Fourteen years after Congress authorized New Mexico to trade 14,000 acre feet of water with a downstream user in Arizona—and four years after a state commission voted to build a diversion on the Gila River—there’s little to show for the project, other than continued confusion and about $17 million in spent money.

“The process is going to end at some point,” said Norman Gaume, an opponent of the project and a former director of the New Mexico Interstate Stream Commission (ISC). “It’s a question of how much more money will they waste?”

At an ISC meeting on Thursday, the state approved an additional $110,000 for the engineering firm Stantec, as well as an amendment that would allow the quasi-governmental organization in charge of the project to someday spend money slated for the diversion on other water projects.

But, noted Gaume, each of the 15 members of the New Mexico Central Arizona Project Entity will need their governing boards to approve it, too. In practical terms, he said, the change means little: the joint powers agreement says the state can only spend money on the diversion.

Now, with a critical deadline just a year away, it’s unclear if New Mexico can meet the 2019 federal deadline. It’s also uncertain what will happen if the state doesn’t.

Gaume pointed out that whether or not New Mexico builds the diversion, it will still have the right to exchange 14,000 acre feet annually. “The water right never goes away,” he said. “But it’s not a very good water right; lots of years there’s no water at all. And nobody has come to grips with that.”

More money needed

In an interim committee hearing last week, lawmakers questioned the diversion’s progress and wondered whether New Mexico can meet its longstanding federal deadline.

Last Friday, members of the New Mexico Central Arizona Project Entity updated the New Mexico State Legislature’s Water and Natural Resources Committee on the diversion’s progress. The NMCAP Entity was created in the wake of the state’s 2014 decision to build a diversion on the Gila River, and is charged with overseeing its construction, maintenance and operation.

The NMCAP Entity’s most recent plans involve building infrastructure on the Gila and San Francisco rivers, which they estimate would divert 7,000 acre feet of water. The entire project, officials said, can be paid for with a $58 million subsidy from the U.S. Bureau of Reclamation.  

Water from the diversion project will cost an estimated $450 per acre foot.

Supporters of the project have not yet identified users or buyers for the water, but those contracts would need approval from both the New Mexico Office of the State Engineer and the federal Secretary of the Interior, said NMCAP Entity member Howard Hutchinson, who represents the San Francisco Soil and Water Conservation District in southwestern New Mexico.

He added that the NMCAP Entity is looking into how it can use revenues from the diversion project to fund other water conservation and efficiency projects. But that’s not the current priority.

“The most important thing about the project at this point is getting the infrastructure set up and the construction fund utilized to put up the basic infrastructure we need for further development in the future,” Hutchinson told the committee.

The NMCAP Entity’s attorney, Pete Domenici, Jr. said that to receive the $58 million federal subsidy, the NMCAP Entity needs a $750,000 budget for 2019.

According to a report from the New Mexico Interstate Stream Commission (ISC), for Fiscal Year 2019, the NMCAP Entity’s operating budget is $700,000 and the ISC’s operating budget for the project is $315,000.

According to a report from the New Mexico Interstate Stream Commission (ISC), for Fiscal Year 2019, the NMCAP Entity’s operating budget is $700,000 and the ISC’s operating budget for the project is $315,000.

Since January 2012, the U.S. Bureau of Reclamation has deposited $63.28 million into New Mexico’s coffers for the project. So far, with just 20 percent of the engineering plans drawn up, the state spent $14.83 million of the federal money through the end of September. It has spent at least another $2 million in state money.

Of the $63.28 million, $9.1 million of that is earmarked for grantees with non-diversion water projects in Catron, Grant, Hidalgo and Luna counties. Those projects include the Grant County Regional Water Plan and a $500,000 grant to Silver City for water conservation and metering projects. So far, New Mexico has paid out just $1.6 million of that funding.

Years in the planning

Four years ago, the ISC voted to build a diversion on the Gila River. The decision was a decade in the making: When Congress passed the Arizona Water Settlements Act in 2004, it gave New Mexico ten years to decide whether to use tens of millions of dollars to meet the future water needs of four counties in southwestern New Mexico through projects focused on conservation, efficiency and forest restoration or instead receive additional millions and build a diversion on the Gila River and its tributary, the San Francisco River.

At an ISC meeting in Albuquerque on Nov. 24, 2014, commissioners chose the diversion alternative—and the bigger pot of money to implement the project.

