By Mary Alice Murphy

The first item of business for the Tuesday, Jan. 13, 2015, Gila/San Francisco Water Commission meeting was to elect officers. Chairman Anthony Gutierrez was re-elected to his position, as was Billy Webb to vice-chairman. As the Treasurer Alex Thal had resigned his position, the commission members chose Darr Shannon of the Hidalgo Soil and Water Conservation District by acclamation.

During public comments, Allyson Siwik, Gila Conservation Coalition executive director, said she wanted to comment on the Gila/San Francisco Water Commission becoming the New Mexico CAP (Central Arizona Project) Entity, which the GCC opposes.

"We have fundamental questions on the technical and financial capacity of the commission," Siwik said. "We believe it is severely limited. We also have questions about the financing of a project."

One of the big questions the GCC has is: "What is Mark Valenzuela's role in the financing? Is he a broker or on contract? What is his relationship to this body? We want to know whether there is a conflict of interest. And second, has Valenzuela redone the financial plan to correct the errors? We believe the 14,000 acre-feet of water overestimates the revenues, as we know there is little to no water available. He also assumed immediate availability of water to pay for the project. Third, the presumed cost, according to his plan, is three times lower than what the Bureau of Reclamation estimated."

"Also what are the transaction costs to taxpayers for the bonds?" Siwik asked. "There is no sense of the cost for the available water, except that Deming's water costs could rise 10 times. Can water be leased out of state? We're not sure it is legal. Valenzuela couldn't give the cost per acre-foot, so we don't know if the agricultural sector can afford it. The financial plan is critical for you moving forward. You need financial capacity. We are concerned the taxpayers of the four counties will be on the hook for the plan, design and construction of a unit. We are opposed to the Gila/San Francisco Water Commission being the CAP entity."

M.H. "Dutch" Salmon of the GCC said he noted on the agenda an item for discussion of the appointment of a CAP Entity Committee. "This is reminiscent of the Interstate Stream Commission's Gila Committee, which met behind closed doors. It brought a suit by former ISC director Norman Gaume against the ISC and then a countersuit from the ISC against Gaume If you have a subcommittee, we want the meetings open to the public."

"The ISC is spending some of the money, out of the $66 million," Salmon said. "About $7 million has been spent on studies and litigation, and the NEPA process is still to be done. More costs are to come. The project in the long run is doomed. I suggest you split the $90 million between the four counties to invest as they wish for water projects today. I think the doomed project should be taken behind the barn and pounded down a badger hole."

The next item of business was to approve the Open Meetings Act for 2015. "I think the only change was the time from 9 a.m. to 10 a.m., because people have to drive here," Gutierrez said.

The discussion began and lasted for more than an hour on the requirements for the GSFWC to become the New Mexico CAP entity "pursuant to the Arizona Water Settlements Act and the New Mexico Consumptive Use and Forbearance Agreement, including discussion and possible action on amendments to the current Joint Powers Agreement, with approval by the New Mexico Department of Finance and/or possible proposed legislation," according to the agenda item.

Pete V. Domenici Jr. of the Domenici Law Firm said he has been around since before the AWSA was signed, so "I have a sense of the background. The settlement statute has attachments that reference the CUFA, which becomes an obligation. It also sets difficult and strong parameters for a CAP entity. It sets up a strict contract for the New Mexico Unit Agreement. It's not unusual for these complicated strict contracts to have similar components and requirements for a quasi-governmental entity to deal with water between states."

"This particular agreement gave us a specific item for a letter to the Secretary of the Interior to move forward with the second phase," Domenici said. "The Department of the Interior will work with the CAP entity."

He noted the requirements to be the CAP entity are not in the federal law, and it doesn't say who is or who is required to be the entity.

Section 2.26A of the CUFA sets forth the definition: "'NM CAP Entity' means the entity or entities to be formed or designated by the State of New Mexico to enter into the New Mexico Unit Agreement with the Secretary as the NM Unit and Authorized Diverter. The NM CAP Entity shall be an entity that: (a) does not have sovereign immunity; (b) does not have the protection of the 11th Amendment to the U.S. Constitution; (c) continues to satisfy all these conditions throughout its exercise."

