Oregon water litigation again exceeds agency’s budget

Klamath Basin water battles have again caused Oregon water regulators to exceed their litigation budget, prompting lawmakers to authorize an additional $650,000 for such legal expenses.

The Oregon Legislature’s Joint Emergency Board voted on Dec. 11 to increase the litigation budget of the state’s Water Resources Department, which would otherwise be forced to cut services and lay off employees.

The agency has already spent more than $1 million on legal battles during the 2019-2021 biennium, surpassing the $950,000 allocated by lawmakers for its litigation costs during those entire two years.

Since OWRD is spending an average $67,000 a month fighting lawsuits, the agency was on track to have a litigation budget shortfall of more than $650,000 that would have to be drawn from other water programs that affect irrigators.

OWRD’s high litigation costs largely spring from the agency’s adjudication of water rights in the Klamath Basin in 2013, which officially recognized the seniority of tribal governments and certain irrigators.

As a result, senior water rights holders have demanded that OWRD shut down water diversions and well pumping by junior irrigators, who have filed lawsuits challenging the agency’s regulatory actions as unjustified.

The agency has also been sued by the Klamath Irrigation District for allowing the federal government to release water from Upper Klamath Lake for federally protected fish rather than irrigation.

A state judge has blocked further releases until OWRD determines the amount of water to which the federal government is entitled for in-stream purposes.

OWRD’s legal costs have consistently exceeded its litigation budget since the 2011-2013 biennium, with the problem peaking during the 2015-2017 biennium, when the agency spent $1 million more on lawsuits than the $800,000 originally allocated by lawmakers.

Since then, though, the overages have declined and it’s “anticipated that the growth rate of legal costs will trend toward the long-term average following the spike in costs stemming from the Klamath Basin regulatory change,” according to an analysis by the Legislative Fiscal Office.

Racquel Rancier, OWRD’s senior policy coordinator, said the agency’s legal expenses have been leveling off, which may bode well for the future.

“While it is impossible to know what legal issues will arise each biennium, we are hopeful that they will not continue to increase,” she said.

However, the economic impacts of the coronavirus pandemic have resulted in a 10% reduction in OWRD’s general fund budget, “essentially removing most of the Department’s ability to address this matter administratively” through such measures as leaving certain job positions unfilled, according to the agency’s budget request.

Without the added $650,000 for litigation, “layoffs will be needed to fill the budget gap, resulting in severe impacts on agency services,” OWRD said.

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