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Water Rights Fight in Dunes City - Peaceful and scenic, the Siltcoos River meanders from Siltcoos Lake in the Westlake area more than three miles through the forests and dunes to the Pacific Ocean. It's a favorite with anglers, canoeists and birdwatchers.
In 1960, International Paper Co. built a small concrete dam with steel gates across the small coastal stream in a wooded area just west of Highway 101, allowing the company to store water there as a backup source for its Gardiner paper mill.

Water from Tahkenitch Lake, a few miles to the south, was the primary source for the approximately 15 million gallons a day used by the mill. Tahkenitch water was stored with the help of a dam similar to the one on the Siltcoos and built about the same time.

The paper mill shut down in late 1998 and 3 1/2 years later shows no signs of reopening. However, IP continues to operate the dams in accordance with state rules - releasing water to help salmon runs, keeping lake levels up to enhance summer recreation and dropping levels in the fall to hold back winter floodwaters.

But now the dams - particularly the one on the Siltcoos - are awash in controversy. Some, including Dunes City, are contesting IP's efforts to "perfect," or make permanent, its decades-old temporary water rights.

The dispute has triggered a public discussion about whether Siltcoos Lake, which covers 4,000 acres and measures about 30 miles around, would be better off if the dam's four gates were left open and the lake and river allowed to drain and flow naturally.

Although some people believe that allowing the lake to revert to a "natural" state would improve its environmental health, others want the lake level regulated to avoid the possibility of late summer and early fall low-water periods that would shrink the lake shore. Dozens of people own homes, cabins or resorts around the lake. Dunes City Councilor David Jackson says a major drawdown could leave docks sitting on mud and private water system pumps out of the water. "There have been a lot of people expressing concern," he says, adding that the council wants a solution that would assure that the lake level remains regulated. He says Dunes City also has an interest in obtaining the Siltcoos water rights in case the city ever develops a water system of its own.

But there's a "Catch-22" that could backfire for the city: The state Water Resources Department says if Dunes City or some other challenger prevails and IP loses its Siltcoos water rights, no one would have the right to impound water in the lake. And, unless new water storage rights were granted, the dam would remain open.