[Editor's Note: This is part two of a multi-part series of articles on the meeting on March 5, 2018. It addresses several of the new business items.]

By Mary Alice Murphy

The first item of new business at the monthly New Mexico Central Arizona Project Entity meeting on Monday, March 5, 2018 addressed the Bureau of Reclamation Notice of Intent document describing the proposed action brought to Reclamation by the entity.

"I received the description of the proposed action in the way the agency needed it," NM CAP Entity Executive Director Anthony Gutierrez said. "I had one comment on the identification on the San Francisco, which I forwarded to the Bureau of Reclamation. We also had a discussion on storage, conveyances and environmental mitigation."

Vance Lee, representing Hidalgo County said he understood the second to last sentence referring to the Globe Equity would be removed.

"Globe Equity water would be the same as adjudicated water in the Virden Valley," Gutierrez said. "We wanted the NEPA done, but we removed it because we didn't want to exclude it by saying 'except for Globe Equity.'"

The next item of new business addressed the final audit for the entity. "We had no findings and all findings from 2016 were fixed," Chairwoman Darr Shannon, representing the Hidalgo Soil and Water Conservation District, said. "We had an unmodified report, which is about as good as you can get."

Howard Hutchinson, representing the San Francisco Soil and Water Conservation District said a question came up about why a separate audit had to be done for the second fiscal agent, which is the city of Deming. "Since the Interstate Stream Commission had to go through their audit on all these expenditures, why did we have to spend $11,000 on a CPA basically to do a cut and paste? The state mandates the audits, yet legislators yell at us for spending money. Are we duplicating efforts with the ISC audit and ours?"

Marcos Mendiola, representing the ISC as a non-voting member, said because it is under a joint-powers agreement, the entity is required to do its own audit. "The second fiscal agent also does an audit on all the services it provides."

"So, the second fiscal agent also has to do an audit on the same numbers?" Hutchinson said. "It seems like the state of New Mexico is expecting us to expend a lot of money."

ISC Counsel Dominique Work said the three audits are required by state law. "Neither the ISC audit nor the Deming (second fiscal agent) audit are funded out of the New Mexico Unit Fund. Only the entity's is funded out of the unit fund. The audit is a measure to give transparency to the public. It gives confidence that you're doing nothing wrong."

"Why not just a review and not a full audit?" Hutchinson persisted. "Maybe we should amend the JPA to require only an accounting review, which will disclose everything shown in the other audits to reduce our cost?"

Work asked to have a further conversation on the issue.

The second memorandum of understanding between the second fiscal agent, which is the city of Deming, and the ISC was approved. Shannon said the changed portion extended it to a three-year agreement.

She addressed the next item of business, which was a letter from the New Mexico State Auditor written on 11/30/2017, the last day of the previous auditor Tim Keller's tenure. It addressed the Gila diversion fiscal impact report of 1/27/2018 New Mexico Unit Fund water projects, as proposed in legislation. The bill proposed pulling $50 million out of the fund for "other" water projects in the area. Amended to the letter was a letter from Silver City Attorney Robert Scavron dated 6/23/2015. The impact statement was for the bill sponsored by Reps. Bill McCamley of Doña Ana County and Rodolopho "Rudy" Martinez, who represents parts of Doña Ana, Grant and Sierra counties.

Hutchinson said he and Gutierrez had had a discussion on the issue. "It was never on our agenda. It was transmitted to Gutierrez. Other people knew about it, but it was not transmitted to them. They had been informed about it. The ISC was going to give a response, but we haven't seen it. The second part of concern is the inclusion of a letter from the Silver City attorney's testimony. Some of the statements made in the memo to Silver City basically allege members of the CAP Entity are in violation of criminal and civil law. It borders on libel against this board."

Gutierrez said he received the document on Feb. 26 and called on Feb. 27. "I received an apology. Silver City sent the news release to Mary Alice who sent it to me. It was addressed to the ISC. Since it has been used in several documents for funding and for analysis on bills, I feel like it is a significant issue. I talked to the investigators in the auditor's office. It was a document to say this was never resolved. I had a discussion with the investigator on the opinion by Silver City. Utilizing opinions from Mr. Scavron and from Silver City on a joint powers agreement was directly related to a study by the assistant town manager. It was based on the project when it was proposed to cost $700 million. I think it would be advantageous to send the document on our position on what the project entails today to the state auditor. The Silver City attorney's largest accusation is the wasting of funds. We can show that what the entity has done is completely opposite to the town's allegations. We may want to take some action."

Work said the original letter was sent to the ISC Director Longworth on the last day of Keller's tenure as state auditor. "There are a lot of allegations that are unfounded and unsubstantiated and, in some cases, outright distortions of fact. I have created a response and sent it up my chain of command for review. I hope it is resolved soon. The entity may do whatever it wants. Let me assure you the ISC will issue a response and we will attach a number of documents to refute the allegations."

Lee asked if the response would include the costs of the current proposed action and Work said yes.

Shannon asked what the entity should do or whether it should wait on the ISC response.

Allen Campbell, representing the Gila Hotsprings Irrigation Association, said he supported an entity response. "We have to respond to blatant false accusations."

Ty Bays, representing the Grant Soil and Water Conservation District, said: "I'm getting tired of all the lies."

Campbell proposed a motion authorizing a response to all three parts of the letter, in consultation with counsel. Bays seconded it.

Lee asked that it should include the time on when it was received and when it was supposed to be received by the entity.

John Sweetser, representing Luna County asked if it was worth responding to or should it be ignored.

Joe Runyan, representing the Gila Farm Ditch, said Scavron is known to be boisterous in his opinions and he should receive a "spanking."

Shannon noted that Scavron's letter was used by the legislators, in spite of its date.

"And, also, by the legislative finance council, who are the ones who drafted the fiscal impact report to justify the rape of the New Mexico Unit Fund," Hutchinson said.

Shannon suggested sending the entity's response to everyone including the legislators.

The rest of the meeting and discussions will be covered in the next and probable final portion of this series.