Board conditionally approves replacement well drilling but requires executed sharing or transfer agreement

Following a quasi-adjudicatory hearing on Sept. 24, the Fox Canyon Groundwater Management Agency Board of Directors reversed an interim executive officer’s denial of a well-permit application and conditionally approved drilling of a replacement well only after the applicant produces either a signed well-sharing agreement or a jointly submitted allocation-transfer agreement.

The appeal involved application number 309, filed by RN Daley Ranch LLC (referred to in the record as Daly/RN Veil Ranch) to replace a failed replacement well (H03). Staff presented the background showing that the original allocation resided with the failed well H02 (owned by Nottingham Trust) and that H03 had operated in a combined accounting code (comp code) with H02. Staff said the key legal and administrative issue was that the application to transfer allocation must be submitted jointly by the owners/operators per agency and OPV allocation ordinances; staff had not received a jointly signed transfer or a copy of any executed well-sharing agreement at the time it denied application 309.

Appellant counsel (representing RN Daley/Veil Ranch) argued the historical operation of the two parcels and wells—farm operations and water use had been commingled for years—and urged the board to use its discretion to permit replacement drilling so the larger parcel could be farmed. Opposing counsel (representing the Nottingham Trust interest) said the trust refused to consent to a transfer and that no well-sharing agreement exists; counsel stressed the board cannot and should not rewrite the ordinance and that the owner’s consent is required under current rules.

The board heard testimony from staff and legal counsel for both parties, admitted staff and parties' exhibits into the record, and questioned witnesses on allocation history and procedures. Agency counsel warned that reversing the interim executive officer without compliance with the ordinance could expose the agency to legal challenge.

After deliberation the board considered two principal routes: (a) affirm the interim executive officer’s denial until a joint application or executed well-sharing agreement is presented, or (b) reverse and authorize the replacement well conditioned on presentation of an executed well-sharing agreement or a jointly signed allocation transfer. A motion to reverse the denial and approve the replacement well conditioned on production of a well-sharing agreement or allocation-transfer agreement was moved and seconded. The board adopted the conditional approval on roll call by a 3–2 vote (yes: Director Kraviota, Director Long, Chair West; no: Director Tremblay, Director Mulhart). Counsel for the agency noted the board’s decision carries legal risk if the stated conditions are not met; the chair directed agency counsel to prepare the written decision consistent with the board’s direction and return it for formal adoption at a subsequent meeting.

The board’s conditional approval does not become operative until the applicant files the required executed documentation. Staff reiterated that transfers and allocation changes require joint applications and Watermaster approval, and no allocation transfer will be applied without the documentation that satisfies ordinance requirements.

The board scheduled follow-up steps: agency counsel to draft the decision consistent with the board’s direction; staff to receive the executed agreement or joint transfer application and process it according to ordinance procedures.