1 in the office of administrative hearings in the matter of … · 2013-11-08 · 13a-sw001-dwr...

13A-SW001-DWR VOLUME I 10/21/2013 1

1 IN THE OFFICE OF ADMINISTRATIVE HEARINGS 2 In the Matter of the Decision of ) 3 the Director to Grant the Salt ) River Valley Water Users' ) 4 Association's Amended ) Applications Nos. E-11, R-30, ) No. 13A-SW001-DWR 5 R-45, R-46, R-71, R-72, A-135, ) and A-136 for Permits to Store ) 6 and Beneficially Use Water on ) the Salt and Verde Rivers and ) 7 Issue Permits Nos. 33-11, ) 33-97001, 33-97002, 33-97003, ) 8 33-97004 and 33-97005 ) ) 9 10 At: Phoenix, Arizona11 Date: October 21, 201312 13 14 REPORTER'S TRANSCRIPT OF PROCEEDINGS 15 VOLUME I16 (Pages 1 through 253, Inclusive) 17 18 19 ARIZONA REPORTING SERVICE, INC. Court Reporting20 Suite 502 2200 N. Central Avenue21 Phoenix, Arizona 85004-1481 22 By: JODY L. LENSCHOW, RMR, CRR Certified Reporter23 Certificate No. 50192 Prepared for:24 25

ARIZONA REPORTING SERVICE, INC. (602) 274-9944 www.az-reporting.com Phoenix, AZ

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1 INDEX TO EXAMINATIONS 2 WITNESS PAGE 3 MICHAEL J. JOHNSON, Ph.D., P.E. 4 DIRECT EXAMINATION BY MS. RONALD 63 EXAMINATION BY ALJ SHEDDEN 191 5 FURTHER DIRECT EXAMINATION BY MS. RONALD 193 CROSS-EXAMINATION BY MR. HENDRICKS 194 6 7 INDEX TO EXHIBITS 8 NO. DESCRIPTION OFFERED ADMITTED 9 Exhibit DWR-1 8-30-1920 Permit 66 6710 Application (R-30) 11 Exhibit DWR-2 10-2-1920 Permit 72 77 Application (R-45)12 Exhibit DWR-3 10-2-1920 Permit 78 7813 Application (R-46) 14 Exhibit DWR-4 10-2-1920 Permit 78 78 Application (A-135)15 Exhibit DWR-5 10-2-1920 Permit 78 7816 Application (A-136) 17 Exhibit DWR-6 12-12 Permit 78 78 Application (R-71)18 Exhibit DWR-7 12-12-1921 Permit 66 6719 Application (R-72) 20 Exhibit DWR-8 12-18-1921 Permit 66 67 Application (E-11)21 Exhibit DWR-9 10-1910 SRP Sketch Map 66 6722 Boundary of Salt River Reservoir District as23 of 2-19-1903 24 Exhibit DWR-10 9-6-1917 Contract 85 85 between US and SRVWUA25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-11 6-5-1922 Carl Hayden 86 87 Speeches 4 Exhibit DWR-12 11-2-1928 Water 66 67 5 Commissioner letter to SRVWUA 6 Exhibit DWR-13 5-15-1929 SRVWUA letter 66 67 7 to Water Commissioner; Storage and Power Dams 8 Data Sheet 9 Exhibit DWR-14 1-23-1930 SRVWUA letter 66 67 to Water Commissioner10 re SRP and RWCD 11 Exhibit DWR-15 5-15-1930 Water 66 67 Commissioner letter to12 SRVWUA re Status of Permits 13 Exhibit DWR-16 12-30-1930 Highway 66 67 Department letter to14 Water Commissioner re generating capacity15 Exhibit DWR-17 12-30-1931 Water 66 6716 Commissioner letter to Mr. Gust re reply to17 5-15-1930 letter 18 Exhibit DWR-18 08-22-1932 Water 66 67 Commissioner letter to19 SRVWUA re status of applications20 Exhibit DWR-19 08-25-1932 SRVWUA 66 6721 response to Water Commissioner re status22 Exhibit DWR-20 3-22-1937 Contract 94 9423 between SRVWUA and SRPAIPD 24 Exhibit DWR-21 9-29-1937 Notation re 66 67 inspection by SRP of all25 applications in file


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-22 10-16-1942 Water 66 67 Commissioner letter to 4 SRVWUA Requesting Meeting 5 Exhibit DWR-23 2-27-1945 State Land 66 67 Department letter to BOR 6 with Abstract of Filings 7 Exhibit DWR-24 7-27-1976 State Land 66 67 Commissioner letter to 8 SRP requesting status 9 Exhibit DWR-25 7-28-1976 SRP Response 66 67 re Status10 Exhibit DWR-26 8-27-1976 State Land 66 6711 Commissioner Response to SRP12 Exhibit DWR-27 7-28-1993 US DOI letter 103 10313 to ADWR withdrawing Statements of Claimant14 Exhibit DWR-28 8-27-1993 ADWR letter 66 6715 to Mr. Lewis re status 16 Exhibit DWR-29 11-18-1993 letter from 66 67 Mr. Lewis to ADWR requesting17 applications be kept open 18 Exhibit DWR-30 3-1-1994 letter from 66 67 Mr. Weldon to ADWR with19 Amended Application 20 Exhibit DWR-31 Application Chart 110 112 21 Exhibit DWR-32 7-2-1998 ADWR letter to 66 67 Mr. Weldon with Notices22 of Amended Applications for Review23 Exhibit DWR-33 9-17-1998 SRP letter to 66 6724 ADWR with revisions to notices of amended25 applications


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-34 10-30-1998 ADWR letter to 66 67 Mr. Weldon re next steps 4 Exhibit DWR-35 2-3-1999 letter from 66 67 5 Mr. Weldon to ADWR responding to 10-30-1998 6 ADWR letter 7 Exhibit DWR-36 6-11-1999 ADWR letter 66 67 to Mr. Weldon requesting 8 meeting 9 Exhibit DWR-37 8-16-1999 SRP Letter to 129 130 ADWR, SRP service area map10 Exhibit DWR-38 5-10-2000 ADWR letter to 66 6711 Mr. Weldon, redrafted amended applications12 Exhibit DWR-39 9-5-2000 letter from 66 6713 Mr. Weldon to ADWR, revision to amended14 applications 15 Exhibit DWR-40 7-24-2009 ADWR letter to 66 67 SRP requesting meeting16 Exhibit DWR-41 11-20-2009 Draft 66 6717 applications submitted by SRP18 Exhibit DWR-42 1-06-2010 ADWR letter to 66 6719 Mr. Weldon requesting final form20 Exhibit DWR-43 3-1-2010 letter from 66 6721 Mr. Weldon to ADWR, Amended Applications redlined22 Exhibit DWR-44 4-10-2010 ADWR letter to 66 6723 Mr. Weldon, revised notices 24 Exhibit DWR-45 8-1-2010 ADWR letter to 66 67 Mr. Weldon, revised notices25 pursuant to 7-19-10 meeting


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-46 10-7-2010 ADWR letter to 66 67 Mr. Weldon, Notice and 4 Affidavits of Posting and Publication forms 5 Exhibit DWR-47 11-23-2010 Business 66 67 6 Gazette Affidavit of Publication Bartlett 7 Dam and Reservoir 8 Exhibit DWR-48 11-23-2010 Business 66 67 Gazette Affidavit of 9 Publication Horse Mesa Dam and Apache Lake10 Exhibit DWR-49 11-23-2010 Business 66 6711 Gazette Affidavit of Publication Horseshoe12 Dam and Reservoir 13 Exhibit DWR-50 11-23-2010 Business 66 67 Gazette Affidavit of14 Publication Mormon Flat Dam and Canyon Lake15 Exhibit DWR-51 11-23-2010 Business 66 6716 Gazette Affidavit of Publication Roosevelt17 Dam and Reservoir 18 Exhibit DWR-52 11-23-2010 Business 66 67 Gazette Affidavit of19 Publication Stewart Mountain Dam and20 Saguaro Lake 21 Exhibit DWR-53 11-23-2010 Daily Courier 66 67 Affidavit of Publication22 Bartlett Dam and Reservoir 23 Exhibit DWR-54 11-23-2010 Daily Courier 66 67 Affidavit of Publication24 Horse Mesa Dam and Apache Lake25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-55 11-23-2010 Daily Courier 66 67 Affidavit of Publication 4 Horseshoe Dam and Reservoir 5 Exhibit DWR-56 11-23-2010 Daily Courier 66 67 Affidavit of Publication 6 Mormon Flat Dam and Canyon Lake 7 Exhibit DWR-57 11-23-2010 Daily Courier 66 67 8 Affidavit of Publication Roosevelt Dam and Reservoir 9 Exhibit DWR-58 11-23-2010 Daily Courier 66 6710 Affidavit of Publication Stewart Mountain Dam and11 Saguaro Lake 12 Exhibit DWR-59 11-23-2010 Payson Roundup 66 67 Affidavit of Publication13 Bartlett Dam and Reservoir 14 Exhibit DWR-60 11-23-2010 Payson Roundup 66 67 Affidavit of Publication15 Horse Mesa Dam 16 Exhibit DWR-61 11-23-2010 Payson Roundup 66 67 Affidavit of Publication17 Horseshoe Dam and Reservoir 18 Exhibit DWR-62 11-23-2010 Payson Roundup 66 67 Affidavit of Publication19 Mormon Flat Dam and Canyon Lake20 Exhibit DWR-63 11-23-2010 Payson Roundup 66 6721 Affidavit of Publication Roosevelt Dam and Reservoir22 Exhibit DWR-64 11-23-2010 Payson Roundup 66 6723 Affidavit of Publication Stewart Mountain Dam and24 Saguaro Lake 25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-65 11-23-2010 SRP letter to 66 67 ADWR with Affidavit of 4 Publication 5 Exhibit DWR-66 11-30-2010 Greenback 66 67 Valley Ranch, Bill Conway 6 Statement of Protest 7 Exhibit DWR-67 12-06-2010 Greenback 66 67 Valley Ranch Greenback I, 8 LLC Statement of Protest 9 Exhibit DWR-68 12-06-2010 Greenback 66 67 Valley Ranch, Jared Nichols10 Statement of Protest 11 Exhibit DWR-69 12-6-2010 Greenback 66 67 Valley Ranch, Jim Farley12 Statement of Protest 13 Exhibit DWR-70 12-06-2010 Greenback 66 67 Valley Ranch Root, LLC14 Statement of Protest 15 Exhibit DWR-71 12-06-2010 XM Development, 66 67 LLC Statement of Protest16 Exhibit DWR-72 12-7-2010 Greenback 66 6717 Valley Ranch, HCC, LLC (Douglas N. Collins)18 Statement of Protest 19 Exhibit DWR-73 12-7-2010 Greenback 66 67 Valley Ranch, HCC, LLC,20 Mary Merz Protest 21 Exhibit DWR-74 12-6-2010 City of 66 67 Phoenix Request to22 participate 23 Exhibit DWR-75 12-6-2010 City of Tempe 66 67 Statement of Interest24 and Support 25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-76 12-6-2010 LGWU Statement 66 67 of Protest 4 Exhibit DWR-77 12-6-2010 LGWU's Motion 66 67 5 on Threshold Issues for Rejection of Amended 6 Applications 7 Exhibit DWR-78 12-7-2010 LGWU's Errata 66 67 Motion on Threshold Issues 8 for Rejection of Amended Applications 9 Exhibit DWR-79 12-6-2010 US DOI for 66 6710 Yavapai-Apache Nation Statement of Protest11 Exhibit DWR-80 12-6-2010 Yavapai-Apache 66 6712 Nation Request for Dismissal and Statement13 of Protest 14 Exhibit DWR-81 12-9-2010 ADWR letter to 66 67 Mr. Weldon with Greenback15 Valley Ranch, Bill Conway Statement of Protest16 Exhibit DWR-82 12-9-2010 ADWR letter to 66 6717 Mr. Weldon with Greenback Valley Ranch Greenback, LLC18 Statement of Protest 19 Exhibit DWR-83 12-9-2010 ADWR letter to 66 67 Mr. Weldon with Greenback20 Valley Ranch, HCC, LLC (Douglas N. Collins)21 Statement of Protest 22 Exhibit DWR-84 12-9-2010 ADWR letter to 66 67 Mr. Weldon with Greenback23 Valley Ranch HCC, LLC, Mary Merz Statement of Protest24 25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-85 12-9-2010 ADWR letter to 66 67 Mr. Weldon with Greenback 4 Valley Ranch, Jared Nichols Statement of Protest 5 Exhibit DWR-86 12-9-2010 ADWR letter to 66 67 6 Mr. Weldon with Greenback Valley Ranch, Jim Farley 7 Statement of Protest 8 Exhibit DWR-87 12-9-2010 ADWR letter to 66 67 Mr. Weldon with Greenback 9 Valley Ranch Root, LLC Statement of Protest10 Exhibit DWR-88 12-9-2010 ADWR letter to 66 6711 Mr. Weldon with XM Development, LLC12 Statement of Protest 13 Exhibit DWR-89 12-9-2010 ADWR letter to 66 67 Mr. Weldon with LGWU14 Statement of Protest 15 Exhibit DWR-90 12-9-2010 ADWR letter to 66 67 Mr. Weldon with US DOI16 Bureau of Indian Affairs Statement of Protest17 Exhibit DWR-91 12-9-2010 ADWR letter to 66 6718 Mr. Weldon with Yavapai-Apache Nation19 Statement of Protest 20 Exhibit DWR-92 1-1-2011 SRVWUA's 66 67 Response to Protests21 Exhibit DWR-93 1-11-2011 ADWR letter 66 6722 to Mr. Nelson, SRVWUA's Response to Statement of23 Protest 24 25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-94 1-11-2011 ADWR letter 66 67 to Greenback Valley, HCC, 4 LLC (Douglas N. Collins) with SRVWUA's Response to 5 Statement of Protest 6 Exhibit DWR-95 1-11-2011 ADWR letter to 66 67 Greenback Valley Ranch, 7 HCC, LLC, Mary Merz with SRVWUA's Response to 8 Statement of Protest 9 Exhibit DWR-96 1-11-2011 ADWR letter 66 67 to Greenback Valley Ranch,10 Jared Nichols with SRVWUA's Response to Statement of11 Protest 12 Exhibit DWR-97 1-11-2011 ADWR letter 66 67 to Greenback Valley Ranch,13 Jim Farley with SRVWUA's Response to Statement of14 Protest 15 Exhibit DWR-98 1-11-2011 ADWR letter to 66 67 Greenback Valley Ranch16 Root, LLC with SRVWUA's Response to Statement17 of Protest 18 Exhibit DWR-99 1-11-2011 ADWR letter 66 67 to XM Development, LLC19 with SRVWUA's Response to Statement of Protest20 Exhibit DWR-100 1-11-2011 ADWR letter 66 6721 to Montgomery and Interpreter with SRVWUA's22 Response to Statement of Protest (YAN)23 24 25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-101 1-11-2011 ADWR letter 66 67 to US Bureau of Indian 4 Affairs with SRVWUA's Response to Statement 5 of Protest 6 Exhibit DWR-102 1-21-2011 ADWR letter 158 159 to City of Phoenix re 7 Request to Participate 8 Exhibit DWR-103 1-21-2011 ADWR letter 158 159 to City of Tempe re 9 Request to Participate 10 Exhibit DWR-104 1-28-2011 ADWR e-mail 66 6711 to Mr. McGinnis re SRP Responses to Protests12 and missing protestors 13 Exhibit DWR-105 1-31-2011 Addendum to 66 67 SRVWUA's Response to14 Protests 15 Exhibit DWR-106 2-3-2011 ADWR letter to 66 67 Mr. Nelson with SRVWUA's16 Response and Addendum to Statement of Protest17 Exhibit DWR-107 2-3-2011 ADWR letter 66 6718 to Greenback Valley, HCC, LLC (Douglas N. Collins)19 with SRVWUA's Response and Addendum to Statement of20 Protest 21 Exhibit DWR-108 2-3-2011 ADWR letter 66 67 to Greenback Valley Ranch,22 Bill Conway with SRVWUA's Response and Addendum to23 Statement of Protest 24 25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-109 2-3-2011 ADWR letter 66 67 to Greenback Valley Ranch 4 Greenback I, LLC with SRVWUA's Response and 5 Addendum to Statement of Protest 6 Exhibit DWR-110 2-3-2011 ADWR letter 66 67 7 to Greenback Valley Ranch, HCC, LLC, Mary Merz with 8 SRVWUA's Response and Addendum to Statement of 9 Protest 10 Exhibit DWR-111 2-3-2011 ADWR letter to 66 67 Greenback Valley Ranch,11 Jared Nichols with SRVWUA's Response and12 Addendum to Statement of Protest13 Exhibit DWR-112 2-3-2011 ADWR letter 66 6714 to Greenback Valley Ranch, Jim Farley with SRVWUA's15 Response and Addendum to Statement of Protest16 Exhibit DWR-113 2-3-2011 ADWR letter 66 6617 to Greenback Valley Ranch Root, LLC with SRVWUA's18 Response and Addendum to Statement of Protest19 Exhibit DWR-114 2-3-2011 ADWR letter 66 6620 to XM Development, LLC with SRVWUA's Response21 and Addendum to Statement of Protest22 Exhibit DWR-115 2-3-2011 ADWR letter to 66 6723 Montgomery and Interpreter with SRVWUA's Response and24 Addendum to Statement of Protest (YAN)25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-116 2-3-2011 ADWR letter 66 67 to US Bureau of Indian 4 Affairs with SRVWUA's Response and Addendum to 5 Statement of Protest 6 Exhibit DWR-117 2-18-2011 Yavapai-Apache 160 161 Nation's Notice of 7 Withdrawal 8 Exhibit DWR-118 2-28-2011 US Bureau 160 161 of Indian Affairs' 9 Notice of Withdrawal of Statement of Protest10 Exhibit DWR-119 5-2-2011 ADWR letter 67 6711 to Mr. Weldon with Yavapai-Apache Nation12 Withdrawal 13 Exhibit DWR-120 3-3-2011 ADWR letter 67 67 to Mr. Weldon with14 Bureau of Indian Affairs Withdrawal15 Exhibit DWR-121 2-22-2011 LGWU's Reply 67 6716 to SRVWUA's Response to Protests to Water Rights17 Applications 18 Exhibit DWR-122 2-28-2011 e-mail to 162 162 City of Tempe re SRP19 Applications 20 Exhibit DWR-123 3-29-2011 letter from 67 67 Mr. Nelson to ADWR21 re Settlement Status 22 Exhibit DWR-124 8-12-2011 letter from 67 67 Mr. Weldon to ADWR23 re Settlement Status 24 Exhibit DWR-125 2-15-2013 ADWR letter 67 67 to SRP with Draft Permits25


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-126 4-9-2013 SRP letter 67 67 to ADWR with Comments 4 re Draft Permits 5 Exhibit DWR-127 4-24-2013 ADWR e-mail 67 67 to SRP with Draft 6 Permits and comments 7 Exhibit DWR-128 4-29-2013 ADWR Memo 67 67 to File re Changes to 8 Draft Permits 9 Exhibit DWR-129 7-19-2013 ADWR letter 171 172 to City of Phoenix10 re Decision of the Director and party status11 Exhibit DWR-130 7-19-2013 ADWR letter 171 17212 to City of Tempe re Decision of the Director13 and party status 14 Exhibit DWR-131 7-19-2013 Decision of 67 67 the Director15 Exhibit DWR-132 8-3-2013 Returned Receipts 67 6716 Exhibit DWR-133 8-16-2013 ADWR letter 67 6717 to Greenback Valley Ranch, Bill Conway Resending18 Decision of the Director 19 Exhibit DWR-134 8-16-2013 ADWR letter 67 67 to Greenback Valley20 Ranch, HCC, LLC, Mary Merz Resending Decision of21 the Director 22 Exhibit DWR-135 8-16-2013 ADWR letter 67 67 to Greenback Valley Ranch,23 Jared Nichols Resending Decision of the Director24 Exhibit DWR-136 8-19-2013 LGWU Notice 67 6725 of Appeal


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1 INDEX TO EXHIBITS CONTINUED 2 NO. DESCRIPTION OFFERED ADMITTED 3 Exhibit DWR-137 8-21-2013 City of 175 175 Tempe letter 4 Exhibit DWR-138 8-26-2013 ADWR letter 175 175 5 to Mr. Cahoy re City of Tempe's 8-21-2013 letter 6 Exhibit DWR-139 5-10-1922 Land and 179 179 7 Water Rights by Mr. Sloan 8 Exhibit DWR-140 Black Ledger Excerpts 184 184 9 Exhibit DWR-141 1989 Mormon Flat Dam 187 187 Photograph Historic10 American Engineering Record11 Exhibit DWR-142 1990 Bartlett Dam 187 18712 Photographs Historic American Engineering13 Record 14 Exhibit DWR-143 1991 Horseshoe Dam 187 187 Historic American15 Engineering Record 16 Exhibit DWR-144 1992 Stewart Mountain 187 187 Historic American17 Engineering Record 18 Exhibit DWR-145 1992 Theodore Roosevelt 187 187 Dam Historic American19 Engineering Record 20 Exhibit DWR-146 Assignment No. R-30 107 107 21 Exhibit LG-23 10-16-1942 SWC letter 96 96 to SRVWUA22 Exhibit LG-45 9-23-1994 JS&S letter 132 13223 to ADWR 24 Exhibit SR-287 Black Book 207 207 25


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1 BE IT REMEMBERED that the above-entitled and 2 numbered matter came on regularly to be heard before the 3 Office of Administrative Hearings, 1400 West Washington 4 Street, Suite 101, Phoenix, Arizona, commencing at 5 8:10 a.m. on the 21st day of October, 2013, before JODY L. 6 LENSCHOW, RMR, CRR, Certified Reporter No. 50192 for the 7 State of Arizona. 8 BEFORE: Administrative Law Judge Thomas Shedden 9 10 APPEARANCES: 11 For the Applicant: 12 SALMON, LEWIS & WELDON, P.L.C. By Mr. John B. Weldon, Jr.13 By Mr. Mark A. McGinnis By Mr. Scott M. Deeny14 2850 E. Camelback Road, Suite 200 Phoenix, Arizona 8501615 For the Appellants:16 MOYES, SELLERS & HENDRICKS17 By Mr. Keith L. Hendricks By Mr. Joshua T. Greer18 1850 N. Central Avenue, Suite 1100 Phoenix, Arizona 8500419 LAW OFFICE OF DOUGLAS C. NELSON, P.C.20 By Mr. Douglas C. Nelson 7000 N. 16th Street, Suite 120 PMB 30721 Phoenix, Arizona 85020 22 For the Arizona Department of Water Resources: 23 ARIZONA DEPARTMENT OF WATER RESOURCES By Ms. Janet L. Ronald24 By Ms. Nicole D. Klobas 3550 N. Central Avenue, Second Floor25 Phoenix, Arizona 85012


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1 ALJ SHEDDEN: All right, good morning. We are 2 on the record in the matter of the decision of the 3 director to grant Salt River Valley Water Users' 4 Association's amended applications Nos. E-11, R-30, R-45, 5 R-46, R-71, R-72, A-135 and A-136 for permits to store and 6 beneficially use water on the Salt and Verde Rivers and 7 issue Permits Nos. 33-11, 33-97001, 33-97002, 33-97003, 8 33-97004 and 33-97005. This is Docket No. 13A-SW001-DWR. 9 Today is October 21st, 2013. It is about 10 10 minutes after 8:00 a.m. My name is Administrative Law 11 Judge Thomas Shedden. I've been assigned by the Office of 12 Administrative Hearings to preside over this matter. 13 This is our first day of hearing, and so I'm 14 going to go through some preliminary announcements for 15 folks. Some of them will be repetitive of what we 16 discussed during the prehearing conference for the 17 attorneys who were present, but I also want to go through 18 some of this for folks who may be witnesses, to kind of 19 help you understand how we're going to go forward and what 20 we're going to do. 21 One, I've turned on my little recording device 22 under the table here, so we're recording the proceedings 23 as we go forward. We've also got our court reporter 24 present today, so there are a couple of things with regard 25 to those two issues, if you will.


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1 One, I've got to have you have a microphone in 2 front of you when speaking so that we come through in 3 terms of our recording. Two, we've got to be cautious 4 about interrupting each other, talking over one another, 5 these kind of things, as we move forward because the 6 recording certainly doesn't come out very well if we do 7 that and it becomes difficult for the court reporter to 8 create a clear transcript that you folks in particular are 9 going to need to rely on as we move forward. 10 So I just remind you about that, and I'll ask 11 her to let us know as we go forward, if we're not living 12 up to that, to tell us as we go, because far better to get 13 that squared away moving along. Also, if there's 14 difficulty understanding what we're saying, if you can't 15 hear us, let us know, or if there is acronyms or our 16 acronyms and jargon that are being used that are 17 problematic, again, let us know if you want those cleared 18 up as we go forward. 19 In theory, we'll be broadcasting the audio and 20 what appears on our computer screens to the hearing room 21 across the hall, B. It wasn't set up as of yet this 22 morning, and since nobody was in there and we're not 23 filled to capacity here, I thought it best to wait until a 24 break to get our staff to accomplish that. And if it is 25 something folks want to use, we'll continue to get it set


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1 up every day. If not, that's fine as well. The caution I 2 will give folks is, once we get that going, the sound from 3 this room will be going over there all day long. Even 4 when we're on the break and we've turned the recorder off, 5 it's coming through via the microphones. And so if you're 6 in this room on a break talking, they can probably hear 7 what you're saying in that room on the break. 8 The other thing along with that lines is, the 9 microphones are very sensitive, so when you're consulting 10 with co-counsel or your clients or whatever the case may 11 be as the hearing proceeds, I recommend you cover the 12 microphones in front of you so that things that perhaps 13 you don't want on the recording don't get on that 14 recording with regard to that. 15 All right, a couple of other reminders. The 16 only food or drink that's allowed in the hearing room is 17 water. So please be aware of that as we move forward. 18 The other things, I'll ask you to turn off your cell 19 phones or these kind of devices and at least get them on 20 mute or vibrate or something like that for our benefit as 21 we go forward. 22 What I'm going to do is, with those kind of very 23 general preliminary announcements, we are waiting for our 24 first witness still, correct? 25 MS. RONALD: Correct. We're trying to get ahold


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1 of him. 2 ALJ SHEDDEN: All right. And we can, of course, 3 adapt, if we need to, I hope, but in terms of continued 4 preliminary activities, what I'm going to do is have the 5 parties make their appearances. Then I'm going to give a 6 little more direction again on how we'll go forward, more 7 so for the witnesses' benefits, and just as a reminder for 8 the parties about what I think we discussed at the 9 prehearing conference. 10 Then, finally, I can turn to you folks and see 11 if there are preliminary issues that any of you would like 12 to address. So with that, I'll just go ahead and start 13 with the Department on my left. And in addition to making 14 appearances, if there are clients or folks from your 15 various entities with you that you want to introduce, 16 you're welcome to do so as well. Go ahead. 17 MS. RONALD: Thank you. For the Department of 18 Water Resources, Nicole Klobas and myself, Janet Ronald, 19 representing the Department as counsel. With us this 20 morning is Liza Logan, who is a staff person with the 21 Department of Water Resources; Sharon Scantlebury, who is 22 our assistant, our administrative assistant. And 23 hopefully Dr. Mike Johnson will be here soon. 24 ALJ SHEDDEN: And he's our first witness? 25 MS. RONALD: Yes, he is.


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1 ALJ SHEDDEN: Okay. All right. Go ahead. 2 MR. DEENY: Good morning, Judge. My name is 3 Scott Deeny. With me is Mark McGinnis and John Weldon 4 from the law firm of Salmon, Lewis & Weldon. We represent 5 the Association. With us here in the room is Dave 6 Roberts, SRP representative, and Patrick Sigl, in-house 7 counsel from SRP. 8 And maybe we should say this right now. Of 9 course, the applicant is the Salt River Valley Water 10 Users' Association. We normally refer to them as SRVWUA, 11 but that's a mouthful. I think not just us, but I 12 understand the Department and perhaps the Lower Gilas will 13 also be referring to them as SRP or the Association. 14 They're all the same. 15 ALJ SHEDDEN: All right. And for our purposes, 16 I assume that that's certainly reasonably and folks with, 17 I guess, probably habit more than anything are going to 18 fall into that anyway; but all right. Then moving on to 19 the appellants. 20 MR. HENDRICKS: Good morning, Your Honor. Keith 21 Hendricks and Joshua Greer of the law firm Moyes, 22 Sellers & Hendricks, and with me as co-counsel, Doug 23 Nelson. We represent a group that is known as the Lower 24 Gila Water Users. I was just looking it up. 25 Do you know what's the official three entities?


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1 It's Arlington, Enterprise and Paloma are the shorthand 2 terms for the three clients that make up the Lower Gila 3 Water Users. And Lower Gila is a -- that's not an entity. 4 It's not a separate entity. The formal entities are the 5 three individual entities. The Lower Gila Water Users is 6 simply a descriptive term. 7 ALJ SHEDDEN: All right. And, I'm sorry, you're 8 Mr. Greer? 9 MR. GREER: Yes. 10 ALJ SHEDDEN: All right. I thought you were 11 here on the prehearing conference, but maybe I was 12 mistaken about that. 13 All right. A couple of things, and again, just 14 housekeeping to get us started and see where we stand. As 15 we discussed at the prehearing conference, or I mentioned, 16 with all the computer monitors, some of our sight lines 17 are not real good in the room. I understand that. The 18 monitors, in theory, are glued to the tables or are 19 velcroed to the tables, so there's limited ability to move 20 those, but folks can move around, if it would be helpful, 21 and we're just going to have to shift as folks -- as we go 22 on, perhaps, through the proceedings. The witnesses will 23 be coming on up here to my left as they testify, so that 24 may present some issues occasionally with trying to have 25 them slide down a little bit, but we'll just have to adapt


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1 as we go forward with regard to that. 2 While talking about the witnesses, for those of 3 you who may be anticipating testimony during our 4 proceedings here, the way it's going to work is, the 5 attorneys will call you up, and we're going to get 6 Dr. Johnson first, and he's been named by the appellants 7 and by DWR, so perhaps a special case in one regard. But 8 the idea will be whichever lawyer is calling you as a 9 witness will question you first. Then I'll allow both the 10 other party and DWR to question as well, and we'll go 11 through that cycle as many times as is necessary until the 12 lawyers feel that they have asked all the questions they 13 have or, alternatively, we get ourselves into a situation 14 where we're just not making sufficient progress with new 15 evidence of sufficient probative value toward the 16 continued use of time. 17 The intention for you witnesses and for the 18 parties as well is that we'll only need to call you up one 19 time. So, for example, Dr. Johnson has been named by a 20 couple of parties. Several of the other witnesses are 21 named by a couple of parties. Want to get all our 22 questions from all parties for those witnesses the first 23 time we call them up, rather than neatly 24 compartmentalizing into direct examination, 25 cross-examination.


