NM CAP Entity to enter into dispute resolution negotiations 070720
By Mary Alice Murphy
The New Mexico Central Arizona Project Entity, the successor to the Southwest New Mexico Water Planning Group, as laid out in the Arizona Water Settlements Act signed into law in 2004 by then-President George W. Bush, continues to fight to access 14,000 acre-feet of Gila River and San Francisco River water. The water was allocated at 18,000 acre-feet in the 1968 Act, which addressed the inequality of water allowed to be taken in New Mexico as a result of the Arizona v. California settlement awarding the water primarily to Arizona and California and not recognizing the beneficial use of water in New Mexico.
It seemed the final blow to the Entity came in a notice of termination of the National Environmental Policy Act process from one of the joint leads in the process, the Interstate Stream Commission. The process would have developed an environmental impact statement (EIS).
The issue was discussed at a special meeting on June 30, 2020 and can be read at http://www.grantcountybeat.com/news/news-articles/58824-nm-cap-entity-does-not-agree-with-isc-decision-in-special-meeting-063020
But the AWSA was not clear on the process for the dispute resolution and left it up to the parties to determine how to solve the issue.
The agenda item at the meeting on July 7 said:
Discussion on Dispute Resolution (Section XI of the Interim Advance Funding Agreement No. 17-AF-32-00010) related to the Action taken by the Interstate Stream Commission to terminate the EIS and unapproved mutual consent to terminate provided by the Interstate Stream Commission.
At the special meeting, members of the NM CAP Entity made it clear they did not approve of the termination of the EIS.
Entity Executive Director Anthony Gutierrez noted that the members had asked him and Attorney Pete Domenici to move forward on the dispute resolution. "We met with ISC staff."
Domenici said they met with ISC's Attorney Dominque Work and the ISC Southwest New Mexico Project Manager Ali Effati "to discuss how a dispute resolution might occur and some ways a dispute resolution could be terminated. My colleague Attorney Lorraine Hollingsworth and Work could not reach consensus on the dispute resolution in the agreement. Basically, such a resolution is just a 'check a box' as done. We can each say what we want to say. Once it's done, we can send out the notice. It doesn't say we each have to approve. In this instance, the ISC's hands are tied and the Bureau of Reclamation's hands are tied, because they can't proceed without funding."
He said that the context in the last two ISC meetings and letters from Reclamation made it fairly clear that there was not going to be a positive result in the EIS but it was likely to recommend a No Action alternative. "The Secretary of the Interior's letter pretty much said the same thing when it did not approve an extension for the record of decision when it said, if you do not have funding before the record of decision, if it were to be extended, you couldn't do anything anyway. The ISC took that to mean that there would be no funding for a unit. They thought terminating the EIS was preferable to a no-action EIS. Are we in the best position? Is there any likelihood a dispute resolution is going to change anything? No. The next thing we have to tackle is the new business item on potential changes to the joint-powers agreement of the CAP Entity with the ISC. It has the potential to change our priorities to non-diversion alternatives. The ISC view is that the CAP Entity has a role to provide to participants in decisions on the use of the New Mexico Unit Fund [which is the funding provided by the federal government out of the Lower Colorado Basin Fund for the operations of a New Mexico Unit diversion structure and its studies.] We are looking again at working with Freeport McMoran. We need to be available as an entity to help someone develop uses of water in the region. Reclamation has been charging the ISC for the EIS. The ISC draws money from the Unit Fund, and the CAP Entity draws from the Unit Fund. Another possibility is that the CAP Entity doesn't want to participate."
He suggested that a dispute resolution might take 10 to 20 days, with top-level participants, such as Leslie Myers from Reclamation, the ISC director Rolf Schmidt-Peterson and the CAP Entity. "We have not been able to determine how the dispute resolution will happen."
Ty Bays, representing the Grant Soil and Water Conservation District, asked Domenici to expand on what changes he envisions for the JPA. "How do we allocate money, with new criteria and rules? Are they trying to dictate who is on this Board?"
