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Category: Front Page News Front Page News
Published: 25 March 2015 25 March 2015

By Mary Alice Murphy

After determining the presence of a quorum of members, approving the agenda and minutes, public comments opened.

Allyson Siwik, Gila Conservation Coalition executive director, said it was hard to make public comments, when the discussion items had not yet been heard. "May I request that public comments be accepted during the three new business items?"

GSFWC Chairman Anthony Gutierrez gave permission.

The first item of new business was a discussion and potential action on a draft joint-powers agreement with the Interstate Stream Commission.

"I'll give you a little background on this," Gutierrez said. "At the last ISC meeting, we were on the agenda. I posed the question on when we would be getting an answer to our request to be the CAP (Central Arizona Project) Entity for AWSA (Arizona Water Settlements Act) water. It was pretty much the consensus that a JPA had to be entered into before the ISC named the CAP Entity.

"This is the very preliminary draft of the JPA from ISC counsel," he continued. "Today I want comments from the commissioners around the table to get us closer to a JPA that we can both live with."

Vance Lee, representing Virden, asked if Gutierrez wanted general comments or specific items.

"I want to get down to the nuts and bolts," Gutierrez answered.

"In the first page, first paragraph," Lee said, "I would prefer the word municipalities to cities. It's hard to think of Virden as a city. I also recommend we add soil and water conservation districts and community water districts, as well as ditches."

The attorney, Pete Domenici Jr., on contract to the GSFWC, walked into the meeting and Gutierrez introduced him, and said the two had discussed the JPA with the ISC counsel, the previous day by telephone. "Mr. Domenici brought up that we already had a JPA solely for contracting for water. In the discussion, we talked about the GSFWC and the CAP Entity being two separate entities. The Act is specific in the duties of each. The GSFWC is in an advisory position and the CAP Entity will have the responsibility for the design and construction of the New Mexico Unit. With two entities, if a member of the GSFWC does not want to be a member of the CAP Entity, it can opt out."

Domenici said the GSFWC should satisfy the Act, but the ISC is breaking funding into non-diversion and diversion projects. "To the extent they are non-diversion projects, we expect the Gila/San Francisco to have a consultation role. The ISC is asking for us to come back for revision for this, another JPA group for the CAP Entity and the New Mexico Unit."

Gutierrez said he voiced his concerns about the members of the Gila/San Francisco. "We support diversion and non-diversion projects. I have a concern that the non-diversion projects of some of our members are not funded fully. The ISC stuck to its guns that 'these are the appropriations we are giving you.'"

Lee said it made sense to have two different groups. "We have a number of inactive members, and the CAP Entity should be the active ones."

He brought up another requested change to the word maximum before 14,000 acre-feet per years of AWSA water... "I believe the wording should be average annual."

On page 6, in the third "whereas," one more than half should constitute a quorum or a majority vote, Lee said In the language on page 12, Lee said under Title to Assets, the water might also be of benefit to parties other than those listed in the document.

"That was also a question we posed," Gutierrez said.

Domenici concurred that the ISC is expecting a rewrite of many of the paragraphs in the document. "This is a preliminary draft."

Don Stailey, representing the Gila Basin Irrigators Coalition, said, as irrigators in the Gila Valley, "we continue to have concerns. We don't see ourselves as represented. Our concerns have become less of a priority. At the start, we were the priority. We also have concerns on who has liability in this JPA and concerns about the liability of the non-members of the Gila/San Francisco that we represent."

Gutierrez said the JPA is not specific to any member or any project until the members are identified in the JPA. He said the members of the JPA would be listed on page 4 of the document.

Domenici clarified the issue of liability. "It's up to us to put in the list of members. As for liability, JPAs are widespread. Liability does not flow through to the individual members or to the entities that become part of the CAP Entity. It is the CAP Entity itself that is liable. It will have assets. It will own the Unit and have contractual rights to the water."

"Both counsels agreed the individual members are not liable," Gutierrez noted.

Domenici said the CAP Entity would have bank accounts for the lease and sale of water. "It may have to buy insurance."

Mary Burton Riseley, Gila Valley resident, said: "I'm thinking of a possible charge of malfeasance. Suppose the state of Arizona charges you. Who would pay the fine?"

Domenici countered with another example. "If the city of Deming, for instance, sued the CAP Entity, it is the entity that is responsible. The CAP Entity will submit an annual request for funding in the early years. That has to be negotiated. The CAP Entity has to come up with a financial plan."

Riseley said she worries that assessments will be levied on members.

Domenici said the New Mexico Legislature has tried to make it clear that liability to individual members does not pass through the JPA.

"If I sue, where would the money come from?" Riseley asked.

"The CAP Entity has the right to take title of the Unit," Domenici continued. "The party will have to look at the CAP Entity for a suit."