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1 Go ahead, Mr. Deeny. 2 MR. DEENY: Judge, I think that that is the 3 intention, with one potential exception. As you are 4 aware, the Lower Gilas have issued subpoenas for everyone, 5 essentially, listed by the Association to present their 6 case. We had an off-record discussion in the hallway, and 7 it is my understanding that their intention is to only 8 call Dave Roberts for their case. They certainly have the 9 option to call others, if they want, but in our 10 discussion, that's my understanding. 11 I just want to make it clear that we do not 12 intend to go forward with Dave Roberts' direct testimony 13 until we present him as part of our case. So he would be 14 brought twice. He would be brought by the Lower Gilas as 15 a witness in their case. We may have some questions for 16 him after that. We may not, but we intend to present him 17 as part of our case as well. So he would be somebody that 18 would come twice. 19 ALJ SHEDDEN: All right. And I'll tell you, you 20 know, again, the intention and the hope is to try and 21 limit the burden on the witnesses, but we'll deal with 22 each one as they come along. 23 Coupled with that approach, I'm going to let 24 folks know, the parties and the witnesses, a similar 25 approach will be employed in terms of the overall picture


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1 of our hearing, meaning that although I've asked or 2 ordered the Department to go first, we're going to go the 3 Department, the appellants, the Association with their 4 evidence, and then repeat that rotation as many times as 5 is necessary for the parties to find that they've 6 presented all their evidence and all their rebuttal 7 evidence that they may have; again, with the warning about 8 probative value and a warning of unnecessary cumulative 9 evidence as well. 10 The one thing I will let folks know is that as 11 we discussed at the prehearing conference, I'm moving 12 forward under the belief that the appellants bear the 13 burden of persuasion in this matter, so I will give them 14 the last word. So if we hear from the appellants, having 15 gone through that cycle, and one of the other parties 16 wants to present some additional evidence, presumably that 17 will be fine with me, but then we'll always be opening the 18 door, if you will, for the appellants to present 19 additional evidence. 20 All right. The other -- well, two other bits of 21 housekeeping, if you will. One, I issued the minute entry 22 Friday about the parking lot situation. Apparently I 23 jumped the gun, and it will not be until tomorrow that the 24 parking lot is closed. And so there's some memos posted 25 in the hallway that may be a little clearer to you folks


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1 than it was to me as to how you're going to have to work 2 to get in the building. But the thrust of it is that the 3 parking lot just north of this building, moving I guess 4 that way to the east, to the building at 1300, is also 5 going to be done, and you may have to go way down toward 6 1300 to get on the sidewalk to get in this building. But 7 I suspect you'll all be able to find your way here 8 tomorrow and myself included. 9 So just be aware of that, and I don't know how 10 much pressure -- the parking lot right across from Adams 11 usually has plenty of parking in it. With these two lots 12 being closed, it may be a little tougher. But, again, I 13 just want to draw your attention to that. 14 The other thing you folks appeared here may know 15 as well. Of course, the restrooms have a key code on 16 them. They're stapled or taped to the wall right outside 17 the hearing room or you can get those from the front desk. 18 Unfortunately, some years back we had a situation where 19 some creeps were hanging around in the ladies restroom, 20 and this was the way it was resolved. But just be aware 21 of that. 22 For you folks who are witnesses or who are 23 observing, from my perspective you're free to get up and 24 go throughout the proceedings. You're not required to 25 stay in your seats there. The folks who have asked you to


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1 come down here may not want you to do that, but that's 2 something for them to consider, rather than me. 3 Finally, in terms of my issues or announcements, 4 I just need to let folks know that our office, the Office 5 of Administrative Hearings, is an independent State 6 agency, and we invite everybody who comes to our hearings 7 the opportunity to give our Director feedback on how we're 8 doing. On the tables where the attorneys are sitting, 9 there should be some forms for that purpose. The front 10 desk can give you the forms if you can't locate one on the 11 tables. It's strictly a voluntary process, but our 12 Director does appreciate it if folks want to let him know 13 how we are doing. Right outside this hearing room there's 14 a little black box on the floor there you could put those 15 in, or turn them in at the front desk where many of you 16 signed in this morning. 17 More on a substantive nature, just to help folks 18 perhaps with the evidence as we move forward, the notice 19 of hearing calls out some 19 issues for resolution in the 20 matter. When I produce my decision at the end of the day, 21 so to speak, I'm pretty well obligated to address each of 22 those 19 issues in some fashion. 23 So my thinking is that you folks ought to 24 address those, each of those issues, either factually, 25 legally, or both. And to some extent it may be helpful at


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1 times to clue me in, whether via the presentation of 2 evidence or perhaps in closing memos or whatever we do in 3 closing, closing argument, to help make clear which issue 4 you're addressing with which particular evidence, or which 5 issues, to help make sure I fully understand it, because 6 it can be at times, I won't say difficult, but when 7 there's so many issues and perhaps a lot of evidence, 8 matching up what you think the evidence, which issue it 9 goes to, is perhaps not always easy for me. So I'll just 10 give you that warning. 11 Finally, I'm going to back up and cover one more 12 thing with regard to the evaluations. There are two 13 aspects to it. 14 One of the issues that our Director's asking 15 folks about in those is physical comfort in the room. So, 16 again, I'll let folks know who are wearing their coats, if 17 you're too warm with those, don't stand on ceremony for my 18 benefit; no need on that. 19 Two, you know, there's no pleasing everyone when 20 it comes to the temperature in a room, but if, as the day 21 goes on, if it should get too warm in the room, let me 22 know or let our front desk know, and they can hopefully 23 address that for us. Occasionally it does get too cold. 24 We can try and fix that as well. 25 But with that, let me just then throw it out to


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1 the parties and see if there are preliminary issues that 2 any of you feel we need to address? 3 MR. MCGINNIS: Your Honor, Mark McGinnis for the 4 Association. We had two issues with our witnesses, and I 5 think we've already worked them out with Mr. Hendricks. 6 First of all, Dr. Kupel, who is one of our 7 listed witnesses, has to be out of town Thursday and 8 Friday for some family medical issues, so I think we're 9 going to try and call him out of order on Wednesday, 10 regardless of where we are in the case. And it sounds 11 like they're okay with that. 12 The other one is, we had listed Paul Cherrington 13 or Roger Baker, because Mr. Cherrington himself was having 14 some health issues. And as far as I know right now, it 15 will be Mr. Cherrington and not Mr. Baker. 16 ALJ SHEDDEN: All right. 17 MR. MCGINNIS: Things could change during the 18 week, but I saw him last week, and he looked okay to me, 19 so... 20 ALJ SHEDDEN: All right. 21 MR. MCGINNIS: Looked better than I did, 22 frankly. 23 ALJ SHEDDEN: All right. And, Mr. Hendricks, 24 you had subpoenas issued for both those parties, but 25 you're content to go with one or the other, or want to


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1 reserve judgment on that? 2 MR. HENDRICKS: Want to reserve judgment on it. 3 As we discussed before, and I wanted to clarify, Mr. Deeny 4 got it about right. I just want to make one little tweak 5 on what he said about our agreement was. 6 We issued a subpoena for everyone. As we talked 7 in the prehearing, we may not know the identity of certain 8 people, because they're not our witnesses and we're not 9 allowed to talk to them. We weren't allowed to do 10 discovery. So there will be -- you know, we likely will 11 call Mr. Roberts and that will be sufficient, but we 12 reserve the right in our case in chief to call any of 13 their witnesses depending on what the information that 14 comes from the stand is. 15 So although our intent right now is to call, you 16 know, just Mr. Roberts and then cross-examine the others 17 after they're called, we would reserve the right to call 18 additional witnesses in our case in chief, depending on 19 what the evidence comes in. 20 ALJ SHEDDEN: All right. And just I'm going to 21 see if the others want to weigh in on that, and always 22 when folks reserve their right to do anything, always, of 23 course, there's a threshold question, is whether there 24 really was a right to reserve. But as I said at the 25 prehearing conference, you know, I'm charged with trying


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1 to help create a full record with a fair hearing. So if 2 issues arise then where we can't all get along, if you 3 will, or don't come to some agreement on your part, then 4 it's incumbent upon me to make rulings, and I'll be glad 5 to do that. 6 The better approach, generally, is to give the 7 parties the first opportunity to come to agreement on some 8 of these issues; but we will, again, just have to deal 9 with those issues if they arise. 10 So are there any other preliminary issues? 11 MR. HENDRICKS: I had one other I did want to, 12 Judge. 13 ALJ SHEDDEN: Yeah, go ahead. 14 MR. HENDRICKS: I think it was revolved in the 15 motion in limine, but I just want to make sure it's very 16 clear on the record. 17 It is our position that the Department and, 18 therefore, you, as the administrative law judge and ruling 19 on this matter, do not have jurisdiction to make a final 20 determination of vested rights; and I think that we have 21 preserved that. I know our motion in limine was denied 22 and there will be evidence taken on that, but I wanted to 23 make sure that we don't waive any right to assert a 24 position that this forum is an inappropriate forum to 25 issue a final decree on what a vested water right is,


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1 based on the statute as it currently exists. 2 ALJ SHEDDEN: Well, I've got to tell you, you 3 know, this is where I'm perhaps uncertain how much 4 disagreement there is among the parties and/or perhaps 5 whether we're all in the same page or even the same book, 6 to some extent. 7 But just backing up a step first, there were a 8 number of motions in limine filed by the parties, and I'm 9 pretty sure I denied all of them. That said, I don't 10 necessarily think that -- well, certainly by denying those 11 motions, it wasn't intended on my part to endorse the idea 12 that we needed evidence on all the items that people 13 sought to exclude. 14 You know, it's just, again, far better to err on 15 the side of taking in excess evidence at the 16 administrative hearing level, as opposed to excluding it 17 out of hand and then either the Director or the Superior 18 Court sends it back here because she or it feels like I 19 should have taken that evidence in. You can ignore 20 evidence that's on the record and move forward that way, 21 or the Director can, as can the Superior Court; but if 22 there is a lack of evidence that should have been taken, 23 that pretty well requires coming back here. So I'm going 24 to err on the side of overinclusiveness. 25 With regard to the motions, again, you know, my


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1 feeling was it's better to deal with every bit of evidence 2 in context of the hearing, rather than at the outset, 3 before we have that context. 4 The other issue with regard to it, and perhaps 5 particularly highlighted by the appellants' motion, the 6 parties aren't in symmetrical positions, in my view, in 7 the sense that the appellants are making certain 8 allegations or have protested, and that's what sets the 9 tone here. 10 It's my understanding that, of course, the 11 Association has a position that the permits that are being 12 issued are, for lack of a better way to put it, and it may 13 have been even in one of your early filings, they're the 14 suspenders, and you've got additional rights that are the 15 belt, if you will. 16 And so my thinking in terms of our hearing here 17 is, at the outset, I'm not sure how probative evidence 18 about that belt will be to a hearing about suspenders, if 19 you'll pardon the bad analogy. So, one, I don't see folks 20 in the same symmetrical positions. But again, I will be 21 needing to make determinations when this evidence comes 22 forward. 23 More specifically, going back to the issue about 24 vested rights, of course, the response to that motion or 25 the responses to that motion both put forth the idea that


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1 the appellants couldn't possibly prevail on several issues 2 if they didn't present evidence of their vested rights. I 3 don't know if that's true or not, but there's some 4 uncertainty in my mind, perhaps, about the full interplay 5 of these issues and how it might affect the presentation 6 of evidence. 7 If one of the legal issues, and it is one of the 8 legal issues, just paraphrasing here, is whether the 9 adjudication court is the proper forum for determining 10 relative rights, then I don't know that I need that much 11 evidence at all on what those relative rights may be or 12 what the two sets of rights that now are going to be 13 compared by the adjudication court, in theory, are going 14 to be. 15 So I don't necessarily agree that we need 16 evidence on vested rights. I didn't exclude it out of 17 hand. 18 The other thing that jumped out to me, and 19 whether you folks agree or not, and I'm going to throw it 20 out, if any of you want to comment on any of this. If 21 not, we'll just move to other subjects and hopefully start 22 taking evidence. But the thing that jumped out at me, 23 based on the materials I've read -- and I'm pretty 24 confident I've read everything in terms of your briefs and 25 prehearing submissions. Obviously not the exhibits


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1 themselves. But the thing that jumped out to me was that 2 the appellants perhaps had a different theory on how they 3 could prove and prevail on some of these issues than maybe 4 DWR or the Lower Gila did. So I didn't know how that 5 might affect the need to present evidence on the vested 6 rights. 7 So at any rate, I will just leave it at that, 8 and I'm going to let you folks comment, if you want, but 9 the key points I guess I want to make are this, or the key 10 point is, two or three of them: One, having denied those 11 motions shouldn't be taken as an endorsement that I want 12 you to present evidence on anything or that, again, in my 13 uninformed state that I'm in, in terms of my knowledge of 14 the case and each party's full theories and how they're 15 really going to go forward, that any of that evidence 16 would be especially probative of the issues that I need to 17 decide. 18 And, again, coupled with that, when there seemed 19 to be the clear legal issues about the scope of DWR's 20 authority, whether it makes sense to spend a lot of time 21 taking evidence that would only be necessary if DWR has 22 legal authority, rather than the contrary. 23 So the point being, raise objections as we go 24 forward if you think it's appropriate, and don't take as 25 an endorsement that I'm anxious to spend a lot of time


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1 hearing all about vested rights. You know, I'll take the 2 evidence that you present as necessary. But denying the 3 motions, we're in a different posture before the hearing 4 than during the hearing. 5 Let me ask, and I'll turn back to you first, 6 Mr. Hendricks, since you initially raised the issue. If 7 you want to comment further, you would be welcome to. If 8 not, that's fine as well. 9 MR. HENDRICKS: No, Your Honor, I think that 10 what we said is not inconsistent with your position. We 11 just wanted to make it clear on the record that we didn't 12 want to waive any argument, you know, for further purposes 13 down the road, you know, any argument about the 14 jurisdiction of this proceedings. 15 I don't think anything you said is inconsistent 16 with that position. In fact, frankly, I don't expect a 17 full-blown trial on whether or not a canal was created in 18 1890 and what the Gillespie Dam did in 1918 or those kinds 19 of things. I think that those are going to be beyond the 20 scope of what is needed, and we don't intend to put on, 21 you know, a lot of evidence on those type of issues. 22 ALJ SHEDDEN: All right. Anyone else? 23 Yeah, go ahead, Mr. McGinnis. 24 MR. MCGINNIS: Yes, Your Honor. Well, I don't 25 expect a full-blown trial on those issues either, but it's


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1 only because they haven't listed any witnesses or exhibits 2 to put on for those issues. 3 Issue No. 1, though, is, do our applications 4 conflict with their vested rights. And if they're going 5 to continue to pursue issue 1, they have to show they have 6 vested rights, they have to show they're not precluded by 7 law from pursuing those vested rights, and they have to 8 show that our applications conflict with those vested 9 rights. 10 And unless we're going to cross issue 1 off the 11 list, they've got to put on all that evidence; and they 12 don't have it. 13 If they want to cross issue 1 off the list, we 14 might finish this week, because some of our witnesses and 15 some of our exhibits deal with their vested rights and 16 whether there's any impact on those vested rights. 17 So I don't think they can reserve those 18 arguments and say we're not going to make them, because 19 they haven't put the evidence on anyway. It's not in 20 their list. It's not in their exhibits. It's not 21 anywhere. 22 ALJ SHEDDEN: All right. Well, let me address a 23 couple of points there. One, you know, you've got to 24 preserve your records, obviously, for whether the 25 Director, necessarily, but certainly for the Superior


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1 Court. And I just have to listen to you do that, and then 2 somebody else gets to make the decision whether you 3 actually did or didn't do that. So that's one aspect of 4 it. 5 Another issue you raise really goes to the heart 6 of one of the motions I denied, and it was the unnamed 7 witnesses, if you will. And again, it's still a concern, 8 certainly, and again, I didn't -- by denying that motion, 9 I think what I wrote and hope what I wrote was, we need to 10 deal with them if the unnamed party is disclosed. In 11 theory, there would be an objection; perhaps not. We deal 12 with it then, is the best way to go forward. 13 With regard to the other point, though, issue 1, 14 I'm going to take issue with how you framed it. What it 15 says in the notice of hearing is -- and you've couched it, 16 I would say, in an affirmative way. DWR has written the 17 issue in the negative, "Whether ADWR properly determined 18 that the amended applications did not conflict with prior 19 vested water rights." 20 And, you know, I'm going to take the evidence 21 and legal argument and make my ruling, but I got the 22 impression from the Lower Gila's filings that their 23 opinion is that DWR didn't do its job, I guess, for a 24 better way to put it. And, you know, whether I've got 25 that wrong I guess will play out during the course of the


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1 hearing or the prehearing -- posthearing submissions. 2 Whether that's a sufficient basis to prevail on that issue 3 is something that will play out during the hearing. 4 Whether Mr. McGinnis's characterization of the need to 5 have evidence on that will play out. 6 But, you know, either I get evidence and legal 7 argument on -- or both, evidence, legal argument or both 8 on every issue or I don't, at the end is what, you know, I 9 started my long-winded schpiel early this morning about. 10 At the end I know how I'm going to have to write this 11 decision, and in my mind at least, I think I know how I'm 12 going to have to do it. In my mind, unless some of these 13 issues by agreement or withdrawal are taken off the list, 14 my decision is going to have to include a conclusion about 15 every one of those issues. You can't have conclusions 16 without evidence, or a statement that there was no 17 evidence on it. So there is that uncertainty, perhaps. 18 But if you want to follow up, Mr. McGinnis, you 19 would be welcome to. 20 MR. MCGINNIS: Well, I would just -- you know, 21 we can go on this all day. I know you want to get to 22 evidence. But I would point you to Page 3 of the DWR 23 decision, where the Department says, "Neither the 24 Greenback Water Users nor the LG Water Users presented any 25 evidence that establishes how granting the amended


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1 applications would conflict with their asserted senior 2 rights." 3 And I think that the ironic thing is, we're 4 still in the same position, because they haven't listed 5 any witnesses or any exhibits in this hearing for that 6 purpose. 7 I would like to circle back to one thing that I 8 think I didn't get a chance to talk about, which was sort 9 of the additional witnesses and whether they're going to 10 call Mr. Roberts and some other folks. And I think all 11 I'll say with that is, they've subpoenaed the rest of our 12 witnesses. If they want to call those folks in their case 13 in chief, I'm not sure we'll have a problem with that; but 14 we would reserve our right to argue at a later time about 15 whether they can call other people under these sort of 16 generic categories, with the hope that we won't need to 17 argue about that. 18 ALJ SHEDDEN: All right. Let me ask, 19 Ms. Ronald, do you want to weigh in on whatever the -- it 20 started with the motion in limine, primarily, from the 21 Lower Gila Water Users; perhaps has broadened out from 22 that. Any comments? 23 MS. RONALD: Your Honor, we'll just rely on the 24 response that we already filed to that motion in limine 25 regarding vested water rights. We are in agreement with


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1 the Association's position on that issue; that they have 2 the burden of establishing that there's going to be a 3 conflict with their vested rights in order to maintain the 4 position that they've taken in their protests and their 5 notice of appeal. 6 And the second major point that we raised in our 7 response had to do with the different jurisdictions that 8 are exercised by the Department of Water Resources when it 9 processes an application for a permit, versus the Gila 10 River adjudication court, in this instance, when it looks 11 at the nature, extent and relative priority of water 12 rights. 13 This is not an adjudication. It's a separate 14 process that's been recognized by case law more than once. 15 And for that reason, I couldn't agree more. If the LG 16 Water Users want to advance the argument that there's a 17 conflict with their vested water rights, then they need to 18 establish they have some, plain and simple. 19 ALJ SHEDDEN: All right. Let me ask, 20 Mr. Hendricks, do you want to add anything else? 21 MR. HENDRICKS: We're into legal argument here. 22 I do want to not let two points go unrebutted on that. 23 The question here is the conformance to the 24 statute, and as Page 3 of the decision says, very clearly, 25 it says the water rights are to be determined by the


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1 adjudication case. And, basically, the argument that we 2 advance is that the Department cannot issue a permit if 3 there is a conflict. The statute doesn't say that and 4 somebody opposing a permit has an obligation to come 5 forward with evidence and to establish, in a contested 6 matter, priorities. 7 It says that the Department has an affirmative 8 duty to avoid issuing a permit where there is a conflict. 9 And for the Department to come in and say, well, we don't 10 know because we've sent this off to the adjudication 11 process, we'll let them sort it out, but we're going to go 12 ahead and issue the permit in the interim because you 13 haven't carried a burden that's not statutorily imposed is 14 contrary to the application of the statute. 15 I really think that this is probably posthearing 16 briefing, and I think this will be clearly sorted out 17 based on the evidence. I don't know if any more 18 prehearing argument is needed on this point. 19 But I thought you expressed it very 20 appropriately. The question is, is whether it is an 21 affirmative obligation on our part to establish a vested 22 water right or whether it's a negative obligation, whether 23 they can issue the permit when they openly admit that they 24 don't know if there's a conflict because the adjudication 25 process has not yet occurred. And that really is the


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1 legal issue being considered here that we'll brief at the 2 end of the case. 3 ALJ SHEDDEN: All right, and I would encourage 4 folks just to be aware or understand, I guess would be 5 another way to put it, that, you know, these discussions 6 during the -- whether it be the prehearing conference or 7 as we go forward through the hearing, on legal points are 8 always best reiterated in your closings, to make sure 9 that, again, I haven't lost sight during the hearing of 10 the arguments that you wanted to make. 11 So let me ask, is there any other comment on 12 this or any other issues? If not, if no further comment 13 on this issue? 14 MR. MCGINNIS: Your Honor, at the risk of 15 beating a dead horse, I don't think this is just a 16 posthearing issue, and it's because, because issue 1 is 17 there, we have maybe two days of testimony to put on about 18 the impacts on vested rights, the lack of impacts on 19 vested rights, the lack of them having a vested right, the 20 preclusive effects of the prior agreements that stop them 21 from asserting those vested rights. 22 So we'll go ahead and put that evidence on, if 23 you want, but I'm telling you I think it's at least one 24 day, maybe two longer days of hearing, just because issue 25 1 is there and we feel like we need to deal with it.


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1 They've not put on any evidence, listed any 2 evidence. They've really not talked about it much in 3 their prehearing brief. Although, their protest was 4 almost all about that. And it puts us in a bad position 5 without dealing with whether issue 1 is really here or 6 not. 7 ALJ SHEDDEN: Well, and let me just read it 8 again. "Whether DWR properly determined," and I want to 9 emphasize those words, two words, "properly determined 10 that the amended applications did not conflict with prior 11 vested water rights." 12 I guess I thought I heard Mr. Hendricks saying, 13 what I thought I read in the prehearing briefs, that they 14 think DWR didn't properly determine, because they think 15 DWR didn't follow the statute. And so that, if I'm right, 16 is in essence a legal issue, and we may need no evidence 17 on that issue. 18 The other aspect of it is, we're going to be in 19 this hearing for as long as it takes to properly let folks 20 present their cases. And much like each of you, I 21 suspect, I would be delighted if we finished during this 22 week and not some other time. I would be especially 23 delighted if we finished before Friday. But that's not 24 something that I really need to consider in my 25 decision-making or be concerned with. And not to be flip,


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1 but if I'm not conducting this hearing, there's others. 2 Our case management's taking in four or 5,000 matters a 3 year for hearing, and they'll give me some other things to 4 do. 5 So this is what my job is. But with that in 6 mind, though, I do want to refer folks to 41-1092.07, 7 where it talks about no need to follow the rules of 8 evidence. And the administrative law judge does have 9 authority to exclude evidence for waste of time, 10 cumulativeness of it, probative value versus the use of 11 time. 12 And that's where, perhaps, we might run into a 13 problem with several days of evidence that I can't make a 14 ruling on at this point because I haven't heard what the 15 appellants' case is and don't know what it is that you 16 would like to present. 17 But when I look at the issue 1 and the way I 18 think it's framed, and then it looks like it is No. 18 is 19 the one about what DWR's jurisdiction is, because I have a 20 pure legal issue there, it seems to me, in terms of -- or 21 largely legal issue in terms of DWR's jurisdiction versus 22 the adjudication court's jurisdiction, that may limit the 23 probative value of evidence as well, because -- and, 24 again, the way that's written, "Whether DWR properly 25 determined it does not have jurisdiction." So we don't


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1 need a lot of evidence on things if they were right, 2 perhaps, evidence about -- if DWR was right and it doesn't 3 have jurisdiction, then that may obviate the need for some 4 evidence. 5 If DWR was wrong and it does have jurisdiction, 6 still maybe don't need evidence at this proceeding, 7 because, you know, once the decision has been made, 8 whether it be a decision of mine, then the Director, then 9 perhaps the Superior Court to make that determination, the 10 better approach, rather than, say, several days of 11 evidence on -- several days of evidence on a topic that 12 may be relevant only if that legal issue has been decided 13 wrongly by DWR seems to potentially fall into the waste of 14 time category, at the risk of next year folks all coming 15 back down here if there's a determination they did do it 16 wrongly. 17 So that's the concern I have. 18 I will hear from others, but I would offer the 19 opportunity, particularly if we still don't have 20 Dr. Johnson, to perhaps let you folks take five, ten 21 minutes off the record. I assume you've been working 22 together to some extent anyway, but maybe you can come to 23 some sort of resolution, now that you understand better 24 what my thinking is. And if you don't understand what my 25 thinking is, it's not going to hurt my feelings if you ask


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1 me to try and explain it more succinctly at all. 2 So, one, does anyone else want to weigh in? 3 Two, with that in mind, does it make sense, perhaps, to 4 take a little time right now off the record and try and 5 hash out just what each of you thinks you need to prove 6 and want to prove and perhaps limit the problems going 7 forward and maybe excuse some of the witnesses or 8 potential witnesses on our list. 9 So let me just throw it out there kind of 10 collectively for anyone to weigh in there. 11 MS. RONALD: Your Honor? 12 ALJ SHEDDEN: Yes. 13 MS. RONALD: For clarification purposes, I think 14 part of the problem is the language in the decision 15 letter. In the third paragraph under issue No. 1, there's 16 a sentence, it says, "The Department's administrative 17 process for determining whether to grant the amended 18 applications does not determine the water rights of 19 potentially conflicting claims." 20 And then the next sentence goes on to explain 21 that rather, the nature, extent and relative priorities of 22 the water rights asserted by folks and those that may be 23 obtained by the Association are going to be resolved in 24 the general stream adjudication. 25 That was an attempt to draw a distinction


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1 between the administrative process that's set up by 2 statute, that ADWR must use when it has an application for 3 a permit before it, in contrast to what happens in the 4 Gila River adjudication in this instance, which is a whole 5 different process. It's judicial. It has a different 6 scope and a different purpose. 7 Now, to the extent that that wasn't clear in our 8 prehearing memorandum, I'm fairly certain that we made it 9 crystal clear that there is a distinction between these 10 two things, and that's at the heart of what's going on 11 here. 12 I take issue with Mr. Hendricks' comments that 13 we are saying and have taken the position, putting words 14 in our mouths, that we can't determine conflict with 15 vested water rights and it has to be the adjudication 16 court that does that. That's not our position. 17 We have a statutory duty to make that 18 determination under 153, and that's what we did. And in 19 this case we had to phrase it in the negative in order to 20 have all of the answers to the questions to be yes instead 21 of no. I mean we had a debate about that. 22 But nonetheless, you can not succeed, I submit, 23 on an argument that we improperly determined that there 24 was not a conflict with vested water rights and then 25 contend -- and it's your vested water rights that are in


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1 front of us, and then contend that you don't have to put 2 on any evidence about that. That's just bizarre to me. 3 But it's the distinction between the 4 administrative process and the judicial process that is at 5 the heart of what's going on here. And I'm not sure -- I 6 mean I would never avoid the opportunity to have a 7 discussion to see if a resolution can't be reached, but I 8 think that there's this basic difference of opinion on 9 that distinction and what it means in this case. 10 Quick update on the status of my witness. I am 11 afraid he may not be here until 9:30. 12 ALJ SHEDDEN: Okay. What we'll do is, we'll see 13 where we're going and we'll just deal accordingly. 14 But in response to the substance of your points, 15 you know, I thought that the materials I read were fairly 16 clear, and I understand we just have a dispute, and that's 17 why we have hearings, because people have disputes. And, 18 you know, this wouldn't be the first hearing in which one 19 group has told me they can't possibly prevail because they 20 didn't present the evidence that we're telling you they 21 need to present. 22 Well, yeah, then at the end maybe they won't 23 prevail. But I've got to let the parties present their 24 cases as they see fit. 25 I guess, you know, in the full disclosure mode,


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1 and then I'm going to see if others want to weigh in, as I 2 said, with regard to issue 18, the jurisdictional issue, I 3 suspect most of the lawyers are aware, but to the extent 4 you may not be -- well, one, I've got to consider every 5 case separately, of course, and so -- but some months back 6 I issued a decision after a hearing involving the 7 Department and the Pueblo Del Sol Water Company. To my 8 recollection, issue 18 here, the jurisdiction of the -- 9 the relative jurisdictions, if you will, was square at 10 issue in that case, and if you want to find my decision, 11 it's online. Certainly I can direct you there. 12 So I've ruled on that issue once. I've got 13 under advisement a second chance to rule on that 14 particular issue. And again, I'll look at each of them 15 separately. 16 I just have a feeling in this matter, though, 17 there doesn't seem to be any dispute about the answer to 18 No. 18. How that affects No. 1, I don't know, or issue 19 No. 1. 20 But at any rate, is there any other thought or 21 discussion about the issue before us that's under 22 discussion, or perhaps understanding we may have a half an 23 hour here or so, I'm sure we can find something worthwhile 24 to do, but if it would make sense, perhaps, if there's -- 25 taking a few minutes off the record to see if some sort of


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1 explicit agreement could be put on the record to help us 2 streamline our proceedings, while, of course, preserving 3 whatever arguments or rights that you may want to preserve 4 for another forum. 5 MR. MCGINNIS: Well, Your Honor, I do believe 6 that the distinction Ms. Ronald is referring to is laid 7 out pretty clearly in the Norviel case, in the Beach case, 8 and, also, there was a case from Little Colorado that's 9 sort of a Superior Court -- Special Master's decision. 10 But you can see how it puts us in somewhat of an 11 awkward position, because the Department I think is saying 12 we made this vested rights determination, we have the 13 statutory duty under 45-153, and we did it, even though we 14 didn't do a general stream adjudication, because that's a 15 different part of the statute. 16 So I think we will still intend to put on 17 evidence about their lack of vested rights, their legal 18 preclusion of things that preclude them from asserting 19 those, and the lack of infringement on those rights; and I 20 just don't see how we can not do that. 21 ALJ SHEDDEN: Well, you know, and I had thought 22 ahead toward this, because, again -- and I'll deal with 23 the evidence as it comes up, but I guess the potential 24 concern I have, and, again, it seems to me -- and give 25 folks a chance to think about it before we get there. I


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1 guess this is what it seems to me: That at some point 2 then, wouldn't be the Association be asking me to make a 3 determination as to the relative rights between the 4 Association and the appellants, the various appellants? 5 MR. MCGINNIS: Well, I mean, again, I think the 6 Norviel and the Beach cases, especially, say they are two 7 different things. And the Department thinks it did it; 8 under 45-153 there is a specific duty. 9 So, yes, I do think you have to make a 10 determination as to whether what the Department did in 11 finding there was no conflict of vested rights was proper, 12 given the evidence that's presented to you. I mean I 13 don't see how you get around that, unless we drop issue 1. 14 Issue 1 is there. The Department says they made 15 the determination. It's in the decision, even though 16 there's some language in there about the adjudication that 17 gets us all a little confused. I think if issue 1 is 18 there, you have to look at the evidence and say do they 19 have a vested right or not, and is there a conflict of 20 vested right, and are they precluded from asserting that 21 such conflict. 22 ALJ SHEDDEN: All right. Let me ask, 23 Mr. Hendricks, do you want to add anything else? 24 MR. HENDRICKS: The only thing I want to make 25 sure, that there's been a lot of statements like we have


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1 no evidence. I absolutely reject that. There's a lot of 2 evidence of my clients' vested rights in this record and 3 in the exhibits. 4 Do I have someone from 1890 here? No, obviously 5 not. That's 120 years ago. No one was alive then. So I 6 don't have anybody who was here when the canal was dug. 7 But I have an awful lot of evidence about that. 8 As to whether the -- what the Department 9 determined or not, I'm actually going to be quite 10 interested to hear what Mr. Johnson says on that, and I 11 think we need to get to that point on that. 12 I don't know that any more legal argument is 13 going to be required. 14 ALJ SHEDDEN: All right. Then let me ask, are 15 there any other comments or any other issues to discuss? 16 MS. RONALD: Just a housekeeping matter, Your 17 Honor, since we have some time. Last night we added an 18 exhibit to our exhibit list, and we have a CD that we're 19 going to file with you. It is a -- I've provided hard 20 copies of this exhibit to counsel and, actually, it's 21 already included partially in one of the exhibits that the 22 LG Water Users filed. So I just wanted to bring that to 23 your attention. 24 ALJ SHEDDEN: All right, and the way the setup's 25 going to be working for our exhibits, if you will, is kind


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1 of a multipart process. And what I'm calling up on the 2 screen right now is the docket for this matter, and so let 3 me just take a quick look. 4 I'm calling up the notice of hearing right now, 5 and I just wanted to check. I couldn't get that to work 6 on my little device at home this morning, so I didn't know 7 if it was systemic or that, but it did come up on the 8 screen here. So this is the docket and the last entry is 9 the notice of filing. 10 In terms of the way the procedure has to work 11 here is, we've got the exhibit list that I've got up on 12 the screen right now, the comprehensive omnibus of 13 exhibits, as the webmaster likes to call it. In theory, 14 all the links are live. When we want those exhibits, of 15 course, we click on them and they come up on the screens. 16 Throughout the course of the week it's, of 17 course, my job to keep track of what's been admitted and 18 not admitted. I'll ask our court reporter if she would be 19 kind enough to keep track of that as well, as we go 20 forward. And periodically during the week I'll try and 21 get the webmaster to update that for us. 22 But what we're seeing right now is loaded onto 23 the computer in this hearing room. So if, for example, 24 DWR or somebody else had given our webmaster or given the 25 front desk additional electric exhibits this morning, they


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1 may be posted to the internet already, but they won't 2 appear on this list until the webmaster has a chance to go 3 ahead and update it. It's a two-step process, and 4 depending on where the webmaster is or what he or his 5 assistant are doing, how quickly that can happen will 6 vary. 7 So I would encourage you, if there are 8 last-minute changes or rebuttal exhibits, bring paper 9 copies with you so we can move forward with our hearing 10 while we wait for these to be posted. 11 My thinking is that there's been nothing added 12 since Friday, the 18th, when the webmaster made an entry 13 saying notice of posting of exhibits. But this then is 14 the internet we're looking at, where he might update that; 15 whereas our lists that we're using in the hearing wouldn't 16 necessarily reflect it as of yet. 17 So just follow the same requirements that are 18 set out in the case management orders for getting late or 19 replacement exhibits filed. But it may be beneficial to 20 bring paper copies. Certainly if it's new, you should. 21 Are there any other issues? 22 MR. HENDRICKS: Your Honor, I had one I wanted 23 to check. I was trying to load up the ledger that you 24 guys filed, the last one, and it took like 45 minutes to 25 load at my office. I was hoping that that's going to load


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1 a lot faster now. It's the very last one. 2 MR. DEENY: What I would suggest, Keith, and I 3 was going to suggest this at some point, too, is that we 4 may want to, in another tab, load it up right now and just 5 have it there, because it took about 30 minutes in my 6 office, too. 7 ALJ SHEDDEN: All right, and what document? 8 MR. HENDRICKS: It's the very last Association 9 exhibit. Go to the very bottom. 10 ALJ SHEDDEN: The number is? 11 MR. HENDRICKS: Yeah, it's the very last one. 12 MR. DEENY: SRVWUA exhibit, the ledger. 13 MR. MCGINNIS: 287. 14 MR. HENDRICKS: Yeah, bring that one up and see 15 how fast it loads. 16 Wow. Okay. Never mind. 17 ALJ SHEDDEN: But this just appears to be one 18 page. 19 MR. DEENY: No, no, Judge. 20 ALJ SHEDDEN: That's why it's taking so long 21 then. Okay, it's slowly -- 22 MR. HENDRICKS: Yeah, but it's not 45 minutes 23 like it was for me this morning. 24 ALJ SHEDDEN: Well, and, again, that's why we 25 have had these hard-loaded. We have servers right over


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1 there somewhere that even the computer guy's theory was, 2 putting them on the hard drive here makes everything a lot 3 quicker. 4 But I'm a big fan of multiple windows. I don't 5 like to tab so much, but I like the windows, multiple 6 windows. And it does make sense, with documents that 7 we're going to be referring to frequently or ones like 8 this that may be slow to load, and our computers, like 9 everybody else's, periodically just start going a little 10 slower than people like me, without a lot of patience, 11 would like them to; but we can get them open in separate 12 windows or tabs and do it that way. 13 Well, my suggestion is going to be this then: 14 It doesn't -- if folks want to try and kill some dead time 15 here, I'm sure we can. I would suggest, though, why don't 16 we just go ahead on break until 9:30, or if Dr. Johnson 17 arrives before that time, when we can round everybody up, 18 we can get started. 19 So is there anything else, or does that make 20 sense? 21 MS. RONALD: Thank you. 22 ALJ SHEDDEN: All right. 23 MS. RONALD: I apologize. 24 ALJ SHEDDEN: No, obviously things happen and 25 we've just got to adapt.