Domenici said he had seen no indication of the ISC wanting to change the board. "There was a suggestion to allow new members. If we decide to go with primarily non-diversion alternatives and how to monetarily match them, that might lead some municipalities to want to join the board. Part of what has to be discussed is that the amount of money left in the Unit Fund is significant. The ISC doesn't want to see a parallel board to them or us and doesn't want to see legislators take the money. There will likely again be efforts for legislators to take the money. The money is statutory in the AWSA that the money is with the ISC, which must work in conjunction with the statutory Southwest New Mexico Water Planning Group. It is understood that the New Mexico CAP Entity is the successor to that group. The main transition is for the CAP to continue being an entity. We have funding through next June. The dispute resolution might be used by opponents to go to the legislators and the governor to take our funding. If the board wants to continue being a board, we can tie it to part of the Southwest New Mexico water decisions."
Howard Hutchinson, representing the San Francisco Soil and Water Conservation District said he disagrees with the contextual analysis of the dispute resolution. "The termination cannot be sent without mutual agreement. The major part of our dispute is the Dear Reader letter that preceded the draft EIS, upon which the ISC commissioners made the decision that it was not worthwhile to go forward with the funding if it was going to be a negative record of decision. That was a pre-decisional statement by the Bureau of Reclamation, which is strictly prohibited under the implementing regulations under the NEPA and the whole concept of the National Environmental Policy Act, so that should be No. 1 in the dispute resolution that the letter even exists is of primary importance in the comments on the EIS. Apparently the ISC is not properly educated in the NEPA process nor did they understand that the Dear Reader letter was a prejudicial statement that negated and was a deadly fault of the EIS. And it should have been a comment back from the Interstate Stream Commissioners that it was a fault of the EIS. Yes, the Interstate Stream Commissioners, and I’m being clear on the commissioners, are the joint lead, not the staff. The commissioners approved a faulty draft. That is key to the dispute resolution. If we have a discussion on the JPA, the state of New Mexico is charged with the designation of the CAP Entity. It has recognized the CAP as the successor to the planning group in the Act. I know we have a new ISC, but the state of New Mexico designated the CAP Entity and entered into a funding agreement. It's a contract and all its provisions, which includes finishing the EIS and the Record of Decision. We, as members, have invested significant time traveling to meet with joint leads and other meetings. I'm guessing I have possibly put in 1,000 hours of my own personal time researching, looking at alternatives and meeting with ISC staff and Reclamation staff, all based on going to reach the EIS. If it's going to be a viable contract, somebody needs to pay for my and the board members' time. We also have an MOU with the ISC and Reclamation. It has a termination clause in it that hasn't been discussed. It also needs a dispute resolution. Also, in the MOU between the ISC and Reclamation, there is a process to terminate, unless it has been done outside the public view. Transparency in all of this is black. I call for the Department of the Interior inspector general to investigate all of this. It has been unethical and maybe illegal. The chairman of the ISC seemed to indicate he thought it was the fault of the CAP Entity. That is not factual, but the Secretary of the Department of the Interior made the decision."
Hutchinson said he has been going through at least a decade of documents. "In 2009, we attempted to get an MOU between the predecessor to the CAP Entity, the Gila-San Francisco Water Commission and the Bureau of Reclamation, but the area director refused the offer. I have the draft. The ISC finalized it and the Phoenix director rejected it. He said it was premature to execute it, but in reality, we should have."
When he said Work had made notations, she questioned her participation, as she didn't come to work for the ISC until October 2011. Hutchinson said he would send it to her, and he might have been mistaken that it was her work, but someone at ISC had written notations.
Hutchinson said the governor at that time made the policy decision that the state was going to do a lot of investing in non-diversion projects before considering a diversion project. "I have the listing of all the studies that have been done, which have been very costly. We received more than 200 proposals and spend years going through them. The majority of this money was spent before the CAP Entity came into existence. That is another area of the dispute resolution. The majority of the projects approved were outside the Gila and San Francisco basins. In the 1968 Act, it allocated 18,000 acre-feet of water to Southwest New Mexico that was lost in the Arizona v. California settlement. If we're going to start the dispute resolution, we have to recognize that money from the Unit Fund has been authorized outside of the two basins that was supposed to benefit the two basins."
Gutierrez said he certainly couldn't disagree with everything Hutchinson said in his analysis of the agreements. "My question is while dispute resolution is in all of the agreements, they also have termination clauses. I don't know what the CAP can do to force the ISC and Bureau of Reclamation to change their decisions not the finish the EIS. I disagree with where we can go. I don't see the benefit of continuing the process."
