Growth at a Crossroads — the Intersection of Water Law and Land Use Law in Oregon

By Steven L. Shropshire

Introduction

In recent years, water scarcity has increasingly affected growth and development in Oregon. Examples include implementation by the Oregon Water Resources Department (OWRD) of ground water mitigation rules in the Deschutes Basin increasing attention to development-related ground water impacts in the Willamette Basin and OWRD's promulgation of new statewide rules requiring public water suppliers to prepare and maintain water management and conservation plans. Such developments have enabled the public to better understand, particularly west of the Cascades, that Oregon does not have a limitless water supply.

Despite this important linkage between water and growth, Oregon's laws have historically addressed water use and land use planning separately. But now these issues are arising together with greater frequency as Oregon's population grows. This article looks at the developing body of law where these issues intersect.

Water Code

Oregon has had a comprehensive water code governing the use of surface water in the state since 1909. A parallel ground water code was adopted in 1955. Taken as a whole, the water code establishes a regulatory scheme under which OWRD exercises jurisdiction over the right to use the state's waters.

Land Use Laws

The water code does not vest OWRD with exclusive jurisdiction over water. In 1973, the Oregon legislature passed Senate Bill 100, creating our present-day land use system. The laws and regulations composing the land use program primarily regulate land in a traditional sense through direct planning and zoning requirements. But on a secondary level, Oregon's land use laws also govern natural resources--including water. The land use laws require OWRD to make decisions that comply with statewide planning goals and are compatible with comprehensive plans. ORS 197.180(1). In addition, the laws contain provisions obligating local governments to account for water resources in their land use decisions.

OWRD State Agency Coordination Program

Consequently, when it comes to water resources, the legislature has given concurrent jurisdiction and regulatory responsibility to both OWRD and the Department of Land Conservation and Development (sometimes referred to as DLCD). To avoid an unseemly collision at this intersection of land use law and water law, the two agencies have attempted to balance their competing mandates by adopting rules under the state agency coordination program.

In 1990, the Water Resources Commission adopted administrative rules that outline OWRD's state agency coordination program (SAC Program). See generally OAR 690, Division 5. This program acknowledges that land use and water management are related. Both statewide planning goals and state water laws require responsible government entities to take steps to protect the public interest in the waters of the state. OAR 690-005-0020(1). In recognition of this interrelationship, OWRD's Division 5 rules for the SAC Program require that the OWRD programs affecting land use be carried out in compliance with statewide planning goals (OAR 690-005-0030) and acknowledged comprehensive plans (OAR 690-005-0035).

Local Government Coordination on Water Resources Issues

The effort to coordinate the regulation of the state's water resources is also carried out at the local government level. Local governments must adopt comprehensive plans that are consistent with the statewide planning goals. Many of those goals have a water resources component, including Goal 5 — Natural Resources; Goal 6 — Air, Water & Land Quality; and Goal 11 — Public Facilities and Services.

Water Availability Protection Ordinances

Local governments also have a specific statutory obligation to consider the protection of water resources when formulating their comprehensive plans. ORS 197.015(5). Most jurisdictions implement this requirement by including water protection and availability requirements in their development codes. These ordinances differ greatly from county to county. As a result, developers and opponents have repeatedly challenged the application of these provisions before the state Land Use Board of Appeals (LUBA). The following cases are a sampling of such challenges centering on water availability ordinances.

