[Editor's Note: This is part 2 of a multi-article series on the New Mexico Central Arizona Project Entity's Dec. 5, 2017 meeting]

By Mary Alice Murphy

At the New Mexico Central Arizona Project Entity meeting held in Silver City on Dec. 5, 2017, Entity Executive Director Anthony Gutierrez asked that an additional amount of $500 be taken out of the utilities line item of the budget to be put toward audit fees.

In a brief discussion, David McSherry, representing the city of Deming, asked if the amount would be enough to cover the gross receipts tax, too. Gutierrez assured him it would.

The motion was approved.

The next item was a discussion on an amendment No. 2 to the joint powers agreement.

Gutierrez apologized for getting the number of acres incorrect at a recent meeting. He said the requested amendment was a result of the verbal beating he took at the Interim Water and Natural Resources Committee meeting.

"I did research and submitted the correction to the interim committee and every entity member," Gutierrez said. "I said 600 acres. I had just given the report on the on-farm storage and when Rep. McQueen asked me how many acres it was the first number that popped into my head. The acreage for each pond is 200, 180 and 292. There are also other lands and wells. The number of acres in the valley that are irrigated total 2,885, and there is other acreage that used to be irrigated."

He said about 4,865 acres in the Upper Gila Valley could potentially be irrigated. In Virden, the Sunset Ditch provides water to about 575 acres, and the New Model to 44, with about 142 acres not being irrigated.

"The system can also provide water to the 33 acres of the East Pleasanton Ditch, and 25 acres near Glenwood," Gutierrez said. "About 485 acres in the Glenwood region are not irrigated. Another 690 are irrigated equaling 1,230 acres in the Glenwood area."

He said potentially more than 9,000 acres could be irrigated. "I apologize. I should have had this information ready to give to them."

Chairwoman Darr Shannon said: "I think we should have been better prepared. I'm sorry the error was made."

"The amendment addresses concerns heard from the legislators and the public," Gutierrez said. "They think we're just sitting on the New Mexico Unit Fund. We're trying to utilize the construction fund for a unit. The legislators made it clear they thought the Regional Water Project could use Unit Fund money. I've learned since that the USDA came to the Grant County Water Commission and suggested they could fund the whole thing at one time with grant and loan funding. The interest on the New Mexico Unit Fund could address the loan component. What we don't want to do is hand out money and be left with nothing.

"A second amendment to the JPA would allow this board to consider after due diligence if some of the money could benefit residents," he continued. "Potentially, we could help with match funds. I am planning a meeting with the legislators to bring them this plan."

Joe Runyan, representing the Upper Gila Farm Ditch said: "I want us to sit back. We want to get the whole 14,000 acre-feet as allocated by the Arizona Water Settlements Act. We agree the push-up dams are primitive. What's the hurry? We've winnowed all these options. Let's wait until this is worked out."

Gutierrez agreed there was no hurry. "I just want to leave us open to other options. It will take us some time to develop language that would be satisfactory anyway."

Shannon asked what specific items would be addressed in an amendment.

"No specifics," Gutierrez said. "I'm not bringing an amendment, just an idea."

Gabriel Ramos, representing Grant County, said he agreed it should not be in the near future. "The Southwest County Commission Alliance has heard concerns from Luna County not benefitting and the same from Lordsburg. I think we need to open it up to other projects, but I want to see a business plan first. This letter we've just approved keeps us moving forward. It's just an option to address in the future."

Vance Lee, representing Hidalgo County said the group needs to make it clear that they have a lot of other ideas, beyond the unit.

"I don't want to eliminate a unit," Gutierrez agreed. "I think it's important to see that the money is used. We have a huge range to fund projects. I think we can use the interest from the New Mexico Unit Fund in the future."

Howard Hutchinson, representing the San Francisco Soil and Water Conservation District, asked if there were anything in the JPA that "prohibits us from using revenue we may receive from marketing the water?"

Entity Attorney Pete Domenici Jr. said there was and cited section III(e), where it says "the use of all funds and income available through the AWSA or derived from the AWSA, or made available to, the New Mexico CAP Entity from all sources, regardless of where those funds are deposited, shall be used for the planning, design, construction, operation and maintenance, of a NM Unit, or all or any combination of those responsibilities, for development of the AWSA water."

Hutchinson proposed the group should change the language. "Both Bucky (Van Allred, representing Catron County) and I have represented that money generated could be utilized for non-diversion purposes. I feel remiss for not catching that language."

Lee asked if the recent amendment gives the entity more leeway.

Domenici said it allows the entity only to work with Freeport-McMoRan.

Allen Campbell, representing the Gila Hotsprings Ditch said the JPA was simply a long and convoluted way to get the 14,000 acre-feet of water from Arizona for forever. "I'm a carpetbagger. I have no dog in this fight. The only thing I seek is financial viability and success to the agricultural community in the four-county area. I voted against the earlier proposal today because I felt it was not inclusive enough. I like the color of the lipstick, but not the pig. I will fight to keep infrastructure. If we increase the economic wealth of the four counties, which water can do, it will raise the economy, which it will allow. I don't think we need to change the JPA."