Hutchinson said the silver lining is the administrative record. "If we don't follow all this it doesn't get into the administrative record. The Interstate Stream Commissioners need to understand what has taken place. If they go forward raiding the New Mexico Unit Fund not for new water, which it was allocated for, we need to not leave the administrative record blank, because it would strip us of any legal basis to challenge."
Gutierrez agreed that the entity should keep the option to develop the water. "We have a lot of comments on the analyses. I didn't agree with the letter from the Department of the Interior, but anything we do we have to work with the ISC continuously. I think a lot of what Howard says is in the administrative record."
Domenici said he said that he had an idea on the issue that a dispute resolution might foreclose other projects. "I would put a reservation in the mutual consent to terminate document to leave an opening for projects. Tying ourselves up would not be at all helpful to us if it doesn't reflect our discussions today. A dispute resolution is often confidential and at least typically not legal in court because it's a settlement. If we could get the concept out that the dispute resolution was sort of forced on us. I do understand the question of how do we protect ourselves in the future, and are there any rights we want to pursue in the near future? Do we have the wherewithal to argue our position, such as pursue a lawsuit? My assessment is I think it's an extremely difficult road because the funding would be uncertain, and any kind of timeline would be uncertain. If an environmental group or some group that opposes us says,' well, you agreed to the termination, so you can't argue it.' I didn't consider a legal action would be done immediately, but I could be wrong and could be instructed otherwise by the board. I agree tying things up without any explanation of our views is not helpful to us. This ISC meeting was on record. We had a meeting that said we will go with dispute resolution, but we didn't really discuss it."
Bays had a couple of comments and some questions. "I concur with Howard's assessment and think it would be worthwhile to have the Department of Interior do an investigation. But we are where we are, and this has gotten so political, congratulations to Allyson (Siwik of the Gila Conservation Coalition), to both senators (Tom Udall and Martin Heinrich), congratulations to the great state of Arizona, which has been using this water and it looks like they're going to continue to use this water. I don't see any point in fighting with the NM ISC. Gov. Richardson did it, Susanna Martinez perfected it and the current governor has exemplified this issue whereby these appointed boards and commissions are going execute their will. Instead of putting intelligent people on these boards that will make good decisions based on what is good for the state of New Mexico, they are instructed to do the governor's will. If they don't, they're gone. And that's happening again. If we pick a fight with the governor, even though I totally oppose what she's doing, I don't see us winning that flight. Bottom line, there's some money left and the potential to do some good. We're all duly elected people and we're all experts, as good as any experts you could find in our communities, on water. Look at Hurley, that is a bad deal over there. My fear is that we saw proposal to provide low-flow toilets to every house in Silver City and a rain barrel under every roof, and we've seen money taken to purchase land. That Double E Ranch is supposedly owned by New Mexico Game and Fish, yet the public doesn't even have access. Is there any chance we can do some good with the money to provide water to southwest New Mexico? Do we have a chance of keeping control of this money to do some good? Maybe the ISC is going to take the money away from us for low-flow toilets."
Domenci said he is trying to be a realist. "As a project sees more resistance, it becomes less viable. At the ISC meeting they had on the agenda a discussion about the CAP Entity, but it was tabled with no discussion. I think there's a big hurdle, but it's not insurmountable. We want to determine our role with the ISC. I think, but there's no guarantee, that the ISC won't do away with the CAP Entity. One of the major promoters of the impetus is Heinrich He wants to get rid of the CAP and sweep the money. But I think showing that it is possible to rebrand the CAP, we can rebrand ourselves to have input, but I can't guarantee it."
Allen Campbell, representing the Gila Hotsprings Irrigation Ditch apologized for not getting on earlier. "I'm sorry to have missed a lot of the discussion, but the AWSA instructed in the statute that the Southwest New Mexico Water Planning Group, of which we are the successor, had authority in how the money was to be spent. I think disposing of us would be contrary to the AWSA, in my opinion. We are fighting a strong political adversary. We might be able to secure beneficial use of the money to improve diversion structures and improve irrigation efficiencies to enhance the water we have."
Domenici asked Work to share any insights she might have.
