by MARK ST.J. COUHIG

Sequim Gazette

The Washington Department of Ecology has announced it plans to formally adopt the new Dungeness Water Management Rule in the second half of November, but questions continue to arise.

This week the agency released internal e-mails that include a statement that the rule isn’t subject to Washington’s Administrative Procedures Act. That means the rule isn’t subject to laws that require a cost-benefit analysis that shows the rule’s benefits outweigh the costs.

The issue has been the subject of a great deal of debate.

Internal agency e-mails released earlier to the Gazette show that Tryg Hoff, the agency economist first assigned to create the rule’s cost-benefit analysis, argued repeatedly that the costs of the rule would far outweigh the benefits.

Hoff also stated that under Washington law, the benefits of the new rule must be greater than the costs.

On Monday, March 19, Hoff provided official notice to the rule’s writers that the draft rule failed to meet that legal requirement.

Hoff declared that eliminating the permit-exempt water uses now available to those moving into the area would push the rule’s costs far higher than its probable benefits. “The rule takes an extraordinarily valuable right from an estimated 2,000 new users once the basin is formally closed (over a 20-year rule period),” Hoff wrote.

“Secondly, in closing the basin it also takes an almost equal value from an estimated 5,250 existing users. The costs of this alone are far greater than 500 million dollars.”

Hoff also called into question the rule’s benefits, noting the rule “will probably save less than 1 CFS of water from the rivers and streams throughout the watershed (over a 20-year period).”

Hoff later asked to be removed as the economist on the rule and his request was granted.

On the other hand

In another Ecology e-mail, this one written on June 7, Wessel, wrote, “One thing I should note for everyone is that RCW 90.82.080 exempts rules adopting watershed plan recommendations from the Administrative Procedure Act process that requires a CBA (Cost Benefit Analysis).

“This means state law does not require completion of a CBA. Nor must the benefits exceed the costs,” she wrote.

Ecology Southwest Regional Director Sally Toteff, an active participant in the creation of the rule, responded the following day, writing, “This is the first I’ve heard that recommendations in a watershed plan were not subject to the APA (Administrative Procedures Act).”

Toteff also suggested reviewing agency newsletters on the rule, and the agency’s “Frequently Asked Questions,” to see if they comported with that understanding.

In the April 2012 edition of the Dungeness Water Watch, a newsletter produced by the Local Leaders Work Group, the economic impact of the rule was examined at length and included statements contradicting Wessel’s.

The newsletter, which prominently features the Ecology logo, declares, “The proposed Dungeness instream flow and water management rule is considered a ‘significant legislative rule.’ This is a rule which will affect individuals, businesses, communities, etc. (as opposed to correcting a typographical error, for example). The Administrative Procedures Act requires both a cost benefit (analysis) and a least burdensome alternative analysis before adoption of a significant legislative rule.”

“A Cost Benefit Analysis evaluates the benefits and costs of adopting a rule — to the public, the environment and businesses. If the benefits do not exceed the costs, Ecology cannot adopt the rule.”

Ecology spokesman Dan Partridge said that while the newsletter was prepared by a contract writer for the Local Leaders, “That doesn’t excuse us from putting out wrong information. We were doing the final edits on the newsletter and distributing it.”

Partridge added that the agency didn’t correct the information in further stories about the issue, including those published in the Gazette, because “it has escaped my notice and no one here on the Dungeness team has brought it to my attention. The reason for that is that team members may have considered it a nuance not needing correction.”

He added, “While the law does not require the benefits of an instream flow rule to exceed its costs, in practice we wouldn’t consider the adoption of a rule in which costs outweigh the benefits, or we would modify it substantially before we did. That’s why we voluntarily do a CBA to determine benefits vs. costs.”

Partridge concluded, “Acting under the discretion given us by the law, Ecology voluntarily decided to treat the Dungeness rule as a significant legislative rule under the APA and in the interest of transparency and open government, conducted a SBEIS (Small Business Economic Impact Study) and CBA on the proposed rule.”

For the defense

Port Angeles businessman Kaj Ahlburg has long been a vocal critic of the new rule. He disagreed with Partridge’s take on the law, saying that while “minimum instream flow rules don’t require a SBEIS, which Ecology here prepared on a voluntary basis, there is nothing that says that a CBA is not required.

The SBEIS is required by the Regulatory Fairness Act and the CBA is required by the Administrative Procedures Act.

“The confusion in the minds at Ecology (if there is indeed confusion and not a desperate attempt to backpedal on a CBA they now realize to be fatally flawed) may arise from the difference between just adopting a flow, which would not constitute a ‘significant legislative rule,’ and (adopting the entire) regulatory program,” Ahlburg said.

He said because the new regulation will include sanctions for violators, it therefore constitutes a significant legislative rule.

“There was nothing ‘voluntary’ about Ecology conducting a CBA,” Ahlburg said. “If the CBA were upside down, with costs exceeding benefits, or was found to have been improperly conducted, the rule would be unlawful under the Administrative Procedures Act.”

Ahlburg suggested the distinction is significant because the rule’s cost-benefit analysis may provide the basis for a challenge of the rule.

Ahlburg added that because Ecology voluntarily conducted the SBEIS, it has to be conducted in compliance with the requirements of state law. “They can’t conduct one, not follow proper procedures, and then say, ‘Just kidding, this analysis was voluntary anyway.’”

Wayne King, vice president of the Jefferson Public Utility District and a long-time critic of a similar rule now in place in much of Jefferson County, had a slightly different take on the issue, saying, “DOE is still making it up as they go. That is why they are never wrong.”

Under state law the agency must promulgate the rule by Dec. 3 or withdraw it. State law also precludes making major changes to the rule before it’s approved. Documents published in draft form at the time of May filing, including the rule’s cost-benefit analysis, will be issued in final form.

For more information, call Ann Wessel at 360-715-5215 or Cynthia Nelson at 360-407-0276.

Reach Mark Couhig at mcouhig@sequimgazette.com.

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Water Rule not tough enough?

In an early 2012 letter written to Ann Wessel, instream flow rules coordinator for the Department of Ecology, Sequim City Councilor Ted Miller expressed his disapproval of the Dungeness Water Rule, saying it doesn’t go far enough.

In his letter Miller referred to a public meeting held at the Guy Cole Center on Jan. 30, saying, “I have a lot of sympathy for people who are constantly under attack by developers and other real estate interests, since I face the same thing on the Sequim City Council.”

“My concern,” he wrote, “is the opposite of those commonly expressed. While I think our current water rights law is ridiculous, nevertheless it is the law. Senior water rights holders MUST be protected and I don’t believe your proposed rule does an adequate job of doing so.”

“Water rights are already oversubscribed and we simply should not allow ANY new wells in the Dungeness Valley. If this prevents the development and destruction of the Dungeness Valley, that is simply too bad (or good).”

“I also object to your artificial creation of a reserve for your water exchange. This just creates a de facto water right in violation of existing Senior Water rights.”

Miller signed his letter, “Ted Miller, Sequim Mayor pro tem.”

In an interview this week, Miller said he continues to believe, “We should have a moratorium on wells because of the potential for contaminating the aquifer.” He also expressed his support for the Growth Management Act, which encourages more building in municipalities rather than in rural areas.

Miller also stated that his opinions are his own and don’t reflect those of the council or the city.