Arbuckle Master Conservancy Dist., Dist. Court, Murray County, No. 9660, In re

• Decision Date: 23 June 1970
• Docket Number: No. 43497,43497
• Citation: Arbuckle Master Conservancy Dist., Dist. Court, Murray County, No. 9660, In re, 474 P.2d 385 (Okla. 1970)
• Parties: In re ARBUCKLE MASTER CONSERVANCY DISTRICT, DISTRICT COURT, MURRAY COUNTY, NO. 9660. ARBUCKLE MASTER CONSERVANCY DISTRICT, Plaintiff in Error, v. G. Don PETITTI, Gene Cope, William G. Gaskins, E. Dunlap, Jr., Bob Downing, John H. Frazier, Jack O. Conroy, The City of Ardmore, Oklahoma, a Municipal Corporation, The City of Davis, Oklahoma, a Municipat Corporation, and The Southern Oklahoma Development Association, a Voluntary Association, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 385

474 P.2d 385

In re ARBUCKLE MASTER CONSERVANCY DISTRICT, DISTRICT COURT MURRAY COUNTY, NO. 9660 ARBUCKLE MASTER CONSERVANCY DISTRICT, Plaintiff in Error, v. G. Don PETITTI, Gene Cope, William G. Gaskins, E. Dunlap Jr., Bob Downing, John H. Frazier, Jack O. Conroy, The City of Ardmore, Oklahoma, a Municipal Corporation, The City of Davis, Oklahoma, a Municipat Corporation, and The Southern Oklahoma Development Association, a Voluntary Association Defendants in Error.

No. 43497.

Supreme Court of Oklahoma.

June 23, 1970.

As Amended and Rehearing Denied July 21, 1970.

Syllabus by the Court

1. Conservancy district, legally established by final judgment of court having jurisdiction of cause, does not have statutory or implied authority to contract for sale or disposition of water outside area of the conservation district before demands of municipalities, industries or other local users are fulfilled.

2. Under provisions of contract between Arbuckle Master Conservancy District and Oklahoma Water Storage Commission, latter entity lacked authority to contract for uncommitted water and/or water storage rights prior to waiver, by municipalities, industries or other local interests within district, of Commission's offer to reassign uncommitted rights.

Appeal from District Court of Murray County; Joe Thompson, Trial Judge.

Arbuckle Master Conservancy District appeals from trial court judgment permanently enjoining proposed sale of water outside District, and also enjoining Water Conservation Storage Commission from contracting or assigning water rights in the Arbuckle project to municipality outside and noncontiguous to area of District. Affirmed.

Frank Gibbard, Sulphur, Russell G. Jones, Lawton, for plaintiff in error.

Gene T. Ritter, Ardmore, for City of Davis, Okl.

Millard F. Lowrance, Sulphur, for City of Sulphur, Okl.

R. B. Garvin, Richard B. McClain, Pauls Valley, for City of Wynnewood, Okl.

G. T. Blankenship, Atty. Gen., Duane Lobaugh, Asst. Atty. Gen., for intervening plaintiff in error.

James E. Thompson, for defendants in error, the individual petitioners.

Andrew B. Riddle, Jr., City Atty., for City of Ardmore, Okl.

Fischl, Culp & McMillin, Ardmore, for Southern Oklahoma Development Assn.

BERRY, Vice Chief Justice.

Complete recitation of factual background would be unduly extended by reason of multiplicity of parties, variant interests and machinations involved. Risking oversimplification, we summarize acts and matters relating to parties who initiated acts, or participated in transactions, which resulted in creation of Lake of the Arbuckles project, and provoked issues herein presented.

Residents of Murray County, and other southern counties, formed Southern Oklahoma Development Association in 1955 to promote Lake of the Arbuckles water project. Planning culminated in meetings at Federal level, which generated agreement by Bureau of Reclamation, hereafter the Bureau, to institute feasibility study. May 14, 1957, the Federal government advised the Oklahoma Water Resources Board of intention to utilize unappropriated waters of Rock Creek, and requested same be withdrawn from further appropriation. On June 7, 1957, the Board formally withdrew this water from appropriation in conformity with 82 O.S.1951, § 91. On March 26, 1958, the United States, through the Bureau contracted for feasibility study in consideration of Southern Oklahoma Development Association's agreement to pay $10,000.00 costs of this survey.

Southern Oklahoma Development Association no longer operates independently, but within the Interlocal Cooperation Act, 74 O.S.Supp.1967 § 1001 et seq., which affects a 10 county area, various municipalities and soil conservation districts. The trial court properly determined Southern Oklahoma Development Association was not entitled to affirmative relief, because neither a taxpayer nor contracting water user.

