May 9, 2017

State approves contract change after Gila diversion plans shift again

Laura Paskus

The Gila River in southwestern New Mexico, downstream from Bill Evans Reservoir.

On Monday, the New Mexico Interstate Stream Commission (ISC) voted to amend an engineering contract for the proposed Gila River diversion.

The change was necessary because the company’s earlier work, done at the direction of the state and the entity planning the diversion, didn’t take into account crucial information.

The ISC and the New Mexico Central Arizona (CAP) Entity has been moving diversions plans forward, even though the proposed infrastructure would cross lands owned by The Nature Conservancy and the state of New Mexico. Last week, the CAP Entity’s board of directors  confirmed their latest plans weren’t going to work, and voted on a new scope of work for the engineering company, AECOM.

According to a presentation by ISC Gila Basin Manager Ali Effati, the cost of the revised tasks and deletion of former tasks will offset each other. In other words, the $1.37 million contract for design work will not increase with the revised scope of work, he said.

New Mexico must follow a strict timeline to receive the full federal subsidy for the diversion project. By now, the state should already be working on environmental studies for the plans it submitted last summer to the U.S. Bureau of Reclamation.

Despite the setback, CAP Entity Executive Director Anthony Gutierrez remains undeterred.

“I think that we’ve actually simplified the project,” he said after the ISC meeting. He explained that in their discussions with the Bureau of Reclamation, CAP Entity officials learned that the simpler the project and the smaller the project area, the shorter the National Environmental Policy Act, or NEPA, process will be. He estimated that a contract for the environmental studies should be in place by late fall or early winter.

“So by simplifying the project,” Gutierrez said, “we felt that potentially we’ll still meet the deadlines.”

Nuts and bolts (and pipes and lands)

When Congress passed the Arizona Water Settlements Act (AWSA) of 2004, it gave New Mexico officials 10 years to decide how they would meet water needs in southwestern New Mexico. The state could either pursue efficiency and restoration projects or build a diversion on the Gila River. Diversion, the more costly of the two choices, also came with a larger federal subsidy.

In 2014, the ISC voted to pursue diversion.

In addition to changing course on designs and locations, officials have yet to clarify who will buy water from the diversion, how much the water will cost or how much water the river will yield.

At Monday’s special meeting, at least one of the commissioners appeared to express dismay that the proposed location and landowner status was a problem.

Commissioner Jim Dunlap said, for example: “Nobody’s pursued with [the Energy, Minerals and Natural Resources Department] why they didn’t voice their support or concern or whatever? I’m a little concerned about that.”

The land in question is jointly owned by the state and The Nature Conservancy under the Natural Lands Protection Act. The Nature Conservancy has long opposed any diversion proposals. The New Mexico Energy, Minerals and Natural Resources Department oversees the lands, which were donated, and preserves them as “unique and ecologically significant lands.”

During Monday’s special meeting, Norman Gaume was the only member of the public in the audience.

Gaume, a former ISC director himself, is an outspoken opponent of the diversion.

Related story: After U.S. Senator’s request, ISC releases previously-withheld data

Laura Paskus

Former ISC Director Norm Gaume opposes the state’s planned diversion

“They’re approaching the development of this water as a religion, as opposed to an exercise that is subject to evaluation and normal processes to determine what’s a good idea and what’s not,” Gaume said after the meeting.

He also said he supported an idea previously raised by Commissioner Mark Sanchez that the state hire a fiduciary to help decision-makers understand the financial ramifications of the proposal.

“It’s never too late for them to do that,” he said. “And, to their credit, and the credit of [ISC] staff, this effort for the first time involves their investigation of yield,” he said.

While studying how much water the Gila River can yield, Gaume and other analysts identified errors in the ISC’s data. They found that New Mexico’s “new” legal water rights granted by Congress in 2004—14,000 acre feet annually—exceed what the river can actually yield.

AECOM has the contract to do that new yield study, he added.

He also said that he and others have filed another complaint, this time with the state attorney general, over AECOM’s donation to a political action committee affiliated with Gov. Susana Martinez—a move they say violates the state’s procurement code.

Procurement questions

On Friday, Gaume, the Center for Biological Diversity and the Gila Conservation Coalition requested that the New Mexico Office of the Attorney General look into the contract, which they called “tainted.”

They’ve asked Attorney General Hector Balderas to move the New Mexico General Services Department to address the violation, which they brought to the agency’s attention in January.

At that time, they petitioned the State Purchasing Agent and Director of the General Services Department to investigate if AECOM’s original contract had been awarded in violation of state law and if AECOM had “acted fraudulently or in bad faith.”

In June 2015, the ISC issued a request for proposals for initial design work on the proposed diversion. The winning bidder would receive the contract to come up with what’s called a “30 percent design.” According to the minutes of the Sept. 17, 2015 ISC meeting, two “impressive” finalists were interviewed, including AECOM.

Public records show that on Nov. 6, 2015, AECOM donated $1,000 to Susana PAC, Martinez’s political action committee run by her top political adviser.

Then in May 2016, ISC awarded the $535,875 contract to AECOM. In August 2016, the ISC amended the contract and raised its ceiling to $1,371,875.

After looking into the matter, the Office of the State Auditor warned ISC Director Deborah Dixon that the “sequence of events exposes a weakness in the ISC’s internal controls for Procurement Code compliance.”

According to that March 2016 letter:

Even assuming that AECOM properly submitted a Campaign Disclosure Form with its RFP response, the Form would not have disclosed the SUSANA PAC contribution because that contribution occurred after the response’s submission. The Contract does not appear to have included another Campaign Disclosure Form. This suggests that the ISC has no internal control in place for identifying potential violations of the Procurement Code’s bar on political contributions during the pendency of the procurement process.

The consequence of violations, wrote State Auditor Tim Keller, “is severe and potentially quite expensive to the state.”

According to the State Auditor’s office, Dixon has not responded to that letter.

A bill introduced this year in the New Mexico State Legislature to require additional oversight of spending on the diversion died in committee.

The state has already spent more than $11 million of an estimated $90 million in federal money it plans to receive. The state also has more than $6 million in outstanding contracts and $1.7 million in ISC’s operating budget. The state also has plans to spend another $15.2 million on the project in Fiscal Year 2018.