Charles "Tink" Jackson, Luna County manager, asked: "What could Arizona sue us for? We've already taken care of impairment to water users in the Act. Arizona has taken on the responsibility for keeping them and us whole."

Domenici said the Act has specific terms to protect New Mexico's rights.

Siwik followed up on Riseley's comments. "What about NEPA liabilities? What about a default of one of the assets? Will the CAP Entity be able to levy assessment fees? The CAP Entity will bring in revenues. Depending on the geographic scope of where water will be delivered, there could be financial default. We or the CAP Entity might not be able to pay. Isn't the Entity us, and we're all liable?"

Domenici said the Gila/San Francisco Water Commission has no rights to levy. The CAP Entity has no requirement that it have the power of assessment.

"How will it pay for construction if it can't assess?" Siwik asked.

"If you want to take the water, you have to pay," Gutierrez said. "It's not different from any other water association."

Siwik asked how the Entity contemplated the system was going to work. "Will entities contract with the CAP Entity for the water?"

"All of those things will have to be negotiated," Gutierrez said.

Siwik asked if there were a placeholder in the draft JPA. "This is the first time I've seen it."

"We made it available to the commissioners," Gutierrez said. "We had the conversations just yesterday. We are trying to determine what the JPA should have in it. We all have ideas of what it should say. We will have meetings. We are trying to draft the JPA at the request of the ISC."

Jackson said the draft had some good things in it, but he also had some concerns. "My biggest heartburn is on pages 6 and 7. The ISC will tell us what to do and that the ISC will be the fiscal agent. The state has issues with knowing where its money is. I think the basic premise is that there should be a transition from the state to local government."

"I had the same question," Gutierrez said. "The ISC counsel said to put it in writing, and they would think about it. I proposed creating a budget and asking for the money."

Jackson said he thought the JPA was a positive step forward. Then he brought up the issue on page 13 of the draft JPA that said the New Mexico CAP Entity would become a legislatively recognized political subdivision of the state. "Why?"

He also had a question about the Grant County Water Commission well field project and why it was singled out at the only project listed in the document.

Craig Roepke, ISC staff, said: "This draft is very much a draft. It does not include staff comments. That line was put in because Sen. Howie Morales requested it. As commissioners, you should consider every word in this draft. David Anderson gave a presentation to the new ISC director. I will let him tell you what he told the director, with the caveat that this is only staff's comments, not from the ISC commissioners."

Anderson gave an overview of the timeline. "The ISC and the CAP Entity or entities must move forward to name the CAP Entity and it must be signed by Nov. 24, 2015, with the Secretary of the Interior. We feel it should be no later than Aug. 1, because of review by the ISC, the CAP Entity, Reclamation and the Secretary of Interior counsel."

"We restate what is in the AWSA, and using state and federal statutes," Anderson continued. "The ISC is responsible for the New Mexico Fund. We will continue to discuss with the Gila/San Francisco Water Commission on disbursement of funds. The ISC's position is that the sole and singular purpose of the CAP Entity is to construct, own and operate the Unit. It can request authority to divert water. We think it is plain in the AWSA that the ISC is to designate the CAP Entity. It is staff's position that all funds, as well as revenues from leases, be dedicated to the New Mexico Unit Fund. The ISC staff believes it is up to the CAP Entity to determine how to share the water and how to deal with shortages or overages. On the subject of assessments, there is no language anywhere. Whatever rules the CAP Entity accepts will be at the sole discretion of the CAP Entity."

Darr Shannon, representing Hidalgo County, said she wondered how the CAP Entity would decide how to allocate water and funding, if it did not have its own fiscal agent.

"The draft JPA names the ISC as an individual member of the CAP Entity," Anderson said. "It is staff's position that the entity can be set up with the ISC not even being a member. I think there will be future discussion on who the fiscal agent will be."

"We want the money to go as far as possible to fund all projects," Shannon said. "Maybe we can find ways to invest the money to make it go as far as it can."

Anderson commented to Jackson: "The language in this contract mimics what is in state contracts, that if reimbursable money is improperly spent, the state may not be responsible to reimburse it."

Roepke replied to Shannon: "We agree. The only money the ISC is responsible to oversee is the New Mexico Unit Fund. It's in the Act. At the same time, nothing says that the only thing the ISC can do is disburse the money to build the Unit. We would expect the CAP Entity would have the final say."

Shannon had a question about JPA language that said the water could be used in the state of New Mexico and asked if could be changed to the four-county area. Gutierrez said it was the language in the Act.

Siwik asked about language that mentioned two fiscal agents. She also asked about the CAP Entity obtaining its own separate legal status and being a legislatively recognized state entity.

Roepke said the draft was patterned after other similar JPAs within the state. "Frankly, I don't think you need two fiscal agents. The ISC must oversee the New Mexico Unit Fund. It's your business how you distribute the water and funding. The second tranche of money is reimbursable only on a construction timeline."