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1 So I guess one last point, now that I told you 2 we could go on break. We do want to try and minimize the 3 down time and have witnesses in the queue so that we can 4 move from witness to witness without delay, use our time 5 fully. 6 As already indicated with Mr. Kupel, I guess it 7 was, out of order, working together to accommodate 8 schedules. I would be unlikely to tell you I won't go out 9 of order if you're all in agreement to do it. So I just 10 ask you to keep an eye on that as we move forward. And 11 we'll either meet back up at 9:30 and hope we can get -- 12 yeah, go ahead. 13 MR. HENDRICKS: Just for your expectation, I 14 talked with the Association's counsel, and, Jan, I'm 15 sorry, we didn't include you in that. We talked about 16 kind of what our expectation for the next couple of days, 17 at least for the first witnesses. 18 We assume that the first two witnesses are going 19 to be rather lengthy, multiple days. Not per witness, but 20 for the witnesses, maybe even into Wednesday. So the fact 21 that we're taking several days with the first two, they're 22 probably the most comprehensive knowledge. We expect that 23 after that it will go a lot faster. 24 ALJ SHEDDEN: And first will be Dr. Johnson, of 25 course. Who will be second?


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1 MR. HENDRICKS: Mr. Roberts from the 2 Association. 3 ALJ SHEDDEN: Okay, got it. 4 MR. HENDRICKS: So those two witnesses. Just so 5 you don't get antsy that we're spending a lot of time with 6 those two, that's our contemplation, and I've talked that 7 over with the Association. Janet, I apologize, I should 8 have included you in that, but that's kind of what -- just 9 wanted to give you a head's up on that. 10 ALJ SHEDDEN: All right. Nothing else? 11 All righty. Thank you. 12 (A recess was taken from 9:10 a.m. to 9:37 a.m.) 13 ALJ SHEDDEN: All right, we're back on the 14 record. 15 Let me ask, where do we stand? Is Dr. Johnson 16 here? 17 MS. RONALD: Yes, he is, Your Honor. 18 ALJ SHEDDEN: Okay, great. 19 Before we get to him, thinking on our break, I 20 guess, I guess I'm just going to ask each party, with 21 regard to issue 18, "Whether ADWR properly determined that 22 it does not have jurisdiction to determine the nature, 23 extent and relative priority of the appellants' water 24 rights in this proceeding," I guess I just want to 25 understand from each of you what your position is on that


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1 particular issue. 2 Let me go to you first, Ms. Ronald. Safe to say 3 that DWR's position is, it did properly determine that, 4 correct? 5 MS. RONALD: Correct. 6 ALJ SHEDDEN: All right. And the Association? 7 MR. MCGINNIS: I think that's correct, with the 8 caveat that our position is that this is not a general 9 stream adjudication. It's a proceeding under 45-153. 10 ALJ SHEDDEN: All right. And Mr. Hendricks? 11 MR. HENDRICKS: I guess our position is, is 12 that, yeah, that the Department properly determined that 13 it does not have jurisdiction. I think there's a dispute 14 about whether or not they determined that. But our 15 position is, is that the Department does not have 16 jurisdiction to determine the relative priority of our 17 water rights. 18 ALJ SHEDDEN: All right. Then with that, unless 19 anyone wants to address any other questions or concerns, 20 we can go to Dr. Johnson's testimony. 21 No? 22 Why don't you come on up and have a seat, and 23 I'm going to get you sworn in. So go ahead and have a 24 seat, and I'll just let me you know, from my perspective, 25 if you would be more comfortable without your coat, don't


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1 worry about that. 2 If you would raise your right hand. 3 (Michael J. Johnson, Ph.D., P.E. was duly sworn 4 by the Administrative Law Judge.) 5 ALJ SHEDDEN: Okay. Just as a formality, go 6 ahead and state and spell your name for our record. 7 THE WITNESS: Michael Johnson, M-I-C-H-A-E-L, 8 J-O-H-N-S-O-N. 9 ALJ SHEDDEN: All right, and a couple of things 10 quickly, since you weren't here when I made the 11 preliminary announcements. The way we're going to go 12 forward this morning is -- let me just verify, it's going 13 to be you for the Department, Ms. Ronald, asking 14 questions? 15 MS. RONALD: That's correct. 16 ALJ SHEDDEN: Okay, you had the microphone in 17 front of you. 18 So we'll turn it over for questions first from 19 Ms. Ronald, then I'll go probably to the appellants, the 20 Lower Gila Water Users, presumably Mr. Hendricks, and then 21 to the Salt River Valley folks, then back to Ms. Ronald; 22 and we'll go through that cycle as many times as necessary 23 for them to ask all of their questions. I may ask some 24 questions of my own, all right. 25 And the other thing we've got to be aware of to


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1 create our record, we've got to get audible responses on 2 the record and we've got to avoid interrupting each other, 3 talking over one another, that kind of thing, all right? 4 THE WITNESS: Yes. Thank you. 5 ALJ SHEDDEN: All right, do you have any 6 questions about the procedure? 7 THE WITNESS: No, I do not. 8 ALJ SHEDDEN: All right. Whenever you're ready 9 then, Ms. Ronald. 10 MS. RONALD: Thank you, Your Honor. 11 12 MICHAEL J. JOHNSON, Ph.D., P.E., 13 called as a witness on behalf of the Department of Water 14 Resources herein, having been previously duly sworn by the 15 Administrative Law Judge to speak the truth and nothing 16 but the truth, was examined and testified as follows: 17 18 DIRECT EXAMINATION 19 BY MS. RONALD: 20 Q. Good morning. 21 Dr. Johnson, would you please give us an 22 overview of your educational background? 23 A. Yes. I have a Bachelor's degree in civil 24 engineering from the University of Arizona and I have a 25 Master's and Doctoral degrees in civil engineering from


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1 Arizona State University. 2 Q. And when did you get your doctorate degree? 3 A. I received my doctorate degree in December of 4 2000. 5 Q. Are you currently employed? 6 A. Yes, I am. 7 Q. Where? 8 A. I am employed with the Arizona Department of 9 Water Resources. 10 Q. Please describe your work responsibilities with 11 the Department of Water Resources, please, and include the 12 dates when you started. 13 A. Sure. I began with the Department of Water 14 Resources on December 18th of the year 2000, I believe 15 four days after receiving my Doctoral degree. 16 I currently am the assistant director for the 17 engineering and permits division, which has responsibility 18 for the programs of dam safety, floodplain management, 19 flood warning, surface water rights, groundwater use 20 permits, well drilling permits and support to the 21 adjudication court. 22 Q. How long have you been in that position? 23 A. I've been in my current position since 2009, I 24 believe. 25 Q. What is your title?


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1 A. Assistant director. 2 Q. Do you sit on any National Boards or 3 Commissions? 4 A. I do. I sit on the National Dam Safety Review 5 Board, which advises FEMA on national policy for dam 6 safety. I'm also the president-elect of the Association 7 of State Dam Safety Officials. I represent Arizona on the 8 Association of Western State Engineers on behalf of the 9 Director of DWR. I believe that's it. 10 Q. How long have you been a member of the, if 11 that's the correct term, the National Dam Safety Board? 12 A. I've been appointed to that board by FEMA since 13 I believe 2010. 14 Q. Were you involved in the review of the amended 15 applications that are the subject of this case? 16 A. Yes, I was. 17 Q. And as part of that review, did you also review 18 the original applications that the amendments related to? 19 A. Yes, I did. 20 MS. RONALD: Your Honor, before I go through the 21 process of introducing the administrative record, counsel 22 for the LG Water Users indicated to me, as well as counsel 23 for the Association, that they would stipulate to a number 24 of the exhibits that were listed by DWR. As I understand 25 it, the Association has no objection to any of the


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1 exhibits that we had listed. 2 However, the LG Water Users have stipulated to 3 most of the exhibits, but not all of them. So for 4 expediency, I thought I could just go through and list 5 that now? 6 ALJ SHEDDEN: All right. 7 MS. RONALD: Okay. DWR-1 has -- I'm going to 8 read the numbers of the exhibits to which the LG Water 9 Users have stipulated. So it's DWR-1, DWR-7, 8 and 9, and 10 then DWR-12 through 19, DWR-21 and 22, DWR-23 through 26, 11 DWR-28 through 30, DWR-32 through 36. 12 Clarification, Mr. Hendricks, was 37 supposed to 13 be included as well or not? 14 MR. HENDRICKS: No. 15 ALJ SHEDDEN: Okay. 38 through 42, 43 16 through -- and then it goes for a long ways. I believe 17 it's 43 through 101. 18 MR. HENDRICKS: Correct. 19 MS. RONALD: And then 106 through 116. 20 MR. HENDRICKS: 104. 21 MS. RONALD: 104? 22 MR. HENDRICKS: Yeah. 23 MS. RONALD: Oh, excuse me. 24 Mr. Hendricks: 104 through 116. 25 MS. RONALD: 104 through 116. Thank you.


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1 The next batch I have is 119 through 121, 123 2 through 128, 131 through 133, and then 134 through 136. 3 I interrupted the sequence because I'm turning a 4 page and it's just easier to do it that way. 5 Did I get that correct, Mr. Hendricks? 6 MR. HENDRICKS: Yes. 7 MS. RONALD: All right. So that will help a 8 little bit as we go through the testimony and exhibits. 9 ALJ SHEDDEN: All right. And I'm not going to 10 read those back, but the exhibits that have been 11 referenced are then admitted by stipulation. 12 MS. RONALD: Thank you. 13 BY MS. RONALD: 14 Q. For purposes of having a complete record, I am 15 going to go through these exhibits, but I am going to do 16 it in an expedited fashion, except for the ones that have 17 not been admitted yet. 18 So we'll start with DWR No. 1, and if you look 19 at your monitor then as we pull each one of these up, you 20 should see a copy of it in front of you; and if for any 21 reason you can't read it or you want it smaller or larger, 22 just let us know. 23 A. Okay. 24 Q. Ms. Klobas is running the monitor and the mouse, 25 so we can do whatever you need.


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1 So this has already been stipulated to. What is 2 this document? 3 A. This document is the original application form 4 for what is referred to as application R-30. 5 Q. Can you see the name of the proposed reservoir 6 on the application? 7 A. I can. It reads Mormon Flat Reservoir. 8 Q. And who filed it? 9 A. It was filed by the Auxiliary Western Canal 10 Landowners' Association. 11 Q. Okay. If we go to Page 4 of this document, 12 please. 13 ALJ SHEDDEN: Before you jump off there, let me 14 just ask you, Doctor -- 15 THE WITNESS: I know. I'm sorry. Go ahead. 16 ALJ SHEDDEN: No, it reads Auxiliary Eastern 17 Canal, correct? 18 THE WITNESS: Yes. 19 ALJ SHEDDEN: Okay. Go ahead. 20 THE WITNESS: Sorry. 21 That's why I put these on. 22 BY MS. RONALD: 23 Q. We're on Page 4 of this document. What's the 24 date that it was received, that it was filed? 25 A. August 30th, 1920.


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1 Q. And then there's a notation, also, on that page, 2 says, "Returned to applicant for correction." What's the 3 date that follows that notation? 4 A. November 17th, 1920. 5 Q. If we go back now to Page 1. Sorry to jump 6 around. Is there a notation up in the upper left? 7 A. Yes, there is. 8 Q. And can you read what that says, please? 9 A. Yes. The notation reads "Canceled," which 10 appears to be hand stamped, and then a note under it. 11 Would you like me to read that as well? 12 Q. Yes, please. 13 A. It appears to be dated January 1st, 1927, and it 14 says, "For the reason that the Salt River Valley Water 15 Users' Association have built this Mormon Flat," or built 16 something, "Mormon Flat Reservoir." I'm not sure if that 17 reads "the" or "this." I believe it reads "the." 18 Q. Thank you. Let's go to DWR-146, which has just 19 been recently filed. It's not in there. DWR-146 is -- 20 let me hand you a copy of it. Copies have already been 21 provided to counsel. 22 MS. RONALD: Did we provide you with a copy, 23 Your Honor? 24 ALJ SHEDDEN: I have not seen one. 25 MS. RONALD: Sorry. Oh.


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1 ALJ SHEDDEN: Thank you. 2 BY MS. RONALD: 3 Q. I'll give you a minute to look at that. 4 If you look at the bottom of the first page of 5 DWR-146, there's a paragraph that starts "Now therefore." 6 Do you see that paragraph? 7 A. Yes, I do. 8 Q. And rather than -- go ahead and just read that 9 paragraph. It's easier than having you read it and think 10 about it. 11 A. Okay. It says, "Now therefore, the said 12 Auxiliary Eastern Canal Irrigation District, [as] hereby, 13 assign, transfer and set over, unto the Salt River Valley 14 Water Users Association, all of its rights and privileges, 15 held and possessed by it and by virtue of that certain 16 application dated August 30, 1920." 17 Q. I'm going to interrupt you right there. That's 18 good. Thank you. 19 So is it fair to characterize this as an 20 assignment document from the Auxiliary Eastern Canal 21 Irrigation District to the SRVWUA? 22 A. Yes, it would be. 23 Q. On the second page, if you would look at the 24 second -- it's the first full paragraph that begins with 25 the language "In witness whereof." What's the date that's


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1 there? 2 A. The 28th of November, 1921. 3 Q. And then at the bottom of the page it says 4 "Filed in the office of the State Water Commission." 5 What's the date that follows that? 6 A. December 20, 1921. 7 Q. Thank you. Now, I'm just going to reiterate, as 8 I go through these, the ones that have been admitted into 9 evidence. That one's already been admitted. 10 The next document is DWR-2, and in order to see 11 what this is, I'm going to direct your attention to Page 4 12 of this document. What application number is this? 13 A. This is the application referred to as R-45. 14 Q. And what's the date that it was filed? 15 A. October 2nd, 1920. 16 Q. And now if we go back to the first page of this 17 document, what entity filed this application? 18 A. The Salt River Valley Water Users' Association. 19 Q. And what's the name of the proposed reservoir 20 for this application? 21 A. McDowell. 22 Q. Again, sorry to jump around, but go over to 23 Page 5 of this exhibit, at the bottom of this page. What 24 does it say? 25 A. Are you referring to the hand --


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1 Q. Yes, I'm sorry, the handwritten. 2 A. The handwritten notation at the bottom of the 3 page says "Application R-45 cancelled." 4 Q. And then if we go forward to Page 9 in this 5 exhibit, what does it say at the upper right? 6 A. The upper right, there is a hand stamp of the 7 word "Cancelled." 8 Q. Do either of these notations indicate why it was 9 canceled? 10 A. No. 11 Q. Do either of these notations cross-reference any 12 correspondence to the applicant regarding the cancellation 13 of this application? 14 A. No. 15 MS. RONALD: I would like to move Exhibit 2 into 16 evidence. 17 ALJ SHEDDEN: All right. Is there any objection 18 to Exhibit 2? 19 MR. HENDRICKS: Your Honor, the reason that we 20 didn't stipulate to Exhibit 2 is that when we copied 21 Exhibit 2 from the records, the page at the last, the one 22 that's on the screen now, is different than the page here; 23 and so there was a foundation question, because when we 24 went over and copied them, when Mr. Nelson went over and 25 copied them, it had a different page.


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1 Now, Counsel, the page that is attached, we've 2 stipulated it in evidence, and it's a little different. 3 But the question that we had is, the one that we got was 4 different than Exhibit 2, and we don't know what the 5 correct last page was because it had additional 6 information. And so we don't know if this last page was a 7 later-created copy, an original. And so our objection is 8 foundation because we don't know. It's different than 9 what we were given. 10 ALJ SHEDDEN: All right, and I'm going to see, 11 Ms. Ronald, if you want to respond to the foundation 12 objection then? 13 MS. RONALD: Yes, Your Honor. Can I bring up 14 another exhibit, by way of clarification? 15 ALJ SHEDDEN: Yeah, sure. 16 MS. RONALD: DWR-21. 17 MR. HENDRICKS: And if we want to admit 21 in 18 connection with this one, then I'll withdraw my objection. 19 But the question -- and then the question I have as to the 20 original, whether that was a copy of -- whether that last 21 page on 2 was a copy of 21 without some additional notes? 22 The handwriting appears to be different, and we 23 just didn't know where the last page of Exhibit 2 came, 24 because Exhibit 21 was the last page that we got when we 25 copied the exhibit from the Department's files a while


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1 ago. 2 MS. RONALD: Well, we would like to move it in 3 with Exhibit 2, if that will resolve it. We can also -- I 4 can also have the witness respond to your concerns, if you 5 would like. 6 MR. HENDRICKS: Yeah, if you want to lay some 7 foundation, then... 8 ALJ SHEDDEN: Yeah, and let me just jump in with 9 two points. One, I'm showing 21 was one of the ones 10 listed by stipulation, so... 11 All right. Then, two, you know, I just have 12 some concerns that we may be getting off on the wrong foot 13 to start with, too much discussion. And although I want 14 to give folks an opportunity to present their positions, 15 I'm going to ask you, Mr. Hendricks, to perhaps just 16 register your objections or concerns and go forward that 17 way. 18 So what we have on the screen now is No. 21 that 19 has been admitted, a single page. And the question I have 20 then is, to see where we stand with No. 2, have you now 21 withdrawn your objection to that, Mr. Hendricks? 22 MR. HENDRICKS: I still have an objection to the 23 foundation of the last page of Exhibit 2. That's the 24 only -- that's the source of my objection. 25 ALJ SHEDDEN: All right. And, Ms. Ronald, your


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1 indication was you would ask the witness some questions 2 about it? 3 MS. RONALD: Yes, Your Honor. 4 ALJ SHEDDEN: All right. Go ahead then. 5 BY MS. RONALD: 6 Q. Let's look at Exhibit 21, since it's already on 7 the screen, and if we could scroll down to the bottom of 8 Exhibit 21, is there a handwritten note there that begins 9 with "September 29th, 1937"? 10 A. Yes. 11 Q. And do you recall when the Exhibit No. 2 was 12 filed? Do we need to go back and look at that to refresh 13 your memory? 14 A. Well, I know it was filed -- I believe it was 15 filed in 1920. 16 Q. Okay. 17 A. Though I don't remember the date. Maybe 18 August 20th, 1920, or I might be thinking of another 19 application. I'm sorry. 20 Q. So on this very page, if we scroll back up 21 again, it says "Application filed." What's the date? 22 A. Okay. October 2nd, 1920. 23 Q. What does that information tell you about this 24 page? When was this page created, in your opinion? The 25 note at the bottom is dated September 29th, 1937.


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1 A. Yes. 2 Q. The date of the application being filed is 3 October 2nd, 1920. 4 A. Yes. Well, that means -- well, the hand -- 5 well, that would tell me that certainly the handwritten 6 portion, it was created in 1937. The handwritten portion 7 was, yes. And the handwriting appears to match, so... 8 Q. Let's go back to Exhibit 2, please. The last 9 page is Page 9. And if we scroll down on that page, do we 10 see the same filing date of October 2nd, 1920? 11 A. Yes. 12 Q. And let's keep scrolling down, see if there's a 13 note at the bottom. Is there a note at the bottom? 14 A. No. 15 MS. RONALD: Move to admit Exhibit 2 in 16 conjunction with Exhibit 21, Your Honor. 17 MR. HENDRICKS: May I ask one voir dire 18 question? 19 ALJ SHEDDEN: I'm going to say no, and the 20 better way to deal with this would be on 21 cross-examination, I think, and my concern becomes one of 22 keeping us constrained in terms of two ways: One, just 23 with the party that's called the witness; and then, two, 24 at what point are we really getting into cross-examination 25 versus voir dire of a witness.


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1 So if the need is to defer ruling on No. 2 until 2 you have a chance to question the witness, I will do that. 3 If you want to raise an objection or have no objection at 4 this point, then let me know, I guess. 5 MR. HENDRICKS: No, that's fine. We'll withdraw 6 the request for voir dire. 7 ALJ SHEDDEN: Pardon? 8 MR. HENDRICKS: Withdraw the question for voir 9 dire. 10 The foundation argument as to 2, I don't think 11 we have foundation for the last page of 2. That stands. 12 But you can rule on that now. 13 ALJ SHEDDEN: All right. So then 2 is not being 14 objected to, correct? 15 MR. HENDRICKS: No, there is a foundation 16 objection to the last page of 2. I do not believe 17 foundation has been established as far as Page 2. 18 ALJ SHEDDEN: All right. I am going to overrule 19 the objection, and there's not a requirement that the 20 rules of evidence be adhered to. What I will tell folks 21 is that the weight I can give any of the evidence that's 22 presented may, of course, be affected greatly by some of 23 the objections you raise and questions you may ask. But 24 with that then, 2 is admitted subject to weighting based 25 on that objection.


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1 MR. HENDRICKS: And, Your Honor, to actually 2 speed things up, our objections to 3, 4, 5, 6 and 7 -- or 3 6 were exactly the same issue. And so we will withdraw 4 our objections to those, 3, 4, 5 and 6, because they were 5 exactly the same issue, the same page. We don't need to 6 go through it again for each one of those. And so based 7 on your ruling, we'll go ahead and stipulate to 3, 4, 5 8 and 6. 9 ALJ SHEDDEN: And just so the record is clear, 10 preserving any foundational objection, correct? 11 MR. HENDRICKS: Correct. 12 ALJ SHEDDEN: All right. 3, 4, 5 and 6 will be 13 admitted then absent some objection from the other 14 parties. 15 All right, 3, 4, 5 and 6, DWR-3, 4, 5 and 6, are 16 admitted then. 17 BY MS. RONALD: 18 Q. DWR-3, please. What's the application number of 19 this document? 20 A. This is application R-46. 21 Q. Who was it filed by? 22 A. Salt River Valley Water Users' Association. 23 Q. And the name of the proposed reservoir for this 24 application is what? 25 A. Mormon Flats.


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1 Q. If we could scroll to the bottom of this page. 2 Is there a handwritten note at the bottom? 3 A. Yes, there's a handwritten note that reads, 4 "Application No. R-46 cancelled." 5 Q. Is there a notation as to why it's canceled? 6 A. No. 7 Q. Is there a cross-reference to any other 8 information regarding the cancellation? 9 A. No. 10 Q. Page 4, please, of this document. What's the 11 date that this application was filed? 12 A. October 2nd, 1920. 13 Q. Go to Page 9 of this application. Scroll to the 14 top, please. What's indicated in the upper right-hand 15 corner? 16 A. In the upper right-hand corner there is a hand 17 stamp of the word "Cancelled." 18 Q. Is there a date next to it? 19 A. No. 20 Q. Is there an explanation next to it? 21 A. No. 22 Q. Okay. DWR-4. What's the application number for 23 this document? 24 A. This is application No. A-135. 25 Q. Who filed it?


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1 A. The Salt River Valley Water Users' Association. 2 Q. For which reservoir, if there is one? 3 Was it filed for a reservoir? I'm sorry, I 4 asked you a bad question. Was this filed for a reservoir? 5 A. No. 6 Q. What was it filed for? Scroll down. 7 A. This was filed for an amount of water to be 8 applied for beneficial use of 1,000 cubic feet per second 9 associated with something referred to as the McDowell 10 Power Canal. 11 Q. Go to Page 4. Scroll down so we can see the 12 date, please. 13 What date was this filed? 14 A. October 2nd, 1920. 15 Q. And go to Page 5, please. Upper right-hand 16 corner, what does it say? 17 A. Again, there's a hand stamp of the word 18 "Cancelled." 19 Q. Is there a date next to it? 20 A. No. 21 Q. Is there an explanation next to it? 22 A. No. 23 Q. DWR-5, please. 24 What's the application number? 25 A. This is application No. A-136.


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1 Q. Who is the applicant? 2 A. The Salt River Valley Water Users' Association. 3 Q. Please scroll down so that we can see 4 Paragraph 6. Thank you. 5 What was this application filed for? 6 A. Similar to the last application, this is an 7 application to appropriate a quantity of water associated 8 with something referred to as the Horse Mesa Power Canal. 9 Q. Let's go to Page 3, please. Scroll down so we 10 can see the date. 11 What's the date that this was filed? 12 A. October 2nd, 1920. 13 Q. And go to Page 5, please. What's indicated in 14 the upper right-hand corner? 15 A. There is a hand stamp of the word "Cancelled." 16 Q. Is there a date next to it? 17 A. No. 18 Q. Is there an explanation next to it? 19 A. No. 20 Q. DWR No. 6, please. What's the application 21 number for this one? 22 A. This is application R-71. 23 Q. Who filed it? 24 A. The Salt River Valley Water Users' Association. 25 Q. For which reservoir?


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1 A. Pine Creek. 2 Q. Let's go to Page 4. What's the date that it was 3 filed? 4 A. December 12th, 1921. 5 Q. DWR-7, please. 6 What's the application number? 7 A. This is application R-72. 8 Q. Who filed it? 9 A. The Salt River Water Users' Association. 10 Q. For which reservoir? 11 A. Horse Mesa. 12 Q. Go to Page 4, please. And what date was it 13 filed? 14 A. December 12, 1921. 15 Q. DWR-8, please. 16 What's the application number on this one? 17 A. This is the application referred to as E-11. 18 Q. Who filed it? 19 A. The Salt River Valley Water Users' Association. 20 Q. Directing your attention to Paragraph No. 2, 21 what does that sentence say, the very first sentence? 22 A. "The appropriation to be made by the enlargement 23 or extension of the Salt River Project by the enlargement 24 of Roosevelt Dam and Reservoir and the construction of 25 Pine Creek, Horse Mesa and Mormon Flat Dams, and by the


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1 utilization of unappropriated, unstored floodwaters of the 2 Salt and Verde Rivers." 3 Q. Let's go ahead and finish reading that 4 paragraph, please. 5 A. "This is an enlargement and extension of 6 existing water rights of the Salt River Project including 7 rights acquired under filings made October 2nd, 1920 on 8 Horse Mesa Power Canal and Mormon Flat Dam. Insofar as 9 the method of development and quantity of water 10 appropriated described in this application differ from 11 that described in the two applications above mentioned the 12 latter are hereby amended to conform hereto. The Mormon 13 Flat Reservoir is described in the filing above mentioned. 14 The Pine Creek and Horse Mesa Dams are described under 15 separate applications for Permit to Construct, submitted 16 herewith and made a part hereof." 17 Q. Turn to Page 5, please. Keep scrolling down, 18 please. 19 Can you read that, the date that it was filed? 20 A. I can. It is December 12, 1921. 21 Q. Thank you. 22 Is that the extent of the original applications 23 that were filed related to the amendments that are the 24 subject of this proceeding? 25 A. Yes.


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1 Q. Looking at the next exhibit, DWR No. 9. This 2 has been stipulated to, but briefly describe what this 3 represents. 4 A. What this is, this is a map of the Salt River 5 Project in Arizona. There's a notation associated with a 6 red boundary that is referred to as the boundary of the 7 Salt River Reservoir District as of February 9, 1903. 8 Q. Are there any dam sites depicted on this map? 9 A. Yes, there are. It shows the existing -- well, 10 it shows Roosevelt Dam and then it shows a Pine Creek Dam 11 site, a Horse Mesa Dam site and a Mormon Flat Dam site. 12 Q. In the lower right-hand corner of the map, can 13 you read the date that's there? 14 A. Yes. The map has a date of October of 1910. 15 Q. So would that have been before the applications 16 that you just reviewed were filed? 17 A. Yes. 18 Q. DWR-10, please. 19 Can you describe what this document is, 20 generally? 21 A. Yes. This is a contract between the United 22 States and the Salt River Valley Water Users' Association, 23 and it is dated September 6th, 1917. 24 Q. Is this a document that was reviewed by you 25 and/or members of staff when these amended applications


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1 came in that are the subject of this proceeding? 2 A. Yes, this contract is part of the documents that 3 were reviewed by myself and staff in relation to those, 4 yes. 5 MS. RONALD: I would like to move No. 10 into 6 evidence. 7 MR. HENDRICKS: Objection, foundation, 8 relevance. 9 ALJ SHEDDEN: And I'm going to go ahead and 10 overrule the objection on the relevance, because the 11 witness has just testified that this was something he 12 did or the staff did use during the review of the matter. 13 So I'm going to overrule the relevance 14 objection, and 10 is admitted. 15 BY MS. RONALD: 16 Q. DWR No. 11, please. 17 Please identify this document. 18 A. Well, this is a speech given by Carl Hayden, and 19 the date shown is June 5th, 1922. 20 Q. Above the word "Speeches," what are the words 21 that appear above the word "Speeches"? 22 A. "Sale of surplus power on Salt River Reclamation 23 Project, Arizona." 24 Q. Does this -- focus on the handwritten words at 25 the top of the page. What does that say?


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1 A. It appears to read, "File, Salt River Valley 2 Water Users' Association, Power Application," I believe it 3 says. 4 Q. Is this a document that was reviewed by you 5 and/or staff in considering the amended applications that 6 are the subject of this proceeding? 7 A. Yes, it is. 8 MS. RONALD: I would like to move 11 into 9 evidence. 10 MR. HENDRICKS: Based on your prior ruling, no 11 objection. 12 ALJ SHEDDEN: Well, let me back up and just make 13 sure we're all on the same page with that. 14 One, of course, as I said at the outset, you can 15 preserve your records on this; and, two, the problem I'm 16 faced with at this point is, as I had said, I've looked at 17 the motions that have been filed, the prehearing briefs, 18 these kind of things; not the wealth of information that 19 presumably you folks have. And so how all of this is 20 going to fit in at the end is far less clear to me than 21 perhaps to the rest of you at this point. 22 So two things: One, go ahead and preserve your 23 records. Two, when it comes to documents that we just get 24 a little bit of general testimony about, it's not my 25 intention to go searching through these exhibits to try


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1 and find evidence or information. It's incumbent on the 2 parties to direct me to the relevant portions of those 3 exhibits, and preferably through witness testimony, rather 4 than just in your posthearing submissions. 5 So the fact that -- I don't know what the volume 6 of materials that have been received are. I could go look 7 in the room where they're all stacked up. But I suspect 8 we have many thousands of pages of exhibits or potential 9 exhibits that have been submitted. 10 So, again, having them come into evidence and 11 having them be of use to you to prove your cases may be 12 two separate things. So I want to be clear about that. 13 And again, because I'm ruling a certain way, I'll leave it 14 to folks whether they want to preserve their records or 15 not. 16 But with that in mind, let me go back to No. 11 17 and ask, are there any objections to Exhibit 11? 18 MR. HENDRICKS: No, Your Honor. 19 ALJ SHEDDEN: All right. 11 is then admitted. 20 BY MS. RONALD: 21 Q. No. 12, please. 22 What is this document? 23 A. This is a letter from the State Water 24 Commissioner to the Salt River Valley Water Users' 25 Association, and it has a date of November 2nd, 1928.