At the time, Commissioner Blaine Sanchez voted against the diversion—citing concerns about its cost—and Commissioner Topper Thorpe, who was also chairman of the Gila Basin Irrigation Commission, abstained from the vote. Then-State Engineer Scott Verhines, Chair Jim Dunlap, Mark Sanchez, Buford Harris, Jim Wilcox, Randal Crowder and Phelps Anderson all voted in favor of the project.

The following year, the NMCAP Entity was created. It includes members from 15 counties, cities and villages and irrigation districts that are responsible building the project, as well as reimbursing the federal government for operation, maintenance and repair costs.

Since its creation in 2015, the NMCAP Entity struggled to meeting deadlines and propose a design and location for the diversion. Without a firm plan, location or engineering design in place, federally-required environmental studies didn’t begin until June 2018—about 18 months behind schedule.  

And the project’s deadline is critical.

To receive the full federal allotment, the state must complete an Environmental Impact Statement in 2019, in time for the Secretary of the Interior to issue a final decision on the project by the end of 2019.

According to the enabling federal legislation, the Interior Secretary can extend the deadline: “If New Mexico exercises all reasonable efforts to obtain the issuance of such Record of Decision, but the Secretary is not able to issue such Record of Decision by December 31, 2019, for reasons outside the control of the State of New Mexico, the Secretary may extend the deadline for a reasonable period of time, not to extend beyond December 31, 2030.”

In other words, New Mexico would have to show it wasn’t responsible for the delays.

Concerns from lawmakers

During last week’s legislative meeting, the committee’s co-chair, Bealquin Bill Gomez, D- Doña Ana, applauded the NMCAP Entity’s efforts, and said he appreciated that they have come up with a “reasonable plan.”

But a number of other legislators, including committee co-chair Rep. Matthew McQueen, D-Galisteo; Sen. Jeff Steinborn, D- Doña Ana; and Rep. Nathan Small, D-Las Cruces, questioned the project and its progress.

Sen. Joseph Cervantes, D-Doña Ana, also reiterated his concerns.

“Ten years ago, I said, ‘Let’s not get to the last point, right before the deadline, to rush and make bad decisions,’” he said during last week’s legislative meeting. “And increasingly, that’s what I’ve seen us do in the last two years.”

The ISC decided on the diversion alternative, he said, and then designated authority to the NMCAP Entity.

“And here we are, the legislature, two, three levels removed from the process to spend $58 million,” he said.

He noted Sen. Howie Morales, D-Silver City, opposed the diversion and will be lieutenant governor in the new year—and that the legislature does not support the project. And in Gov.-elect Michelle Lujan Grisham’s water plan, released in late October, she said her administration would end work on the diversion project and “take whatever steps are available” to use the federal funding for other water projects in the region.

Since 2014, legislators have tried to rein in the ISC’s spending on the project and shift the federal funding to other water projects in southwestern New Mexico.

In 2017, when Morales and fellow state Sen. Sander Rue, R-Albuquerque, introduced a bill that would have required additional oversight of the state’s spending of the federal money, the ISC and the NMCAP Entity both opposed the bill, calling it a “roadblock” that would prevent the state from meeting deadlines and receiving its full federal subsidy.

“How do we deal with the end-of-2019 deadline, and have undertaken all the work required before then, and have something that enjoys the support of the incoming governor and the legislature?” Cervantes asked. “We have had hundreds of public meetings, [spent] millions of dollars. But an extension may prevent us from jamming through a project that doesn’t have the support I think it should.”

Directing his comments to Domenici, Cervantes said the state should “begin the appropriate process” to work with the federal government on extending the deadline. Otherwise, he feared, “in the middle of 2019, when we’re not in session, we’re going to find out this project is going to cost much more money, or we’re going to be paying an exorbitant amount of money for water for a handful of farmers.”

The legislature should reassert its role in the project, Cervantes said. “That may mean us adopting, through whatever process, to direct that an extension be requested to the federal government.”

He added, “I make that suggestion with a great deal of hesitation and remorse, but I don’t see an alternative.”

To read all of our coverage of the Gila River diversion, visit https://nmpoliticalreport.com/tag/gila-river/

Correction: We originally erred in identifying Rep. McQueen’s district. He represents Galisteo, not Santa Fe. We also incorrectly characterized the joint powers agreement; it is separate from the state’s agreement with the federal government. The story has been changed to reflect those changes.