[Editor's Note: This is the final part of a multi-part series on the two-day Interim Legislative Water and Natural Resources Committee, which concluded its meetings on Wednesday, Sept. 6, at a little after noon. This article will address the questions and answers on the topic of the day.]

By Mary Alice Murphy

The one presentation by multiple presenters to the Interim Legislative Water and Natural Resources Committee on Wednesday, Sept. 6, was titled: Arizona Water Settlements Act Implementation, Budget and issues; New Mexico Central Arizona Project (CAP) Entity Plans; Southwest Regional Water Project Alternatives.

Committee Chairman Sen. Joseph Cervantes said he had heard a diversity of opinion on the panel, "as planned. I heard you have concerns about the direction of the CAP Entity and how do we work through the issues with the CAP Entity."

[Editor's Note: One of five panelists had concerns. The other four were ISC members or a participant in the CAP Entity or discussed only the regional water project.]

Rep. Bill McCamley asked the first question, after saying that some of his questions has been answered, such as the potential for a $1 billion project. "Is $225 million roughly what you're looking at?"

NM CAP Entity Executive Director Anthony Gutierrez said the number is "deceiving. Phase 1 of the original project was a completely different project, trying to take the maximum amount of water allocated and putting it into maximum storage. To have a comparative analysis, we had to work with Phase 1. We were just as shocked as (Grant County Commissioner Harry) Browne was at the $1 billion figure. We wanted to reduce the scope of the project so it was more affordable. At present, we have a set of separate components that can be put together. That $225 million is for the maximum amount of water. We want to take less."

Browne said he spoke about inefficiencies. "What people don't understand is that the ditches are providing water back to the system. The ditches provide riparian areas. I was hoping to have information by now. They will be making a decision in three weeks."

McCamley asked if "upward of $70 million is the range?"

Gutierrez said: "Our target is to use just the 'other' money—the construction dollars that are available above and beyond what is in the New Mexico Unit Fund. We want to benefit conservation and agriculture with the $52 million. Hopefully the design will leave the Unit Fund whole. Rep. Martinez recently called it a pot of gold. A pot of gold can go empty quickly. Our intent …"

McCamley interrupted Gutierrez and said: "You still have nothing in terms of who is going to pay to use the water."

Gutierrez said the users of the water would be the ones to pay the costs of operations to the Arizona CAP Entity. "We are trying to do things to offset those costs. People are looking at Freeport and think our negotiations are such that we are trying to make them richer. We made it clear with Freeport that we would like to generate revenue and have a sustainable system."

"If we do not build a New Mexico Unit, we will lose the money available to New Mexico," Gutierrez continued. "The state is consistently fighting for water. Here is a Congressional Act to help us keep our water, and it looks like many of us are not trying to keep it. Without development of a Unit, we will lose the construction dollars."

McCamley said: "You have real needs in your area. The money could be used right away. It's a resource management issue. Secondly, for me, other things are more important. I want to have minimal impact on the river. Taking water out of a free-flowing river is a great impact."

[Editor's Note: The Gila River is free-flowing only within the Gila Wilderness and below the Bill Evans diversion, until you reach Redrock and then Virden Valley. At least 11 diversions already take water out of the river and a dam on the river diverts water to Bill Evans Lake. The Gila River is not a free-flowing river.]

"It seems like a vague project," McCamley said. "I would support a project to use the ISC funding for other projects."

Rep. Matthew McQueen noted that Gutierrez had said the project would strictly be for agriculture. "What is the connection to the municipal efforts as reported by (Southwest New Mexico Council of Governments Executive Director Priscilla) Lucero?"

Gutierrez said the allocation from the NM Unit fund was to jumpstart the municipal project. "I, as a former county planner, am aware that a little bit of money can generate a lot of money."

Lucero said the allocation of $2.1 million to the Grant County Regional Water Project was to acquire water for the town of Hurley. "We applied for Colonias funding also, which doubled it. We used the matching funds from capital outlay to present to the USDA, which allowed us to get the remaining funding to Hurley."