Domenici said in his opinion to satisfy subpart (a) would be complicated and uncharted territory. "This Act was done quickly and cobbled together, with New Mexico brought in at the tail end. Does your JPA operate or set you up as an entity? ...There is no real precedent that says you have sovereign immunity. ... I believe you do not have sovereign immunity, so you are eligible to be the CAP entity."

He then listed three options for the GSFWC to request being the CAP entity-Communicate that the GSFWC become the CAP entity based on existing provisions of the JPA; Amend the JPA, with approval from the Department of Finance and Administration, to state it does not have sovereign immunity; and/or to pursue legislation confirming the lack of sovereign immunity or that it is waived.

"You will be doing business at a high level," Domenici said. "You will be doing high-level negotiations with the Department of Interior and other federal and state agencies and quick ones."

He then asked how the GSFWC would deal with money. "In order to receive the funding, the commission will have to qualify as a fiscal agent or a city or county would have to designate a member as fiscal agent. Each of you has that sovereign immunity through the entity you represent. If you waive the sovereign immunity, you are left liable. My opinion is related only to the rights, funds and assets of the entity. Leasing water before or after construction of the NM Unit can be done. With the funding of the Unit, I think the ISC has to be more involved."

Domenici warned the commission that this upcoming legislative session is the only one where legislation can be pursued before the end of year deadline, by statute, to sign the NM Agreement.

He encouraged the GSFWC to be in dialogue with the ISC, which should take steps to confirm the GSFWC as the CAP Entity. "You need to be able to negotiate with the Secretary of the Interior within 90 days of becoming the entity. The NM Agreement needs to clarify, whether you need a project to sign the agreement. NEPA has alternatives for you to look at. I think you can use the federal money to explore options. My opinion is that the one lawsuit, which was dismissed, won't be the only lawsuit. Fighting over water comes with the territory. I think the commission needs to be aware to the extent the ISC made decisions that might tie the hands of the CAP Entity that might be appealable. I don't think the ISC should tie the hands of the CAP Entity."

"I think there is potential for the money to be transferred, as well as the decision-making," Domenici said. "There, frankly, is not that much time in one year. I suggest you come up with a timeline for dealing with the public, state agencies and federal agencies."

He also said he was over his budget and requested consideration to amend his contract from $5,000 to $10,000.

Gutierrez asked how this CAP Entity differentiates from other water authorities. Domenici said some were set up by statute specific to a project, some were federal legislation with talk about the powers of the authority; and some are set up as regional authorities, which gives everyone their own right to do supply and distribution. "Someone has to sign a contract with the federal agency. Statute gives broad authority to some state agencies to do that. I think this statute and the JPA would be the heart of what you would rely on."

Vance Lee, representing Hidalgo County, asked which option Domenici would recommend, to which he replied all three, but cautioned that the first should be a communication and not a formal request. He said the request the GSFWC was prepared to send to the ISC should have minor edits to meet the language. "I would focus more that this entity was formed to become the CAP Entity. Do it quickly. ISC personnel are here today. Ask them today if they are ready to engage." Domenici said a simple paragraph in the JPA, amended and sent to the DFA for approval, would meet the requirements. "And you should draft concise legislation this session to address waiving sovereign immunity."

Domenici also recommended the GSFWC clarify the funding and decision-making and who controls them.

Lee noted the JPA requires a 2/3 vote of commissioners to modify the JPA. "We need to get it put together, so we can take it to our governing bodies."

Lee made a motion to follow Domenici's recommendation to include all three options.

Javier Diaz, representing Luna County, said the county would take on drafting legislation.

Item C on the agenda addressed discussion regarding appointment of a CAP Entity Committee. Gutierrez recommended it be tabled. Diaz said, as a point of discussion, "I think everyone involved in the Gila/San Francisco Water Commission should be involved and included in talking about what's at stake. We've wanted to take local control."

Darr Shannon, representing Hidalgo Soil and Water Conservation District, said she agreed. "I think to gain the trust of the people we need to all be involved. And to show the knowledge of everyone on the commission is valued."

Gutierrez said, because Alex Thal had requested the item, and he was absent, that the item should be tabled, which was approved.

The next article will address the continuation of the discussion about forming a CAP Entity, with input and reports from ISC personnel.

Disclaimer: In the past, this author has provided services to the GSFWC through her additional freelance business.