Domenici said the language flowing through the JPA was not the consensus of "this board. You must determine what language to put in. There is no requirement in the Act for a legislative recognized entity. It may be a recommendation to structure funding from other places than the Unit Fund."

Gutierrez asked the commissioners to email him any additional comments. "This is an extremely preliminary draft. If it is the will of the commission, I want to ask for assistance from counsel." To a later question about the possible need for a motion, Gutierrez said the commission had previously allocated funding to pay Domenici.

"It will be challenging to come up with language," Domenici said. "I like the August 1 target deadline."

"I'm hoping for before then," Gutierrez said.

"We will put together what we like, and we will send it to the ISC and then back to us?" Lee asked.

"I hope by the next meeting to have a better draft," Gutierrez said. "We will work as closely as possible with our counsel and the ISC's counsel instead of throwing it back and forth."

Howard Hutchinson, alternate for the San Francisco Soil and Water Conservation District, who used to be member of the commission, said he remembers numerous presentations from Catron County, the village of Reserve and the soil and water conservation district on storage proposals. Up to 4,000 acre-feet of water is allocated to the San Francisco Basin, "but I don't see our concepts anywhere. We could become signatories to the CAP Entity, so maybe there is a way to capture the 4,000 acre-feet of water. As we go forward with a letter to the Secretary, I would ask we be given a way to reconsider our projects."

Gutierrez said a version of those projects still existed with the wording that ditches have storage.

Anderson clarified that the Catron County projects were in Tier 1, but did not proceed to Tier 2, because the project on the mainstem of the San Francisco was not considered viable. "The watershed proposals were tabled, but the ISC set diversion points on the acequias. The main project does not preclude diversion on the San Francisco," he said.

Hutchinson said the county never contemplated a mainstem dam on the San Francisco. "We agreed it wouldn't get serious consideration, but there were diversions with storage components. What type of detail is needed?"

Gutierrez said he thought the issue should be brought to the ISC itself.

"At this point, no one is going forward with a design on the San Francisco as part of the New Mexico Unit, but it is still within the Act for 4,000 acre-feet on the San Francisco," Anderson said. "The allocation of $500,000 was for permanent diversions, not for storage."

"In the Tier 1 process, Catron County suggested storage on the San Francisco and on two other tributaries," Roepke said. "The evaluation panel concluded they were not environmentally viable. However a single proposal from Catron County was for small ponds on ditches and improvements to ditches. The ponds were specifically not to capture AWSA water."

Lee said, when Catron County had the big fire, the county revised its watershed proposal. Roepke agreed and said the original proposal was for thinning the watershed, but "the fire took care of that. The storage on the ditches was only to capture existing water rights, not AWSA water."

Gutierrez, addressing the next item on the agenda, said he forgot about the request for proposal for 30 percent design. "I would like to see a Gila/San Francisco member as part of the selection committee." Aaron Sera, city of Deming manager, volunteered to be part of the committee.

"We welcome a member," Roepke said. "We hope the Gila/San Francisco Water Commission will also provide an observer on any future value engineering process. We want to keep the water commission and the public fully informed. We hope the final entity will take over that process."

Siwik said she was glad to hear the ISC wants to keep the public apprised about the project. "I would like to see the calendar for the RFP process, where it will be posted, how much it is for, and when we will see the 30 percent design. We no longer have a stakeholder process, and we still do not have a public process in place for this phase of the process."

"I disagree," Gutierrez said. "I allow comment, at my discretion, on every part of this meeting. I think public participation is ongoing, and we will continue to provide documents, and I, too, would like the schedule."

Anderson said the RFP for 30 percent design is in draft form, with nothing final yet. "The ISC staff is trying to get the draft together as soon as possible. We need the design at least halfway through the NEPA process. That's why we are going forward. The advertisement will be like all other ISC RFPs, on the ose.state.nm.us website. I invite everyone to attend the ISC meeting this week. We are requesting approval of the modified work plan. Hammering out language for the JPA and RFP are the only things we must do right now. NEPA is a public process, which requires a notice of intent to proceed. It will be posted in the Federal Register. And we will develop the scoping process."

Gutierrez gave a brief overview of the legislative session. "There were a few bills on water. Some wanted to make the ISC more accountable. The Senate passed it, but the House never heard it."

Tom Bates, representing the Deming Soil and Water Conservation District, asked for a discussion on Norm Gaume's recommendations at a previous meeting. He suggested forming a committee to look at Gaume's statements. Bates, Lee and Gutierrez will serve on the committee.

Gutierrez noted that Janice Kiehne, who had resigned from the Luna Ditch Irrigators' Board, would not be representing the group on the Gila/San Francisco Water Commission any longer and another member was needed. He asked Kiehne to request another member be named.

The next Gila/San Francisco Water Commission meeting will take place Tuesday, April 21, at 1 p.m. at the Grant County Administration Center.