May 10, 1960, the United States forwarded Oklahoma Water Resources Board a Plan Of Development For Arbuckle Project, and requested filing in compliance with statutory authority (82 O.S.1951, § 91) under which water of Rock Creek previously had been withdrawn from appropriation. This plan, submitted as inducement for congressional authorization of the project, provided:

'The plan of development contemplates, as a Federal project, (1) the construction of Arbuckle dam, reservoir, and related recreational facilities, (2) the construction of pipelines and pumping facilities necessary to deliver water from the reservoir to Ardmore, Ardmore Airfield, Sulphur, Davis, Wynnewood, and the Kerr-McGee Refinery, and (3) the purchase and development of wildlife management program lands to mitigate upland game losses caused by reservoir construction.'

This development plan also was basis for a committee report to Congress recommending passage of enabling legislation for the project. In every instance the plan expressed furnishing of needed water to area municipalities, including City of Ardmore. By Congressional Act (August 24, 1962) Public Law 87--594, 43 U.S.C. §§ 616k--616s inclusive, construction of the Arbuckle project was authorized.

Petition for creation of the District had been filed January 24, 1962, and referred to district court of Murray County for hearing and determination in conformity with 82 O.S.1961, § 542. Decree creating Arbuckle Master Conservancy District, hereafter Arbuckle, was entered April 24, 1962, declaring the purpose and fixing district boundaries as follows:

'* * * developing and providing water for domestic, industrial and agricultural requirements, and to persons within the territory of the District;

'To enable the acquisition, construction and maintenance of improvements and facilities for common benefit and/or use of constituent areas; * * *.'

The decree also fixed boundaries for Arbuckle until specifically defined by viewers and engineers, as '* * * boundaries or city limits of Wynnewood, Davis, Sulphur, Dougherty, Ardmore (including Ardmore Industrial Airpark), Oklahoma.' No viewers or engineers performed any function relating to boundaries.

After directors were appointed by the court Arbuckle was joined by the Bureau in negotiating reimbursement contracts between Arbuckle and United States; between Arbuckle, the United States and Oklahoma Water Conservation Storage Commission, herein the Commission; and between Arbuckle and participating municipalities and water users.

By action of governing bodies, each municipality except Ardmore submitted its respective contract to and received approval by the electorate. The electorate of Ardmore twice refused approval of the proposed reimbursement contract, the last time on February 4, 1964. In cooperation with Bureau Arbuckle revised and renegotiated a proposed contract with Commission. Under this contract Commission assumed the obligation and agreed to reimburse the government for that portion of costs not contracted for by Davis, Sulphur and Wynnewood. These contracts were executed March 19, 1964, and the following day (20th) Ardmore filed motion to withdraw from Arbuckle without notice or appearance by any party.

March 23rd Arbuckle sought confirmation of reimbursement contract with United States, without mention of Ardmore's withdrawal. On March 24th the matter was set for hearing on April 14th after publication notice. This same day the court signed an order allowing Ardmore to withdraw from the District and be held harmless from further responsibility. On April 28th the court confirmed acceptance of resignation of Ardmore's members of Arbuckle's directorate. Ardmore subsequently demanded and received rebate of funds advanced for feasibility study.

The executed contracts mentioned obligated Arbuckle for $7,102,000 total reimbursable costs of the Arbuckle project. Of this obligation over 4 million in costs was underwritten by Commission's contract with United States; $774,400.00 by Arbuckle's contract with Wynnewood, $300,700.00 with Sulphur and $745,700.00 with Davis; a contract with an individual user at a fixed monthly rate ($5,100.00) plus agreed price for gallonage above 1.5 million gallons monthly. Although somewhat amended, these contracts as negotiated originally formed basis for approval of the Arbuckle project.

Following completion, Arbuckle supplied water to participating municipalities and a private user, much of this by aqueduct which was part of the project. Under contract the first reimbursement installment was due in October 1969. Early in 1967 Lawton city officials evinced interest and discussed means for acquiring 11 million gallons of water daily. Being advised an election pledging water revenues and support of a contract by ad valorem tax levy would be required, an election was held and the proposal approved by Lawton's electorate.

In February 1968, Ardmore resumed activities by appointing a study committee and turning to the Bureau for aid. Arbuckle knew of Ardmore's interest, although no formal application had been filed. However, Arbuckle's board made it clear no contract with Ardmore would be considered until after determination whether a contract with Lawton would be consummated.

The evidence uncontrovertibly showed the proposed contracts between the municipalities and Lawton would have allowed the towns to realize substantial profit ($1,400,000.00) over life of the contract. Additionally, sale of surplus water to Lawton would have accrued amounts sufficient to retire their contractual obligations to Arbuckle. Payments to Sulphur would have been sufficient to discharge obligation before Arbuckle delivered any water either to Sulphur or Lawton.

Evidence also shows a supplemental contract was approved April 9, 1968, whereby the Commission voted to assign additional 3294 acre feet of annual yield to Arbuckle. At this meeting a Commission member reported meeting with Ardmore's water committee, and advising the committee Arbuckle already had agreed to give Lawton all...