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1 Q. What is the letter asking; or what does the 2 letter describe, I'm sorry? 3 A. It is written in response to a request on 4 October 31st, presumably of that same date, 1928, for 5 certified copies of all the filings that have been made by 6 the Salt River Valley Water Users' Association and, also, 7 for a -- together with a copy of the Water Code. 8 Q. Is the State Water Commissioner one of the 9 predecessors to the current Arizona Department of Water 10 Resources? 11 A. Yes. 12 MS. RONALD: It's already been stipulated to, 13 Your Honor, so I'm just going to go through these pieces 14 of correspondence and briefly identify each one of them. 15 BY MS. RONALD: 16 Q. DWR-13, please describe this document. 17 A. This is a letter from the Salt River Valley 18 Water Users' Association to the State Water Commissioner, 19 and it has a date of May 15th, 1929. 20 Q. Is there an attachment? 21 A. Yes. I believe it's the second page of the -- 22 no. Well, yes. It makes reference to the prior 23 correspondence, and it is a response, I believe. 24 Q. So let's look at that attachment. It's on the 25 screen now.


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1 What's the first row of this table; what does it 2 say? 3 A. The first row of -- 4 Q. The very top row, like the title row. 5 A. You mean like "Compiled"? 6 Q. Yes. 7 A. It appears to be compiled January 1, 1927 and 8 corrected March 19th, 1927, and then there is a -- then 9 that's followed by the date May 15th, 1929. 10 Q. And does it list certain storage and power dams? 11 A. Yes, it does. 12 Q. Which ones? 13 A. Roosevelt, Horse Mesa, Mormon Flat, Cave -- it 14 reads Cave Creek, I believe. 15 Q. Uh-huh. 16 A. And Stewart Mountain. 17 Q. And the diversion dams are listed as what? 18 A. Granite Reef and Joint Head. 19 Q. No. 14, please describe this document. 20 A. This is a letter from the Salt River Valley 21 Water Users' Association to the State Water Commissioner, 22 and it has a date of January 23rd, 1930. 23 Q. What's the subject of this letter? 24 A. It is providing certain information in response 25 to a verbal -- what is referred to as a verbal request,


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1 and the information relates to the Salt River Valley 2 Project and the Roosevelt Water Conservation District. 3 Q. DWR-15, please describe this document. 4 A. This is a letter from the State Water 5 Commissioner to the Salt River Valley Water Users' 6 Association, and it has a date of May 15, 1930. 7 Q. Does it relate to certain applications? 8 A. It does. It says that it is related to or in 9 regards applications R-45, R-46, R-71, A-135, A-136, R-72 10 and E-11. 11 Q. Direct your attention to the second paragraph 12 that begins "Inasmuch." Could you just read that 13 paragraph, please? 14 A. "Inasmuch as certain of the dams and reservoirs 15 have been constructed and are now in use, we would request 16 that you advise this department of what disposal you 17 desire made of these filings. They comprise the following 18 applications filed on October 2nd, 1920." 19 Q. You may stop there. Thank you. 20 And then does the letter go on to list the same 21 application numbers as the ones you just mentioned? 22 A. Following the October 2nd, 1920, it lists 23 four of those; and then related to December 12th, 1921, 24 it, at least on this page, lists two more. 25 Q. And then if we go to the second page?


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1 A. And now we see that it lists a third application 2 that was related to the filings on December 12th, 1921. 3 Q. Let's go to 16, please. 4 Please describe this document. 5 A. This is a letter from the Arizona Highway 6 Department to the State Water Commissioner, and it has a 7 date of December 20, 1930. 8 Q. What's the subject of the letter? 9 A. The letter is in response to a request. They 10 are providing, as it says, a copy of a table presented to 11 this office by the Salt River Valley Water Users' 12 Association which shows the generating capacity of the 13 Salt River Project power system. 14 Q. If we could go to the next page of this exhibit. 15 Is this the table that's being referenced in the 16 letter? 17 A. Yes. 18 Q. No. 17, please. 19 Please describe this document. 20 A. This is a letter from the State Water 21 Commissioner to an attorney, and it carries a date of 22 December 30th, 1931. 23 Q. What's the subject of this letter? 24 A. It shows that the State Water Commissioner is 25 providing a copy of what it refers to as a letter this


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1 office wrote to the Salt River Valley Water Users' 2 Association on May 15th, 1930. 3 Q. Was there an answer; did they receive an answer 4 yet to the May 15th, 1930 letter? 5 A. No. In the paragraph it says that "to which no 6 answer has been received." 7 Q. Does the letter close by requesting a response 8 by a certain date? 9 A. It does. It asks that a reply be made on or 10 before January 2nd, 1931, which is actually prior to 11 December 30th, 1931, so I'm assuming they mean 1932. 12 Q. No. 18, please. 13 What is this document? 14 A. This is a letter from the State Water 15 Commissioner to the Salt River Valley Water Users' 16 Association, and has a date of August 2nd -- I mean, I'm 17 sorry, August 22nd, 1932. 18 Q. And what's the subject? 19 A. The subject is, they are enclosing a copy of a 20 letter written by the office of the State Water 21 Commissioner to the Salt River Valley Water Users' 22 Association on May 15th, 1930 and a copy of a letter 23 written December 30th, 1931 to John L. Gust, attorney for 24 the Association. 25 Q. Does the letter indicate whether they received a


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1 reply to that correspondence? 2 A. Yes, it does. It states that they have received 3 no response. 4 Q. No. 19, please. 5 What is this? 6 A. This is a letter from the Salt River Valley 7 Water Users' Association to the State Water Commissioner, 8 and it has a date of August 25th, 1932. 9 Q. What's the subject of this letter? 10 A. The subject of this letter is in reference to 11 the August 22nd letter from the State Water Commissioner. 12 Q. Has there been an answer yet, according to this 13 letter? 14 A. This letter indicates that they do not know what 15 has caused the delay, but suggests that they will find 16 out. 17 Q. No. 20, please. 18 What is this document? 19 A. This is a contract between the Salt River Valley 20 Water Users' Association and the Salt River Project 21 Agricultural Improvement and Power District. It has a 22 date of March 22nd, 1937. 23 Q. Was this a document that was reviewed by you 24 and/or staff related to the processing of the amended 25 applications that are the subject of this proceeding?


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1 A. Yes. 2 MS. RONALD: I would like to move DWR-20 into 3 evidence. 4 MR. HENDRICKS: No objection. 5 ALJ SHEDDEN: All right, 20 is then admitted. 6 BY MS. RONALD: 7 Q. 21. This is just a reminder. We've already 8 talked about this exhibit. If you could scroll down to 9 the bottom, please. This is already admitted into 10 evidence and we talked about it earlier. 11 So let's go to DWR-22. 12 Please describe this document. 13 A. This is a letter from, I believe -- yes, this is 14 from the State Water Commissioner to the Salt River Valley 15 Water Users' Association, and it has a date of 16 October 16th, 1942. 17 Q. What is the subject of this letter? 18 A. This letter is in reference to application 19 No. R-45, which has been filed with the office of the 20 State Water Commissioner, as well as application No. R-46. 21 Q. Can you read? It says, "Also," blank, "to store 22 120,000 acre feet of water in Pine Creek Site." 23 A. Are you asking me to read that? 24 Q. Can you read it, what's been blanked out there, 25 blacked out?


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1 A. Yeah. I believe that says, makes reference to 2 application R-72. Yes, I believe that's what that says. 3 Q. Could it also be making a reference to E-11 as 4 well, potentially? 5 A. The darkened area, from my reading, says 6 application No. R-72. 7 Q. Okay. 8 MR. HENDRICKS: Janet, if you want, the LG-23 is 9 the same one without the highlighting, so you can see it 10 without the darking out. 11 MS. RONALD: Oh, thank you. 12 THE WITNESS: Thank you. 13 MR. HENDRICKS: LG-23. 14 MS. RONALD: If we could pull up LG-23. 15 Sorry, Your Honor, I shouldn't be talking 16 directly to counsel. 17 MR. HENDRICKS: That's the same one, isn't it? 18 MS. RONALD: Yes, it is. 19 THE WITNESS: Yes, and it says application 20 No. R-71. 21 BY MS. RONALD: 22 Q. Thank you. 23 If we go back to DWR-22, basically, what is this 24 letter requesting of the Salt River Valley Water Users' 25 Association?


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1 A. Well, it makes reference to these applications 2 having not been, in its words, pushed by the application. 3 Leads us to believe that the application -- or leads them, 4 at the time, to believe that the application might not be 5 interested in them, and it is requesting a response of 6 what the Association -- of what the interest of the 7 Association is in regards to these applications. 8 Q. If you could please read the paragraph 9 immediately above "Thanking you for your consideration in 10 this connection"? 11 A. Yes. "If there is any good reason why no action 12 should be taken at this time, this department should know 13 it because late next summer the personnel of this 14 department will in all probability be changed in its 15 entirety." 16 Q. Thank you. 17 DWR-23. 18 MR. DEENY: Pardon me. Janet, if nobody has any 19 objection, might I suggest we admit LG-23 in as well? 20 MR. HENDRICKS: We have no objection. 21 MR. DEENY: I figured not. 22 ALJ SHEDDEN: All right. And then LG-23 is then 23 admitted, understanding it's in essence the same as the 24 DWR exhibit, but without the highlighting or 25 strike-through that was making the DWR exhibit difficult


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1 to read. So LG-23 is admitted. 2 MS. RONALD: Thank you. 3 BY MS. RONALD: 4 Q. DWR-23, please. 5 What is this? 6 A. This is a letter from the State Water 7 Commissioner to the United States Bureau of Reclamation, 8 and it has a date of February 27, 1945. 9 Q. I'm going to direct your attention to the first 10 paragraph. Tell me if I'm reading this correctly. "In 11 accordance with your request to Mr. O.C. Williams, State 12 Land Commissioner of Arizona, we have prepared, and attach 13 hereto, abstracts of the filings of the Salt River Valley 14 Water Users' Association for permit to appropriate and 15 store public waters from the Salt and Verde Rivers for the 16 purposes of power and irrigation." Did I read that 17 correctly? 18 A. Yes. 19 Q. Was there a reference to the State Land 20 Commissioner in that paragraph? 21 A. Yes, there is. 22 Q. I believe you testified that this is from the 23 State Water Commissioner to the Bureau of Reclamation. 24 Would you like to revise your answer? 25 A. Yes. Yes, at some point around this time,


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1 responsibility and authority related to water rights was 2 transferred to the State Land Commissioner's office, and I 3 believe if we scroll down, we'll see that this is a letter 4 from the State Land Commissioner's office, not the 5 State -- yes, this is a letter from an engineer for the 6 Water Division within the State Land Department, yes. 7 Q. Does this letter refer to applications 45, 46, 8 135, 136, R-71, R-72 and E-11? 9 A. If we scroll up, we'll see that it does relate 10 to R-45, R-46, 135, 136, R-71, R-72 and E-11, yes. 11 Q. The paragraph that's above -- I'm sorry, the 12 second full paragraph, does it indicate whether any action 13 has been taken on these applications? 14 A. It indicates that no action. 15 Q. Does it indicate why not? 16 A. It relates -- it makes reference to due to the 17 fact that the Salt River Valley Water Users' Association 18 has not responded to the letters on file that were written 19 by the former State Water Commissioners. 20 Q. At the bottom of that letter, does it indicate 21 there's an attachment? 22 A. Could we scroll down? 23 Oh, yes. Well, it says "Abstract attached," 24 yes. 25 Q. Right. Okay, and so the second page of this


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1 exhibit, is that an abstract of the application 2 numbers that were referenced in the letter? 3 A. Yes, it is. 4 Q. 26. I'm sorry, 24. Jumped ahead. 5 Please describe this document. 6 A. This is a letter from the State Land 7 Commissioner to the Salt River Project, Watershed 8 Division, and has a date of July 27, 1976. 9 Q. Please look at the second paragraph and read 10 what it says. 11 A. "Enclosed, please find copies of the above 12 applications as filed December 12, 1921. Our records 13 indicate that no further definitive action took place 14 after that date." 15 Q. What applications are being referred to in the 16 second paragraph? 17 A. The applications referred to are stated in the 18 prior paragraph as R-71, R-72 and E-11. 19 Q. And the next to the last paragraph that begins 20 with the words "In the event," what does that say? 21 A. "In the event [that] you are no longer 22 interested and wish to withdraw the [applications], please 23 sign the enclosed Request For Cancellation forms and 24 return them to this office." 25 Q. Do you know whether any request for cancellation


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1 forms were ever -- did you find any request for 2 cancellation forms in the documentation that's in the 3 Department's files concerning these amended applications? 4 A. No. 5 Q. DWR-25. 6 Please describe this document. 7 A. This is a letter from the Salt River Project to 8 the Arizona State Land Department, and it has a date of 9 July 28th, 1976. 10 Q. And this is a short letter. Would you please 11 read it? 12 A. It says, "The Salt River Project does not want 13 to want cancel Applications R-71, R-72 and enlargement 14 No. E-11 for Permit to Appropriate Water; but, instead, 15 desires to perfect them. Please instruct us regarding the 16 procedure required to perfect the applications." 17 Q. DWR-26. 18 What is this? 19 A. This is a letter from the Arizona State Land 20 Department to the Salt River Project, and it has a date of 21 August 27, 1976. 22 Q. Do you recall the date of the last letter you 23 just read from? Should we pull it up? 24 A. Yes. 25 Q. Let's go look at 25 again.


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1 A. July 28, 1926 (sic), so roughly one month prior. 2 Q. And then prior to that, what was -- I'm sorry, I 3 should have gone back to 24, I think. 4 No, 23. If we would look at 23, what's the date 5 of that document? 6 A. That is February 27, 1945. 7 Q. And then if we look at No. 24, what's the date? 8 A. July 27, 1976. So roughly 31 years, 31 and a 9 half years. 10 Q. Did you and/or Department staff do an intensive 11 search to try to locate all correspondence that was 12 related to the processing of these applications? 13 A. We performed a search to find all relevant 14 information regarding and related to these applications. 15 Whether or not it was an intensive search would be, I 16 guess, you know, a subjective characterization; but I 17 would consider that we performed an intensive search, yes. 18 Q. To your knowledge, the documents that I'm going 19 through, and we still have a few left, are the extent of 20 the historical correspondence? 21 A. It is the extent of the historical 22 correspondence for which we were able to find, yes. 23 Q. So let's go back to where I stopped. We just 24 went through 25. We're on 26. 25 So what is this?


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1 A. Are we on -- 2 Q. We're on Exhibit 26. 3 A. 26? 4 Q. Yes. 5 A. Okay. This was a letter from the State Land 6 Department to the Salt River Project, August 27th, 1976, 7 regarding applications R-71, R-72 and E-11, and it is in 8 response to the request for information on how to perfect 9 these applications and includes -- well, and it says 10 that it acknowledges receipt of that request and states 11 that a response to that request is undergoing further 12 consideration and that they will be kept advised. 13 Q. This brings us to DWR-27. 14 What is this? 15 A. This is a letter from the Arizona Department of 16 Water Resources to the United States Bureau of 17 Reclamation, and it has a date of July 29, 1993. No. 18 Well -- 19 Q. Mike -- I'm sorry. Dr. Johnson, would you try 20 that again? Who is the sender and who is the recipient on 21 this letter? 22 A. Okay, I may have -- yes, that's right. I'm 23 sorry. 24 This is a letter from the Department of 25 Interior, Bureau of Reclamation to the Department of Water


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1 Resources, and it has a date of July 28th, 1993. 1993 I 2 said, correct? Yes. 3 Q. And what does this letter relate to? 4 A. This is a letter by which the Bureau of 5 Reclamation is withdrawing four statements of claimant 6 that had previously been filed. 7 Q. Related to what? 8 A. To the Gila River adjudication. 9 Q. For which reservoirs? 10 A. For the Salt River Project reservoirs. 11 Q. Is this a document that was reviewed by you 12 and/or Department staff in the processing of the amended 13 applications related to this proceeding? 14 A. Yes. 15 MS. RONALD: I move 27 into evidence. 16 ALJ SHEDDEN: Is there any objection to DWR-27? 17 MR. HENDRICKS: No, Your Honor. 18 ALJ SHEDDEN: All right. 27 is then admitted. 19 BY MS. RONALD: 20 Q. DWR-28, please. If you could scroll down a 21 little bit. 22 What is this? 23 A. This is a letter from the Arizona Department of 24 Water Resources to legal counsel for the Salt River Valley 25 Water Users' Association, and it has a date of


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1 August 27th, 1993. 2 Q. What's the subject of this letter? 3 A. The subject is in regards to applications R-71, 4 R-72 and E-11. 5 Q. What does the letter indicate? 6 A. The letter indicates that the latest 7 correspondence in regards to these applications was dated 8 in 1976 and asks the Salt River Valley Water Users' 9 Association to advise the Department of Water Resources as 10 to whether they wish to continue with these applications. 11 Q. DWR-30, please. 12 I'm sorry, DWR-29. 13 Please describe this document. 14 A. This is a response to the prior correspondence 15 from legal counsel for the Salt River Valley Water Users' 16 Association to the Arizona Department of Water Resources, 17 and it has a date of November 18th, 1993. 18 Q. What is the subject of this letter? 19 A. The subject of the letter is in regards to the 20 same three applications, R-71, 72 and E-11. 21 Q. What does the letter indicate? 22 A. The letter indicates that they acknowledge the 23 prior letter that was dated August 27th, 1993, and they 24 are working with their client to determine specifically 25 what should be done with these applications and requests


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1 that the matter be kept open until they have a chance to 2 make that response. 3 Q. And now DWR-30. 4 Please identify this document. 5 A. This is a follow-up to that last correspondence 6 from counsel for the SRP to the Arizona Department of 7 Water Resources, and it has a date of March 1st, 1994. 8 Q. If you would please focus on the first 9 paragraph, and read the second sentence that begins with 10 the words "The Association." 11 A. "The Association, consistent with its previous 12 instructions to the Arizona State Water Commission and the 13 Arizona State Land Department, still desires to perfect 14 Applications Nos. R-71, R-72 and E-11 which remain on file 15 in your office." 16 Q. And if you could please read the first three 17 sentences of the next paragraph. 18 A. "Moreover, the Association also desires to 19 perfect Application Nos. R-30, R-45, R-46, A-135 and A-136 20 which it believes were improperly inactivated or canceled 21 without the Association's consent. We have reviewed our 22 correspondence, as well as the Department's, concerning 23 these applications and have been unable to locate any 24 explanation or legally permissible rationale for the 25 inactivation or cancellation of these Applications without


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1 the Association's consent." 2 Q. If you could stop there. Thank you. 3 If we would go to Page 2 of this letter, and 4 just read the top paragraph. 5 A. "Accordingly, the Department is requested to 6 reactivate Application Nos. R-30, R-45, R-46, A-135, and 7 A-136, to process the enclosed amendments to these 8 Applications (as well as those to Application Nos. R-71, 9 R-72 and E-11), and to issue the Permits and Certificates 10 to the Association relating to the amended Applications." 11 Q. Were there amended applications enclosed with 12 this letter? 13 A. Yes. 14 Q. I would like to turn to DWR-31. 15 MR. DEENY: Judge, we've been going for about an 16 hour and a half, and I was wondering if maybe now might be 17 a good time to take a ten-minute break and then come in 18 and finish. 19 ALJ SHEDDEN: Yeah, it is. Anyone object then 20 to taking a break at this point? 21 MR. HENDRICKS: No, Your Honor. 22 ALJ SHEDDEN: All right. Why don't we take a 23 break until we'll call it, as he said, ten minutes, and 24 we'll pick it up right about three or five after 11:00. 25 (A recess was taken from 10:54 a.m. to


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1 11:06 a.m.) 2 ALJ SHEDDEN: All right, we're back on the 3 record. 4 Let me just make sure I got my notes correct 5 here when we were going through the exhibits for 6 stipulation. I guess where I think I may have gotten off 7 base was the very last numbers that were referenced. I 8 wrote down, Ms. Ronald, that you said 134 to 136, but then 9 I heard you say that 146 had been stipulated to. 10 So should it have been 134 to 136 or perhaps 134 11 to 146? 12 MS. RONALD: Your Honor, it's still 134 to 136, 13 and I believe that 146 has been stipulated to, but I 14 forgot to list it when I was going through the process. 15 MR. HENDRICKS: It was the last one that was 16 just -- it's the paper one we got this morning that wasn't 17 on the list until today. 18 ALJ SHEDDEN: Right. So it's either stip -- it 19 is stipulated to admission then? 20 MR. HENDRICKS: Yeah, the one they gave us this 21 morning. 22 ALJ SHEDDEN: Okay. So 146 is admitted, and 23 then otherwise my recordkeeping was correct. 24 All right. With that then, Ms. Ronald, you can 25 pick up your questions.


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1 MS. RONALD: Thank you, Your Honor. 2 BY MS. RONALD: 3 Q. DWR-31 has been put on the screen. 4 Who created this? 5 A. This table was created by myself, along with 6 other ADWR staff. 7 Q. What's included in this table, just generally? 8 A. What is included in this table is a listing of 9 the original and amended applications, as well as the 10 facilities to which they relate, including, you know, 11 certain other additional relevant information. 12 Q. Without saying specifically what, what types of 13 relevant information are you talking about? 14 A. Volumes, years of construction and other 15 activities, which applications relate to which facilities 16 and so forth. 17 Q. Is this chart split into half, horizontally? 18 A. Yes, it is. The top half relate to the original 19 applications reflecting the planned reclamation project as 20 of the time of their filing, and the lower half provides 21 information related to the amended applications, which 22 reflect the as-constructed reclamation project. 23 Q. Does the top half of this chart reflect the 24 information in the original applications that you already 25 testified to?


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1 A. Yes. 2 Q. The bottom half of the chart, there's some 3 volumes indicated over on the far right column. Has there 4 been any testimony regarding that information yet? 5 A. No. 6 Q. Do you know where that information comes from or 7 came from for purposes of this chart? 8 A. For purposes of this chart, that came -- those 9 volumes came from the information included in the amended 10 applications. 11 Q. The amended applications that were filed in '94, 12 or perhaps later? 13 A. No. I'm not sure how to maybe refer to them, 14 but akin to the final amended applications. 15 MS. RONALD: I'm not going to move this into 16 evidence yet, Your Honor, but I would like to be able to 17 use this chart for demonstrative purposes. I have an 18 oversized exhibit that I would like to put on the easel so 19 that it can be referred to throughout testimony. 20 ALJ SHEDDEN: All right. And before we see if 21 there's any response to that proposition, if you will, 22 I'll let folks know that if I'm not mistaken, the same 23 chart was included in DWR's prehearing brief, correct? 24 MS. RONALD: That's correct. 25 ALJ SHEDDEN: All right. And I will let you


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1 know then that I started -- I made a separate copy of that 2 chart and started using it to help myself understand the 3 applications and the various physical projects, the dams 4 or whatnot, the canals. 5 Similarly, the Lower Gila's prehearing brief had 6 not a table, but I guess -- or not a chart like this, but 7 a table showing application number, original purpose, 8 amended purpose, sort of drawing where they saw some 9 distinctions between the matters. I also made a separate 10 copy of that to try and help myself get a handle, if you 11 will, on the evidence that would come in. 12 Neither of them are, of course, evidence until 13 we hear it during the hearing; but with that advisement 14 for your own benefits, to use as you see fit, is there 15 going to be any objection to Ms. Ronald using the 16 demonstrative version, the large version of DWR-31, prior 17 to its being offered into evidence? 18 MR. HENDRICKS: Without trying to be 19 objectionist or obstructive, yes. I have a -- I don't 20 think it should be used as demonstrative because we're 21 using it for substantive purposes and that's not the 22 purpose of a demonstrative exhibit. 23 As to its admission, though, I only have two 24 questions; and if they got answered, I think I wouldn't 25 have an objection to admission, and then we could use it


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1 substantively. 2 ALJ SHEDDEN: All right. Then assuming you 3 don't mind, Ms. Ronald, should we let Mr. Hendricks ask -- 4 any objection to letting him ask his questions? 5 MS. RONALD: Yes, Your Honor. 6 ALJ SHEDDEN: No objection? 7 MS. RONALD: No objection. That's fine. 8 ALJ SHEDDEN: Okay. I changed form in the 9 middle of my question to you there. 10 Go ahead then. 11 MR. HENDRICKS: Dr. Johnson, when was Exhibit 31 12 prepared? 13 THE WITNESS: Exhibit 31 was a working table 14 that was prepared during our review of these amended 15 applications and was finalized with some additional 16 clarifying information and presentational purposes prior 17 to this hearing. 18 MR. HENDRICKS: Okay, and that was actually my 19 second question, was why was it prepared; and I take it 20 from your answer it was prepared initially as part of the 21 review and subsequently as part of the preparation for 22 litigation? 23 THE WITNESS: It was prepared for our use during 24 review of these applications and then finalized in its 25 present form for demonstrative purposes, I guess.


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1 MR. HENDRICKS: For this hearing? 2 THE WITNESS: In advance of this hearing, yes. 3 MR. HENDRICKS: Your Honor, I have no objection 4 to its admission at this point. 5 ALJ SHEDDEN: All right. So 31 is admitted, and 6 then obviously we can use the big version of that, if 7 necessary, or if you care to. 8 MS. RONALD: Yes. Thank you. 9 BY MS. RONALD: 10 Q. Let's go to Paragraph 32. I'm sorry, DWR-32. 11 I'm fine. 12 Please identify this letter. 13 A. This is a letter from the Arizona Department of 14 Water Resources to legal counsel for the Salt River 15 Project. It has a date of July 2nd, 1998. 16 Q. And what applications does it relate to? 17 A. It relates to applications R-30, R-46, R-71, 18 R-72, A-135, A-136, and E-11. 19 Q. Is that the complete set of original 20 applications that were filed related to the amendments in 21 this proceeding? 22 A. I believe so, yes. 23 Q. Is maybe one missing? 24 A. Yeah, that's what I was thinking. I counted 25 seven.


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1 Yes, the R-45 is not here. Well, R-45 is not 2 listed in regards to, but I see it in the first paragraph, 3 so... 4 Q. Thank you. 5 A. Sorry. 6 Q. So what is enclosed with this letter? 7 A. What are enclosed with this letter are draft 8 notices for each of the amended applications. 9 Q. Is there a mailing list that's also 10 enclosed? 11 A. Yes, thank you, there is also a mailing list 12 enclosed. 13 Q. If you would look at the second paragraph, and 14 read the second sentence, please. 15 A. "The Department requests that you review the 16 notices of amended applications for accuracy." 17 Q. Is that a Departmental practice in a case such 18 as this? 19 A. Yes, it is the practice of the Department that 20 the applicant review public notices for pending 21 applications to ensure their accuracy and completeness 22 prior to being noticed to the public. 23 Q. So if he could please turn to Page 6 of this 24 exhibit, and scroll down underneath where it says 25 "Location of reservoir."


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1 Okay, there's a paragraph underneath "Location 2 of reservoir" that begins "This application amends 3 application R-30." Do you see that? 4 A. Yes, I do. 5 Q. Could you please read the last sentence of this 6 paragraph? 7 A. Italicized? 8 Q. Yes. 9 A. Okay. This shows parenthetically, "Note: 10 Construction of Mormon Flat Dam was completed in 1925 by 11 the U.S. Bureau of Reclamation in Section 5, Township 2 12 North, Range 9 East. On January 1, 1927, the Department 13 of Water Resources canceled application R-30 because 14 Mormon Flat Dam had already been constructed." 15 Q. Did you previously testify that this was a draft 16 notice? 17 A. Yes, I did. 18 Q. And if we scroll up to the top of this document, 19 does it say "Horse Mesa Draft"? 20 A. Yes, it says, "Horse Mesa Draft, 6 of '98." 21 Q. So the last sentence that you just read, "On 22 January 1st, 1927, the Department of Water Resources 23 canceled application R-30 because Mormon Flat Dam had 24 already been constructed," is that what you read? 25 A. Yes, I did.


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1 Q. Is that an accurate statement? 2 A. I would say that that is not a precisely 3 accurate statement, no. 4 Q. Why not? 5 A. Well, for one thing, the Department of Water 6 Resources did not exist in 1927; and additionally, to say 7 that application R-30 was canceled suggests that we know 8 with certainty what happened in 1927, which we don't. 9 What we do know is that there are notations of 10 the word "Cancelled" associated with the application. 11 Q. There are several notices attached to this 12 letter; do you agree? 13 A. Yes. 14 Q. And is there similar language about 15 cancellations in several of these notices? 16 A. Yes, there is other similarly imprecise draft 17 language, yes. 18 Q. DWR-33, please. 19 Please describe this document. 20 A. This is a letter from counsel for Salt River 21 Project to counsel for the Department of Water Resources, 22 and it has a date of September 17, 1998. 23 Q. And what does the first paragraph of this letter 24 indicate? 25 A. It indicates that there are revised draft


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1 notices -- I'm adding the word draft. There are revised 2 notices of amended applications being returned to the 3 Department of Water Resources for a review. 4 Q. And were those revised notices attached to this 5 or enclosed with this particular letter? 6 A. Yes. 7 Q. DWR-34. 8 Please describe this document. 9 A. This is a letter from counsel for the Arizona 10 Department of Water Resources to counsel for the Salt 11 River Project, and it has a date of October 30, 1998. 12 Q. And what's the subject of this letter? 13 A. The subject of the letter are the series of 14 amended applications, R-30, R-45, R-46, R-71, R-72, A-135, 15 A-136 and E-11. 16 Q. What does the second paragraph of this letter 17 indicate? 18 A. The first paragraph under the word "Notices"? 19 Q. Yes. 20 A. Okay. It indicates that we generally agreed 21 with the amended notices as they had been recently revised 22 by SRP, and notices would be ready to be issued following 23 a certain number, three, of steps that were remaining to 24 be completed. 25 Q. Does the letter describe the procedure that


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1 would need to be followed once the notice -- in order to 2 effect appropriate notice of the applications? 3 A. Yes, it does. 4 Q. Does it describe that it needs to be posted and 5 published in newspapers of general circulation? 6 A. It does, yes. 7 Q. And does it require the applicant to file an 8 affidavit that it's been published and posted as required? 9 A. It does, yes. 10 Q. If we could look at Page 2 of the letter, 11 there's the heading "Issues." Do you see that? 12 A. I do. 13 Q. And if we could just scroll through this letter 14 one page at a time, on Page 2, in Paragraph No. 1, what is 15 the topic of that? 16 A. What is listed as issue No. 1 in bold, it says 17 "E-11." So these are issues to be resolved related to 18 amended application E-11. 19 Q. Okay. Let's look at Page 3. Does that continue 20 onto Page 3? 21 A. It does. 22 Q. Let's look at Page 4. And in Paragraph 2, what 23 application is listed there? 24 A. R-30. 25 Q. And then moving down that page, what are the


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1 rest of the applications about which issues have been 2 raised? 3 A. R-46. I'm sorry. R-45, then followed by R-46, 4 R-71, R-72. 5 Q. And if we could go to the next page, please. 6 A. A-135 and A-136. 7 Q. And down at the bottom there's a Paragraph 9, 8 which references R-30, R-45, A-135 and A-136; do you see 9 that? 10 A. I do. 11 Q. Could you please read that paragraph? 12 A. All right. It says, "As you are aware, these 13 applications were canceled by the Department some time 14 ago. Application R-30 was canceled in 1927 because Mormon 15 Flat dam had already been constructed. Applications R-45, 16 R-46, A-135 and A-136 were canceled after 1945 for 17 undisclosed reasons. I have a copy of your letter of 18 September 23rd, 1994 to the Department which describes 19 SRP's position on these cancellations. The Department is 20 continuing to research this issue." 21 Q. Do you agree with the wording of that paragraph? 22 A. I think similar to the draft notices, the 23 language, strictly speaking, the language of this 24 paragraph is imprecise. 25 Q. Would you please repeat your reason for thinking


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1 that? 2 A. Well, for one thing, it says that these 3 applications were canceled by the Department some time 4 ago; and again, the Department of Water Resources did not 5 exist at the time that these applications were filed and 6 the subject years. 7 And again, we are using -- the paragraph is 8 using the word "canceled" in a definitive way, and that 9 implies that we know with certainty what occurred in 1927 10 and prior or -- and after 1945, which we don't. What we 11 have are records, some of which have handwritten notations 12 on them, some of them stamped. And so strictly speaking, 13 to be precisely accurate, that's what we know. 14 Q. DWR-35. 15 Please identify this document. 16 A. This is a letter from counsel for the SRP to 17 counsel for the Department of Water Resources. It has a 18 date of February 3rd, 1999. 19 Q. Let's go ahead and scroll to the second page, 20 just so that we can see the top. It says it's Page 2 of 9 21 at the top in the upper left; is that correct? 22 A. It does. 23 Q. So this is a nine-page letter? 24 A. Yes. 25 Q. And is this letter responding to an earlier


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1 letter? 2 Go back to Page 1, please. 3 Please look at the first paragraph. 4 A. Yes, this letter is in response to a letter from 5 counsel for the Department of Water Resources which was 6 dated October 30, 1998. 7 Q. Are there any enclosures with this letter? 8 A. I believe there probably were, but I want to 9 confirm. 10 Q. So what does the second paragraph say? 11 A. Yes, the second paragraph says, "I have --" that 12 a revised map of Bartlett Dam and Reservoir has been 13 enclosed, as was requested. And they also -- I think 14 those are -- I think that's the only enclosure. The 15 paragraph makes reference to the draft mailing list, but 16 I'm not certain off the top of my head whether or not a 17 revised mailing list was attached or whether or not these 18 comments are simply made. 19 Q. So this letter is in response to the 20 October 30th, 1998 letter that we just talked about, that 21 listed all those issues; is that correct? 22 A. Yes, it is. 23 Q. I would like to direct your attention to Page 2 24 of this letter, the last paragraph. A little more than 25 halfway down, there's a sentence that begins "The