"I don't have much to add," Work said. "I appreciate the CAP Entity is at a difficult juncture. I envision a quick process with the dispute resolution. It seems to me that you are addressing the essentials to reach an agreement. The CAP Entity is not my client and I have no formal direction from the Interstate Stream commissioners."
Runyan said he believed the goal of the ditch members is to bring irrigation improvements. "With the river at historic lows, I think aquifer recharge has the potential, along with water efficiency uses. How do we preserve disbursements of funds to use for these projects? It just seems crazy to put money allocated to us toward low-flow toilets. I think these diversion improvements are palatable to just about everyone."
Domenici said: "We have to acknowledge where we are, and we have to express a willingness to do what you suggested. If we remain as a board, our goal is to preserve the money. We are coming to grips with the mission that we can get ISC staff and commissioners on board with projects they can support. I don't think the dispute resolution eliminates the possibility. The resolution needs to have a semi-collaborative aspect, or I think adversaries will use it against us. I don't think realistically the CAP Entity can self-fund itself. I don't think costs will be as much. We will need the willingness to continue to serve as a board. The ISC can use the board to navigate with the Legislature."
Runyan suggested negotiating for the Entity to take half of the funds and invest them in current and future technology.
Domenici said that kind of concept hadn't come up yet.
Work said if the entity is interested in revisions in the JPA, it should be put out to the world with the member signatures.
Bays asked: "Are we under constraints to sign the dispute resolution?"
Hutchinson said that in accordance with all the MOUs, "we should have the dispute resolution as soon as possible. Dominique brought up a good point. None of the ISC staff has the authority to do the dispute resolution. It has to go before the ISC commissioners. For myself, I don't feel comfortable meeting with staff. The ISC should either meet as a whole or create a subcommittee to meet on the dispute resolution. I think it's an issue of preparing for a closeout. We must ensure that the requirement of the record proper be completed, and I think that's also a subject of the dispute resolution, because that record proper should also be sent to all the signatories. I don't know how to get from here to there. As Pete said the dispute resolution is not fleshed out. The dispute resolutions that I've been a part of or as a facilitator they can be somewhat informal. As Pete says it can be an exclusive without transparency to the public or can be very transparent. There are significant issues that need to be resolved. If we do not resolve the disputes of the present, we may end up in the same situation over again. As part of the dispute resolution, as we go forward, I want to make sure that I and my board do not spend a whole lot of time and money and don't have a product at the end for the effort. We have had people come into our community and like an infection, they have become a cancer. They are not good neighbors, and they are not benefiting our environment, both the physical environment and the social and cultural environment. We need to understand that the future in the Southwest is water, not the saving of water per se but water in quantity. I don't think those people who have come into our community and are paid to obstruct and are paid to invent catastrophes are doing us any benefit. I'm hoping that we recognize that this dispute resolution needs to look at all those elements. Look at the lies that have been put forward. I put into my follow-up comments to the Interstate Stream Commission that it's kind of like the treaties that were signed with the Indians, that as long as the rivers flow and the grass grows and the sky is blue, that the treaty would remain inviolate. Well, the Indians found out how well the treaties were treated, and we are finding out that honor and ethics cannot be counted on when you are dealing with these people. It's a very sad situation where a handshake and a good look in the eye cannot be something we can count on. And, pardon me, but the lawyers have screwed us."
