Saturday, December 15, 2007

Conservancy boad members question whether attorney has a conflict of interest

Juan-Carlos Rodriguez Journal Staff Writer

Albuquerque Two conservancy district board members are questioning whether their attorney has a conflict of interest in also representing a company that wants to drill for thousands of acre-feet of water near Datil and pipe it east to the Rio Grande.

Augustin Plains Ranch LLC, owned by Italian businessman Bruno Modena, has asked the Office of the State Engineer to allow it to gain access to 54,000 acre-feet of water per year from an aquifer about 60 miles west of Socorro. The water would come from 37 wells, each 2,000 feet deep.

The application, prepared by MRGCD legal counsel Chuck DuMars, says the water could be used for domestic, livestock, irrigation, municipal, industrial or commercial purposes in Catron County, Socorro County and on the Augustin Plains Ranch. Some could be pumped into the Rio Grande to replenish its supply.

Several board members are concerned about potential effects on their water users and possible water rights transfers that could limit water available to farmers. They want a meeting to decide whether to protest the application, but the protest period ends Monday.

MRGCD directors Bill Turner and Janet Jarratt are calling out DuMars over filing the application.

"My personal opinion is that since he's on the application for this, there's certainly the appearance of a conflict because I think that limits his ability to advise (the board) on this particular issue," Jarratt said.

DuMars said he has no conflict and believes the application, far from potentially hurting the district, could actually help it.

"Obviously I don't think there's a conflict of interest or I wouldn't have filled out the application," DuMars said. "The proposal is not to take water from the Rio Grande, but to put water in the Rio Grande."

Turner agreed with Jarratt.

"If the district protested the application ... he couldn't defend the district's position against his own," Turner said.

DuMars said if the board formally disagrees with the application, he would cut his ties to the applicant and serve the board.

"I couldn't continue representing that client if the district were opposing it," he said.

'Only in New Mexico'

Acting state Natural Resources Trustee Jim Baca, a former MRGCD general manager, pointed out that while he's not sure if DuMars has a conflict, the MRGCD board is suing Turner to remove him because of an alleged conflict of interest over Turner's water brokerage.

In his "Only in New Mexico" blog on Tuesday, Baca wrote: "an immense water mining scheme near Datil ... is being fronted here by Attorney Chuck Dumars, the contract attorney for the Middle Rio Grande Conservancy District. He is the one that is always complaining about MRGCD Board Member Bill Turner being in a conflict of interest for his water banking and engineering firm. Dumars isn't doing anything illegal, and his use of his knowledge of the New Mexico system of water rights is understandable."

The district maintains Turner's WaterBank business is a conflict because he is in competition with the district's own water-leasing program.

But Turner says there is no conflict and he deals in pre-1907, or senior, water rights while the district only handles junior water rights.

DuMars said the application he prepared is a completely different matter.

"The water is not in the district; it's outside the district by 45 miles," he said.

DuMars noted that Turner has filed an application to appropriate excess surface waters that evaporate off Elephant Butte, Cochiti and Caballo reservoirs.

'I want a meeting'

The application's real effect on the district and its irrigators is unclear, but Turner, Jarratt and Eugene Abeita have been calling for a public meeting about it for nearly a week, ever since the board's regular meeting on Monday was canceled last Thursday at vice chairman Jim Roberts' request because four board members could not attend.

"It's a hot topic, and I want a meeting," Abeita said.

Turner had brought up the issue of the Augustin Plains Ranch application at a November meeting, saying a large water application had been filed and should be discussed. But it was never suggested as a board meeting item until after Monday's meeting was canceled, although Turner said he intended to request it be added to the agenda Friday.

MRGCD spokesman Dennis Domrzalski said board chairman Gary Perry wants to discuss the application at the board's next meeting on Jan. 14 and representatives of Augustin Plains Ranch would be invited to talk about it.

"What the chairman wants to do is be cautious and thorough, and he doesn't want to move with haste and make a decision to protest that might not be justified by the facts," Domrzalski said.

He said Perry suggested the district could piggyback on another entity's protest if board members vote to do that. The Interstate Stream Commission, among others, has protested the application as being too vague.

State Engineer John D'Antonio said the district should file a protest to guarantee itself a "seat at the table." He said a formal protest is the best way to be a part of future debate.

"I think if they're really interested in being officially part of it they ought to file a formal protest before (Dec.) 17th just to make sure they preserve their position to be recognized as a formal protestant."

D'Antonio said if the district found the application not to be a problem, it could always drop its protest.

'It's an augmentation of supply'

Turner said he is worried that municipalities might try to transfer water rights from Augustin Plains Ranch, which would allow them to increase the amount they take from their own sources. He said that would diminish the amount of water available to farmers in the district.

DuMars disagreed and said New Mexican farmers are always at risk because the state is bound by the Rio Grande Compact, which states New Mexico is responsible for delivering a certain amount of water to Texas each year.

If the application is approved, DuMars said, the ability to pump in water below many of the developing areas of the state would mean the state, instead of clamping down on agricultural water use, could purchase water from the Augustin Plains Ranch.

"It's an augmentation of supply," DuMars said.

D'Antonio said any transfer of water rights from Augustin Plains Ranch to another location would be a completely separate application process.

The district paid DuMars' law firm $853,000 from April 2005 through this June. This year, the district upped the budget for legal expenses to $700,000.

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