Editor's Note: This is Part 3 of a four-part series of articles on the first organizational meeting of the New Mexico Central Arizona Project Entity.

By Mary Alice Murphy

Mary Reece of the U.S. Bureau of Reclamation Phoenix Office Program Development Division spoke at the first meeting of the New Mexico Central Arizona Project Entity held Monday, Aug. 10, at the Grant County Administration Center.

"I will touch on four questions," she said. "The first is what is Reclamation's role moving forward into next steps for this process."

She said Reclamation has multiple and sometimes conflicting roles.

"We provide oversight and technical support to the Secretary of the Interior," Reece said. "We manage the Lower Colorado River Basin Development Fund. We are specifically in charge of environmental compliance and oversight to the tribes in the Arizona Water Settlements Act.

"With respect to our oversight role, our primary task is to see the New Mexico Unit Agreement completed with two signatures—that of the CAP Entity and the Secretary of the Interior," she said.

Reclamation is working actively with the Secretary because of New Mexico's decision to move forward with a diversion. "I support conversation with the Interstate Stream Commission. The entire agreement, including the description of the New Mexico Unit, and supplemental terms will not be easily modified. That's why the description is broad."

"We are coordinating with the Secretary and her staff and throughout the Central Arizona Project, we are the boots on the ground," Reece continued. "We will have many more opportunities to talk about environmental compliance. At the end of the NEPA process, we will recommend a specific project or no action. 2019 is the earliest date for that decision. At no fault of New Mexico, the decision can be delayed to 2030."

The final funds of $66 million and $34 million, as allocated in the AWSA, are deposited into the LCRBDF, including those from the $66 million already going into the New Mexico Unit Fund at about $9 million annually for 10 years.

"The federal trust responsibility to the tribes assures the terms of the AWSA must protect the tribes," Reece said. "The Globe Equity water quality part is kept in mind to protect the tribes. We coordinate with the Secretary's Office of Indian Water Rights. We are responsible for negotiations for this Act and will be part of continuing negotiation.

"The federal approval process is closely working with the Secretary within Reclamation's administration," Reece said. "The Reclamation Commissioner, who was once the New Mexico ISC director, Estevan Lopez, has recused himself from dealing with the AWSA process. We have been dealing with his Deputy Commissioner Mike Conner. All of those groups have to buy into the process. We've been coordinating with all of them."

She said Reclamation had set a deadline of Aug. 24 to complete the New Mexico Unit Agreement, which includes the Description and any supplemental terms added, because the Secretary's staff said they would need about three months of review before the Secretary signs it on Nov. 23. "We asked for new data and were told to take a few extra weeks. In September, we need to put pen to paper. Reclamation is willing to work with you, particularly with the people you designate."

Reece said Reclamation would like to add some supplemental terms to the New Mexico Unit Agreement. "Reclamation has developed over the past 100 years laws and policies to manage Western water law. I am an engineer, not an attorney, so I want you to understand what you are stepping into. I don't like the use of the word supplemental, because it makes you think we are adding requirements that don't exist. They do exist. We are clarifying the ways we typically do business. We are not putting a heavier burden on you."

She made clear to the Beat that the version of the New Mexico Unit Agreement that was handed out to participants included only what was already an attachment to the Consumptive Use and Forbearance Act. The necessary "supplemental terms" had not yet been put into the document.

"We want a term acknowledging the needs for additional funds," Reece said. "Think carefully about what you want in the agreement and the description. We at Reclamation cannot possibly have all the discussion we need before it is signed, but it will not be easily modified. We have to make sure that the agreement is in compliance with the federal Anti-Deficiency Act, which stipulates that you can't do the work until you have the funding necessary for it."

She noted the funds to pay for the NEPA process would come out of the New Mexico Unit Fund. "Another primary term we need is 'future construction.' We know the costs will be in excess of the federally allocated funds, so there must be language reflecting other sources of revenue. Water service and water delivery contracts will have details. The Secretary will also sign those. Typically there are a lot of three-way contracts."

She said it is particularly important to make sure the entire document is consistent with the CUFA.

Another term needed would address operations and maintenance transfer.

"The Secretary is responsible for the design, construction, operations and maintenance unless this entity takes them over," Reece said.

She said the process is like "Hooker Dam and alternatives. The AWSA of 2004 added details and the CUFA. The operation has to be consistent within existing law. Whoever does the Unit will use Reclamation standards for planning, design, construction, as well as operations and maintenance. A timeline for design and construction is not in the Act."

"The expectation is to make sure the design, construction, operations and maintenance will be done within Reclamation guidelines," Reece said. "The legal status part of the agreement has as its purpose to put in a provision for the possibility of legislative changes. If they are done in a way the Secretary feels she cannot fulfill, it will be your responsibility. We will be talking to you to clarify."

She described the three pots of money in the Lower Colorado River Basin Development Fund that relate to the AWSA. "The $66 million is indexed and will pay into the New Mexico Unit in equal amounts for 10 years. This money can be put toward a Unit or other purposes. It goes into the New Mexico Unit Fund, managed by the ISC."

She said the second pot could be accessed at its earliest when the project moves into construction. It is also indexed, but has other priorities attached to it that might put the New Mexico Unit farther down in the order of receiving the funding. The priorities are listed in the AWSA.

"There is a third pot of $28 million that can also be used," Reece said. "However, it is based on earnings in the fund since 2004, when the AWSA was signed. The LCRBDF has not seen interest rates any better than we have. The less than1 percent average rate doesn't look like that $28 million will be available. It was predicated on the average 4 percent at the time."

The 2.48 attachment to the CUFA and the 3.1 Attachment to the NM Unit Agreement have differences that need to be dealt with, Reece said. "There is still a lot of discussion around sovereign immunity. This is your last opportunity to have your concerns addressed before the document is complete."

She said the focus of the next steps are to complete the New Mexico Unit Agreement, the description and the supplemental terms. "The Secretary will not sign it until you sign it. She wants it in time to review it before the deadline of Nov. 23, 2015. We will help you with the process."

Reece said she had received questions about the Value Study Reclamation has been working on. "The PowerPoint of the study is on the nmawsa.org website. The final report is due by the end of August. We conducted this study at the request of the ISC."

Darr Shannon, temporary CAP Entity chairwoman said a committee for determining the final language of the agreement and description had been chosen at the first of the meeting. "Do we have questions for anyone today?"

Lee asked for a list of Reclamation's concerns about the document.

"We presume we will provide them to you, then we will sit down with you and discuss them," Reece said. "I can't craft the language right now, but I can capture your questions."

The participants recessed for lunch.

The next and final article will cover the questions from CAP Entity members and the answers they received.

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