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1 facilities." Could you read that, please, through the end 2 of the paragraph? 3 A. "The facilities which are the subjects of these 4 original applications were intended, among other purposes, 5 to permit SRP to more fully regulate its releases from 6 Roosevelt for power uses without jeopardizing the 7 subsequent use of that water for other downstream 8 beneficial uses by SRP. It is our understanding that this 9 belief in Roosevelt's large storage capacity is the basis 10 for various statements in some of [the] applications that 11 "this application does not contemplate an appropriation of 12 additional water for irrigation" (see A-135), yet also 13 refers to new uses for power and municipal uses, (see 14 A-135, A-136) as well as of an intention to supplement 15 SRP's available water supply in times of drought (see 16 R-45, R-46 and E-11)." 17 Q. If you had to characterize what you just read, 18 how would do that? How would you describe what you just 19 read, in general? 20 MR. HENDRICKS: Objection, foundation. The 21 document speaks for itself, and he's not the author. 22 ALJ SHEDDEN: All right. I'm going to overrule 23 the objection, with the understanding, and I'll just ask 24 you to correct me if I'm wrong, Ms. Ronald, because 25 Dr. Johnson is the primary person from DWR who worked on


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1 these permits, his understanding of what was being 2 conveyed in the document would be relevant to DWR's 3 granting of the applications, correct? 4 MS. RONALD: Correct. 5 ALJ SHEDDEN: All right. And the document says 6 what it says, as we know; but with regard to this 7 witness's understanding of it, I'm going to go ahead and 8 allow him to answer the question. 9 THE WITNESS: Could you repeat the question, 10 please? 11 BY MS. RONALD: 12 Q. Sure. 13 Based on what you just read, how would you 14 characterize the information that's included in those 15 sentences vis-à-vis your review of the amended 16 applications in this proceeding? 17 A. Okay, well, this portion of this paragraph is an 18 attempt to clarify the SRP understanding of a statement 19 which appears on one or more of these applications related 20 to the application not contemplating an appropriation of 21 additional water, and clarifying that it was not seeking 22 an appropriation for additional water for irrigation, 23 while at the same time, it does contemplate new uses for 24 power and municipal, new uses of power and municipal, as 25 well as the intention of augmenting the available water


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1 supply in times of drought. 2 Q. Thank you. 3 Going back to Page 1, at the bottom of the page 4 there's a paragraph that begins with the No. 1 and then 5 (a). This is in response -- is this in response to an 6 issue that was raised in the prior letter sent to counsel 7 for SRP? 8 A. Yes, I believe the numbering system is 9 consistent with the numbering system of issues to be 10 resolved from the Department of Water Resources letter, I 11 guess. 12 Q. Does SRP maintain that E-11 is an appropriate 13 application to use to seek a permit to appropriate water? 14 A. Yes. 15 Q. Going to Page 3 of the letter, the second 16 paragraph, read that first sentence, please. 17 A. I can't see the top of the page. Is the second 18 paragraph "With respect to"? 19 Q. It's one lower. 20 A. Okay, yeah, the second paragraph. 21 "Moreover, based [on] our cursory review of the 22 Department's files, it is clear that the Department has 23 regularly permitted similar applications to the amended as 24 plans for the proposed facilities evolve, even when the 25 proposed facility is moved from one watershed location to


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1 another or when additional facilities are included. For 2 example, on August 22nd, 1966, the United States Bureau of 3 Reclamation filed an application for a permit to 4 appropriate public waters [for] the State of Arizona 5 and/or to construct Orme Dam on the Salt River and [store 6 for] beneficial use (Application R-2517). The site for 7 Orme Dam in the 1966 application was "at the site of the 8 existing Granite Reef diversion structure...."" 9 Q. Thank you. 10 Does the next paragraph after that indicate that 11 that application R-2517 was subsequently amended? 12 A. It does, yes. 13 Q. And then the next paragraph after that, does it 14 indicate that that same application was amended a second 15 time? 16 A. It does, yes. 17 Q. And then the paragraph after that, does it 18 indicate that there was yet a third amendment to this 19 application? 20 A. It does. 21 Q. And the paragraph after that, does it indicate 22 that the application, which was filed in 1966, was 23 ultimately granted by order dated April 11th, 1996? 24 A. Yes. 25 Q. How many years is that between the date of the


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1 application and the date of the Director's decision? 2 A. 30 years. 3 Q. And how many amendments were there in between? 4 A. Three. 5 Q. Turn your attention to Page 5 of the letter, at 6 the bottom, please. It's the paragraph that begins "With 7 respect to your question concerning amended application 8 E-11's reference to power as a beneficial use." Do you 9 see that language? 10 A. I do. 11 Q. Is it SRP's position that they don't believe 12 that the statute 45-162 is applicable to the applications? 13 A. Yes, it is. 14 Q. What is the Department's position with respect 15 to the applicability of 45-162 to these applications, the 16 amended applications? 17 A. The Department's position is that these 18 applications are not yet permitted or certificated, and I 19 don't have my book of water law in front of me, but I 20 believe that is the trigger for 45-162. 21 Q. Thank you. 22 Page 6, Paragraph 1(g), does that indicate that 23 a revised map of the Salt River Reservoir District was 24 enclosed with this letter? 25 A. It does, yes.


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1 Q. Page 7, top of the page, above the table, first 2 full sentence that starts with the word "We," would you 3 please read that, just that sentence? 4 A. "We have enclosed the following chart 5 identifying the non-power uses at the dam sites together 6 with maps showing the places of use." 7 Q. Were these non-power uses at the dam sites 8 included in the amended applications at this point in 9 time? 10 A. At this point in time I believe they were. 11 Q. Would you read the last sentence above the 12 table? 13 A. "If after reviewing this information you believe 14 it is necessary for us to formally amend the applications 15 to reflect these uses, please advise us and we will do 16 so." 17 Q. Would you like to revisit your answer to the 18 prior question? 19 A. At this time those uses were not part of the 20 amended application, no. 21 Q. Direct your attention to 2(a) on that page, 22 which is further down. This is in response, again, to a 23 letter that had been sent to them previously; is that 24 correct? 25 A. Yes, it is.


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1 Q. So there's no easy way to get at this, so I'm 2 just going to have you read 2(a), please. 3 A. Okay. "With respect to your questions 4 concerning the inclusion of Horse Mesa Dam in Amended 5 Application R-30, it is apparent from the proposed 6 reservoir capacity for Mormon Flat Dam as stated in the 7 original application that it would have encompassed not 8 only the existing Mormon Flat Dam but also the existing 9 Horse Mesa Dam and Reservoir facilities. That is the 10 reason for including Horse Mesa Dam in that amended 11 application." 12 Q. If you would like to look at the chart that 13 we've enlarged on the easel, what's the -- can you read 14 that from where you are? 15 A. I can, yes. 16 Q. Okay. And for Mormon Flat Dam in the original 17 application R-30, what is the quantity listed there? 18 A. 400,000 acre-feet. 19 Q. And what is the quantity listed for Mormon Flat 20 Dam as ultimately constructed? 21 A. Mormon Flat Dam, as ultimately constructed, had 22 an estimated reservoir capacity as of 2009 of 57,852 23 acre-feet. Thank you. 24 Q. And then Horse Mesa Dam, as constructed, what is 25 its approximate storage?


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1 A. Its storage as estimated in 2009 was 245,138 2 acre-feet. 3 Q. Is the sum of 57,852 acre-feet plus 245,138 4 acre-feet less than 400,000 acre-feet? 5 A. Yes, it is. 6 Q. Okay. Let's move to DWR-36. 7 Please identify this document. 8 A. This is a letter from counsel for the Arizona 9 Department of Water Resources to counsel for SRP, and it 10 is dated June 11th, 1999. 11 Q. What does the letter indicate? 12 A. The letter indicates that there have been -- 13 that there has been correspondence exchanged between the 14 Department of Water Resources and SRP in relation to the 15 above -- to the subject amended applications and, 16 basically, that we would continue engaged in these 17 discussions towards resolving the issues that had been 18 identified and to effect a noticing of the amended 19 applications to the public. 20 Q. Does the letter indicate that the Department and 21 SRP were trying to schedule a meeting for further 22 discussions? 23 A. It does. 24 Q. And does the letter indicate that SRP wanted to 25 resolve as many legal issues as possible before the


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1 applications were actually noticed? 2 A. Yes, it does. 3 Q. Okay, 37. 4 What is this? 5 A. This is a letter from the Salt River Project to 6 the Arizona Department of Water Resources, and it is dated 7 August 16th, 1999. 8 Q. And what's the subject of the letter? 9 A. The subject of the letter is that enclosed there 10 is a map of SRP's water service area, which basically just 11 shows their transmission and distribution system. 12 Q. 38, please. 13 Oh, I'm sorry. Thank you. 14 MS. RONALD: 37 was not stipulated to, and the 15 letter does not include the attachment. 16 MR. HENDRICKS: And that was the objection, is I 17 wanted to see if there was a -- it didn't have the 18 attachment. 19 ALJ SHEDDEN: And let me ask you then, 20 Ms. Ronald, is it your intention at this point to just 21 move the letter, understanding we don't have the 22 attachment, or to see if the attachment can be located? 23 MS. RONALD: Just move the letter, Your Honor. 24 ALJ SHEDDEN: All right. Understanding that 37 25 is what it is without the attachment, is there any


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1 objection to 37? 2 MR. HENDRICKS: With that understanding, no, 3 Your Honor. 4 ALJ SHEDDEN: All right. So 37 is then 5 admitted. 6 Let me ask you, Ms. Ronald, before perhaps 7 moving to a new exhibit, we're almost at ten to 12:00. Is 8 this a good breaking point for you, or do you want to tie 9 up some things before lunch? 10 MS. RONALD: This is fine, Your Honor. 11 And just for completeness purposes, if you will, 12 the LG Water Users also listed this same exhibit, LG-55, I 13 believe, but it didn't have the map either. 14 ALJ SHEDDEN: All right. So why don't we take 15 an hour and 15 minutes for lunch. We'll reconvene at five 16 minutes after 1:00. 17 (A lunch recess was taken from 11:50 a.m. 18 to 1:09 p.m.) 19 ALJ SHEDDEN: We're back from lunch, back on the 20 record. 21 Let me just let folks know the webmaster has 22 updated the exhibit list in two ways: In theory, 23 everything that was filed as of this morning has now been 24 added to that list. So that would include, for example, 25 DWR-146. I don't know if there were others.


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1 Two, I entered the exhibits that I believe were 2 admitted already. Apparently I missed No. 1 on that list, 3 and I will get that corrected and updated. 4 What I would also suggest that folks be doing as 5 we move forward during the hearing is, as the master list, 6 if you will, on the internet gets updated or when we come 7 back from a break, like we just did, if you note that I've 8 made an error and either added one that shouldn't be or, 9 as the case is here, neglected to add one that should be 10 shown as admitted, and we haven't had any that have been 11 denied as yet, the same kind of thing, the second column 12 over will reflect any that are denied admission; but if 13 you see errors like that, bring them to my attention, and 14 we'll try and get them squared away. 15 So with that, unless there are any issues that 16 any of you feel we need to address, I can turn it back to 17 Ms. Ronald to pick up questioning as you see fit. 18 MS. RONALD: Thank you, Your Honor. 19 I would like to complete the record by adding an 20 exhibit from the LG list at this point. In 21 Exhibit DWR-34, at Page 5, Paragraph 9, which the witness 22 read into the record, there is a reference to a letter 23 dated September 23rd, 1994, and that's a letter to the 24 Department from SRP. And for unknown reasons, oversight, 25 whatever, this particular letter dated September 23rd,


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1 1994 did not end up in our list of exhibits; but it does 2 exist, and the LG Water Users have put it in their list of 3 exhibits as LG-45. And so I just wanted to clarify that. 4 ALJ SHEDDEN: And it's your intention to offer 5 LG-45 at this point, correct? 6 MS. RONALD: Yes. 7 ALJ SHEDDEN: All right. Is there any objection 8 to LG-45? 9 MR. HENDRICKS: No, Your Honor. 10 MR. DEENY: None. 11 ALJ SHEDDEN: No, all right. LG-45 is then 12 admitted. 13 MS. RONALD: Thank you. 14 BY MS. RONALD: 15 Q. I believe that we left with DWR-38. 16 MS. RONALD: DWR. 17 MS. KLOBAS: Sorry. 18 BY MS. RONALD: 19 Q. Could you please identify this document? 20 A. This is a letter from counsel for the Department 21 of Water Resources to counsel for SRP, and it has a date 22 of May 10th, 2000. 23 Q. And what's the subject of this letter? 24 A. The subject of this letter is the same set of 25 amended applications as we've been discussing, and...


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1 Q. What does the first line of the first paragraph 2 say? Please read it. 3 A. "Based on our prior correspondence and meetings, 4 the [notice] for the above-referenced applications have 5 been --" I'm sorry, "the notices for the above-referenced 6 applications have been redrafted." 7 Q. And then the last sentence, please, the last two 8 sentences of that same paragraph. 9 A. Can I see them? 10 Q. Yes. 11 A. "Please note that the new language incorporates 12 most of the changes previously suggested by SRP with the 13 exception of the introductory paragraph. A copy of each 14 of these notices is enclosed, and is being sent via e-mail 15 to facilitate SRP's review." 16 Q. Is this part of the Department's practice to 17 send these draft notices for review by the applicant? 18 A. Yes. I think as I said previously, the 19 Department wants to ensure always that notices made to the 20 public regarding pending filings are as accurate and 21 complete as possible, and one of the things we do in order 22 to ensure that is, we provide the notices in draft form 23 for the review of the applicants. 24 Q. Then the last paragraph on that page says, "A 25 new issue raised at page 7." If you could read the last


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1 two lines of that paragraph, please. 2 A. Okay. "The Department has reviewed the 3 additional information in your letter concerning these 4 small appropriative rights and requests that SRP amend the 5 applications to reflect these additional uses. It would 6 be helpful for SRP also to make corresponding changes to 7 the notices for the Department's review." 8 Q. Is this a reference back to the small 9 appropriative uses at the dam sites? 10 A. Yes, it is. 11 Q. And if you'll scroll down to Page 3 of this 12 group. 13 Is this one of the notices that was attached to 14 this letter, enclosed with this letter? 15 A. Yes, it is. 16 Q. I think we should focus on one of these notices 17 for a minute. This one says "Notice of Amended 18 Applications R-45, R-71, A-135 and E-11," is that correct? 19 A. Yes. 20 Q. And then underneath that, what does it say? 21 A. It says, "Stewart Mountain Dam and Saguaro 22 Lake." 23 Q. And why are several applications being referred 24 to for Stewart Mountain Dam and Saguaro Lake? 25 A. We noticed these amended applications in a way


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1 that focused on the constructed facilities. We thought 2 that made more sense. That's the way that the public, who 3 the notice was going to, would best be able to understand 4 them. And these are the four applications which make 5 reference to or provide for rights associated with Stewart 6 Mountain Dam and Saguaro Lake. 7 Q. Could you please refer to the chart on the 8 easel, which is a reformatting of DWR Exhibit 31, and 9 where would you find Stewart Mountain on that chart? 10 A. In the lower half of the table that relates to 11 the amended applications reflected in the as-constructed 12 reclamation project. Stewart Mountain Dam and Saguaro 13 Lake Reservoir is the third of six. 14 Q. And what do the X's in the row across from 15 Stewart Mountain refer to? 16 A. The X's identify which of the amended 17 applications relate to or provide for rights related to 18 this facility. 19 Q. And which applications are those, according to 20 this chart? 21 A. Well, we see X's in R-45, R-71 and A-135. And 22 although we don't see an X, there's also information in 23 the E-11 column, which shows that that amended application 24 also has reference to the structure. 25 Q. So is it correct to say that we prepared one


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1 notice for Stewart Mountain Dam and Saguaro Lake based on 2 those four applications; is that a correct way to state 3 that? 4 MR. HENDRICKS: Objection. 5 THE WITNESS: Yes, it is. 6 MR. HENDRICKS: I don't know who "we" is. 7 ALJ SHEDDEN: All right. Ms. Ronald, do you 8 want to clarify your question at all? 9 BY MS. RONALD: 10 Q. The notices that were prepared by the Department 11 of Water Resources, you testified for Stewart Mountain Dam 12 refer to R-45, R-71, A-135 and E-11; is that correct? 13 A. Yes, it is. 14 Q. Are those the same X's that appear across from 15 Stewart Mountain Dam and Saguaro Lake on the chart, plus 16 E-11? 17 A. Yes, they are. They are the three X's plus 18 E-11, yes. 19 Q. So is it correct to say that the notice that was 20 prepared for Mormon Flat Dam and Canyon Lake, based on 21 this chart, would have referenced R-30, R-46 and E-11? 22 A. Yes, that's also correct. 23 Q. And what would the notice for Horse Mesa Dam and 24 Apache Lake refer to? 25 A. The notice for Horse Mesa Dam and Apache Lake


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1 does refer to R-30, R-72, A-136 and E-11. 2 Q. The same question for Bartlett Dam and 3 Reservoir. 4 A. R-45, A-135 and E-11. 5 Q. And Horseshoe Dam and Reservoir? 6 A. The same three, R-45, A-135 and E-11. 7 Q. And then for the Roosevelt Dam enlargement? 8 A. The Roosevelt Dam enlargement is solely related 9 to the enlargement application, E-11. 10 Q. Thank you. 11 DWR-39. If you could scroll down a little bit. 12 That's good. 13 Could you identify this, please? 14 A. This is a letter from counsel for SRP to counsel 15 for the Department of Water Resources. It has a date of 16 September 5th, 2000. 17 Q. Could you please look at the second paragraph on 18 this page? It starts with the word "First." 19 A. Okay. 20 Q. Please read that paragraph. 21 A. "First, I have enclosed revised excerpts from 22 the notices you sent to me with several suggested changes, 23 all of which we believe are quite minor. If you would 24 prefer to have us e-mail all of the notices as revised by 25 the excerpts we would be glad to do so."


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1 Q. And based on the next paragraph, what did SRP 2 suggest deleting in the opening paragraph of each one of 3 the notices? 4 A. On drafts of the notices, there was reference to 5 each of the reservoir facilities being constructed by the 6 U.S. Bureau of Reclamation, and this in one or more cases 7 was not correct, and so that reference of each structure 8 being constructed by the Bureau of Rec was removed. 9 Q. Page 2, please, last paragraph. The paragraph 10 that starts with "Second," please read that. 11 A. "Second, with respect to the specific questions 12 raised in your May 10 letter, we have decided not to 13 include in these amended applications the small non-power 14 uses listed on page 7 of my February 3rd, 1999 letter to 15 you. Accordingly, the amended applications will not be 16 changed to include these uses." 17 Q. Page 3, top paragraph. 18 A. "With respect your question concerning the 19 capacity of Roosevelt Reservoir, as I indicated above, we 20 will amend Amended Application E-11 to list the storage 21 capacity at Roosevelt Dam as 1,366,966 acre-feet. This 22 number includes SRP's actual conservation storage capacity 23 as specified in the most recent silt survey plus the dead 24 storage space that was created through the modifications 25 to Roosevelt as part of the Plan 6 changes."


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1 Q. Regarding applications A-135 and 136, amended 2 applications A-135 and 136, does SRP still want to have 3 those applications public noticed? 4 A. Yes, they do. 5 Q. Page 4, the paragraph beginning with the words 6 "With respect to," please read this paragraph. 7 A. "With respect to Amended Applications A-135 and 8 E-11, I agree there is confusing language so we are going 9 to try to remedy the situation by returning to close to 10 the original wording in Application A-135. Enclosed is an 11 amended Amended Application A-135 in which the sentence in 12 the Remarks section has been amended to state: This 13 application does not contemplate an appropriation of 14 additional water for irrigation but proposes to control 15 the annual distribution of water on the Salt River Project 16 and to lend flexibility to the operation of said project," 17 and then parenthetically "See R-45 and E-11." 18 Q. Turning to Page 5, please, it's the paragraph 19 that begins "With respect to your question." If you could 20 please read the first sentence, and then I have a question 21 for you. 22 A. Okay. "With respect to your question concerning 23 the necessity under ARS 45-141.B to identify separate 24 quantities of water appropriated for each beneficial use 25 claimed, we do not believe that Section [145.B] mandates


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1 any such requirement. " 2 Q. Does the rest of that paragraph and, for that 3 matter, the rest of that page provide an example to 4 support the statement in that sentence? 5 A. Yes, it does. 6 Q. What does that paragraph refer to in support of 7 the statement in that sentence? 8 A. It refers to a permit that was previously issued 9 by the Department and it's a permit to the Central Arizona 10 Water Conservation District. I -- 11 Q. Is there some language there that is a quote 12 from the permit to the CAWCD, the Central Arizona Water 13 Conservation District? 14 A. Could we page down a little bit -- 15 Q. Oh, yes. 16 A. -- so I could see the page? Yes, thank you. 17 Yes. Yes, there is. 18 Q. Is the permit granted to appropriate water for 19 several different types of beneficial uses? 20 A. Yes. The permit states that water is being 21 granted to appropriate for the purposes of domestic, 22 municipal, irrigation, stock watering, water power, 23 recreation, wildlife, including fish, artificial 24 groundwater recharge and mining uses. 25 Q. As far as you know, is there any language in


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1 this permit to CAWCD that identifies a separate quantity 2 of water for each one of these beneficial uses? 3 A. No. 4 Q. Okay. Let's look at DWR-40. 5 Please describe this document. 6 A. This is a letter from the Arizona Department of 7 Water Resources to the Salt River Project, and it has a 8 date of July 24th, 2009. 9 Q. And what's the letter indicate? 10 A. The letter indicates that the Department of 11 Water Resources was prepared to continue moving forward 12 with the noticing of these amended applications. There 13 were a few remaining issues to discuss, and an invitation 14 to meet to discuss those. 15 Q. DWR-41. Let's scroll down so you can see what 16 this is. 17 Do you see a notation about these separate 18 applications? 19 If you would scroll back to the first page, 20 please. Thank you. Up to the top. 21 So do you see the notation about "Application 22 R-30"? 23 A. Yes. 24 Q. And what is -- without reading what 1, 2 and 3 25 are underneath "Application R-30," what is being


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1 represented there; what's being described? 2 A. What's being represented there are further 3 amendments to the amended applications from 1994. 4 Q. Thank you. 5 And if we scroll down, do we see the similar 6 thing for R-45, if we continue to go down to Page 2? 7 There's several attachments there for R-45. And down to 8 Page 3, is that application R-46? Do you remember seeing 9 this document? 10 A. Yes, I do. 11 Q. And so is it your memory that this document 12 includes a description of amendments for each one of these 13 original applications? 14 A. I believe it does include further amendments to 15 each of the amended applications, yes. 16 Q. Let's go to R-42, or I'm sorry, ADWR-42. 17 Please describe this letter. 18 A. This is a letter from the Department of Water 19 Resources to counsel for the Salt River Project, and it 20 has a date of January 6, 2010. 21 Q. If you could please scroll down. 22 What does the letter indicate? 23 A. This letter indicates that we had met 24 previously, or the Department of Water Resources had met 25 previously with representatives of SRP, and that we had


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1 received written language describing further amendments to 2 the amended applications, and we were requesting that 3 those further amendments be used to amend the amended 4 applications directly, and provide those to us for our 5 review. 6 Q. Does the letter specifically refer to a meeting? 7 A. No, it does not. I believe I said a meeting 8 because that was my overall recollection, yes. 9 Q. Okay. Let's go to the next exhibit, DWR-43. 10 Please identify this document. 11 A. This is a letter from counsel for SRP to the 12 Department of Water Resources. It has a date of 13 March 1st, 2010. 14 Q. What is this letter about? 15 A. This is the letter accompanying the further 16 amended applications, in response to our earlier request 17 for them to do so. 18 Q. Is this the last set of amended applications 19 that the Department received from SRP? 20 A. The last? I believe this is the last set of 21 amended applications we received from SRP. I'm not 22 certain that there were -- yes, I believe that's correct. 23 Q. Thank you. 24 Let's go ahead and scroll down to the first page 25 of one of these.


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1 Okay, what is this? This was attached to the 2 letter. Can you identify this? 3 A. I can. We had requested information and 4 documentation concerning annual use for beneficial use. 5 Q. What does it say above that table? 6 A. Are you referring to the paragraph? 7 Q. Yes. 8 A. Okay. 9 Q. Sorry. 10 A. That based on a certain period of record, they 11 identified 1969 as the year that had the maximum annual 12 use, and that the table that follows provides what those 13 quantities are. 14 Q. What is the total that's listed there? 15 A. The total at the bottom of the table is 904,982 16 acre-feet. 17 Q. If we could scroll down some more to the next 18 page, Page 4. 19 And is this an example of the redlined amended 20 applications that were submitted with this letter? 21 A. Yes, it is. 22 Q. Let's go to DWR-45. 23 ALJ SHEDDEN: Let me just ask a question, I'm 24 sorry, before we go to the next exhibit, in case we want 25 to go back.


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1 It's your belief that the one we were just 2 looking at, 43, Exhibit 43, represents the last set of 3 amended applications, correct? 4 THE WITNESS: Correct, yes. 5 ALJ SHEDDEN: All right. Then is it fair to say 6 that this would be the documents, ultimately these are 7 what was granted then; is that a fair characterization? 8 THE WITNESS: That the permits being issued are 9 related to these applications, yes. 10 ALJ SHEDDEN: All right. And so while there may 11 be plenty of reason to go back to previous iterations, if 12 one wanted to just cut to the chase, so to speak, this 13 would be the document one would look at, correct, in terms 14 of the applications that the permits relate to? 15 THE WITNESS: Correct. 16 ALJ SHEDDEN: Okay. All right. I'm sorry. Go 17 ahead, Ms. Ronald. 18 MS. RONALD: Thank you. 19 BY MS. RONALD: 20 Q. I'm sorry, I misspoke. We're at DWR-44. 21 Can you identify this, please? 22 A. Yes. This is a letter from the Department of 23 Water Resources to counsel for the Salt River Project. It 24 has a date of April 30, 2010. 25 Q. Please read the first paragraph.


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1 A. "Based on our prior correspondence and meetings, 2 the notices for the above-referenced applications have 3 been revised. As before, these amended applications have 4 been grouped by dam site, resulting in six separate 5 notices. The revised notices incorporate most of the 6 changes previously suggested by SRP in correspondence 7 dated September 5th, 2000, and reflect discussions between 8 SRP and ADWR over the last few months. These notices also 9 include SRP's changes to the applications by amendments 10 dated March 1st, 2010." 11 Q. And the first line of the next paragraph, please 12 read that. 13 A. "A copy of each of the revised notices is 14 enclosed for your review and comment." 15 Q. And, again, is that part of the Department's 16 practice, to provide copies of draft notices for review 17 and comment by the applicant? 18 A. Yes, it is. 19 Q. So if we could scroll down to the next page, 20 please. 21 Is this what is attached or enclosed with this 22 cover letter; is this one page of what was attached? 23 A. Yes, it is. 24 Q. And if we could go to -- 25 And, I'm sorry, before we go forward, there


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1 are -- this is a redlined copy, correct? 2 A. Yes, it is. 3 Q. And are there notes to the side that indicate 4 the changes that were made, as well as changes in the body 5 of the document itself? 6 A. Yes. There are notes along the right side, 7 which identify either deleted passages or comments. 8 Q. I would like to go to PDF 4. 9 MS. KLOBAS: Page 4? 10 MS. RONALD: Should be off one. It's Page 3, 11 actually. Wait a minute. Yes, that's correct. 12 BY MS. RONALD: 13 Q. I would like to direct your attention to the 14 Remarks section at the top of this page, and there are two 15 changes in this paragraph, one of which is purely 16 editorial, and the last one of which, though, is more 17 substantive. Please read the sentence that says "There is 18 a notation in the file." 19 A. "There is a notation in the file, without 20 supporting documentation, that the application was 21 canceled some time after 1945." 22 Q. So the language that was deleted, is that 23 indicated in the right-hand margin in one of those boxes? 24 A. Yes, it is. 25 Q. And is there a comment accompanying that change


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1 in language? 2 A. Yes, there is. 3 Q. And what does the comment indicate? 4 A. "Agreed upon at October 6, 2009 meeting." 5 Q. What is your memory of the discussion of that 6 language? 7 A. My recollection of that meeting is, SRP or 8 representatives of SRP raised the issue of what previously 9 in my testimony I had referred to as the imprecise 10 language that was being used, and discussion ensued; and 11 we from ADWR suggested the language that you see this 12 revised to, and it was agreeable to SRP. 13 Q. Agreeable to ADWR as well? 14 A. Yes, considering that we had suggested it, yes. 15 MS. RONALD: I'm sorry, Your Honor, I'm looking 16 for something. It will be just a moment. 17 BY MS. RONALD: 18 Q. Direct your attention to -- it's hard copy 19 Page 7 of the attachment, which should be PDF 8. Yes. 20 Under the paragraph that relates to Quantity, 21 there are several revisions that were made to that 22 paragraph, including the last sentence. What does the 23 last sentence say? 24 A. "The calculated quantity of water stored will 25 fluctuate based on the most recent silt surveys, but will


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1 be below the top elevation of the SRP conservation storage 2 area for each reservoir." 3 Q. Were you involved in developing that language? 4 A. I was, yes. 5 Q. And why was this language inserted? 6 A. Well, this language was inserted because I 7 understood that for reservoirs of this type, the precise 8 quantity of water stored is unknown; that you make 9 periodic surveys of the silt while every day, as water 10 flows into the reservoir, more silt is deposited. So over 11 time, as the true amount of silt in the reservoir changes 12 and the methods by which the volume of stored water is 13 calculated, that calculated volume will fluctuate. 14 So because of that, because we don't actually 15 ever know what the true volume is, I suggested that the 16 language be written as shown here. 17 Q. The numbers that are in the rest of that 18 paragraph, are those the numbers that are reflected on 19 DWR-31, the chart, the volumes? 20 A. Yes, they are. Yes. 21 Q. And the chart I don't believe has a total on the 22 far right-hand column. 23 A. No. 24 Q. So directing your attention back to this notice, 25 under Quantity, what's the total of all those numbers?


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1 A. The total is shown in the first sentence within 2 the Quantity section, 1,959,422. 3 Q. Based on what? 4 A. Based on the 2009 calculated reservoir 5 capacities. 6 Q. Thank you. 7 Okay, DWR-45. 8 Please identify this. 9 A. This is a letter from the Arizona Department of 10 Water Resources to counsel for the SRP, and it has a date 11 of August 2nd, 2010. 12 Q. And what does this letter address? 13 A. This is transmittal from the Department to SRP 14 of the revised notices for the amended app -- the 2010 15 amended applications. 16 Q. So, again, are copies of each one of those 17 revised notices enclosed for review and comment by SRP? 18 A. Yes, they are. 19 Q. And, again, that's the usual practice of ADWR -- 20 A. Yes, it is. 21 Q. -- in processing these kinds of applications? 22 A. Yes. 23 Q. Let's look at hard copy Page 1 of the enclosure, 24 but it's PDF 2; and if we can scroll down. Okay, that's 25 good, I think.


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1 Under Uses, is there a comment associated with 2 those changes? 3 A. Yes. The comment is -- yes. 4 Q. What does the comment state? 5 A. "These changes conform to 45-151. Municipal 6 includes industrial and commercial." 7 Q. So were industrial and commercial deleted from 8 the description? 9 A. Yes, they were. 10 Q. Was agriculture deleted from the description? 11 A. Yes, it was. 12 Q. DWR-46. 13 Please describe this document. 14 A. This is a letter from the Arizona Department of 15 Water Resources to counsel for the SRP, and it has a date 16 of October 7th, 2010. 17 Q. What does it relate to? 18 A. This has notices of the 2010 amended 19 applications and includes instructions for the noticing. 20 Q. Do some of the instructions require the notices 21 to be posted at the claimed point of diversion? 22 A. It does, yes. 23 Q. Do the notices need to be published in 24 newspapers? 25 A. Yes, they do.


