By Mary Alice Murphy

On Thursday, April 30, the members of the Gila/San Francisco Water Commission met in a special session to discuss a proposed Central Arizona Project (CAP) Entity joint-powers agreement. Area governing bodies will present letters of intent and signed resolutions to be part of the CAP Entity to develop a New Mexico Unit to utilize up to 14,000 annual acre-feet of water in the Gila and San Francisco basins, as allocated by the 2004 Arizona Water Settlements Act. The entity members will work with the U.S. Secretary of the Interior to develop the water.

The preliminary working draft of the JPA can be found at nmawsa.org.

Allyson Siwik, Gila Conservation Coalition executive director, said she had a number of concerns. One addressed whether the CAP Entity, made up of local members would have the ability to perform duties as set forth in the draft on page 3.

"There still are no concrete plans for a unit," Siwik said. "I wonder whether the area has the capability to undertake these duties. It also says in the continuation on page 4, that the parties shall provide financial support. We know there's not enough in the New Mexico Unit Fund to pay for a project. And on page 8, when the unit fund is depleted, there will be no more money for the unit.

"There is no plan that can be financed that is affordable for users," she alleged. "We have non-diversion alternatives that we can afford and can do immediately. I ask you to think long and hard before you sign up for this entity. It's a bad deal."

Gerald Schultz, representing state Natural Resource and Conservation districts, questioned the process for submitting comments on the nmawsa.org website. "You can read the document, but unless you can sign in with the approved password, access to make comments is blocked."

Terry Timme, representing the Southwest New Mexico Audubon Society, said he wanted to follow up on Siwik's remarks about financial commitments. "It commits you to a lot of expenses. The community will have to pay the exchange costs, which will cost $120-$140 an acre-foot. We are in drought, which may limit how much water is available. I truly stress you inform your community what you're getting them into."

Wendy Phillips, Silver City resident, said: "So many of us support Allyson, even though we might be silent. We don't hear the answers to her questions. We have concerns about the finances. I personally am totally opposed to a unit. You have to ask the citizenry to vote on a project. This topic is definitely talked about in homes in the county."

M.H. "Dutch" Salmon, Grant County resident, said: "Allyson and Terry have warned you about what you shouldn't do-get tied up with a $1 billion boondoggle. We have things we should do. The $66 million is growing toward $100 million. If you give $25 million to each county, with interest, it could grow to $100 million. That makes more sense than getting tied into the boondoggle."

GSFWC Chairman Anthony Gutierrez noted that each governing body would be required by vote to approve a public resolution to be part of the CAP Entity.

"Everything we are doing is in the Act to begin engineering and the NEPA process," Gutierrez said. "My door is always open. I have had numerous questions on the other side about why we are entering into the JPA."

The main item on the agenda was to discuss and approve or disapprove the draft JPA with the Interstate Stream Commission for appointment to the New Mexico CAP Entity.

Pete Domenici Jr., GSFWC counsel, was on the conference call for the meeting. He said he could hear some comments more clearly than others.

Tom Bates, GSFWC member, asked what the teeth were on page 9 (p) that no representative might "frustrate conduct of the business of the New Mexico CAP Entity by failing or refusing to attend the meetings..."

Gutierrez said once the CAP Entity is formed, it would have to create bylaws. Domenici said the passage was put in because the entity will need a quorum. "If members make it impossible to conduct business, nothing will get done."

Gutierrez said pages 1 and 2 of the document set forth the requirements for the members of the entity. "One says: '...the parties are dedicated to the beneficial use of the AWSA water.' Another states the parties desire to obtain all benefits from the diversion and beneficial use of the AWSA water...."

He said his question was on the makeup of the membership of the entity. Charles "Tink" Jackson, Luna County manager, said language should be added "'or appointees' after the words, public employees."

Vance Lee, representing the Hidalgo Soil and Water Conservation District, asked if it were for sure that there would be a second fiscal agent, in addition to the ISC, as the first fiscal agent. Gutierrez said he thought the second would be needed for additional monies, other than that coming from the NM Unit Fund, which the ISC is mandated by the Act to oversee. The CAP Entity would define the second fiscal agent.