• Paddock v. Yamhill County, 35 Or LUBA 39, aff'd without opinion 189 Or App 596 (2003) (For a six-lot subdivision in a rural residential zone, Yamhill County land division ordinance does not require consideration of impacts on the water supplies of adjacent properties).
• Helvetia Community Association v. Washington County, 31 Or LUBA 446 (1996) (In its decision to amend the county's comprehensive plan to redesignate Agricultural and Forest District property from AF-10 to AF-5, the county's findings adequately responded to OWRD concerns about potential ground water overdraft where the findings included a remedy restricting development to one- or two-acre lots if declining ground water levels were observed).
• Kirkpatrick v. Jackson County, 22 Or LUBA 3 (1991) (County's approval of a nine-lot subdivision overturned by LUBA where the county failed to consider the impact of increased ground water pumping on surrounding properties).
• Harcourt v. Marion County, 33 Or LUBA 400 (1997) (County's approval of rural-residential subdivision in the South Salem Hills Ground Water Limited Area overturned where county failed to find that adequate water was available to serve proposed subdivision).
• Durig v. Washington County, 40 Or LUBA 1 (2001) (Upholding County's approval of seasonal farmworker housing construction in an EFU zone where applicant demonstrated that adequate water supply existed to support the development, and ground water withdrawals would not have an adverse impact on surrounding properties).
• Spiro v. Yamhill County, 38 Or LUBA 133 (2000) (Implicitly upholding portion of county's conditional use approval for a church to be located in a rural residential zone, where approval imposed a smaller volumetric cap on ground water pumping than otherwise allowed under Oregon's water code in order to prevent adverse effect on neighborhood wells).

Some jurisdictions take the additional step of regulating ground water resources beyond simply requiring a finding of availability. For example, Marion County has taken the extraordinary step of adopting a sensitive ground water overlay zone. For development proposed within the overlay zone, land division applicants must provide a hydrogeologic report. Other requirements include a notation on all deeds that the property is located within a sensitive ground water area in which the water supply may be limited. This requirement also includes significant irrigation restrictions on properties located within the area of greatest sensitivity. See Marion County Planning Code, sections 181.010 et seq.

Irrigation District/Special District Coordination on Water Resources Issues

Special districts providing water service must also comply with the coordinated planning mandate under Oregon law. They must comply with statewide planning goals and carry out their programs in accordance with acknowledged local plans. ORS 195.020. Further, under ORS 195.060 — 195.080, certain special districts providing urban services must enter into cooperative agreements that coordinate planning activities and development application review between all city, county, and service districts providing urban services within an urban growth boundary. This should be distinguished, though, from an obligation to engage in land use planning. See Churchill v. Neahkahnie Water District, 29 Or LUBA 354 (1995) (Land use planning responsibilities are not imposed on special districts under ORS 195.020(1)).

Special District Subdivision Conflicts

Urban development of vacant lands within a special district frequently involves converting irrigated agricultural land to an urban use. Generally, this means the irrigation water supplied by the special district is no longer needed, raising two primary issues. First, until the subdivision is excluded from the district through a formal process, the lands generally remain subject to assessments regardless of whether they are still receiving water. Second, such development often creates conflicts with district delivery facilities, requiring relocation or piping of those facilities. In such circumstances it is important for both the special district and the developer to communicate at the outset about the quality of materials or workmanship that the district will require in the relocation of the facility and how the district approval process works.

Land Use Tools for Addressing Water Concerns

In addition to the many approaches available to OWRD for monitoring and regulating the state's water resources, there are several land use tools available to local governments. They include the following:

• Regulatory Approaches
• Goal 5 significance designation
• Water supply ordinances
• Minimum lot sizes
• Deed notification requirements
• Hydrologic study requirements
• Landscaping and irrigation restrictions
  
  
• Nonregulatory Approaches
• Monitoring
• Education
• Conservation
• Alternative supply

Some jurisdictions employ a combination of these tools to address water availability issues. But many local governments pay little attention to this issue. Such shortsighted planning will inevitably lead to future problems in those locales.

Facility-Siting Cases

Water issues also appear with some frequency in cases involving siting applications for aggregate mines or destination resorts. In each type of case, there is a statutory requirement that the permitting body consider water availability and the possible effects the development may have on surrounding properties, including impacts on other water users. These situations are particularly complicated because multiple local and state government entities exercise concurrent jurisdiction over siting applications. A few representative cases are discussed below.