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1 Q. And is the applicant requested to return 2 affidavits of posting and publication to the Department of 3 Water Resources? 4 A. Yes, they are. 5 Q. So is it fair to state that these are the final 6 notices that were actually issued regarding the amended 7 applications? 8 A. Yes, they are. 9 Q. And if we could scroll down to the very first 10 notice for Bartlett Dam and Reservoir, and go to the last 11 page of that notice. 12 When was this issued? 13 A. The notice is -- it's dated October 7th, 2010. 14 Q. Thank you. 15 These notices -- let's go back to the first page 16 of the Bartlett Dam and Reservoir notice, which is PDF 3. 17 There's some introductory language; is that 18 correct? 19 A. Yes, it is. 20 Q. And that's followed by a description of what's 21 in the application itself; is that correct? 22 A. There's introductory language associated with 23 this reservoir, and then there is, for each of the 24 applications which pertain to that reservoir or set of 25 reservoirs, there is the information that's related to


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1 that application, yes. 2 Q. Is there also a Remarks section? 3 A. Yes, there is. 4 Q. And what's described, generally, in the Remarks 5 section? 6 A. Well, generally in the Remarks is any 7 information that the Department believes is pertinent for 8 an accurate and complete noticing of the application. 9 Q. So in this case, was there a description of the 10 original application? 11 A. I don't see it on the screen, but I believe 12 there is, yes. 13 Q. Could you scroll down, please? 14 A. I know that there is, I should say. 15 Q. Yes. So if you go down about four lines, it 16 says, "In the original application," is that correct, or 17 even before that, I suppose? 18 A. Yes, the very first sentence of the Remarks 19 makes reference to the original filing date of October 20 1920. 21 Q. So were similar types of remarks included in the 22 notices for each one of the amended applications? 23 A. Yes, they were. 24 MS. RONALD: Following this exhibit, Your Honor, 25 are several exhibits that relate to the affidavits of


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1 publication for each one of these notices, and they are in 2 three different newspapers and they range from DWR-47 3 through DWR-65, 65 being a letter from SRP to DWR with an 4 affidavit of publication. These all have been stipulated 5 to for admission into evidence, and I do not propose to go 6 through each one of these individually. 7 ALJ SHEDDEN: All right. 8 BY MS. RONALD: 9 Q. Dr. Johnson, do you remember whether any 10 protests were filed to the amended applications? 11 A. I do, and there were. 12 Q. Let's pull up DWR-66. 13 And this is a statement of protest filed by who? 14 A. The protester's name is shown as Greenback 15 Valley Ranch, Bill Conway. 16 Q. Okay. Let's look at DWR-67. 17 I'm not going to go into any detail on any of 18 these. I'll just identify each one for the record. So 19 this is a protest filed by who? 20 A. Greenback Valley Ranch Greenback I, LLC. 21 Q. DWR-68. 22 Is this another statement of protest? 23 A. Yes, it is. 24 Q. Who filed it? 25 A. Greenback Valley Ranch, Jared Nichols.


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1 Q. DWR-69, is this another statement of protest? 2 A. Yes, it is. 3 Q. Filed by whom? 4 A. Greenback Valley Ranch, Jim Farley. 5 Q. DWR-70, is this another statement of protest? 6 A. Yes, it is. 7 Q. Who filed it? 8 A. Greenback Valley Ranch Root, LLC. 9 Q. DWR-71, is this another statement of protest? 10 A. Yes, it is. 11 Q. Who filed it? 12 A. XM Development, LLC. 13 Q. DWR-72, is this another statement of protest? 14 A. Yes, it is. 15 Q. Who filed it? 16 A. Greenback Valley, HCC, LLC (Douglas N. Collins). 17 Q. DWR-73, is this another statement of protest? 18 A. Yes, it is. 19 Q. Who filed it? 20 A. Greenback Valley Ranch, HCC, LLC, Mary Merz. 21 Q. DWR-74, is this a statement of protest? 22 A. No. 23 Q. What is it? 24 A. This is a request from the City of Phoenix to 25 the Arizona Department of Water Resources to be included


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1 as a participating party in any administrative process 2 that may be held. 3 Q. DWR-75, is this a statement of protest? 4 A. No, it's not. 5 Q. What is it? 6 A. Similar to that of the City of Phoenix, it is a 7 request by the City of Tempe to the Department of Water 8 Resources to participate in any administrative proceedings 9 that may follow. 10 Q. DWR-76, is this a statement of protest? 11 A. Yes, it is. 12 Q. Who filed it? 13 A. Could we scroll down so I can get it right? 14 It is filed by a representative for the Lower 15 Gila Valley Water Users. 16 Q. DWR-77, please describe this. 17 A. This is a filing of a motion by the Lower Gila 18 Water Users for what is referred to as threshold issues 19 for rejection of these amended applications. 20 Q. DWR-78, please identify this document. 21 A. This is an errata filing for the filing that we 22 just referred to. 23 Q. DWR-79, is this a statement of protest? 24 A. Yes, it is. 25 Q. Who filed it?


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1 A. This was the United States Department of 2 Interior, Bureau of Indian Affairs, on behalf of the 3 Yavapai-Apache Nation. 4 Q. DWR-80, is this a statement of protest? 5 A. Yes, it is. 6 Q. Who filed it? 7 A. The Yavapai-Apache Nation on their own behalf. 8 Q. Okay. 9 MS. RONALD: At this point, Your Honor, again, 10 instead of going through each one of the following 11 exhibits individually, I would just like to point out that 12 DWR-81 through 91 are all letters from ADWR to a 13 representative of SRP forwarding copies of the statements 14 of protests. 15 ALJ SHEDDEN: All right. 16 BY MS. RONALD: 17 Q. And then DWR-92, please describe this. 18 A. This is a filing by counsel for the Salt River 19 Valley Water Users' Association responding to the 20 protests. 21 MS. RONALD: And, again, Your Honor, there are a 22 series of letters that DWR then forwarded to each one of 23 the protestants, with a copy of the response to the 24 protests that were just identified in DWR-92. Those are 25 found in Exhibits DWR-93 through 101.


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1 ALJ SHEDDEN: All right. 2 BY MS. RONALD: 3 Q. Let's look at DWR-102. 4 Please identify this letter. 5 A. This is a letter from the Department of Water 6 Resources to the City of Phoenix, and the date is 7 January 21st, 2011. 8 Q. And what does the last sentence of the first 9 paragraph indicate? 10 A. "The Department is placing copies of your letter 11 in the application files, but has not yet made a decision 12 on your request for participation." 13 Q. DWR-103. 14 Please identify this document. 15 A. This is a similar letter to the last, by the 16 same date, January 21st, 2011, written to the City of 17 Tempe. 18 Q. DWR-104. 19 MS. RONALD: Oh, thank you. 20 I move to admit 102 and 103. 21 ALJ SHEDDEN: All right. Is there any objection 22 to either 102 or 103? 23 MR. HENDRICKS: I'm sorry, Your Honor, those 24 flew by so fast, I'm behind on my notes. Okay, 102 and 25 103 is the letter to the City?


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1 ALJ SHEDDEN: Correct. We're showing 102 is the 2 letter to City of Phoenix and 103 to Tempe. 3 MR. HENDRICKS: And it just says they've not yet 4 made a determination. 5 No, Your Honor, no objection. 6 ALJ SHEDDEN: All right. 102 and 103, DWR-102 7 and 103, are admitted. 8 BY MS. RONALD: 9 Q. Now we'll go to 104. 10 Can you identify this? 11 A. These are prints of a series of e-mails between 12 Department of Water Resources staff and counsel for SRP. 13 Q. And what do they relate to? 14 A. They relate to an apparent oversight in 15 transmittal of -- well, let me -- of inclusion of two of 16 the protesting parties, in their being referenced in the 17 SRP response to the protests. 18 Q. DWR-105, what is this? 19 A. This is a filing by counsel for SRP, which is an 20 addendum to their response to protests, which now includes 21 those protesting parties that had not been included 22 previously. 23 MS. RONALD: And at this point, again, Your 24 Honor, there are a series of letters that then ADWR sent 25 to each one of the protestants, with a copy of the


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1 addendum that SRVWUA prepared, and those are found at 2 DWR-106 through 116, and I would propose to just let them 3 speak for themselves. 4 ALJ SHEDDEN: All right. 5 BY MS. RONALD: 6 Q. So that brings us to DWR-117. 7 What is this document? 8 A. This is a notice to the Department of Water 9 Resources from the Yavapai-Apache Nation, on their own 10 behalf, withdrawing their protest to the amended 11 applications. 12 Q. Let's look at DWR-118. 13 And what is this? 14 A. Similarly, this is the U.S. Department of 15 Interior, Bureau of Affairs' notice of withdraw of the 16 protest on behalf of the Yavapai-Apache Nation. 17 Q. Did you mean Bureau of Indian Affairs? 18 A. Yes. I'm not sure what I said, but I meant to 19 say Bureau of Indian Affairs, yes. 20 MS. RONALD: I would like to move these into 21 evidence. 22 ALJ SHEDDEN: All right. So it's 117 and 118, 23 the two withdrawal notices. Are there any objection to 24 those exhibits? 25 MR. HENDRICKS: Your Honor, could I have them


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1 scroll down a little bit so I could see a little bit more? 2 I don't have that hard copy in front of me. 3 No objection, Your Honor. 4 ALJ SHEDDEN: All right. 117 and 118 are 5 admitted then. 6 BY MS. RONALD: 7 Q. 119. 8 Please identify this. 9 A. This is a letter from the Department of Water 10 Resources to counsel for SRP. The date -- could we scroll 11 up -- is May 2nd, 2011, and it is noticing the applicant 12 of the withdraw of the protest by the Yavapai-Apache 13 Nation on their own behalf. 14 Q. And DWR-121. I'm sorry, 120. 15 Please identify this document. 16 A. Similarly, this is a letter from Department of 17 Water Resources to counsel for SRP, dated March 3rd, 2011, 18 noticing them of the Bureau of Indian Affairs' withdraw of 19 the protest they had made on behalf of the Yavapai-Apache 20 Nation. 21 Q. DWR-121. 22 Please identify this document. 23 A. This is a filing by counsel for the Lower Gila 24 Valley Water Users replying to the Salt River Valley Water 25 Users' Association's response to protests.


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1 Q. DWR-122. 2 Can you identify this document? 3 A. This is a print of a series of e-mails between 4 the City of Tempe and the Department of Water Resources 5 regarding their pending request to act as a participant in 6 any administrative proceedings that may follow. 7 MS. RONALD: I would like to move 122 into 8 evidence. 9 ALJ SHEDDEN: Is there any objection to 122? 10 MR. HENDRICKS: What's the -- is there more than 11 this first e-mail? Can you go up just a little bit? 12 MS. RONALD: That's the top. 13 MR. HENDRICKS: Oh, that's the top? Can I grab 14 this just for a second? 15 MS. RONALD: Yes. 16 MR. HENDRICKS: No objection, Your Honor. 17 ALJ SHEDDEN: All right. 122 is admitted. 18 BY MS. RONALD: 19 Q. 123. 20 Please identify this document. 21 A. This is a letter from counsel for the Lower Gila 22 Water Users to the Director of the Department of Water 23 Resources. The date is March 29th, 2011. 24 Q. What is this letter about? 25 A. This letter is to inform the Department of Water


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1 Resources of discussions or communications between the 2 Lower Gila Water Users and the Salt River Valley Water 3 Users' Association related to potentially settling the 4 protests that had been filed. 5 Q. DWR-124. 6 Please identify. 7 A. This is a letter from counsel for the SRP to the 8 Director of the Department of Water Resources, and the 9 date is August 12th, 2011. 10 Q. What is this letter about? 11 A. This is to inform and update the Department of 12 Water Resources that communications related to potentially 13 settling the protests by the Lower Gila Water Users have 14 not been successful, and I believe it also makes reference 15 to the Greenback Valley Ranch group of protestants as 16 well, with the same status. 17 Q. DWR-125. 18 Please identify this document. 19 A. This is a letter from the Department of Water 20 Resources to the Salt River Project and has a date of 21 February 15, 2013. 22 Q. Are there any enclosures with this letter? 23 A. Yes, there are. This letter is accompanied by 24 draft permits related to the amended applications, for 25 review and comment by the applicant.


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1 Q. If you could scroll down, please, to the bottom 2 paragraph. 3 In that bottom paragraph, did the Department 4 make some proposals about how to handle the variety of 5 applications that had been amended? 6 A. Yes. 7 Q. And, basically, what did the Department propose? 8 A. Okay, in that final paragraph there, one thing 9 to understand is, the way that it's phrased, "The 10 Department did not grant," that is in reference to these 11 being draft permits for review and what is proposed by 12 these draft permits. 13 And the Department proposed that the permits be 14 granted for a subset of the amended applications, but 15 potentially not for others, which appeared on their faces 16 to be redundant or duplicate. 17 Q. Was there any other reason that the Department 18 was considering a subset of permits for the -- or a subset 19 of the amended applications for which to issue permits, in 20 addition to the fact that some of them appeared to be 21 duplicates? 22 A. Well, we also make the point in the paragraph 23 here that some of the amended applications made reference 24 to -- well, were for -- let me rephrase that again. 25 Some of the amended applications were amendments


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1 to applications for which the originally planned 2 structures were not constructed. 3 Q. Had any of the issues that are discussed in this 4 paragraph, again, that being the last paragraph of Page 1, 5 had ADWR ever raised these particular issues with SRP 6 prior to this letter? 7 A. No, we had not. 8 Q. DWR-126. 9 A. I do think I remembered, though, something as I 10 was sitting here. I think that another consideration we 11 had was that we were for the first time, you know, 12 drafting these permits and we realized that not all of the 13 applications that were related to each facility were filed 14 at the same time and, therefore, would have the same 15 priority date. 16 So I think that the issue of dealing with more 17 than one priority date was another consideration for which 18 we had proposed issuing permits in the manner that were 19 shown in these drafts. 20 Q. DWR-126. 21 Please identify this. 22 A. This is a letter from SRP to the Department of 23 Water Resources, and it has a date of April 9th, 2013. 24 Q. And what is this letter about? 25 A. This letter is in response to our providing SRP


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1 or the Salt River Valley Water Users' Association's 2 opportunity to review and comment on the draft permits. 3 Q. Let's look at Page 2 of that letter, and scroll 4 down to the paragraph that begins "SRVWUA suggests." If 5 you could please read the first sentence. 6 A. "SRVWUA suggests that, to the extent that the 7 Department determines that a permit for any application 8 otherwise should be granted but for the fact that the 9 application is "duplicative" of one of the other pending 10 applications, it should go ahead and issue the permit for 11 the duplicative application as an alternative basis for 12 the water right." 13 Q. Let's look at Page 3 of this letter, and go down 14 to the paragraph that starts "Although." 15 I'm sorry, the paragraph right above that, the 16 one that starts "Second." If you could please read that 17 paragraph. It's not very long. 18 A. "Second, it is important to remember that SRVWUA 19 amended the applications so that the locations would 20 correspond to the facilities that were actually 21 constructed. Thus, although some of the locations of the 22 existing dams and reservoirs do differ from the locations 23 contained in the original applications filed more than 24 ninety years ago, the locations in the amended 25 applications are identical to those at which the dams and


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1 reservoirs exist." 2 Q. Okay, the next sentence that begins -- the next 3 paragraph, just read that first sentence, please. 4 A. "Although no specific statute or rule provides 5 for amendments to applications, it is common practice in 6 matters before the Department and other State agencies." 7 Q. Do you agree with that sentence, that there's no 8 specific statute that provides for amendments to 9 applications? 10 A. Yes, I do. 11 Q. Is there any statute at all that provides for 12 ways to correct information on applications? 13 A. Yes, I believe that there is. 14 Q. Is a correction and an amendment different? 15 A. I would say that an amendment would constitute a 16 correction. 17 Q. Do you know if ADWR has ever processed amended 18 applications for permits to appropriate? 19 A. Yes, we have. In fact, I believe that we, 20 earlier in my testimony, made reference to at least one of 21 those. 22 Q. Would that be about Orme Dam? 23 A. Yes. 24 Q. Page 4 of this letter. So if you look at -- if 25 you just glance at this whole letter, is this another


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1 discussion of the Orme Dam application that was testified 2 to previously? 3 A. Yes, it is. 4 Q. Let's go to Page 5 of the letter. There's an 5 indented quote there that purports to be from the 6 Department's website. Can you summarize that without 7 reading it, or would you prefer to read it? 8 A. It says that prior to 1972, an application to 9 appropriate surface water was either -- was either 10 assigned a prefix of an A for, I believe, appropriation, 11 and then R for a -- or R for a reservoir or, in other 12 words, storage. But nowadays, post-1972, they all now 13 receive a prefix of 33, and what's commonly referred to as 14 a 33 filing can be either for appropriative use or for 15 storage. 16 Q. DWR-127. 17 Please identify this document. 18 A. This is a print of a series of e-mails between 19 the staff of ADWR and staff of SRP, and it relates to or 20 it informs SRP that we had received their prior comments 21 on the draft permits, we had incorporated their comments 22 as appropriate, and that I think this is transmitting 23 those revised draft permits. 24 Yes, that is it. 25 Q. Let's go to PDF 4 in this exhibit.


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1 All right, well, then let's try 5. 2 This is one of the attachments to the e-mail. 3 This is a draft permit, according to that e-mail; is that 4 correct? 5 A. Yes, it is. 6 Q. And what's the permit number that's assigned to 7 this? 8 A. The permit number assigned to this draft is 9 33-97001. 10 Q. So is that consistent with the discussion 11 earlier about the change from A's and R's to 33's? 12 A. Yes, it is. 13 Q. And in the introductory paragraph on this 14 particular permit, is there a reference -- excuse me -- to 15 more than one application in support of this permit? 16 A. Yes, there is. It makes reference to amended 17 applications Nos. R-30 and R-46. 18 Q. And in the last sentence of that introductory 19 paragraph, is there another reference? 20 A. Yes. It also makes reference to permit 21 No. 33-11, which would be a reference to amended 22 application E-11. 23 Q. And if you look down, if we scroll down to dates 24 of applications, what are the dates that are listed there? 25 A. These are the dates of filing for applications


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1 R-30, R-46 and E-11. 2 Q. And these are the same applications that are 3 referenced in the introductory paragraph? 4 A. Yes, they are. 5 Q. So do each one of these permits incorporate each 6 of the applications, each of the amended applications that 7 relate to that particular reservoir and dam site? 8 A. Yes, they do. 9 Q. DWR-128. 10 What is this? 11 A. This is a print of an e-mail. No, it's not a 12 print of an e-mail. I'm sorry. 13 This is a note to the file, a print of a note to 14 the file by ADWR staff, describing a telephone call 15 received from SRP requesting a correction be made to the 16 draft permit, specifically No. 33-97002. 17 Q. Did we make that correction in the final draft 18 permits that we issued? 19 A. Yes, we did. 20 Q. DWR-129. 21 What is this? 22 A. This is a letter from the Department of Water 23 Resources to the City of Phoenix, and it is dated July 19, 24 2013. 25 Q. What is this letter about?


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1 A. This letter is in reference to the City of 2 Phoenix's request to be designated as a participant in any 3 administrative proceedings to follow. 4 Q. What does the last sentence of the first 5 paragraph say? 6 A. "The Department does not have authority to grant 7 this request." 8 Q. DWR-130. 9 Please describe this document. 10 A. Similar to the prior letter we just mentioned, 11 this is a letter from the Department of Water Resources to 12 the City of Tempe, by date of, if you scroll, July 19th, 13 2013, the same date. 14 Q. And what does the last sentence of the first 15 paragraph indicate? 16 A. "The Department does not have authority to grant 17 Tempe party status." 18 MS. RONALD: I move 129 and 130 into evidence. 19 ALJ SHEDDEN: Is there any objection to 129 or 20 130? 21 MR. HENDRICKS: Can I look at them for just a 22 second? 23 ALJ SHEDDEN: Sure. 24 MR. HENDRICKS: No objection, Your Honor. 25 ALJ SHEDDEN: All right. 129 and 130 are


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1 admitted. 2 BY MS. RONALD: 3 Q. 131. 4 Please describe this document. 5 A. This is commonly referred to as the decision 6 letter by the Department of Water Resources to the 7 applicant, dated July 19th, 2013. 8 Q. Are there other addressees other than the 9 applicant to whom this was sent? 10 A. Yes. This was also -- yes, there is. 11 Q. Was there an attachment to this document? 12 A. Yes, there was. 13 Q. What was it? 14 A. The copies of the final draft permits. 15 Q. Does the letter address the issues that were 16 raised in the protests? 17 A. Yes, it does. 18 Q. Is there a copy of a mailing list attached to 19 this letter that indicates to whom it was sent? 20 A. Yes, there is. 21 Q. I would like to scroll down to the page that's 22 just past the certified mailing list, and for the record, 23 that's PDF 11. 24 So we've talked about the introductory 25 paragraph, and I just wanted to hit the titles of the


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1 other types of information that's included in this permit. 2 So it says, "The following provisions apply to this 3 permit." Do you see that language? 4 A. I do, yes. 5 Q. And are sources described? 6 A. Yes, they are. 7 Q. Are the uses, amounts and period of use 8 described? 9 A. Yes, they are. 10 Q. Are the location of points of diversion 11 described? 12 A. Yes, they are. 13 Q. Are those descriptions by legal description; 14 township, section, range? 15 A. Yes, they include that, yes. 16 Q. What about locations of the places of use, do 17 those include township, range, section? 18 A. Could we scroll down? 19 Yes, they do. 20 Q. And going to the next page, the authorized 21 amount of water storage in reservoirs, is that indicated? 22 A. Yes, they are. 23 Q. And is there similar type of information for 24 each one of the draft permits? 25 A. Yes, there is.


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1 MS. RONALD: The next few exhibits, Your Honor, 2 are housekeeping exhibits that I would prefer not to spend 3 time on with testimony, and just let them speak for 4 themselves. DWR-132 is copies of the return receipts for 5 the certified mailing. DWR-133 is a letter that was 6 resent to one of the protestants because the certified 7 mail was returned as undeliverable. The same for DWR-134 8 and 135. So that brings us to DWR-136. And all of those 9 were stipulated in. 10 ALJ SHEDDEN: All right. 11 MS. RONALD: Thank you. 12 BY MS. RONALD: 13 Q. DWR-136. 14 Can you identify this? 15 A. Yes. This is a notice of appeal filed by the 16 Lower Gila Water Users and presented to or filed with the 17 Arizona Department of Water Resources, and it has a 18 received date stamp of August 19th, 2013. 19 Q. DWR-137. 20 Please identify this. 21 A. This is a letter with subject line titled Notice 22 of Appeal, filed with the Arizona Department of Water 23 Resources, with a date of August 19th, 2013 and a received 24 date stamp of August 21st, 2013, and it is from the City 25 of Tempe.


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1 Q. DWR-138. 2 I'm at 138. Please identify this one. 3 A. This is a letter from the Department of Water 4 Resources to the City of Tempe, with a date of 5 August 26th, 2013, and it is a response to the prior 6 letter we had just made mention to, what they had termed 7 in the subject line a Notice of Appeal. 8 Q. And if you would turn your attention to the 9 third paragraph, first sentence, and read that, please. 10 A. "The Department's July 19, 2013 letter is not an 11 appealable agency action." 12 MS. RONALD: I move 137 and 138 into evidence. 13 ALJ SHEDDEN: Is there any objection to 137 or 14 138? 15 MR. HENDRICKS: No, Your Honor. 16 ALJ SHEDDEN: All right. 137 and 138 are 17 admitted. 18 BY MS. RONALD: 19 Q. 139. If you could scroll down. 20 Do you recognize this document? 21 A. Yes, I do. 22 Q. Did you review this document as part of the 23 processing of the amended applications that are the 24 subject of this proceeding? 25 A. Yes, I did.


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1 Q. What's the date of this document? 2 A. The title page of the document shows a date of 3 May 10, 1922. 4 MS. RONALD: Excuse me. 5 MR. MCGINNIS: Could we see Page 2? 6 MS. KLOBAS: Page 2. 7 MR. MCGINNIS: How about the next page? 8 Okay. Thanks. 9 BY MS. RONALD: 10 Q. I would like to go to hard copy 28, which might 11 be around PDF 31. That's it. 12 Direct your attention to this page. There are 13 four facilities that are features that are described 14 there; do you see those, (1), (2), (3), (4) indented? 15 A. I see them, yes. 16 Q. And there's language above that list. Starting 17 with the word "Nevertheless," would you please read that? 18 A. "Nevertheless pending a decision on this point 19 preliminary applications for permits were prepared in 20 accordance with the 1919 act and filed with the State 21 Water Commissioner on October 2nd, 1920. These 22 applications cover the following features [from which] the 23 data then available seemed the most promising." 24 Q. And then if you would continue to read after the 25 list.


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1 MR. HENDRICKS: Your Honor, this has not been 2 admitted into evidence. We have an objection to it. 3 There shouldn't be substantive testimony about a document 4 until it's admitted into evidence, is my objection to the 5 question. 6 ALJ SHEDDEN: All right. And what is the 7 objection to the document itself then? 8 MR. HENDRICKS: Foundation. It wasn't -- this 9 document wasn't in the files when we inspected the records 10 earlier. They said it was in the files. I don't know 11 where it came from, who prepared it, when it was prepared, 12 or anything about it. 13 ALJ SHEDDEN: All right. Let me ask you, 14 Ms. Ronald, do you want to deal with the foundation 15 objection or suggest an alternate approach? 16 MS. RONALD: Your Honor, the witness testified 17 that he reviewed this document as part of the processing 18 of the applications, and, you know, I can't provide 19 evidence about whether this document existed in the file 20 or not. I believe that it did, because it was considered, 21 according to the witness's own testimony. 22 It's not that important. There's information of 23 a historical nature that was considered by the witness in 24 the processing of these applications that lends some 25 insight into why the applications were changed over time,


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1 and for that reason he reviewed this information and 2 relied on it, to some extent, in reaching a comfort level 3 about the necessity of amending these applications. 4 So that's why it's being offered. He didn't 5 prepare it, but it was in our files. We didn't 6 manufacture it. 7 And I apologize if it was not available when the 8 LG Water Users came in to review our files. 9 MR. DEENY: Support the Department. She has not 10 moved for it to be submitted into evidence, but we hope 11 that she does. It was relied upon by Dr. Johnson. It was 12 reviewed. It contains historical information. Certainly 13 the LGWUs are entitled to put their objection on the 14 record, and you can take that into consideration when you 15 determine the weight of the document if their objection 16 remains. 17 ALJ SHEDDEN: All right. What I'm going to do 18 is, I'm going to overrule the objection. And the 19 document's not been offered into evidence as of yet, but 20 in terms of Dr. Johnson's testimony about it, I think 21 we're better served just to go ahead and let him testify. 22 He has already said he reviewed the document during his 23 work. And perhaps the alternative way to go about it 24 would be sort of a memory test, which probably doesn't 25 help anyone to ask him questions about it without letting


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1 him see it. 2 So in terms of the objection about the document, 3 having not been offered into evidence, I'm going to 4 overrule that and allow you to ask your questions, 5 Ms. Ronald, and we'll deal with any objections to the 6 document itself if and when you offer it into evidence. 7 MS. RONALD: Well, Your Honor, I think I've 8 established a foundation for the document and how it was 9 used by the Department in the processing of the amended 10 applications, so I'll go ahead and move it into evidence 11 now. 12 ALJ SHEDDEN: All right. Is there or are there 13 any objections to DWR-139, the document that's now on the 14 screen? 15 MR. HENDRICKS: The objections as previously 16 stated. 17 ALJ SHEDDEN: All right. What I'm going to do 18 is overrule the foundation objection then, and certainly 19 you would be free, Mr. Hendricks, to explore the issue 20 with the witness on cross-examination. 21 And, again, Ms. Ronald, if it's something 22 that you would like to further address foundationally, 23 you're welcome to as well. But the document is what it 24 is and we'll just leave it at that, and 139 is then 25 admitted.


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1 BY MS. RONALD: 2 Q. I believe we were at the point of asking you to 3 read information below the numbered paragraphs on that 4 page. So if you could just continue to read that, over to 5 the beginning of the next page. 6 A. "As data became available from additional 7 studies in progress it became evident that the plans 8 outlined would require modification. A new application 9 was therefore prepared and filed on December 12th, 1921. 10 Careful surveys had shown [that] the Horse Mesa Power 11 Canal --" no, "had shown the Horse Mesa Power Canal to 12 be infeasible from an economic standpoint. Power dams 13 at Pine Creek and above Mormon Flat at the foot of Horse 14 Mesa (called the Horse Mesa Dam in the application for 15 permit and the Mormon Flat Power Dam in the completed 16 power report) were substituted. The location of the 17 proposed Pine Creek Dam was changed from that named in 18 the first application as a diversion dam for the "Horse 19 Mesa Power Canal" to a point immediately below Pine 20 Creek." 21 Q. Thank you. At the beginning of your testimony, 22 you testified that you sit on the National Dam Safety 23 Board, is that the correct title? 24 A. It's the National Dam Safety Review Board. It 25 was created by Congress as an advisement board to FEMA on


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1 issues of national dam safety policy. 2 Q. And you testified that you oversee the dam 3 safety section within the Department of Water Resources? 4 A. I do, yes. The dam safety program is within our 5 engineering/flood hazard management set of programs, and I 6 previously had managed those programs directly, but now 7 their management falls under me, yes. 8 Q. In your opinion, based on your work with dam 9 safety and dam engineering, is it common for plans for dam 10 construction to change from those that are originally 11 contemplated? 12 A. Yes, it is. I mean these kinds of projects, I 13 mean if you think back to the time that we're talking 14 about here, these were largely unsurveyed lands and these 15 were reconnaissance level investigations, trying to 16 identify what would potentially be feasible sites. And 17 it's more common than not, as you transition from a 18 reconnaissance level study into more of a design study, 19 that you'll find factors that make what you thought were 20 potentially feasible locations to not be as feasible as 21 you thought. And when you do that, you then tend to, you 22 know, have to move things around. And a system like this 23 is a series of facilities that work together as a larger 24 system, so you make a change in the location of one of the 25 component parts and it has a rippling effect that then


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1 require you to make other changes as well. 2 I would say it's more common to make these kind 3 of changes than it is to not have to make them. 4 Q. So the language that you just read out of this, 5 I'll call it a report, is consistent with your experience? 6 A. Yes, both my experience on actual projects and 7 my general knowledge and experience on, you know, past 8 historical projects. 9 Q. DWR-140. 10 ALJ SHEDDEN: Let me ask then, Ms. Ronald, if 11 you're going to a new document, would this be a good 12 opportunity for a break? 13 MS. RONALD: Yes, Your Honor. 14 ALJ SHEDDEN: All right. Why don't we meet back 15 up at five minutes after 3:00. 16 (A recess was taken from 2:47 p.m. to 3:07 p.m.) 17 ALJ SHEDDEN: All right. We're back, ready to 18 move forward with continued questioning, and you were 19 going to DWR-141, correct? 20 MS. RONALD: 140, Your Honor. 21 ALJ SHEDDEN: 140. 22 BY MS. RONALD: 23 Q. Do you recognize where this page might come 24 from? 25 A. Yes, I do.


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1 Q. What is it from? 2 A. Something that is -- it's a document that was 3 historically maintained by the agencies of the State which 4 historically had had the responsibility and authority for 5 permitting of surface water rights. It's commonly 6 referred to as either the black ledger or the black book. 7 Q. Is this information about applications that were 8 filed to appropriate water and for storage rights? 9 A. Yes, it's applications filed for both -- well, 10 for either appropriative rights or reservoir storage 11 rights, along with information related to the, disposition 12 in some cases, of those applications. 13 Q. On this particular page, do you see A-135 and 14 A-136 application numbers? 15 A. I do, yes. 16 Q. And does this ledger indicate that they were 17 filed by the SRVWUA? 18 A. It does, yes. 19 Q. And what is the status that's indicated, as you 20 continue to go across those rows? 21 A. Well, under the column with the heading 22 Permit No., there's a hand stamping of "Cancelled" on both 23 rows, on both lines. 24 Q. Is there a date indicated? 25 A. No, there is not a date indicated for either of


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1 those marks. 2 Q. Is there a reason indicated? 3 A. No, there is not. 4 Q. Did SRP, in one of its letters to DWR, request 5 that these two applications be reinstated? 6 A. Yes, it was in a letter I believe in 1993. 7 Q. If we could go to the next page. 8 MR. HENDRICKS: Your Honor, just to be 9 consistent with my last objection, I would request that 10 the document be moved into evidence before we get into the 11 substance of the document; and I'll withdraw any objection 12 and stipulate to its admission. 13 ALJ SHEDDEN: All right. With the stipulation 14 to admission, then No. 140 is admitted. 15 MS. RONALD: Thank you. 16 BY MS. RONALD: 17 Q. Do you see a reference to R-30 on this page? 18 A. I do, yes. 19 Q. And who is listed as the applicant? 20 A. The applicant is listed as the Landowners 21 Association of the Auxiliary Eastern Canal. 22 Q. And what does it say under Permit No.? 23 A. It appears to be a stamping of the word 24 "Rejected." 25 Q. And as you go across, what does it say under


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1 Remarks? 2 A. Under Remarks it says "Canceled January 1st, 3 1927," and then there there's a hand stamping of the word 4 "Cancelled." 5 Q. Is this one of the applications that SRP 6 requested be reinstated? 7 A. Yes, it is. 8 Q. Does the request that the applications be 9 reinstated assume that they were properly canceled to 10 begin with? 11 MR. HENDRICKS: Objection, form. I don't 12 understand. 13 ALJ SHEDDEN: Do you want to restate your 14 question? 15 MS. RONALD: Sorry. Yes, I do. How about if I 16 don't ask that question. Okay. 17 BY MS. RONALD: 18 Q. On the next page of this exhibit, if you look 19 down and see R-45 and R-46? 20 A. Oh, I'm sorry. Yes, I do see them. 21 Q. And do you see the status? What does it say in 22 the rows right across there under Permit No.? 23 A. Well, under Permit No., on each of those rows 24 there is a hand stamping of the word "Cancelled," followed 25 by something else which is not intelligible.