Don Stailey, representing the Gila Basin Irrigation Commission, asked about language on page 7, which said the ISC shall be the administrating agency, unless the CAP Entity chooses to designate a different political subdivision as its administering agency.

Domenici explained that the ISC already had some projects underway. "We want to allow the transition to take place until the CAP Entity can take over."

Gutierrez gave an example. "The ISC already has a draft request for proposal for engineering. The ISC is already doing that, so the CAP Entity wouldn't be responsible. For NEPA, the ISC is co-lead with the Bureau of Reclamation until the CAP Entity is set up. There would be things that would have to continue."

Stailey also asked about page 14 and the termination clause that says the 'agreement shall expire when the CAP Entity becomes a legislatively recognized political subdivision of the state.'

Domenici said the ISC counsel has pushed for the language, but "we may want to delete part of it. We haven't agreed that this agreement will terminate unless the CAP Entity needs to be terminated. I may substantially revise this language."

Gutierrez asked if the CAP Entity would be responsible to the Legislature, if it were a legislatively recognized state political subdivision.

Domenici said the entity may need to be recognized by the Legislature, but "I think we should consider an amendment to this draft." He said the language protects the New Mexico Unit Fund, so that the money would go back to the ISC and couldn't be used by the Legislature."

Jackson said he didn't believe an expiration date for the agreement was needed. Domenici recommended deleting the date of Dec. 31, 2020 as a possible termination date for the agreement.

Howard Hutchinson, alternate representing the San Francisco Soil and Water Conservation District, asked that it be entered into the minutes that he requested "if there is 'a unit in the San Francisco Basin,' because it seems to me that most parties are more concerned about the Gila. I want it said that San Francisco parties are not obligated to pay for design and construction."

Domenici noted the most important part of the document was item (t) on page11, which states that the entity "shall allocate among its members and manage for the benefit of its members the AWSA water for which it has contracted with the Secretary of the Interior."

He also said it was critical to come up with what a unit looks like.

Hutchinson said he wanted to make sure everyone understood that there could be a unit in the San Francisco Basin, as well as in the Gila Basin. "Those in the San Francisco Basin will have control in the San Francisco Basin, so that we function basically autonomously."

Domenici noted that most of section (r) on page10 was directly from the statute.

Darr Shannon, representing Hidalgo County, asked about why the New Mexico Department of Finance and Administration must "execute" the JPA. Domenici recommended the work be changed to "approve," which is what the DFA must do with JPAs.

Jackson asked if language on page 11, item (t) would allow leasing of the water while a unit is under construction.

Domenici said it would have to be part of a water users agreement, because the CAP Entity can contract with the Secretary of the Interior. "The CAP Entity can allocate the water to users, which can lease to third parties," but he noted that there would be "interpretation" of this agreement. He then said he did not think the agreement limits third-party leasing.

Jackson asked how it would be addressed in the agreement if the CAP Entity wanted to explore investing funds.

"We can request that the ISC can pay third parties from the New Mexico Unit Fund, and we could include a request that the ISC may make a payment for investment," Domenici said. "The ISC feels it can reimburse the CAP Entity only after the money is expended. I haven't discussed that issue with the ISC lawyers."

Jackson asked for clarification. "If the entity has to turn in a budget, it still has to expend the money before reimbursement?"

Gutierrez said he didn't think the ISC would honor requests in separate agreements. "In the budget, we would have to clearly express the contractual agreements. Our concern is if we apply for grant funding. Can match money come from the New Mexico Unit Fund, similar to what we do in local governments?"

Domenici said if the CAP Entity budget approves a contract for a staff person, the ISC could pay that person directly. "The ISC can't just give operating funds, but it can reimburse."

Stailey suggested a limit to reimbursement, to which Gutierrez said he thought the limit would lie in the approval of the budget and up to the amount of the budget.

Jackson noted the second fiscal agent could be an employee of the county and reimbursed to the county.

Stailey asked if any organization could be part of the CAP Entity. "Could a group that is not part of the Gila/San Francisco Water Commission be part of the CAP Entity?"