Browne noted there is no connection to water, but "the connection is money. Currently, there exists the potential to use that money for the rest of the regional water project. I would rather chase certain projects."

McQueen said, in a questioning manner, the CAP Entity is looking at some sort of diversion, but has not yet defined it.

Gutierrez said the entity would select the components for a diversion at its regular meeting on Oct. 3.

McQueen said the biggest threat to agriculture is municipal systems "who can pay for the rights and the water. I don't understand how ag can pay for $75,000 an acre-foot."

"Those are maximum figures," Gutierrez said. "The minimums will be based on components chosen by the CAP Entity. Alternatives include where to take 200 acre-feet or 50-75 acre-feet. A diversion will be identified with the potential to use surface water. The diversion would be the foundation of other water projects. In Arizona, they explained to me how they balance surface water, groundwater and conservation."

McQueen asked about the New Mexico Unit Fund and how much of it would be used for the diversion.

Gutierrez said the construction fund is identified in the AWSA and is estimated to be $52 million.

"Are you trying to size the project to hit that $52 million?" McQueen asked.

"That's correct," Gutierrez said. "We want to take and store 3,000 acre-feet a year. It will supplement existing irrigation. The Valley also has 1,000 acres of fallow land that has the potential to be irrigated."

"We hear about it a lot," McQueen said," but you don't have much to show for it. Our goal is to do good for the state. We hear the goal is to use the money. I think that's a fallacy. The only good use of water is to take it out and use it. The Gila River is a big deal around here. I don't think we would be here if the only reason is to spend the pot of money. Shouldn't we fix the roof rather than buy an RV? If we can't spend the money on a diversion, we should spend the other pot of money for making life better for people. I hope this process will reach an end I would like."

Rep. Angelica Rubio said, "As a recovering Catholic, I was surprised by Bishop Cantú's comment. Are there projects right now?"

Gutierrez assured her there are a lot of projects. "Through a vetting process of 178 projects, 16 projects were identified for funding. They include a lot of infrastructure. I appreciate McQueen's analogy. If would be nice if we can fix the roof and buy an RV. We want to use all the resources we have available."

"What happens to Santa Clara and Bayard if the regional water project is not fully funded?" Rubio asked.

Priscilla Lucero, Southwest New Mexico Council of Governments executive director, who had earlier presented on the Grant County Regional Water plan, said: "In my career, we have dealt with water shortages. Hanover twice. Now Bayard provides water to the town, capped at 200,000 gallons a month. There is a tremendous need. The Grant County Water Commission continues to look at ways to complete the project. All the entities, the county and the municipalities are now sitting at the table. It is a huge difference in collaboration, with a multitude of projects based in the ICIPs (Infrastructure Capital Improvement Plans)."

Browne said he has mentioned a range of possible projects. "Right now, the Bayard wastewater treatment plan is putting out 600,000 gallons of treated effluent a day. It is treated to a high standard, but it being discharged into the tailings dumps. It's a waste of excellent water. If it were taken up north of Fort Bayard, it could be used to construct wetlands, which would treat it more and recharge into the Bayard and Santa Clara wells. It would also encourage birding. That's the kind of project, we can do with resources."

Ali Effati, ISC Gila Basin Manager, said the project is one of the 16 projects funded by the ISC with $1.2 million.

Rubio said she was glad to hear the investment in the project. "In my opinion, it would be a better benefit than a benefit to a few residents in the Gila Valley."

Gutierrez noted the CAP Entity has no taxing authority. "There has been a high depletion of our shallow aquifer. That is why we are proposing recharge projects in the valley. In the county, numerous subdivisions have been developed right up to the forest boundary, but no water has been identified for them."

"There needs to be a balance of the use of water," he continued. "There is more to this than just for the agricultural community. There will be a demand for other water. The purpose of the diversion is to secure and use the water. There is an issue with water in shallow wells in southwest New Mexico."

"I hope there are alternatives that are more reasonable," Rubio said.