McSherry said the group needs to think 25 years down the road.

"We have one goal and that is to secure the water," Hutchinson said. "We need to keep the water forever. Money will not last long. The legislation that Santa Fe saw in 1962 is the same as this water. It took 50 years, but now we're looking at using it. Our water is harder to get to. We must keep the goal in sight. If we take our eyes off the prize, I'm afraid we would not meet our goal."

Runyan agreed: "Preserve the funds and stay single focus."

Domenici noted that the risks were significantly different in the Chama project in northern New Mexico. "Our risk when we go to the Legislature is that we are at the mercy of the New Mexico Unit Fund. We cannot function without this money. It's the risk and the best argument against us. Our proposed $50 million to $55 million project will use construction funds. We will need money coming in for operating costs and maintenance. If we want to develop this water, we need to keep the money."

"We are not like Albuquerque and Santa Fe," he continued. "Who is going to do the due diligence to make use of the CUFA water? We must stay collectively together. We must set up this entity to contract for the water. It is so easy for others on the outside to make a misstatement as Allyson Siwik did earlier when she called it a $100 million project. The legislators have the reaction when they hear that to cut off access by the entity to the Unit Fund."

McSherry said it would help to have a business plan to secure the water first.

"I don't think a business plan will be persuasive to those opposing us in legislative committees," Domenici said. "A business plan will say there is extra water for the potential use by municipalities. We need to be ready to take advantage of the water and money and allow the unit fund to grow. We must leave the money unavailable so we have it for future needs."

McSherry said Deming has applied for Water Trust Board funding. "I'm afraid we will be told to apply for Unit Fund money."

"It will be a hard sell to the legislators for Gutierrez to go before them, when 80 percent of them are against a diversion," Domenici said. "The New Mexico Unit Fund generated about $4 million last year.

"For one small step, we could say that what is generated could be used by the Interstate Stream Commission for other projects," Domenici continued. "We are the consultative entity to the ISC. The fund will receive $9 million a year until the whole $90 million is reached. $9.1 million is still allocated to other projects, other than a unit, but the use of that money is moving slowly."

He noted this upcoming 30-day session will be followed by the 2019 60-day session. "It will be hard to ride 18 months. It creates risk of having people cut us off and take it away from this entity and the ISC. That discussion will continue. We need to protect ourselves."

Runyan asked how the state could take the funding way from the ISC and the entity.

"The language in the act says that the $60 million can be used only for construction, but the $90 million can be used for a unit or other water projects," Domenici said. "The Legislature has threated to have the right to take capital outlay from the Unit Fund, unless we want to go through a court battle. I think we may need language in the JPA to show we do control the money and have a way to use it."

Hutchinson said they continue to attack on the entity's failure to fund other projects. "They have clever talking points from those who don't want a diversion—period. It presents a false concern that we aren't caring about a whole bunch of people."

"This is 14,000 acre-feet of water in perpetuity with the potential for hundreds of thousands of people to live in our four counties," Hutchinson continued. "The Gila gets 10,000 acre-feet of water, with 4,000 for the San Francisco. We now have 10,000 adjudicated in the San Francisco Basin and 15,000 adjudicated in the Gila Basin. Can we divert over the Continental Divide to Deming and Silver City? Yes, but if we don't have the water, we can't.

"I would like to see our agricultural production grow and bring in additional revenue," he said. "These clever talking points by the anti-diversion people are having an effect. The problem is that we are not constantly communicating to the legislators, the facts. I agree with Campbell; our main focus is getting the 14,000 acre-feet of water. The water will have end users. We have never had any indication that the users will not pay. The water will be available to use or lease. $5,000 an acre-foot is a revenue stream. We need to start looking at doubling the water and what it does to the economy. It will double or triple economic development. Who knows what future leadership will demand. The water will be more valuable than gold."

He said he understands the perspective of wanting to protect the San Francisco and the Gila rivers. "I live on the San Francisco. I love that I can put a boat in it and float downstream. I would be lying if I said I wanted to destroy the river or impact downstream or hurt the environment."

"We have our mission to keep in the back of our minds the revenue stream that starts coming in," Hutchinson said. "Then we can consider other uses for the water and money. We were deliberately excluded from the AWSA negotiations. That language was adopted by the ISC. All the way along, this stuff has been shoved down our throats, not under our control, not our decision."

Gutierrez said the entity still has some priority. "I think the New Mexico Unit Fund should be used for the project. I think the project we have can potentially be paid for with just construction dollars."

McSherry moved that the executive director bring a proposed draft for discussion and consideration of an amendment. "Then we can consider it, accept it or put it off."

Hutchinson warned that Gutierrez should include the ISC in the discussions.

Dominique Work, ISC attorney, who attended by telephone, said the ISC does not have any more authority over the entity. In the JPA, the ISC is only a non-voting members. "For amendment No. 1, it came to the ISC because the ISC controls the budget."

Gutierrez noted that, as with the original JPA and the first amendment, every entity that is a member of the CAP Entity will have to sign the amended JPA.

The next article will address the rest of the agenda items.