"Yes, if it's a public agency," Gutierrez said. "The town of Silver City is not part of this commission, but it could be part of the CAP entity, if it agreed to develop and utilize the water. The Arenas Valley Water Association could be part of the CAP Entity, if it wanted to."

Siwik asked about the language on page 11 item (t), which refers to third party contracts. "What does 'solely for the benefits of the New Mexico CAP Entity' mean?"

Domenici said it comes out of the statute that payment for leased water would have to go to the CAP Entity.

Siwik also asked if a group would have to be a member of the CAP Entity to use the water. Gutierrez said water could be allocated to a third person.

"Or is it a way to make money?" Siwik asked.

"Contracts can be made with third parties," Gutierrez said.

Domenici said he would change the word "members" to "parties," because the use of the water is not limited to members.

Siwik asked if there were things that would not be considered a benefit.

Domenici said if the CAP Entity were contracting, the payment would have to go back to the CAP Entity as opposed to individual entities. The benefit would not leave the four counties.

"But the water does not need to stay within the four counties?" Siwik sought clarification. "Is the water a benefit and if it leaves the area, it is not a benefit?"

"The payment can't leave the four counties," Domenici explained.

Jackson noted that prior to the project unit being constructed, the area would not be able to use the water.

Shannon asked if the JPA could stipulate that the water could only be used in the four counties. No, because the Act states it can be used anywhere in New Mexico.

Jackson said the CAP Entity members would be limited to those in the four counties.

Domenici said the Act states that contracts are made for only the benefit of the parties. Gutierrez said the water could be used outside the four counties, anywhere in New Mexico.

Stailey asked, if the water could be used anywhere in the state, what would stop Albuquerque from being a member.

"That's why we have stipulated that members of the CAP Entity can be only from the four counties," Gutierrez said.

Archie Payne, representing Virden, asked for clarification that only water above a baseline of 150 cubic feet a second could be taken from the rivers.

Gutierrez said it has to do with the agreement with the San Carlos Reservoir.

Schultz said he had nine things, which were submitted to nmawsa.org, but "I don't know if they were reviewed. This whole public involvement starts to be a sham."

Gutierrez said he read Schultz's comments, but most were relating to the New Mexico Unit and the bylaws. "This is for comments on the JPA. We've allowed public comment and you can comment."

Schultz said the project should be self-sustaining. Gutierrez said that would be part of operations and maintenance to be self-sustaining.

Schultz asked about term limits on CAP Entity members, to which Gutierrez said that would be determined in the bylaws. Schultz also asked about whether the assessment of dues would come from citizens' pockets.

"So far, the dues have been from the member entities," Gutierrez said, to which Schultz said "from the citizens."

Schultz also asked if CAP Entity members should be advised to have liability insurance. The answer was that it was up to the individual.

Schultz asked if any excess New Mexico Unit Fund would be sent back to the Colorado River Basin Fund and what if the total liabilities exceeded the assets.

"We'll have to figure that out," Gutierrez said.

Shannon asked for a clarification on page 10. "I would like a non-attorney definition. It's a fear of mine that the counties will become liable. Will each individual member be responsible for paying for other projects?"

Domenici pointed out that page 4 requires a two-thirds vote for the addition of parties to the agreement and that the agreement would need to be amended.

Gutierrez said he thought the question was different. "If Deming had a project, does the entire CAP Entity have to be responsible for that project? I think the CAP Entity makes the contracts, but not the responsibility. The JPA is only related to a unit, not to an individual project."

"I think we're all concerned about costs, and the feasibility of a project is a concern," Gutierrez said. "Every entity in the CAP Entity has to be realistic about costs. I have said more than once that the proposed project is too large and too expensive. We need to know the costs."

Siwik asked what dues would be used for, to which Gutierrez said he saw it potentially for operation of the CAP Entity, "but we have no bylaws yet."

Gutierrez had earlier called for a vote on the JPA, and Siwik asked what the vote covered.

"We are voting to take these amendments to the ISC," Gutierrez said. "We will provide our comments to the ISC, and there will be discussion at next Thursday's ISC meeting."