Van "Bucky" Allred, representing Catron County, said he had been listening to the comments. "One of the things brought up to me is that Catron County is shaped by the voting demographics. Senator Heinrich told the governor he wants the CAP Entity to end, but he wouldn't even come to see us in the county. Taxpayers spend a lot of money to fund the ISC, but Chairman Sanchez says it's the CAP Entity's fault because of the time constraints. Catron County joined as a cooperating agency with the BoR to try to correct inaccuracies in our data. At the end of it, there was a lot of innuendo and terminology used that were designed to talk over our heads. It was myself and some of the soil and water conservation people and a room full of government people, including state highway department people. I always wondered why they were there. I guess it's because Howard and I were so scary, I'd like to think, how about that? We talked a lot about the time and money spent going to these meetings. I think Mr. Sanchez should have been at our meetings, so the commissioners had a better understanding of water. Dominique comes on and assures us that she represents the ISC. We’ve understood that all along. We spend a lot of money to have these meetings, and I think it's disgraceful to have us be on the phone where Dominique has so much background noise in her office, it's hard to understand. I just think it's really tough on you, Chair Shannon. You don't get paid to do these meetings. I understand there are people, who because of personal circumstances don't want to be in large groups and that's fine. But it would be better for those of us to sit down at a distance and talk about this, especially after our governor, our legislators, our lieutenant governor, all of them right there together with no one with masks on, but she'll fine us $100 if we don't have a mask on. Catron County has always been at the end of everything. I listen to Pete; I listen to Anthony; I listen to Howard all say if we play nice in the sandbox, we might get something. At the Legislature, I've sat in front of those who opposed us. I once was told by Craig Roepke that Catron County didn't have a dog in the hunt. Catron County would like to develop 4,000 acre-feet of water for growth in the economy, for irrigation. We've always confronted doing things like this with no money, because frankly Santa Fe and those people up there see us at the end of the line. Then our opposition people have come to our county and some of them have taken away every resource we have, and the last one was the Spurgeon diversion, with our hopes of getting it done and a pipeline to the confluence, that's when cattle grazing came up. Nathan Newcomer and his group brought the Wild and Scenic River. They have no stake in the game. They've invested nothing, yet they lead the charge and determine the direction because they have deep pockets. And our representatives, like the governor, like Mr. Heinrich, that's the direction they go. Catron County will stand alongside what Mr. Hutchinson has to say. I don't see Heinrich, our governor, Howie Morales, of any of those people helping us. I don't see the ISC, Mr. Sanchez helping us. He can blame the CAP Entity, when everyone on this phone knows who drug their feet. I know I'm a dumb ass trying to hold onto a wild tail, but I'm telling the board members, it's better to take an ass whipping rather than be bullied."
Lee said he wanted to address a suggestion from Mr. Runyan on setting some money aside for this or that. "I don't think we can trust the ISC to maintain something that a former ISC made. I've seen that, when we elect a new governor, those things can change. I don't think we can get into that kind of agreement and trust people to carry it forward. Is Mr. Domenici still on? A few minutes ago, you said the ISC had the option to do away with us, I presume financially. Does that loom over our heads all the time?"
"On the budget side, it's for one year, but halfway through the budget cycle they vote for the future budget," Domenici said. "Yes, I think they can have a thumb on us indefinitely."
Campbell said: "We have stood for years with our primary purpose to accomplish getting the 14,000 acre-feet of water. We've done this in good faith. We've followed the rules. Our adversaries have not followed the rules. This whole United States is in crisis mode, in an economic and social instability. I can't vote for anything right now. The ISC dodged the responsibility of where we stand. If they say we've been ineffective, the ISC has been all over the board. If we agree to suspend the NEPA, I think we are capitulating our principles. When you're a soldier in war, you don't worry about dying, but you worry about dying well. Do we die well? The reason why I was late today was because over the weekend, environmentalists destroyed our diversion dam, not once, but twice. This is where we are coming from. So, do we go out with a whimper or do we die well?"
Gutierrez brought up a point of order. "At the special meeting we took a vote to proceed with dispute resolution. Today we were to discuss where to go with it. I don't know what happens with the dispute resolution, with Howard bringing up good points. You have already agreed to go forth with it. Have you had a change of heart?"
Hutchinson said that, at the last meeting, he had suggested a committee and delegating authority to the committee the authority to enter into a dispute resolution with the Interstate Stream Commission and the Bureau of Reclamation. "I will volunteer to be on such a committee."
Chair Darr Shannon suggested he be the leader and name his committee members.
Aaron Sera, representing the city of Deming, made a motion to name Hutchinson, Gutierrez and Domenici to come up with a process for the dispute resolution. Lee seconded it.
Runyan said: "From my viewpoint, it seems to me we have too many forces to terminate the NEPA process, so I agree to terminate the NEPA process, but at the same time, let's try to get some of the remaining funds, maybe half of it that we could put into a kind of escrow to look toward the future and narrow our tasks. I don't think this board wants to deal with counties outside our area to decide who gets new water systems or new sprinkler systems. We say we want to stay focused on the Gila and San Francisco, and we get half the funds. That's the way I want to resolve the dispute. That's my motive."
Lee wondered from the ISC side, "would there be commissioners on the team?"