Aggregate Mine-Siting Cases

• Eugene Sand and Gravel, Inc. v. Lane County, 44 Or LUBA 50 (2003), aff'd. 189 Or App 21, 74 P3d 1085 (2003) (County's rejection of proposed aggregate operation due in part to anticipated ground water impacts from chemical discharges to ground water and lowered ground water levels was appropriate).
• Molalla River Reserve, Inc. v. Clackamas County, 42 Or LUBA 251 (2002) (County properly denied mining application where operation could result in risk of increased turbidity to the Molalla River).
• Jorgensen v. Union County, 37 Or LUBA 738 (2000) (Local code section implementing ORS 215.296(1) did not require county to find that mining operation would create no off-site adverse impacts in the form of water table drawdown; county required only to deny application if mining would result in a significant change in accepted farm practices or significantly increase the cost of those practices).

Destination Resort-Siting Decisions

• Bouman v. Jackson County, 23 Or LUBA 628 (1992) (County properly permitted destination resort despite multiple challenges based on inadequate legal and physical availability of water supply).
• Wetherell v. Douglas County, 44 Or LUBA 745 (2003) (County's approval of a destination resort and subdivision plat required only substantial evidence that the applicant was not precluded from obtaining the necessary water use permits as a matter of law).

Measure 37 Implications

In November 2004, the Oregon voters approved Measure 37, which requires a public entity (defined as the state, a metropolitan service district, a city, or a county) that enacts or enforces a new land use regulation restricting the use of private real property to pay compensation to the property owner or waive the application of the regulation. Measure 37 claimants are limited to those individuals who can show that their ownership interest (or that of immediate family members extending back two generations) predates the land use regulation. In the context of this article, this presents two primary issues for discussion.

The first question is one of practicality for Measure 37 claimants and the local governments evaluating those claims. Many Measure 37 claims involve proposals to place housing or other development on land located outside urban growth boundaries. Because municipal water service is often difficult or impossible to obtain outside an urban growth boundary, a claimant will generally have to develop an independent source of water for the proposed development. This is likely to bring the claimant face to face with the county water-availability ordinances discussed above. Where ground water is in short supply, the ordinance will probably prevent the county from approving the development request. Moreover, if the developer seeks a water right from the state, instead of relying on a domestic well exemption (and its inherent limitations), the OWRD is likely to deny or carefully constrain the use of scarce ground water.

The second question then is whether a claimant could end up with a Measure 37 claim within a Measure 37 claim. In other words, does Measure 37 extend to county or state development restrictions based on water availability concerns? At this early stage, the answer is unclear. As a threshold matter, a claimant would have to demonstrate that a particular water-related restriction qualified as a "land use regulation" under Measure 37. Arguably, a county comprehensive plan or ordinance restricting development due to water availability constraints could qualify. Nonetheless, even if this argument could be sustained, the claimant would next have to show that the ordinance did not restrict development due to concerns about protection of public health and safety — a category of regulation specifically excluded from the reach of Measure 37. In the case of ground water availability, OWRD routinely denies new ground water permit applications on the grounds that the proposed use would not be protective of the public welfare, safety, and health. See ORS 537.621(2). With this basis for regulation specifically incorporated into the water code, a Measure 37 claimant would face a significant challenge to show that a permit denial or conditional approval based on water availability concerns could be redressed under Measure 37. Thus, water availability could ultimately be the Achilles heel of many Measure 37 development projects.

Conclusion

Water is not yet a constraining factor for growth in most urban areas in Oregon. But that day is coming. In the last decade several cities in the relatively wet Willamette Valley have enacted temporary building moratoriums due to water supply shortages. In addition, several public water suppliers across the state are actively seeking to develop new water sources to serve a rapidly expanding population. Water supplies needed for development outside urban growth boundaries are already tight, and new supplies are becoming more difficult to obtain. With this additional traffic at the crossroads, future collisions are all but certain to occur if the parties involved do not understand the complexity of these issues before they embark on their journey.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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