Craig Roepke, ISC Gila Project manager, addressed all the comments up to that point. He said, on page four, second paragraph, that the language "'for development of the AWSA water,' is in there intentionally. This language is non-lawyer's language that mimics the responsibility of the New Mexico CAP Entity in statute. I think it excludes investing and taking money to build something other than a New Mexico Unit. And the next sentence about parties providing financial support as they may be able to..., I would guess the ISC will hold close to that, too. That is so a government body doesn't decide it wants to keep any of the money."

On page 7, (l), he wasn't sure sentences 1 and 2 belonged in the same paragraph.

To Jackson's question about page 9, he said Domenici had said the ISC would not front any operations costs. "By state law, we have to reimburse. I don't know if any funds derived from leasing can be used for matching. The funds and interest go to the New Mexico Unit Fund. Howard brought up who will be responsible for costs of the units that benefit parties. You must decide among yourselves, as well, how assets will be split."

In reference to page 11 (t), the CAP Entity would have to come to the ISC and say: "This is our plan. Can water be leased outside of the area? I would not exclude that."

"Allyson asked what is not allowed," Roepke continued. "If an environmental group wanted to lease the water for instream flows, the benefits of the payment must come back to the CAP Entity for use in building a New Mexico Unit."

Roepke addresses Schultz's comments about an identification being needed for the nmawsa.org. "For every one person, we get 20 to 30 robots that want to get in. We have the ID to keep out profane comments."

In reply to Phillip's comments about taxpayers picking up the tab. "With investing, that will be minimal, I would hope, but I expect that residents have to have buy in."

He also specified that the exchange water being put to effective use from the Gila River has the senior right on the river.

Roepke said the ISC statutorily has responsibility for the New Mexico Unit Fund and "every commissioner will husband it. Once the funds from the Colorado River Basin Fund are deposited in the New Mexico Unit Fund, then it's New Mexico's money."

Jackson asked if the Gila/San Francisco Water Commission voted today, would there be discussion at next week's ISC meeting.

"The ISC has to send in its work plan by June 11," Roepke said. "The next meeting will be June 11. That is the deadline for signed resolutions from those who wish to be members of the CAP Entity. Next Thursday, we hope there will be a lot of discussion, and then maybe another meeting here. The less discussion, the better off we are."

Jackson opined that the ISC would not say it loves the document.

"With our current schedule, we will approve it on or before May 21," Roepke said.

"Potentially the ISC will have a special meeting," Gutierrez said. "In this preliminary draft, I think the changes are minimal. What we've been asked to do is to send a sufficient draft for us. I think we should have authority at that meeting to change a little bit, so as much as we can we need to be in agreement on or before May 7.

"I ask that any entity that wants to be part of the CAP Entity, send me a non-binding letter of intent before May 7," Gutierrez requested. "Not the resolution yet. That is due before June 11."

"If the CAP Entity has a plan to invest, it can take the request to the ISC, and if the ISC approves, it can invest the proceeds, but it must go toward building a New Mexico Unit," he said.

On June 11, all state bureaus have to submit their work plans. "That doesn't mean we can't amend it," Roepke said.

Hutchinson commented that when Bernalillo County and Albuquerque agreed to the San Juan-Chama project, it didn't have any idea of the billions of dollars they would need to expend, "but I can tell you, Albuquerque is tickled pink to have spent those dollars, because without that water, the population would be about a half million. We don't have as much water, but for us it is a lot of water and will be valuable in the future."

To a question about a special meeting next week, Gutierrez said he did not think it was necessary. "May 19 is our next meeting. We can call a special meeting, but we have to have a quorum. This draft has a lot of changes from the original draft. I think Domenici has done a good job negotiating. Until we get input from the ISC, we can't do much."

The water commission approved the draft JPA be forwarded to the ISC with the group's changes.

Gutierrez noted that Domenici is identified as the GSFWC counsel on the ISC agenda.

Stailey said irrigators still have concerns, so he voted no on approval of the JPA.

The Gila/San Francisco Water Commission will hold its next regular meeting at 1 p.m. Tuesday, May 19, at the Grant County Administration Center.

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