Sen. Jeff Steinborn said he was curious why Silver City was not a part of the CAP Entity.

"They chose not to join," Gutierrez said. "I think they had issues with the JPA."

"Not all government entities are included in the entity," Steinborn said. "Every decision has to be approved by the entities, right?"

Gutierrez said every decision is made by majority vote and must also be approved by the ISC.

"The CAP Entity has an economic development focus," Steinborn said. "Who will benefit? Who is pulling the strings? There is still a gorilla in the room."

Gutierrez said the engineers would make a presentation on Sept. 25, and the CAP Entity has a week to make a decision on Oct. 3.

Steinborn said the water might be transported out of the region. "As an economic focus of the CAP, is it to create jobs?"

"Our focus is on securing the water for economic development," Gutierrez said. "We have to have the water, not an economic development focus. Arizona has been benefitting from New Mexico water and marketing it for 50 years."

Steiborn said: "It's our water, but users have to pay replacement cost. Has the CAP done an economic analysis, not just for ag and recreation?"

"We have not done a full economic analysis, because we haven't fully decided on a project," Gutierrez replied. "During the agricultural season, the river goes dry in places. Water storage will keep the river flowing during the season."

Steinborn said New Mexico is using less than 50 percent of its senior water rights. Why is there such a need for agricultural water?"

"It has to do with the availability of water during the agricultural season," Gutierrez replied. "Agriculture needs water in storage to grow crops, not just pasture land. We want to store water to get them past the dry season months."

Steiborn asked: "If you go that direction, what is water yield?"

Effati said the engineers are working on the yield analysis. It has to be tied to the alternative. "The CAP Entity will have the full picture."

Steinborn said since some years there are no flows, "do you have data to support the possibility?"

Gutierrez noted the CUFA put restrictions on the flows. "What we have done is try to incorporate the water rights to make more efficiencies. We want a robust agricultural system, while utilizing the water."

Steiborn continued his questioning. "Have the 50 farmers agreed to pay for the water?"

"There is no a contractual agreement," Gutierrez replied. "It would have to be part of the contract for delivery of water. The cost is for the operations and maintenance on delivery of water in Arizona."

Browne said yield models should be scientific. "A recent workshop went a long way to resolve the issue. There are frequent years when we can't take water. It is a very strict CUFA." He said storing water and infiltrating it into the aquifer "are highly questionable. Water is not going to stay put until June. I believe the ISC did a study on paying for exchange costs."

Effati said a 2012 study showed that lavender was one of the more economically feasible crops, but it is not the only one to replace the existing low value crops. An economic analysis was done three years ago and is available on nmawsa.org.

Steinborn said: "Can you fix the roof and buy the RV? If you choose to do the diversion, would not you need to use all the money?"

"The target is to use the construction money for the diversion," Gutierrez said. "After NEPA, we should still have about $70 million in the Unit Fund."

Steinborn asked if the state would see interbasin transfer. "It doesn't feel like you're doing the 30,000-foot view for everyone. It's a diversion for one part of the residents. The money belongs to all the state. We want the highest use for the region. I believe it lacks analysis at a high level."

Sen. Peter Wirth said: "We've been hearing about this issue since 2004." He then read a quote from then ISC staff Craig Roepke from July 18, 2006, saying the water was for the people of New Mexico and citing dates of 2009, 2014 and 2019. Roepke proposed finishing NEPA by 2014. "Yet you are still in the engineering stage. I would like to schedule this issue again for the November meeting. I'm glad the scope has changed. However, I still prefer non-diversion alternatives. In 2014, I did carry a bill to appropriate $82 million to non-diversion projects. It seemed like an opportunity in a time of drought. This Grant County Regional Water Project is exactly what we want. How much more money is needed?"

Lucero said about $15 million. "Phase 1B would provide for a secondary well, which is not included, nor is solar to operate, which would require about $840,000. It's right around the $18 million mark," she said.

Wirth asked: "At what point, do we look at a project like this? In trying to figure out how to redirect this pot of money, is it through the ISC or the CAP Entity?"