Work said: "We have not had any formal conversations with commissioners on how this negotiation will go forward. Typically, commissioners do not attend dispute resolution meetings, they delegate the authority to the director. I can't guarantee any commissioners will be part of the dispute resolution."
Sera said: "We have to make sure that what we have discussed is part of the record on the dispute resolution."
Gutierrez said he believes the Bureau of Reclamation has staff that knows "our intent. We need to provide a formal notice to Reclamation to go into dispute resolution. It can just be an email."
Sera said that Hutchinson, Gutierrez and Domenici will do the process on dispute resolution. "Securing the money has to be in the JPA discussion."
The motion was unanimously approved.
The next item on the agenda was approval of the 2021 fiscal year budget.
Gutierrez said the total budget is for $381,800. The professional services line item has no money for such as engineers, translators or transcribers. "The budget has been approved by the Department of Finance and Administration, as well as by the governor and the Interstate Stream Commission."
Marcos Mendiola, non-voting member of the CAP Entity representing the ISC, said it was correct that the ISC had approved the funding. Work concurred that to her knowledge she is aware of no discussions on whether this money is available.
Hutchinson said: "I have to reason to trust any of the Interstate Stream Commission. I'm not sure we need to expend all these funds, but I'm glad to see they are 'in the bank' and can be expended."
The next agenda item addressed the existing joint-powers agreement.
"I think we have already had that discussion," Gutierrez said. "The current action of the board is to act on the dispute resolution. I think in the future we need more discussions on the JPA. What the board needs to do is take a good look at the JPA if there is something you want in there. Be thinking about it, so we can determine how we want it to look in the future. A lot of provisions prioritize the New Mexico Unit, so if we are using it for other water utilization alternatives, it may need some changes. If you need a copy, let me know and I'll provide it."
Sera noted: "We need to preserve the rights of only the signatories to review the JPA. If it gets out to everyone, there's no hope for it."
Shannon said she thinks if there are a lot of changes, it's going to take 10 months to get the signatures.
Sera said he thought it would depend on the changes. " If there are a lot of changes, and if the money is not to be spent on a New Mexico Unit, it should be noted what the money will be spent on and who will control that."
Hutchinson said: "I would like to point out that the Interstate Stream Commission policy was voted on and entered into the minutes that all future money out of the Unit Fund was going to be devoted to the construction of diversions. I have not seen the Interstate Stream Commission enter into discussions in a public meeting and vote on whether or not they are continuing the policy or suspending it. Therefore, it's in the record and there should be no discussion on expending money other than what the Interstate Stream Commission voted on and put into the record. The other point is if there is a change in direction of the Interstate Stream Commission and it wishes to change its policy, they are to enter into discussion with the CAP Entity on changes on their expenditures. I guess they are considering changes on expenditures on the Hurley project. New Mexico statute and the AWSA state that all such decisions are made in consultation with the CAP Entity. I think the Interstate Stream Commission needs to make some decision whether they are going to violate previous Interstate Stream Commission commitment and policy… or not. We need to see some assurance. I would like to see a contract executed in blood that the Interstate Stream Commission will honor its contracts and honor its words on these projects. Pete, and Dominique, I don't know how we get the blood for the contracts, but we need some kind of assurance that words given today are not rescinded tomorrow. A change in the JPA, we have already gone through two amendments to satisfy opposition and every time we satisfy opposition, they come back for more. And now they are coming back with wanting to do away with us. I’m not going away. I'm not dying yet. So, opponents out there, be ready, the fight is on. We need to live with honesty, and we need a little bit of integrity and transparency."
Next was the executive director report and roundtable among the members.
Gutierrez said budget expenditures need to be approved. "Has DFA approved the budget? I think there are still some steps we need to do for reimbursement."
Sera said the DFA has approved the preliminary budget. "We can now submit the final budget. I think there's a 99.9 percent chance we will get approval, although we can start making expenditures off that. We're submitting the request for salary numbers, and we'll get a notice to proceed so we can continue paying Anthony."
Hutchinson said a special meeting may be required. "It will depend on the response to our letter to the Bureau of Reclamation and the Interstate Stream Commission. After we notify the Interstate Stream Commission and the Bureau of Reclamation that we are willing to enter into dispute resolution, I expect it will take at least 15 days for a response."
The meeting adjourned.