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1 Q. And the last page. That is the last page. 2 And are those two applications ones that SRP 3 requested be reinstated? 4 A. Yes, they are. 5 Q. DWR-141. 6 Please identify this document. 7 A. This is a report that was commissioned, I 8 believe, by the U.S. -- well, there are a series of 9 reports, they're known as HAER reports, and they have to 10 do with -- I believe HAER stands for Historical 11 American -- no. It's something like it's Historical 12 Architectural and Engineering Report. 13 Historic American Engineering Record. Thank 14 you. 15 And there are a series of these reports for the 16 reservoirs constructed on the Salt and Verde Rivers. Some 17 of them were commissioned by the U.S. Bureau of 18 Reclamation, some of them by the National Park Service, I 19 believe some by SRP. 20 Q. So let's look at DWR-142. 21 A. Oh, I'm sorry, and that one in particular was 22 for the Mormon Flat Dam. 23 MR. HENDRICKS: I'm sorry, I wasn't writing fast 24 enough. What did HAER stand for? 25 THE WITNESS: Historic American Engineering


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1 Record. 2 BY MS. RONALD: 3 Q. 142, is this another HAER report? 4 A. Yes, it is. This one is for Bartlett Dam. 5 Q. And DWR-143? 6 A. This is the HAER report for Horseshoe Dam. 7 Q. And 144? 8 A. This is the HAER report for Stewart Mountain 9 Dam. 10 Q. And 145? 11 A. That is the HAER report for Theodore Roosevelt 12 Dam. 13 Q. Did you review these documents in the processing 14 of the amended applications that are the subject of this 15 proceeding? 16 A. Yes, I did. 17 Q. Can you generally describe -- 18 MS. RONALD: I would like to offer these into 19 evidence. 20 MR. HENDRICKS: No objection. 21 ALJ SHEDDEN: All right. And so we're looking 22 then at 141 is the first one, correct? 23 MS. RONALD: Yes. 24 ALJ SHEDDEN: Yeah, 141, 142, 143, 144 and 145 25 are then all admitted.


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1 BY MS. RONALD: 2 Q. Okay. Let's go back, please, to 141. And on 3 the cover it says that this is for Mormon Flat Dam; is 4 that correct? Is that what you testified to? 5 A. Yes, it is. 6 Q. Are there other reservoirs described in this 7 report as well? 8 A. I believe in this report reference is made to 9 other reservoirs on the Salt and Verde Rivers in addition 10 to Mormon Flat Dam, yes. 11 Q. Was there a discussion in this report of the 12 construction of Horse Mesa Dam? 13 A. I believe that there is, yes. 14 Q. Was there a discussion of Stewart Mountain Dam? 15 A. Yes, there is. 16 Q. And was there a discussion of Bartlett Dam? 17 A. Yes, there is. 18 Q. And then there was a separate report as well for 19 Bartlett; is that correct? 20 A. Yes. The individual reports will center on a 21 particular engineering structure, while including a 22 discussion of engineering, of societal and other factors 23 that relate to other structures as well. 24 Q. Generally speaking, what information in these 25 reports did you find particularly helpful in processing


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1 the amended applications? 2 A. Well, other than the information that would be 3 of interest to an engineer, you also -- there is 4 interesting and informative historic information related 5 to what was going on at the time. Remember, these 6 applications filed in 1920 and '21. That's a long time 7 ago. 8 And it's very helpful to have information that 9 informs your knowledge about what were the circumstances 10 at the time, the circumstances both with the Salt River 11 Water Users' Association, with the country in general, 12 with the Phoenix metropolitan area, the planning and other 13 studies that were done in both the preparation and the 14 planning for these structures and the actual construction 15 and implementation. 16 So there was some very useful information that 17 really helped sort of fill in some of the void that is 18 left when you're looking at conditions, you know, a fairly 19 long time ago. 20 Q. I would like to direct your attention to the 21 chart again, DWR-31. Can you please -- these dates may be 22 off by a year or so, depending on what you read, but when 23 was Mormon Flat Dam constructed? 24 A. Mormon Flat Dam, its construction ranged from 25 1923 to 1926.


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1 Q. And then what about Horse Mesa? 2 A. Horse Mesa Dam was constructed in 1927. 3 Q. And then Stewart Mountain? 4 A. Stewart Mountain Dam was constructed between 5 1928 and 1930. 6 Q. Bartlett? 7 A. Bartlett Dam was constructed between 1936 and 8 1939. 9 Q. Horseshoe Dam? 10 A. Horseshoe Dam was constructed between 1944 and 11 1946. 12 Q. And Roosevelt Dam, was it constructed -- 13 A. Well, Roosevelt Dam, the initial construction I 14 believe was between 1906 and 1911. The enlargement due to 15 the construction of spillway gates, I believe it was, that 16 is referenced in the E-11 application occurred in 1924. 17 Q. So there were a series of dams that were 18 constructed beginning in 1923, and putting aside Roosevelt 19 for a moment, and ending in 1946. There would have been 20 five dams constructed during that time frame. Is there 21 anything important about that? 22 A. Well, I would say that that is -- it would not 23 have been -- it would not have been very feasible, 24 probably, to construct them very much faster than that. I 25 mean when you look at the construction techniques and


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1 materials that were available at the time, the labor force 2 that was available at the time, the fact that there was a 3 World War and a Great Depression that was happening in 4 this time frame, to average a time of three to four years 5 for construction of what I believe were the largest dams 6 in the state at the time, outside of the ones on the 7 Colorado River, you know, that's -- you know, it makes 8 sense. 9 MS. RONALD: No further questions, Your Honor. 10 ALJ SHEDDEN: Let me just ask one or perhaps two 11 before I turn it over. 12 13 EXAMINATION 14 BY ALJ SHEDDEN: 15 Q. Looking back at No. 31, the big chart there, the 16 Roosevelt Dam and Reservoir, you show, of course, the 1906 17 and 1924 values. Is the value in the last column, the 18 1,366,000 plus acre-feet, does that storage reflect only 19 the situation in 1924, or -- and you can correct me if I'm 20 wrong. There was a subsequent enlargement to the 21 reservoir there. So which value is the 1,366,000? 22 A. I believe that the 1,366,000 is the calculated 23 storage not including the more recent modifications. But 24 it -- so, essentially, that's the storage at the end of 25 1924, which includes, of course, the storage that was


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1 constructed during the original 1906 to 1911 period. 2 Q. All right. 3 A. And Salt River Project I'm sure can correct me 4 if I'm wrong. 5 ALJ SHEDDEN: All right. Ms. Ronald, if you 6 want to follow up on that, you're welcome to. If not, we 7 will move on down the line. 8 MS. RONALD: Yes, Your Honor, I was just going 9 to point out that -- I'm looking for the exhibit number. 10 Here it is. 11 If we look at Exhibit -- if you give me a 12 moment, there is a table that's an attachment to the 13 amended applications that describes all of the reservoir 14 capacities, and it is very instructive and it might go to 15 your question and be helpful for clarification. 16 It's DWR-43. I think that's where it's at. 17 It's actually within the application itself, so if we'll 18 keep scrolling down. Which application is this one? Is 19 this E-11? Yes, good. All right, keep scrolling down. 20 Keep going. And we're looking for an attachment. Keep 21 going. 22 MR. HENDRICKS: Which exhibit are we in? 23 ALJ SHEDDEN: 43. 24 MS. RONALD: We're in 43. This is the first 25 amended application that's attached. And there it is.


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1 That's the table I was looking for. 2 3 FURTHER DIRECT EXAMINATION 4 BY MS. RONALD: 5 Q. Do you recognize this table, Dr. Johnson? 6 A. I do, yes. 7 Q. And what does it say above the table up there? 8 A. In the red -- 9 Q. Both. 10 A. -- or in the paragraph? 11 Q. Both. 12 A. "The capacity of the reservoirs has varied over 13 time as a result of spillway modifications and sediment 14 accumulation. This historical capacities of the 15 reservoirs are listed in the table below. The amount of 16 water appropriated for storage is based on these storage 17 capacities with continuous fill of the storage. The 18 elevation of the top of SRP conservation storage is also 19 provided, which may change over time as the result of 20 sediment surveys." 21 Q. Thank you. 22 And if we'll scroll down a little bit to get to 23 the bottom of that table, then you see the number for 24 Roosevelt? 25 A. Yes.


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1 So if I can improve my answer to your question, 2 Judge, the 1,366,966 is the currently calculated estimate 3 of that, of the value. 4 ALJ SHEDDEN: All right. 5 And then, Ms. Ronald, is there anything else? 6 MS. RONALD: Not at this time. 7 ALJ SHEDDEN: Then I'm going to turn it over to 8 Mr. Hendricks then. 9 10 CROSS-EXAMINATION 11 BY MR. HENDRICKS: 12 Q. Good afternoon, Dr. Johnson. 13 A. Thank you. 14 Q. My name is Keith Hendricks. I represent a group 15 of three clients who are referred to as the Lower Gila 16 Water Users. 17 A. Yes. 18 Q. I want to first start going over some of your 19 background. 20 A. Okay. 21 Q. You said that you got your education in civil 22 engineering, a Bachelor's, Master's and a Doctorate 23 degree; is that correct? 24 A. Yes, it is correct. 25 Q. And then you said you first became employed by


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1 DWR in 2000; is that correct? 2 A. Yes, it is. 3 Q. Did you have any professional employment before 4 your employment by the State? 5 A. I had worked as an independent consultant with 6 my graduate advisor prior to that, but that was 7 contractual work. But contractual work, and I was not at 8 the time a registered professional engineer, but I did do 9 professional engineering work under his supervision, and I 10 had done that from 1996 until the year 2000. 11 Q. So you worked for your professor from '96 to 12 2000? 13 A. I did, yes. 14 Q. And what type of work was that in? 15 A. It was -- what he would do is, he would be hired 16 by engineering firms or government agencies to basically 17 do third-party, independent peer reviews of work that 18 other engineers hired by them had done. 19 Q. And what I'm looking for is, was it road 20 construction, building -- 21 A. Oh, okay. 22 Q. -- water? What type of -- 23 A. They were both -- they were primarily dams, dam 24 safety, and other geotechnical and structural projects. 25 Q. In any of your work prior to 2000, did you have


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1 an opportunity to work on any of the dams or reservoirs 2 that are at issue in this case? 3 A. No, I did not. 4 Q. Okay. So the first time you had any personal 5 involvement with any of the dams or reservoirs that are at 6 issue in this case was after the year 2000? 7 A. Correct, yes. 8 Q. And what was your personal involvement with the 9 dams or reservoirs that are involved in this case between 10 2000 and 2009, when you became the assistant director? 11 A. I had not been directly involved with the 12 Department's processing of these applications prior to 13 2000. 14 Q. Prior to 2000 or -- 15 A. I'm sorry, prior to 2009. 16 Q. Okay. So prior to 2009 you had no personal 17 involvement with any of these applications or any of the 18 issues that we've been talking about today? 19 A. Correct. 20 Q. So all of your knowledge regarding that, what 21 was it based on? 22 A. My knowledge of information -- my knowledge of 23 the process and proceedings prior to 2009 is based on 24 information that's been communicated to me by staff who 25 were involved, as well as my review of the documents and


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1 other related files. 2 Q. The information that was conveyed to you by 3 staff, was it memorialized in any fashion, or are these 4 oral conversations? 5 A. These were primarily oral conversations. 6 Q. So, for example, the back and forth between the 7 Department and the Association regarding the amendment and 8 the notices that occurred in the 1990s and the early 9 2000s, you had no involvement in that? 10 A. Correct. 11 Q. Did you have -- but you were informed about that 12 by reading what's on the documents themselves that we saw 13 today, correct? 14 A. Correct. 15 Q. And then you said that there was also staff 16 meetings? 17 A. I was also informed of what happened during 18 those communications by ADWR staff, who were themselves 19 involved. 20 Q. Any minutes of those meetings or anything that 21 would show what you were informed? 22 A. No. These were internal ADWR working meetings, 23 and we normally don't keep minutes of those. 24 Q. How many dams have you approved? 25 A. Approved in what way?


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1 Q. In any fashion, in any -- 2 A. Oh. On the dam safety side I have probably 3 approved construction on 30 dams. 4 Q. All in the state of Arizona? 5 A. All in the state of Arizona. Prior to my work 6 with the Department of Water Resources, I had done some 7 consulting on work on dams in Colorado and in Utah as 8 well. 9 Q. The 30 dams that you just testified to, were 10 they all while you were employed by the State, or was that 11 also including work that you had done previous? 12 A. Some of them I worked on prior to my work with 13 the State. The Department of Water Resources has 14 jurisdictional oversight over 250 dams, so ultimately I'm 15 responsible for the oversight of each and every one of 16 those. 17 Q. Okay. Let's confine it to construction of dams. 18 A. Sure. 19 Q. There's not been 30 dams constructed since 2000, 20 have -- 21 A. There have not been 30 dams newly constructed, 22 but there have been construction projects on more than 23 30 dams. The ones that I have personally approved have 24 been since I was in a management role since 2005. 25 Q. And what types of projects? If it's not new


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1 construction, what are we talking about? 2 A. Well, some of them are new construction and 3 other ones are repairs, rehabilitations of dams that have 4 safety deficiencies and so forth. 5 Q. How many dams, new construction dams, have you 6 been involved in the approval of? 7 A. Probably only three or four. 8 Q. Can you remember those? 9 A. Not off the top of my head. There have been a 10 couple constructed by copper mines here in the state. The 11 Carlota dams; there are three dams at the Carlota Copper 12 in Gila, in Gila County, that I oversaw and approved the 13 construction of; and probably one or two more in the last 14 six years that I can't think of right now. 15 Q. Any dams that you've been involved in, in the 16 approval of, that have a storage capacity that is anywhere 17 near the six dams that we're talking about in this case? 18 A. The smallest of these dams is 41,000 acre-feet; 19 and probably for new construction, I think probably the 20 largest new construction dam that's been built in the 21 state in the last ten years was probably 2,500 to 22 3,000 acre-feet. 23 Q. Now, let's talk about your responsibility since 24 2009 for processing permits and determining water rights. 25 I want to focus not on the dam safety side of it --


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1 A. Sure. Understood. 2 Q. -- but the water rights side of your job. 3 A. Understood. 4 Q. Tell us exactly what your responsibilities with 5 regard to permits, applications and determining water 6 rights are. 7 A. Okay. Arizona statute vests with the Director 8 of the Department of Water Resources the authority for 9 approval of permits to appropriate and use surface water. 10 That authority is delegated by the Director to the 11 assistant director, who oversees that program. 12 So my responsibility is the recommendation and 13 approval of these permits to appropriate, as well as 14 transfers of water rights and other similar filings. 15 Q. How many applications for approval of 16 appropriation of water have you been involved in in the 17 three, four years that you have been the assistant 18 director? 19 A. I don't know that number offhand. What I do 20 know is that our surface water permitting group processes 21 a number of different types of filings. There are 22 assignments of existing rights. There are filings for new 23 rights. There are filings for the transfers and changes 24 to existing rights. 25 I don't off the top of my head know the numbers


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1 of those, but I would guess in the past four years there 2 have probably been more than a thousand assignments of 3 water rights that have been filed with the Department of 4 Water Resources and an order of magnitude fewer filings 5 for new rights. So maybe 100 of those, plus or minus 50, 6 in the last few years. 7 Q. So anywhere between 50 and 150? 8 A. Probably between maybe 50 and 150, 175, yes. 9 Q. And these would be applications to appropriate 10 water of the state of Arizona? 11 A. Either applications to appropriate water or 12 applications to change or transfer existing rights, yes. 13 ALJ SHEDDEN: Let me caution you, Dr. Johnson, 14 to let him finish his questions -- 15 THE WITNESS: Thank you. 16 ALJ SHEDDEN: -- before jumping in. 17 THE WITNESS: Thank you. 18 BY MR. HENDRICKS: 19 Q. And I appreciate that it's late and we've been 20 here for a long time and you want to get through. So I'll 21 try to not walk over you, if you'll try and wait for me. 22 A. Okay. Thank you. 23 Q. Let's just focus on not the transfer, but just 24 the appropriation, and I want to get just a -- I 25 understand you don't have an exact number with you, but


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1 the order of magnitude of how many applications for -- new 2 applications to appropriate water have been running 3 through the Department in your tenure? 4 A. I would say that I would estimate between 30 and 5 70. 6 Q. Now, you gave some testimony on direct 7 examination about the Association's request to reinstate 8 permits that had been canceled. Do you remember that 9 testimony? 10 A. I do, yes. 11 Q. And that happened before your tenure, correct? 12 A. Correct. I believe it was 1993. 13 Q. Okay. And, now, in your tenure, has there been 14 any request to reinstate applications that have been 15 canceled? 16 A. There may have been, but I cannot specifically 17 think of one right now. 18 Q. Does the Department have a policy and procedure 19 on how it handles requests to reinstate an application 20 that has been canceled? 21 A. The Department does not have a formally 22 established procedure for evaluating those, as far as a 23 formal process goes. We do have a consistent set of 24 procedures that we use, but I would say that it's not 25 formalized.


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1 Q. Okay. What is the consistent set of procedures? 2 Well, how do you know that there's a consistent set of 3 procedures if you can't be sure that you've even come 4 across that situation? 5 A. Well, what I meant by that is, there's not a 6 formal set of proceedings that go through; that there's 7 not a consistent -- there's not a formal set of 8 proceedings that are initiated upon such a request. 9 If such a request is made, it goes through the 10 manager of the program, who then consults with myself and 11 our legal counsel. We evaluate such a request and then a 12 decision is made. 13 Q. Legal counsel would be -- 14 A. We internally have attorneys who work for the 15 Department who advise the programs as to Arizona's Revised 16 Statutes. 17 Q. And is that Ms. Ronald? 18 A. Well, that includes her, yes. 19 Q. Okay. Do you know who made the decision, who 20 the individual was who made the decision to reinstate 21 these applications? 22 A. Off the top of my head, I don't recall who the 23 assistant or deputy director was in 1993. That may have 24 been Herb Dishlip, but I'm not sure. 25 Q. Was there any type of written document


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1 memorializing the reinstatement of these applications? 2 A. Not that I'm aware of, no. 3 Q. In your review of the file, did you review any 4 document that discussed the merits or the procedures or 5 the substance of reinstating these applications? 6 A. No, I have not. 7 Q. And to your knowledge, there is no such document 8 in the Department's records, correct? 9 A. Correct, yes. 10 Q. Was notice given to any other party that 11 canceled or rejected applications were considering to be 12 reinstated by the Department? 13 A. The notice is provided as part of the public, 14 the notice generally of the applications. 15 Q. Well, I'm not sure that answered my question. 16 A. So -- go on. 17 Q. My question was, is notice given to the public 18 or to any interested parties that the Department is 19 considering reinstatement of canceled or rejected 20 applications? 21 A. That question presumes that there was a proper 22 and appropriate canceling or rejection of such an 23 application in the past. But the answer to your question 24 is no. 25 Q. Okay. So whether -- now, are all -- is it your


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1 testimony that all applications that have been canceled in 2 the past are not proper; that there has been no proper 3 cancellation -- 4 A. No. 5 Q. -- of -- 6 A. Sorry. 7 Q. So how many times has the Department, to your 8 knowledge, ever reinstated a canceled or rejected 9 application? 10 A. I don't know the count; but I know that the 11 black ledger or black book that I previously testified to 12 contains within it examples of applications that had been 13 shown or marked within the book as having a stamping of 14 "Cancelled," which also have a date of approval following 15 that. 16 Q. Have you done any study or attempted to reach 17 any determination as to the number of times that has 18 occurred? 19 A. No, I have not. 20 Q. Do you know if anyone has? 21 A. I don't know if anyone has done a study of the 22 number of times that has occurred within the State of 23 Arizona, no. 24 Q. How many times, to the best of your knowledge 25 sitting here today -- well, strike that.


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1 Let me ask this: Do you know how many 2 applications are stamped "Cancelled" or "Rejected" in the 3 black book? 4 A. No, I don't know that count. 5 Q. Is there any reason that you know of that that 6 number is less than a thousand? 7 A. I don't know that of -- I don't know what the 8 number is. 9 Q. Let me have you turn -- I'm going to 10 introduce -- oh, there's been some new exhibits added. 11 Okay. Salt River Valley Water Users' 12 Association Exhibit 287. Do you recognize the front page 13 of this exhibit? 14 A. Yes, I do. 15 Q. Is this the black book? 16 A. Yes, it is. 17 Q. We saw -- 18 MR. HENDRICKS: Janet, can you help me out? 19 What exhibit number was that portion that you used? Do 20 you remember? 21 MS. RONALD: 140, I believe. 22 MR. HENDRICKS: Yeah, I think it was. 23 BY MR. HENDRICKS: 24 Q. Exhibit 140 previously, that's a subset of Salt 25 River 287, is it not?


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1 A. I'm sorry? 2 Q. Exhibit 287, well, it's 700 pages. 3 A. Yes. 4 Q. That would be the complete black book, correct? 5 A. I believe so. 6 Q. Okay. And we saw on direct examination 7 Ms. Ronald showed you an exhibit; do you remember that? 8 A. Yes. 9 Q. And that would have been a subset of 10 Exhibit 287, correct? 11 A. Yes, that's correct. 12 MR. HENDRICKS: Your Honor, move the admission 13 of SR-287. 14 ALJ SHEDDEN: Is there any objection to SR-287? 15 MR. DEENY: No, no objection. 16 ALJ SHEDDEN: All right. SR-287 is then 17 admitted. 18 BY MR. HENDRICKS: 19 Q. Let's just take a look at a couple pages and 20 just start at the very beginning. 21 Looking on the first page of the applications, 22 R-1 through R-20, you would agree with me, would you not, 23 that the majority of these applications are stamped 24 "Cancelled"? 25 A. I would agree that in the column that reads


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1 Certificate of Water Right, there are seven that are hand 2 stamped "Cancelled," and in the Remarks column it shows 18 3 with typed the word "Canceled" and two typed the word 4 "Rejected," or one's "Rejected" typed, the other one is 5 hand stamped. 6 Q. And then in the one place the "Rejected" is 7 crossed out and there's actually a certificate number? 8 A. Yes, that's right. Yes. 9 Q. So based on your review of that, could you 10 conclude R-8 was issued, or was it rejected? 11 A. This would suggest that there is a certificate 12 of water right No. 54 that is related to application R-8. 13 Q. Okay. So 18 have been canceled and has 14 typewritten notes. There are hand stamps that have 15 "Cancelled" in two places in the black book, correct? 16 A. I think I agree with you. I'm not sure on the 17 last part, about the two with the hand stamped in the 18 black book. 19 Q. In the Remarks column there's a typewritten 20 "Canceled" and then there's also a hand stamped 21 "Cancelled"? 22 A. Yes. 23 Q. Okay. So in some of them it has "Cancelled" 24 over underneath the Certificate of Water Right, and other 25 places it's hand stamped "Cancelled" in Remarks and then


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1 some places both? 2 A. Correct, yes. 3 Q. Then look at the next page. So 18 were canceled 4 of the initial 20. You would agree that -- and we don't 5 need to get the exact numbers. You just agree with me 6 that the majority of the applications on the second page 7 were also canceled? 8 A. Well, they are marked as "Canceled," yes. 9 Q. I counted them up. I came up with 17. The 10 number is not material; but the issue is that the majority 11 of them are marked "Canceled," correct? 12 A. Correct. 13 Q. And on the third page, again, the majority -- I 14 came up with 16 on this page, but the majority of the 15 applications on the third page are canceled? 16 A. A majority of them are marked as "Canceled," 17 either in the Remarks or under the column of Permit No. or 18 Certificate No., yes. 19 Q. Now, let's look at R-45 and R-46. Those are two 20 of the ones that are at issue in this case, correct? 21 A. Correct. 22 Q. And not only are they stamped "Cancelled," they 23 are also stamped "Rejected"? 24 A. Correct. 25 Q. What's your understanding of the use when it is


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1 stamped "Rejected" in the official black book? 2 A. I do not know what the different uses of those 3 terms meant and were used as in 1920. 4 Q. It's obviously a protocol that was being 5 employed at the time; would you agree with that? 6 A. Yes, I would. 7 Q. You see that there are multiple occasions of 8 hand stamped "Cancelled" and there are also examples where 9 it is hand stamped "Rejected," both under the Certificate 10 column and under the Remarks column; do you see that? 11 A. I do, yes. 12 Q. And on the fourth page, again, the majority of 13 the applications are either stamped "Cancelled" or 14 "Rejected"; you would agree with that? 15 A. I would say I would agree, yes. 16 Q. Is it the Department's position then that -- you 17 know, we've just looked at the first four pages -- that 18 all of these -- and there's 20 per page, so that would be 19 80 applications, and if you do the math, it comes out to 20 about like in excess of 70 have been stamped "Cancelled." 21 Is it the Department's position that this cancellation of 22 those first 70 or 70 of the first 80 applications was not 23 validly accomplished? 24 A. It's our position that when looking at any of 25 these individual applications, that we do not know what


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1 process was employed that led up to them being marked the 2 way they are and whether or not notice was provided to the 3 applicant and whether or not that applicant had the 4 opportunity to appeal and reinstate. That, we don't know. 5 Q. Was notice ever given to SRP or to the 6 Association that these applications had been stamped 7 "Cancelled" and/or "Rejected"? 8 A. We were not -- we did not identify that any of 9 these had been returned to the applicant as canceled or 10 rejected, no. 11 Q. Well, and on direct examination we saw the 12 letters from the Department and from the applicant in the 13 '90s where it was clear that the applicant knew, the 14 Association new, that the applications had been stamped 15 "Cancelled"; isn't that correct? 16 A. I think what we saw, we saw letters that were 17 making reference to a subset of the applications, without 18 making reference to others. And I think maybe you're 19 making the presumption that that means -- that that means 20 something, and I don't know what that means. But we were 21 not able to find correspondence that specifically says 22 these applications have been rejected or canceled. 23 Q. Let me make sure. This Exhibit SR-287, is it an 24 official book and record of the State of Arizona? 25 A. It is a historic record of the State of Arizona


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1 and surface water rights. 2 Q. The title of Exhibit SR-287, it says, "Number 3 Indices Of: Applications, Permits, Certificates of Water 4 Right, Old Water Rights, Withdrawals, Rejections & 5 Cancellations," correct? 6 A. Correct. 7 Q. So cancellations and rejections is actually in 8 the title of the black book, correct? 9 A. Correct. 10 Q. Look at the Department's Exhibit 21 that was 11 admitted into evidence. Do you remember seeing this 12 document on direct examination? 13 A. Yes, I do. 14 Q. Do you know what this document is? 15 A. This was a form that I believe was more or less 16 an internal tracking form that was used by the State 17 agency at the time responsible for the processing of 18 applications for surface water rights and the issuing of 19 such rights. 20 Q. Okay. And so this form, do you believe that 21 this form was contemporaneously used back in the 1920s 22 when these applications were created? 23 A. I believe it was. 24 Q. And you see the printed portion of the form, 25 what you call a tracking form, it has a line for


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1 cancellation, does it not? 2 A. Yes, it does. 3 Q. Is it your understanding that cancellation was 4 an accepted method of final disposition of an application 5 at that time? 6 A. I don't know that it was a -- I don't know that 7 it was that as far as the final disposition goes. 8 Q. Do you know that it wasn't? 9 A. No, I do not. 10 Q. Does anybody at the Department, to your 11 knowledge, know if cancellation was or was not an accepted 12 final disposition of an application from 1920 through 13 1960s? 14 A. Not that I'm aware of. I do know that we find 15 one or more examples of applications that were marked as 16 canceled that were later apparently either reinstated or 17 some other means, so that they were issued permits. So 18 that would suggest that it wasn't a final disposition in 19 all cases. 20 Q. And you said there's one or more examples. Can 21 you name an example? 22 A. No, I can't. I can't remember. 23 Q. Did you do an investigation to see what 24 procedure was used in those specific examples? 25 A. We don't have records of such a procedure. So


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1 to the extent that an investigation was performed, per se, 2 I'm not sure. But we're not aware of those, no. 3 Q. So you don't know sitting here today if there 4 was any extenuating circumstances, if notice was 5 published, if a hearing was held, or anything was done to 6 reinstate the application before further action was taken 7 on that application? 8 A. No. 9 Q. Let's talk about this while we're here, and I'm 10 jumping around a little bit and I apologize for that. I 11 did actually have a more coherent presentation planned. 12 But while we're here, Exhibit 21 has a note at 13 the very bottom, and this is an -- and it's identified 14 with R-45, R-46, A-135 and A-136 on those. Do you know 15 which applications, just for the Court? I think it's up 16 on your chart, if you need to look at it. What 17 application was R-45 with regard to? 18 A. R-45 was for a plan structure called the 19 McDowell Reservoir on the Verde River. 20 Q. So R-45 was for McDowell Reservoir, which was 21 never built, correct? 22 A. Correct. 23 Q. And then R-46, what was it for? 24 A. It was for Mormon Flat Reservoir on the Salt 25 River.