"Ultimately the ISC would make the decision," Gutierrez said. "The CAP Entity took the baton from the Southwest Water Planning Group, which was in the Act, as advisory to the ISC. I presume the CAP Entity would be the one that would recommend such an action. The water and funding, according to the JPA, are for a diversion. That's why we made only one small change in the JPA, because we wanted no conflict with decisions already made by the ISC."

Effati noted the ISC is a non-voting member of the CAP Entity. "The commission does not weigh into details. We oversee and approve the budget and changes to the JPA. I don't know if the commission will allocate further funding."

"Once the CAP Entity makes a decision, they will submit it to us and to Reclamation as the lead agency," Effati continued. "Then the NEPA process will lead to the final decision."

"What is going on with Freeport," Wirth asked. "This interaction has bipartisan concern and support. When did the CAP Entity move into working with Freeport?"

Gutierrez said initially it was two separate projects, looking at the transfer of AWSA water using existing infrastructure. "Freeport didn't feel comfortable with AWSA and NEPA. They came to the table at our request. Yes, there is still a municipal need. The request came from Deming, because a pipeline to Deming is not feasible, but there is existing infrastructure. Silver City already has a well field in the Gila Bain that is an interbasin transfer, so it's already done. Right now, with Freeport, it's not even a negotiation, just an evaluation."

Wirth asked if some of the AWSA money would be used.

"There is no negotiation at this point," Gutierrez said. "We have had discussion on using other money to do some things."

Wirth said talking to Freeport causes him concern.

Browne said 70 percent of the Gila Valley water belongs to Freeport. Combined, Freeport owns 63,000 acre-feet of water rights in the Gila Basin and 40,000 acre-feet in the Mimbres Basin.

"Santa Fe and Albuquerque have benefitted from interbasin transfers," Wirth said.

Gutierrez said 6,200 acre-feet of Freeport water is connected to its infrastructure.

Kim Abeyta-Martinez, ISC program manager and CAP Entity non-voting member, said the commission has approved in the JPA only to investigate the opportunities.

Browne said the JPA change also gives the CAP Entity authority to manage. "Read it. It's far more than that. If the ISC only approved the budget to investigate, I don't know."

Wirth said interbasin transfer seems like it would take time away from the entity's primary purpose. "If it's not going to work, we can do extraordinary tings with the money that would have statewide implications."

Sen. Mimi Stewart said all but one of her questions had been answered. "I was impressed that at least five of us have been leading on this issue for 11 years. We see no demonstrated need when the money could be used for other projects. I am very impressed with you, Mr. Gutierrez. The whole panel has changed. What haven't changed are the people in the audience. The ISC has a role, not just the CAP Entity. The law is clear."

Gutierrez said the Act says once the CAP Entity is formed, it can request responsibility for design. "We requested it in November 2015 and it has been approved by the Secretary or the Interior. The ISC is responsible for the New Mexico Unit."

Stewart asked if the ISC has no role in the design.

"The ISC is the co-lead on NEPA," Gutierrez replied. The agency approved the budget fully aware of what we're doing."

Dominique Work, ISC attorney, said the Arizona Water Settlements Act sets the specific roles for the ISC. It continues to control the budget and is the joint lead. Those are its only two roles left."

Stewart asked: "Even if it's a $225 million project?"

"It is up to the commission, " Work said. "The commission will go through a full economic analysis."

Stewart asked who does the analysis, and Work replied: "Reclamation."

Rep. Paul Bandy said there are three different projects. "Are you proposing all three?"

Gutierrez explained there are three components. "The set of components is to be decided by the CAP Entity. The Gila and San Francisco components are still be analyzed as well as the potential for a tributary to provide water to storage. It's not an alternative. It's a component."

Bandy said on the Animas River, they store and release water during dry times. "Isn't that an ecological benefit?"

"We feel it will be an ecological benefit," Gutierrez said.

Bandy asked how much it would cost to replace the water in Arizona. Gutierrez said he thought the current price was around $148 an acre-foot.

