water-right applications as they come in for time extensions. But he disagreed with any contention it will require builders to take bigger financial risks.
Developers can still get permits for their housing projects, but they just cannot get final water right certificates until they know how much water will be used, he said.
"What this really says is Ecology should not be issuing a final water right certificate until the development is completed, and that the water right should be based on beneficial use, not speculation that you may eventually use the full amount," Slattery said.
The Supreme Court was asked to determine whether a water-right certificate may be issued based upon the capacity of a public water system a policy known as "pumps and pipes" - or on the actual amount of water used.
Ecology followed the "pumps and pipes" approach for some 40 years, issuing hundreds of permits, according to court documents.
In 1973, the agency issued a water-right certificate to developer George Theodoratus for the Wilderness Village housing development near Concrete, located along the Skagit River. The certificate entitled him to as much water as a system of wells he planned for the 253-lot development could handle.
But the agency changed the rules in 1992 out of concern it was becoming increasingly difficult to keep track of unused water.
Ecology officials said future water rights would be based upon the amount of water actually put to "beneficial use," not system capacity. Theodoratus appealed.
Writing for the majority, Justice Barbara Madsen said relevant statutes, case law and recent legislative history left no doubt water rights must be based upon use, not capacity.
She noted Gov. Gary Locke vetoed a bill last year that would have allowed water rights to be based on system capacity. The governor said the measure would have increased the difficulty of managing Washington's waters.
But Sanders, in his dissent, noted Theodoratus' development is a community of its own, with an expensive, self-contained water system. The developer built the system under Ecology's direction and with the agency's promise that doing so would vest a water right.