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1 Q. And A-135, what was it for? 2 A. The McDowell Power Canal. 3 Q. And that was a facility that was never 4 constructed, correct? 5 A. Correct. 6 Q. And A-136? 7 A. The Horse Mesa Power Canal. 8 Q. And that canal was never constructed, correct? 9 A. Correct. 10 Q. Okay. The note at the top referencing those 11 three -- or those four applications, and then the note at 12 the bottom, can you read that for us? 13 A. Starting with "September"? 14 Q. Yes. 15 A. "September 29, 1937, Mr. Lin Orme, president of 16 the Salt River Valley Water Users' Association called at 17 the office today and inspected all of the applications in 18 this file, at the invitation of the Commissioner." 19 Q. Okay. Do you have or does the Department have 20 any information as to the Association's inspection of the 21 applications in 1937, beyond what's on the face of this 22 document? 23 A. No, I believe that we do not. 24 Q. Okay. As of 1937, the application for R-30, 25 which had been assigned from the Eastern Canal Association


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1 to the Salt River Water Users' Association, that had 2 already happened, correct? 3 A. Are you referring to the assignment? 4 Q. Yes. 5 A. I believe the assignment had already happened, 6 yes. 7 Q. Yeah, we saw in the Department's Exhibit 146 8 where in 1929 there was a resolution by the Canal 9 Landowners Association assigning their rights in the 10 application to the Salt River Water Users' Association, 11 correct? 12 A. Correct. 13 Q. That was 1921 that that occurred -- 14 A. Yes. 15 Q. -- and that's Exhibit 146, the Department's 16 Exhibit 146. And that, we saw. 17 Let me bring up Exhibit 1, is stamped "Canceled" 18 and dated 1-1-27 that it had been canceled, correct? 19 A. Correct. 20 Q. Do you have any reason to believe that the 21 notation on the face of the application stating that it 22 had been canceled and dated 1-1-27 was not on the document 23 when the president of the Association went to the offices 24 and inspected all of the applications on file? 25 A. I have no reason to believe that it was not. I


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1 don't know that it was, but I mean I can't say obviously 2 for sure. I wasn't there. But no. 3 Q. Okay. Let's talk about this one, and I want 4 to -- I'm going to talk now on just the processes. 5 Exhibit R-130 (sic) was returned by the 6 Department to the applicant, wasn't it? 7 A. Yes, that's the information that we have. As 8 shown on the screen here, shows it was returned to the 9 applicant on November 17th, 1920. 10 Q. And it says in the document itself, it says, "In 11 order to retain its priority, this application must be 12 returned to the Water Commissioner, with corrections, on 13 or before January 17." Do you see that? 14 A. Yes, I do. 15 Q. Is there any question in the Department's mind 16 that this application was returned to the applicant and 17 corrections were requested? 18 A. Any question in our mind. We just saw that the 19 application shows that on a certain date it was returned. 20 We have no information to suggest that that's not correct. 21 Q. So is it the Department's position or does the 22 Department agree or accept that this application was 23 returned to the applicant and the applicant was instructed 24 that corrections needed to be provided within 60 days? 25 A. Can we scroll back down to the date that it was


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1 returned, please? 2 Okay. "Returned to the applicant for correction 3 November 17th, 1920." 4 And can we scroll back up? 5 And shows "on or before January 17th, 1920." 6 Q. This is one of those, the day, they probably -- 7 A. Okay, that's what I was trying to see. 8 Q. They probably meant '21. 9 A. I would think so, yes. 10 Q. Yeah. But you would agree that, in fact, you 11 understand that the regulations at the time required 12 corrections to be made within 60 days? 13 A. It required that corrections be made within 14 60 days unless an extension was allowed, is what I 15 believe. 16 Q. And in this case, we know from the face of the 17 document that it was returned. There's nothing in any 18 document that indicates that an extension to that 60 days 19 was allowed, correct? 20 A. We don't have any written documentation that 21 such an extension was provided for, no. 22 Q. Okay. And there is a provision on the 23 application that would -- for a date stamp for when the 24 corrections were returned, correct? 25 A. That is correct. We also know that it was


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1 assigned the following year. 2 Q. We'll get to assignment; we'll get to assignment 3 in a minute. 4 A. Okay. Yes, okay. 5 Q. Let's just stick with it was returned for 6 corrections. 7 Was it ever -- was a corrected application ever 8 then sent back? 9 A. I don't know. 10 Q. The Department, as far as -- 11 Let me ask you this then: Does the Department 12 have any evidence suggesting that a corrected application 13 was ever sent back? 14 A. No, we have not found documentation that 15 establishes that whatever the requested corrections were 16 were made and returned. 17 Q. For example, there are blanks; there are simply 18 sections of this application that are blank, are there 19 not? 20 A. There are, yes. 21 Q. So the application was not complete when it was 22 submitted, correct? 23 A. On its face, the application was not complete. 24 I'm not aware specifically of in the 1920s what they 25 considered to be a complete application, whether or not


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1 that meant every line have something written or not. I 2 don't know how they implemented the program at the time. 3 Q. Well, we know that this application was returned 4 for corrections? 5 A. Correct. 6 Q. And there is no evidence that a corrected 7 application was ever returned then again to the 8 Department, correct? 9 A. Correct. 10 Q. Okay. So let's go to the assignment. Have you 11 reviewed the assignment in any detail? 12 A. I have read the exhibit that has been provided 13 here. 14 Q. Let's talk about -- the assignment consists of a 15 resolution by the Eastern Canal Irrigation District 16 resolving to assign its rights in the application to the 17 Salt River Valley Water Users' Association; is that a fair 18 characterization? 19 A. Yes, it is. 20 Q. And it says in the resolution that on August 30 21 they applied for a permit to construct a reservoir and 22 store for beneficial use the unappropriated waters of the 23 State of Arizona at certain locations, correct? 24 A. Correct. 25 Q. And is there anything in the resolution that


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1 indicates that a corrected version of the application was 2 ever filed or any other additional information was filed 3 after August 30, 1920? 4 A. Well, there is an indication that the request 5 for assignment was approved, but there is not specifically 6 information that speaks to the question that you're 7 asking, no. 8 Q. Okay. So the answer to my question -- 9 A. No. 10 Q. -- is no -- 11 A. Yes. 12 Q. -- correct? 13 Okay. And then the assignment, it says, and now 14 let's go to the operative language, "Now therefore," and 15 it says that it's assigning -- has some initial stuff, and 16 it says "all of its rights and privileges, held and," I 17 assume it would be "possessed by it by virtue of that 18 [specific] application dated August 30, 1920, to the State 19 Water Commissioner of the State of Arizona, for a permit 20 to construct a reservoir and to store for beneficial use 21 unappropriated waters of the State of Arizona, at Mormon 22 Flat," blah, blah, blah. 23 Anything in this assignment that provides 24 additional information regarding the substance of the 25 application that would have corrected the deficiencies


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1 that caused it to be returned? 2 A. No, there is not. 3 Q. So they say whatever rights we have in that 4 application we're assigning to the Salt River Water Users' 5 Association, correct? 6 A. Correct. 7 Q. Is there any representation or warranty that the 8 application was in proper form or complete? 9 A. No. 10 Q. Is it fair to say that this assignment was an 11 assignment of the rights as they then existed? 12 A. Well, I'm not sure in this case what the meaning 13 of right is when associated with an application. I think 14 primarily it's preserving the filing date of the 15 application, which would become the priority date for the 16 right once established. 17 Q. Okay. But this application was in November of 18 1921, so almost a year later, correct? 19 A. Correct. 20 Q. Okay. So we make sure we got the sequence down, 21 the application was filed in August of 1920, it was 22 returned in November of 1920, the deadline for correction 23 was January of 1921. There is no evidence that it was 24 corrected, but in November of 1921 it was assigned. Is 25 there anything wrong with the sequence of events that I


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1 just stated? 2 MR. DEENY: Objection just to the extent that I 3 don't think the dates are actually listed like that on the 4 documents. He's pointed out where he thought that perhaps 5 the '20 might be a '21, but I don't think that's been 6 established. 7 ALJ SHEDDEN: All right. And what I'm going to 8 do is overrule the objection, because the question perhaps 9 encompassed that, with a question about whether the 10 sequence as laid out is correct as this witness 11 understands it. So you can answer the question. 12 THE WITNESS: I would say that that 13 characterizes -- that that's an accurate characterization 14 within the context of the question, with the caveat that 15 we don't know that the deadline of January was not 16 extended, and we don't know that a corrected application 17 was not returned. 18 BY MR. HENDRICKS: 19 Q. But you have no evidence, affirmative evidence, 20 that either of those things occurred, correct? 21 A. Correct, yes. 22 Q. Okay. Now, in deciding to reinstate the 23 application R-30, what consideration did the Department 24 make, if any, as to the fact that the applicant was 25 specifically told that in order to maintain the priority


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1 date, a corrected application must be returned within 2 60 days? 3 A. I'm sorry. Can you repeat the question? 4 Q. Well, let me ask it this way. 5 A. Yeah. 6 Q. This statement here on the screen in Exhibit 1, 7 it says in order to retain its priority, the application 8 must be returned to the State Water Commissioner, with 9 corrections, on or before a date that's 60 days in the 10 future; do you agree with that? 11 A. Yes, I do. 12 Q. What consideration -- and, again, in the file 13 there is no evidence that this was ever done, correct? 14 A. Correct. 15 Q. What consideration did the Department make or 16 what consideration did they ascribe to the fact that the 17 applicant was warned that failure to correct an 18 application -- that in order to retain the priority, there 19 must be a corrected application filed within a certain 20 amount of time? Did the Department give any consideration 21 to this fact? 22 A. Of course the Department gave consideration to 23 that fact, along with all of the other known facts, yes. 24 Q. The Department allowed a corrected application 25 to be filed 90 years later; isn't that correct?


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1 A. Yes. 2 Q. Obviously 90 years is a lot longer than 60 days. 3 How does the Department's allowance of a 90-year time 4 frame to correct an application effectuate the public 5 policy provision that in order to retain a priority, that 6 corrected applications need to be made within 60 days? 7 A. They needed to be made within 60 days unless 8 extended. 9 Q. And there's no evidence that it was ever 10 extended, correct? 11 A. We do not have documentation of it having been 12 extended, no. 13 Q. Is the current policy that an application needs 14 to be corrected within 60 days of return? 15 A. We have the same policy now, because the law 16 says the same thing now. 17 Q. Okay, so every -- 18 A. We -- I'm sorry. Go. 19 Q. Everybody has -- 20 MR. DEENY: I would just -- Keith, you've got to 21 let him finish, too. 22 ALJ SHEDDEN: Well, I'm going to jump in and ask 23 you to direct your objections to me. 24 And what's also going on here, I'll note, is, I 25 would say the witness is going beyond the questions that


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1 are being asked -- 2 THE WITNESS: Sorry. 3 ALJ SHEDDEN: -- frequently, which may be 4 causing some of the problem. So if I need to start 5 jumping in to ask him not to do that, I would be willing 6 to. 7 Certainly, Mr. Hendricks, if you see it as a 8 problem, you can jump in or ask me to jump in as well. 9 So as I heard the question, it was, currently 10 the policy is, correct and return within 60 days. The 11 answer was, we have the same policy because the law was 12 the same. 13 Did that answer your question? 14 MR. HENDRICKS: Yes, it did. 15 ALJ SHEDDEN: Okay. With that, you can go ahead 16 and pick up new questions then. 17 BY MR. HENDRICKS: 18 Q. Is it fair to say that applicants have known, 19 for as long as the Water Code's been in existence in 1919, 20 that corrected applications are required within 60 days? 21 MR. DEENY: Objection, foundation. 22 ALJ SHEDDEN: All right. I'm going to overrule 23 the objection and just ask a question of my own, though. 24 Well, I'm going to ask you to restate your question. 25 MR. HENDRICKS: Fair enough.


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1 BY MR. HENDRICKS: 2 Q. To your knowledge, do applicants know that the 3 law requires that corrected applications be resubmitted 4 within 60 days? 5 A. I don't want to go beyond your question, but 6 applicants understand that the law requires that they be 7 returned within 60 days, unless that time period is 8 extended. 9 Q. And, in fact, the 60-day requirement, that's 10 preprinted on the application that is filled out, is it 11 not? 12 A. I believe so, yes. 13 Q. Let's move away from this. I kind of got down 14 this a little quicker than I intended to in my order of 15 things. Let's talk about permits in general, just kind of 16 a theoretical. 17 There's three types of applications involved in 18 this case, an A, an R and an E. Tell us what those 19 applications do. 20 A. As discussed in my previous testimony, an A 21 application is an application for a right to appropriate a 22 quantity of water. An R application -- and I should say 23 prior to 1972. An R application was an application to 24 construct a reservoir for the storage of water. And an E 25 application, an application to enlarge or extend an


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1 existing right. 2 Q. Okay. So let's start with R, because we have 3 Exhibit 1 up on the screen. And in fact, at the bottom of 4 the application, it says, with the star, it says, "A 5 different form of application should be used for the 6 appropriation of stored water to beneficial use." Do you 7 see that? 8 A. I do, yes. 9 Q. This is an R application. This is R-30, right? 10 A. Yes, it is. 11 Q. Okay. So -- and I know you said it a little 12 bit, but for my benefit, since I'm probably the one here 13 in the room that has maybe some of the least knowledge of 14 water law in all of these things, the R is an application 15 for the permit to construct a reservoir and for beneficial 16 use of unappropriated waters of the State of Arizona. So 17 if I get an R permit, what does that give me? 18 A. It gives you the right to construct a reservoir; 19 and once constructed, to perfect that right as a 20 certificate of water right. 21 Q. Okay. What does it mean for the benefit -- 22 Let's start with unappropriated waters. What am 23 I going to put behind the reservoir? I understand I get a 24 permission to build the reservoir. 25 A. Yeah.


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1 Q. I can understand that part. 2 What does the use of unappropriated waters, what 3 does that right give me? 4 A. Well, unappropriated waters are waters that have 5 not already been appropriated by another right holder. 6 Q. So let me use a theoretical example that I can 7 get my head around. I have some property up in the White 8 Mountains. There is a wash on it and there is a -- 9 somebody's built a diversion of the wash so that stock can 10 water from that. I don't know if it's permitted or not. 11 It was there when I bought the property. 12 But let's say I wanted to do that. I wanted 13 to -- there's going to -- I wanted to build a berm so that 14 it would collect waters. If there is somebody downstream 15 from me who has already established an appropriation of 16 that water coming through that wash, could I put -- would 17 that be unappropriated waters that I could store? 18 A. It would be unappropriated waters if your 19 storage allows them to fulfill their right. 20 Q. Okay. So in this case, this is an R-30 21 application for Mormon Flat Reservoir, correct? 22 A. Right. 23 Q. And it's for the unappropriated waters in the 24 Salt River, correct? 25 A. Correct.


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1 Q. So the application is to store unappropriated 2 waters at Mormon Flat Reservoir? 3 A. Correct. 4 Q. Okay. If there were appropriated waters 5 downstream from Mormon Flat Reservoir, what would this 6 permit do to the downstream users' rights? 7 MR. DEENY: Objection, form. I'm not sure I 8 understood the question. 9 ALJ SHEDDEN: Well, if you want to restate your 10 question, you can. If not, I'll rule on the objection. 11 BY MR. HENDRICKS: 12 Q. Let me just ask, did you understand? I'll 13 restate it if you don't understand it. 14 A. I think I understand it. 15 Q. Okay. If you would. 16 ALJ SHEDDEN: All right. Then I'm going to 17 overrule the objection. 18 THE WITNESS: Under the doctrine of prior 19 appropriation, it should have no effect on that senior 20 right holder's right. 21 BY MR. HENDRICKS: 22 Q. So let's just use an example if there was -- the 23 Paloma Irrigation District had a right to 7,500 cubic feet 24 per second of water in the Gila River. What would -- so 25 just assume that fact. The Salt River's flowing.


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1 Downstream somebody has a right to 7,500 cubic feet per 2 second. 3 What should this application do to that right, 4 that downstream right? 5 MR. DEENY: I'm just going to object, I mean 6 hypothetical. I think you can go into some discussion 7 about how the Department processes rights. But to the 8 extent we're getting into hypothetical situation involving 9 facts that aren't in evidence, I think that goes a little 10 far. 11 ALJ SHEDDEN: All right. Well, the alternative 12 would be, I guess, to get some clear examples. But I'm 13 going to overrule the objection and allow the background 14 to come in, in terms of how the system is intended to 15 work. So the objection's overruled. 16 THE WITNESS: Could you repeat the question, 17 please? Sorry. 18 BY MR. HENDRICKS: 19 Q. Okay. Assume for me that we have this 20 application to build a reservoir at Mormon Flat to store 21 400,000 acre-feet of water. Assume that there is a 22 downstream right, and I'm using the hypothetical number of 23 7,500 cubic feet per second. Someone downstream has a 24 vested right for that amount. 25 What does this application do to that downstream


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1 right? 2 A. Under the doctrine of prior appropriation, it 3 should have no effect. The senior right holder has the 4 right to their water first, and a junior right holder 5 upstream, theoretically, would -- or do not have the right 6 to fulfill their quantity and right of water at the 7 expense of a senior right holder downstream. 8 Q. And, in fact, the form itself says that they're 9 making an application to construct the following described 10 reservoir and to store the unappropriated waters of the 11 State of Arizona, subject to existing rights. 12 So that means that an R application should do 13 nothing to the downstream vested water rights, correct? 14 A. I'm not sure of the meaning of the word do 15 nothing to; but it should not adversely affect the senior 16 right downstream. 17 Q. Now, at the bottom of the form, it says, "A 18 different form of the application should be used for the 19 appropriation of stored water to beneficial use." 20 What application was needed at this time for the 21 appropriation of stored -- to be used for appropriation of 22 stored water to beneficial use? 23 A. As we've discussed, that is the A application 24 type. 25 Q. Does an E application -- is an E application an


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1 application for the appropriation of stored water to a 2 beneficial use? 3 A. I believe that in some instances, historically, 4 the use of E applications have varied. 5 Q. Can you answer my question whether an E 6 application would be the form that would be acceptable for 7 the appropriation of stored water to a beneficial use? 8 A. In some cases it has been. 9 Q. Let me ask this: Did the Eastern Canal -- what 10 is it -- the Auxiliary Eastern Canal Landowners' 11 Association file an A application? 12 A. Not that I'm aware of, no. 13 Q. Do you know of any A application that was filed 14 in the 1920s for Mormon Flat Reservoir? 15 A. No, I am not. 16 Q. Let's go to Exhibit E-11. 17 ALJ SHEDDEN: That's the application number. 18 The exhibit is -- 19 MR. HENDRICKS: Exhibit 8, DWR Exhibit No. 8. I 20 apologize, Your Honor. 21 BY MR. HENDRICKS: 22 Q. Okay. The title of it says an Application For a 23 Permit to Appropriate the Public Waters of the State of 24 Arizona, correct? 25 A. Yes, correct.


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1 Q. At the bottom of the application, however -- let 2 me blow this up. And we can see this. If you can't see 3 it, we can get a different form. 4 It has the same statement at the bottom. It 5 says, "A different form of application is provided for new 6 appropriations, and where storage works are contemplated." 7 Do you see that? 8 A. I do, yes. 9 Q. Is an E application an appropriate application 10 to appropriate water in a new reservoir? 11 A. No. 12 Q. And there were no A applications ever filed with 13 regard to Mormon Flat Reservoir, correct? 14 A. No, there were not. 15 Q. So in the 1920s nobody filed an application to 16 appropriate water for Mormon Flat Reservoir; is that a 17 correct statement? 18 A. Nobody filed an A application. 19 Q. And an E application is not an appropriate 20 application to appropriate water for a new reservoir; that 21 was your testimony, correct? 22 A. My testimony is that I believe throughout the 23 history of surface water rights in Arizona, E applications 24 have at times, contrary or the language on the permit form 25 itself notwithstanding, has been used and accepted by the


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1 State as an application for appropriation. 2 Q. Can you think of an example where an E 3 application was accepted by the State to appropriate water 4 for a new reservoir? 5 A. I cannot think of -- I do not know of a specific 6 example off the top of my head, no. 7 Q. Let's talk about -- I want to go back to R-30 8 again. What is -- the application indicates under 9 question No. 4 that the use to be made of the impounded 10 water is irrigation and power; do you see that? 11 A. Yes, I do. 12 Q. Describe for us the doctrine of beneficial use. 13 A. The doctrine of beneficial use is that you don't 14 get the right to a quantity of water. You get a right to 15 the quantity of water that you can put to beneficial use 16 up to a certain amount. 17 Q. If -- 18 A. So it's -- I'm sorry. 19 Q. No, go ahead. I cut you off. I didn't realize 20 you were -- 21 A. It is the -- I believe the language in the 22 statute is that the beneficial use is the kind of measure 23 by which the use of water, you know, is allowed. 24 So although you may have a water right for a 25 certain quantity, you don't just get that amount of water,


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1 unless you can put it all to beneficial use. 2 Q. Is storage a beneficial use? 3 A. No, it is not one of the beneficial uses that 4 are listed in Arizona law. 5 Q. Is selling it to a consumer a beneficial use? 6 A. Selling it to a consumer, can you explain what 7 you mean by that? 8 Q. If I have a dam and I have water behind the dam 9 and I have a customer who is willing to pay me for that 10 water, is my contract to sell that water to a consumer a 11 beneficial use? 12 A. You can have a -- you can have a right that is 13 related to a water delivery contract through which the 14 party you have a contract with is putting the water to an 15 established beneficial use. So I mean there's a subtlety 16 in my answer, and I apologize. 17 Q. No, and I think we're actually getting exactly 18 to the concept I want to explore. 19 A. Okay. 20 Q. And that is, if I'm a farmer and I'm going to 21 use the water to irrigate my orange groves, I have 22 40 acres of orange groves and in 1910 I started diverting 23 water from the river to irrigate my 40 acres of orange 24 groves, would that be a beneficial use? 25 A. Yes, it would.


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1 Q. And assuming that I went through the right steps 2 and I had a water right, that water right would be 3 appurtenant to my 40 acres, correct? 4 A. Yes, it would be. 5 Q. Let's assume now I sell my 40 acres, so I don't 6 need that water to irrigate my 40 acres. Can I sell that 7 water to Motorola for running its plant? 8 A. Again, I want to answer your question, but 9 you're using the word sell the water. In Arizona there is 10 a process by which the use, the place of use of water can 11 be severed from one land and transferred to another land. 12 I'm not sure if that's what you're describing or something 13 else. 14 Q. And that's exactly where I want to go. 15 A. Yeah. 16 Q. And the idea is that the use of the water on the 17 40 acres was appurtenant to that particular 40 acres, 18 correct? 19 A. Correct. 20 Q. And if I wanted to move that water to another 21 location, I would have to sever the water from that 22 40 acres and transfer it, correct? 23 A. Within the hypothetical scenario you're 24 describing, correct, yes. 25 Q. Okay. So if I get a permit to -- and let's


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1 assume in this case I get a permit, both an R and an A 2 permit, so I have a permit to construct a reservoir and 3 appropriate water, okay? 4 A. Okay. 5 Q. And I'm going to appropriate the water for 6 irrigation and for power, correct? 7 A. Correct. 8 Q. Okay. And, now, the beneficial use, that's what 9 this question is asking; it's saying what are you going to 10 do with the water, correct? 11 A. May I ask for a clarification on your question? 12 Q. Please. 13 A. Are you speaking in terms of a permit for the 14 right to use this water that has been issued by the State, 15 or are you talking at the application stage that we're 16 looking at here? 17 Q. Well, and I guess I would be looking at this 18 application. This application is an application to 19 construct a reservoir and to store 400,000 acre-feet and 20 use that water for irrigation and power purposes, correct? 21 A. Correct, that's what the application says. 22 Q. And let's assume that there was an A application 23 associated with this, okay? 24 A. Okay. 25 Q. So the only hypothetical I'm adding is assuming


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1 there's also an A application and that this reservoir, the 2 permit is granted and the reservoir is built and it's 3 filled, has 400,000 acre-feet in it, okay. 4 What happens next? In order to get that 5 certificated water right, what needed to happen next? 6 A. Well, I mean the term is you perfect your right. 7 You build the works. You demonstrate that the water is 8 being put to a beneficial use. And at that time you 9 have -- you can then apply for and receive the certificate 10 of water right. 11 Q. Assume that I built this Mormon Flat Reservoir 12 as identified in this application, built the dam. You 13 know, we can look farther down. I think it's 300 feet 14 high, or whatever the number is, but it has 400,000 15 acre-feet behind it. I'm using it to water crops and to 16 generate power, and then I decide I want to start selling 17 it to the mines. Is that use permitted? 18 A. If you've been -- if you are the holder of a 19 permit or a certificate of water right for the use of that 20 water for the purposes of irrigation and power, in order 21 to change the beneficial use or change the place of use, 22 there is a process or procedure that you go through to 23 allow you to be able to do so. 24 Q. It's true, is it not, that under the 25 applications at issue, the beneficial use as originally


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1 applied for has been amended to include uses that are 2 completely different, true? 3 A. Yes, that's true. 4 Q. If the permits had been granted at the time of 5 application, in order for those uses to be changed, they 6 would have had to follow this severance and transfer 7 policy that you have talked about? 8 A. Yes, a sever and transfer is for a change in the 9 place of use; but presuming that the change in type of use 10 would have also involved a change in place of use, then 11 yes. 12 Q. So what we have here is, under the amended 13 applications, is we have a current -- the amended 14 applications reflect the current 2013 uses of the water, 15 and the priority date would be the 1920 or 1921 16 application dates, so they're conflating the current uses 17 with the priority dates from the original applications; 18 true or false? 19 A. That is true. 20 Q. And if the original applications had been 21 processed and prosecuted and processed as they were 22 initially applied for, the current uses would either not 23 be permitted or they would have had to go through quite 24 rigorous transfer and severance procedures, correct? 25 MR. DEENY: Objection to the form of the


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1 question. 2 ALJ SHEDDEN: All right. 3 MR. DEENY: Change in use is different than 4 severance and transfer, which is moving the water of the 5 place of use. 6 ALJ SHEDDEN: All right. Let me ask you, 7 Mr. Hendricks, do you want to rephrase your question? 8 MR. HENDRICKS: Yeah, I'll try and rephrase. 9 BY MR. HENDRICKS: 10 Q. You testified that the current uses that exists 11 in the applications today are materially different from 12 the uses that were initially set forth in the application? 13 MR. DEENY: Objection. I don't know that he 14 said they were materially different. 15 ALJ SHEDDEN: All right. And I'm going to -- I 16 don't know that I heard that word, so I'll sustain the 17 objection, and you can reask your question. 18 BY MR. HENDRICKS: 19 Q. Let me ask you. Do you believe that the uses of 20 the water in the current applications is materially 21 different than the beneficial uses set forth in the 22 original applications? 23 A. They're different. 24 Q. Are they materially different? 25 A. I don't know that Arizona Statute defines


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1 changes in beneficial use using that term, but it talks 2 about different uses, and they would fall under different 3 uses under Arizona law, yes. 4 Q. If I were to move water that I have a right for 5 irrigation and I want to change it to use it and sell it 6 to municipalities, is that a materially different use? 7 A. Yes. 8 Q. And the applications, all of the applications 9 except for E-11, and we'll talk about that, but all of the 10 R and the A applications were for irrigation and power 11 only, correct? 12 A. I believe so, correct, yes. 13 Q. None of the R and the A applications 14 contemplated municipal use, correct? 15 A. Correct. 16 Q. So assuming that a change from an irrigation to 17 a municipal use, which you said was a material change, the 18 applications have -- the beneficial use has been 19 materially changed, correct? 20 MR. DEENY: Just objection to the extent that 21 he's already stated there is no such term material change 22 in any surface water statute. 23 ALJ SHEDDEN: But the witness did testify, 24 perhaps not the first go-around, but the second go-around, 25 that these were materially different uses. So the


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1 objection is overruled. 2 THE WITNESS: Could you repeat the question? 3 MR. HENDRICKS: Can you read it back? I don't 4 know if I can remember it that well. 5 (The requested portion of the record was read.) 6 THE WITNESS: The application -- correct, yes. 7 Right. 8 BY MR. HENDRICKS: 9 Q. Does a material change in an application fall 10 within the gambit of a -- or the -- gambit is a good word, 11 I guess -- gambit of a correction? 12 A. As has been the practice of the State of Arizona 13 within the issuance of surface water permits, yes. 14 Q. Let me get to that then right now. It was 15 further down on my outline. 16 The practice of the State of Arizona with regard 17 to corrections that you just testified to, what examples 18 do you know of and is the Department relying on of past 19 examples of those type of corrections to an application? 20 A. We have earlier in my testimony made reference 21 to the permits associated with Orme Dam. 22 Q. Okay, so we've got the Orme Dam example. 23 A. That's one. 24 Q. I just want to identify examples now. 25 A. I do not know off the top of my head other


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1 specific examples that I can quote to you, no. 2 Q. Okay. So there's the -- when you say that the 3 practice of the State of Arizona with regard to allowing 4 these types of corrections, the only example that you can 5 think of sitting here today is the Orme Dam example? 6 A. Correct, yes. 7 Q. Let's talk about Orme Dam. 8 A. Okay. 9 Q. What do you know about the Orme Dam application? 10 A. In a broad sense or -- 11 Q. Well, I mean I can't understand what you know. 12 A. Sure. 13 Q. So you tell me what you know. 14 A. Well, there was an application in 1966 to 15 construct a reservoir at a certain location, and that 16 application was amended more than once over a period of 17 30 years and was later approved and issued. 18 Q. Let's talk about what I understand, and let's 19 see if the two of us can come to a consensus of what 20 happened. 21 A. Sure. 22 Q. Application was filed by the Bureau of 23 Reclamation in 196 to construct a dam at the Granite Reef 24 diversion dam site; is that your understanding? 25 A. More or less, yes.


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1 Q. And then approximately, I want to say, ten years 2 later, an amendment was filed to the application before 3 any construction actually occurred; is that true? 4 A. That's my understanding, yes. 5 Q. Okay. And the amendment was to move the dam to 6 the confluence of the Salt and Verde Rivers; is that your 7 understanding? 8 A. To the current Granite Reef site, yes. 9 Q. Or from the current Granite Reef site to the 10 confluence of the Salt and Verde Rivers? 11 A. Okay. Yes. 12 Q. Do you know? 13 A. I don't recall the specific sequence of the 14 locations of the changes, no. 15 Q. Let me ask you this: Were the amendments filed 16 before any construction started? 17 A. I believe so, yes. 18 Q. So the amendments would have been filed before 19 any water was actually put to a beneficial use? 20 A. Yes. 21 Q. Are you aware of any amendment that was allowed 22 post-construction and post-use of the water? 23 A. I am aware of surface water permits for 24 constructions of reservoirs, although I can't name the 25 examples, that were approved subsequent to or following


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1 the construction of the reservoir. That, I am aware of. 2 Does that answer the question, or is it 3 something other than that? 4 Q. No, not even remotely. 5 A. Okay. 6 Q. What we're talking about here is a corrective -- 7 whether an amendment that changes a material use of the 8 water and whether an amendment is allowed after the water 9 is being -- you know, to conform the application to the 10 current use, as opposed to an amendment before the use is 11 actually created. 12 Are you aware of any example of an amendment 13 that allows a change in the use of the water after it has 14 been established? 15 A. I cannot name a specific example of that, no. 16 Q. Orme Dam was an application filed by the Bureau 17 of Reclamation, correct? 18 A. Correct. 19 Q. And it was filed as an R application? 20 A. I believe so, yes. 21 Q. Do you know if the Bureau filed an A 22 application? 23 A. I'm not sure, no. 24 Q. Do you know if the Cities filed A applications? 25 A. I don't recall.


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1 Q. So you don't know if, on the appropriation side 2 of it, whether the amendments -- because if the Federal 3 Government was only filing an R application, its 4 amendments wouldn't have any effect on appropriation, 5 would it? 6 A. It would depend on what the amendments to the 7 storage right were, I believe. 8 Q. Before we're running out of time for this 9 evening, let me just a couple of thoughts more on Orme 10 Dam. 11 Orme Dam initially started as a dam at the 12 Granite Reef site, and then it shifted to the confluence 13 of the Salt and Verde Rivers, and then it shifted to an 14 expansion of Roosevelt and a new separate dam on the Verde 15 River, and it ultimately ended up being solely an 16 expansion of Roosevelt. Is that inconsistent with your 17 understanding? 18 A. That sounds correct, yes. 19 Q. Okay. Here's a question I have for you: Who is 20 the owner of Roosevelt? 21 A. The owner of Roosevelt. Do you mean the dam or 22 the land the dam sits on or the reservoir or the land of 23 the reservoir or the use of water? I'm not sure what you 24 mean by own. 25 Q. I want to ask all of those questions. Let's


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1 start with the dam. Who is the owner of the dam? 2 A. I believe that the Salt River Project holds 3 title to the dam structures, but I'm not sure. 4 Q. Then why did the Bureau of Reclamation file the 5 application for enlargement? 6 A. I don't recall that. I don't know. 7 Q. The dam was built initially prior to 1919, 8 correct? 9 A. Roosevelt Dam's construction was, yes, correct. 10 Q. And so there was no application, R application, 11 filed because it was pre-Water Code, correct? 12 A. Correct. 13 Q. And then there was an enlargement that was filed 14 by the Association in 1920, I believe, or I can't remember 15 if this was '20 or '21. 16 A. Correct. The E-11 application included the 17 enlargement of Roosevelt, yes. 18 Q. And then later the Bureau of Reclamation files 19 an application for enlargement of Roosevelt. 20 How can two entities, two separate entities, 21 both have the right to enlarge the same structure? 22 A. Well, is it a -- the right holder can be the 23 entity that puts the water to use. 24 I think the answer to your question is, I'm not 25 specifically aware of the proceedings that were related to


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1 that modified Roosevelt application. These applications 2 aren't directly related to that. So I don't know the 3 answer to your question. 4 Q. Well, let me ask then this question that is the 5 basis of where we got here. 6 A. Okay. 7 Q. And that is, if the basis for allowing this type 8 of an amendment is the example of the Roosevelt Dam 9 expansion and what occurred there, how can the Department 10 use that as a basis to allow these amendments when it 11 cannot line up the two situations as being symmetrical? 12 MR. DEENY: I'm sorry. Object to the form. 13 Again, I'm not sure I understood it. Maybe Dr. Johnson 14 did. 15 ALJ SHEDDEN: All right. Let me ask you, 16 Dr. Johnson, do you understand the question? 17 THE WITNESS: I do understand the question, 18 yeah. 19 ALJ SHEDDEN: All right. Then you can go ahead 20 and answer. 21 THE WITNESS: Okay. 22 We relied on that, on the Orme Dam, as an 23 example of the accepting of amendments to applications 24 prior to being approved. I'm not sure that that would 25 require all facts of the two cases to line up exactly and


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1 be symmetrical, as you say. 2 BY MR. HENDRICKS: 3 Q. Let me just ask then a couple of distinctions -- 4 A. Okay. 5 Q. -- and see if the Department feels that they 6 would be material. 7 One would be whether the use of the water, the 8 amendment would be proposed before the use is created or 9 after the use is already in existence? Would those be two 10 material distinctions between the two situations? 11 A. No, not necessarily, if the question is whether 12 or not an application may be amended prior to its being 13 approved or denied. 14 Q. Well, if an application, if this was prosecuted 15 in the ordinary course and at the time, so in the 1920s 16 the application was prosecuted and the permit was issued, 17 a specific permitted use of the water would exist, 18 correct? 19 A. Correct. 20 Q. And you have already testified that the current 21 use is materially different than the use that was included 22 in the original application, correct? 23 A. Correct. 24 Q. And so the fact that the use has materially 25 changed in the Orme School (sic) situation, where it goes


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1 from Orme School to Roosevelt Dam, all of that happened 2 before any construction or any use of the water existed, 3 correct? 4 A. Correct. 5 Q. So when they amend the use and say we intend to 6 in the future use it for municipal uses, where in the past 7 we may have used it for irrigation purposes, the 8 Department could consider that before the use was actually 9 created, correct? 10 A. Correct. 11 Q. And the Department doesn't see that as a 12 distinction between the Orme School example and the 13 example that is currently before us now? 14 Orme Dam. Excuse me. Orme School is a law 15 case. 16 MR. NELSON: They're both in the same family. 17 BY MR. HENDRICKS: 18 A. No, the Department does not see a distinction in 19 relation to the narrow question of whether or not an 20 amendment to a pending application would be accepted or 21 not. 22 MR. HENDRICKS: Your Honor, I think this is a 23 good time to -- I was going to move to a new topic, and 24 it's five to 5:00 or three to 5:00. 25 ALJ SHEDDEN: All right. Unless there are any


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1 issues folks want to quickly address, we'll adjourn for 2 the day and try and get started about 8:00 tomorrow again. 3 Bear in mind, I think the parking lot may be 4 closed tomorrow, so just be aware of that. 5 Is there anything before we adjourn for today? 6 MR. HENDRICKS: No, Your Honor. 7 ALJ SHEDDEN: No. All right. See you all 8 tomorrow then. 9 (The proceedings adjourned at 4:57 p.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25


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1 STATE OF ARIZONA ) ) ss. 2 COUNTY OF MARICOPA ) 3 4 I, JODY L. LENSCHOW, RMR, CRR, Certified 5 Reporter No. 50192 for the State of Arizona, do hereby 6 certify that the foregoing printed pages constitute a 7 full, true, and accurate transcript of all the proceedings 8 had in the foregoing matter, all done to the best of my 9 skill and ability. 10 I FURTHER CERTIFY that I am not related to nor 11 employed by any of the parties hereto, and have no 12 interest in the outcome. 13 DATED at Phoenix, Arizona, this 28th day of 14 October, 2013. 15 16 JODY L. LENSCHOW, RMR, CRR17 Certified Reporter Certificate No. 5019218 19 20 21 22 23 24 25


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