Bandy asked who would pay for it and Gutierrez said: "The users." Bandy opined that it was expensive.

Rep. Nathan Small said agricultural infrastructure could be upgraded to stop losses and lead to more agricultural efficiencies. "Why commit it all to construction?"

Effati said the infrastructure projects are already being funded by the ISC. "Irrigators are looking at permanent structures."

Small said the engineering estimate at $225 million makes it seem very clear "that any diversion will take all the federal funds."

"Those are maximum estimates," Gutierrez said. "We don't want a 30-foot wide structure in the river. The components will cost less."

Small said if capture is the only portion, it runs counter to pushing for all the funds.

Browne said Gutierrez had presented information from AECOM, which said the projects are scalable. "Costs will scale with the size."

Gutierrez said it is scalable related to yield. "If we design for maximum capacity, we can scale for yield analysis."

Small said he would ask again about revenue enhancement projects and whether they include Freeport.

"Potentially if there is demand," Gutierrez replied. "And potentially with Freeport. It would be in contractual agreements."

"Am I wrong in thinking any overage will be paid by the state?" Small asked.

"That has not been part of our discussions," Gutierrez said.

Rep. Rodolpho "Rudy" Martinez said, in the presentation in Table 1, it lists the ISC studies at $3.7 million. What are the studies?"

Effati said 35 studies had been done between 2006 and 2014 in order to inform the commissioners so they could make an informed decision. He said they included engineering, hydrological, environmental, ecological and cultural resource studies.

Martinez said he had heard 18,000 acre-feet, then the AWSA lowered it to 14,000 acre-feet. "What is the capability of the Gila? Has it been reduced?"

Effati said the reduction to 14,000 acre-feet in availability had occurred during the AWSA negotiation. "The 18,000 acre-feet was part of the 1968 Act. It is not an actual annual 14,000 acre-feet but 140,000 acre-feet over 10 years."

Rep. Bealquin Bill Gomez said he hears 14,000 acre-feet.

"That is available acreage," Effati replied.

"You are using 35 acre-feet for agriculture," Gomez said.

Effati said he would get back to Gomez, as he doesn't know off the top of his head the 10-year consumptive use limit.

Browne noted that Freeport owns 23,000 acre-feet of water rights. "Using my calculator, that means 33,000 acre-feet of rights is utilized. A diversion may not reflect diverted acreage. On average 16-17 acre-feet are being used."

Gutierrez noted the amount diverted is measured, but the amount returned to the river is not.

"You need $15 million total for the Regional Water Plan?" Gomez asked.

Lucero said $7.7 million has been received. "We need phases 2-4, which does not include the $3 million for Phase 1B."

Gomez said that would be $11 million more for lots of people. "I personally think that should be priority No. 1."

Gutierrez noted the chart includes all the four cities in the county who have also put money into the effort.

Rep. Larry Larrañaga asked for a summary.

CAP Entity Attorney Pete Domenici Jr. said from the 30,000-foot view, such a project usually requires a 50-year horizon.

"Fifty years from now we will have the right to pull the 14,000 acre-feet of water, which is now floating on top of the Arizona CAP," Domenici said. "The water that has been flowing out of the state is the most valuable water for whenever we need it. We haven't received a penny for it. It keeps being used in Arizona. I'm working on it. It is worth $50 million to $100 million even if we don't use it. If we bring it back and if we develop the water and use it, what you will see at your Nov. 13 meeting, is the existing irrigation system overlaid over the New Mexico Unit. The best thing to build would be one on the Gila and two on the San Francisco for about $10 million—three permanent diversions out 50 years."

"I commend all you who have worked toward a pragmatic focus," Larrañaga said. "The focus should be on wet water. We can buy anything else, but we can't buy wet water. For every $1 invested, it yields six times the economic benefit. To do nothing would send the water to Arizona, with Arizonans as the benefactors and New Mexicans would be the losers. Do your best with this water."

Cervantes gave closing statements.

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