Water Rights And A Second Opinion

It looks like finally the city will be getting a second opinion regarding the purchase of additional water rights. This agenda item will be voted on tomorrow night.

I cannot begin to tell you how often citizens have asked for this.

Since this water rights situation hit the big time, Water Right Solutions from Helena has been the city's consultant.

The Commission has been unrelenting in having absolute faith in Dave Schmidt of this company and not asking for a second opinion. As recent as the Oct. 21 meeting, commissioners were placing their total confidence in this fellow. This is well after Water Right Solutions indicated their principals, who include Dave Schmidt, have a conflict of interest. It seems that Mr. Schmidt and others will receive a fee from the sale of these water rights to the city.

After all this time, I wonder who's idea it was to finally get a second opinion?

Our Water Rights And The Corps Of Engineers

On October 23, 2008, this article appeared in the Great Falls Tribune pertaining to a discussion at the October 21 City Commission work session with regard to water rights:

City may pay $10 million for water rights


By RICHARD ECKE
Tribune Staff Writer

City government may consider spending up to $10 million to buy new water rights for future city use.

The City Commission at a work session Tuesday generally agreed to consider the idea, proposed by city fiscal officer Coleen Balzarini and David Schmidt, a water rights consultant from Helena.

Balzarini said if the city agreed to purchase the water rights, the "worst-case" effect on city water customers would be a total annual rate increase of 10 percent. The city decided about a year ago to raise water rates by 5 percent per year to improve the city's water system; a water rights purchase might increase city water rates an additional 5 percent through 2019. City growth could moderate such an increase, she said.

The plan drew some immediate questions from residents, including Ron Gessaman of Great Falls. "That's a lot of money," Gessaman said.

Schmidt said buying water rights is not the only thing commissioners can do to keep the city supplied with water. He said the city can dig individual wells to keep its parks watered, and new developers if land could be charged a water-rights fee, such as a $6,000 per acre-foot fee charged to developers in Bozeman.

Great Falls could charge a different amount than Bozeman, or not levy the fee, he said. "I think they're in a bigger pickle than the city of Great Falls," Schmidt said of Bozeman.

Earlier, Schmidt had recommended, and the city agreed, to abandon some of the city's water claims from the time of Paris Gibson, who founded the city of Great Falls in 1884. Schmidt said the city had not been using the water, so the state Water Court would not have looked kindly upon the city claiming water Great Falls had not been using.

Kathleen Gessaman of Great Falls disagreed at a later City Commission meeting. "I think we'd have an excellent chance in the Water Court," she said. The alternative of buying water rights is "awfully expensive," she added.

Schmidt said he would not get directly involved in a city of Great Falls purchase of water rights from the owner because his firm represents the owner, an agricultural user.

Commissioners may take up the issue of a water rights purchase this fall. Tuesday night, they disputed the notion that the city could successfully retain rights to water the city had not used.

"If you haven't used it, you don't have it," City Commissioner John Rosenbaum said. He added jokingly, "the only thing we haven't addressed in our water rights is evaporation."

Commissioner Bill Bronson said some of the city's critics appeared to be trying to say Montana's cities should receive special treatment for their claims to water. "It would totally undo 160 years of water law in the American West," Bronson said. He cited a decision, made by a Montana water master three years ago dealing with the Clark Fork of the Yellowstone River, that flatly said Montana municipalities are not exempt from state water laws.

"I have total confidence in our consultant on water issues," Commissioner Bill Beecher said.

Perhaps the following correspondence from the Department Of The Army, Corps Of Engineers, dated July 2008 and April 2008 may have something to do with the urgency the water consultant, Coleen Balzarini and some of the commissioners have with regard to the city buying $10 million worth of water rights:

"Historic Water Rights May Go Downstream"

Taken from the CCE website: (click on "breaking news")

Press Release (7/27/08)

Great Falls Historic Water Rights May Go Downstream

• Why is it that the City is willing to litigate to prevent it’s citizens from seeing public documents but refuses to even consider using legal means to protect it’s historic water rights?

• Billings is planning on defending 400,000 acre-ft per year of water rights. The City of Great Falls is embarrassed to defend an 1889 53,000 acre-ft/yr water right. Billings is defending a water right over seven times as large as Great Falls, but its population is only twice as large.

• City documents show Great Falls pumped between 48 million and 55 million gallons of water per day in the sixties. This fact along with the incremental growth of water use in Great Falls is very important data the Water Court could review to determine if Great Falls can keep it’s historical water right of 53,000 acre-ft/yr (about 59 million gallons/day).

• The City’s consultant recommended the City reduce it’s water rights from 53,000 acre-ft/yr to 20,000 acre-ft/yr, a 62% reduction of our historic 1889 water rights, and then offered to help the City purchase other water rights for about $7.5 million dollars over the next ten years . . . Does this make any sense for the taxpayers of Great Falls?

• This past week members of CCE/MEIC have been given access to certain public documents and records. That has lead to the finding of other record trails that may support keeping our water rights at the historic volume. We just need more time to follow the evidence through to a supportive conclusion. Is that too much to ask, a simple letter from city hall could possibly save future citizens millions of dollars and grief over water issues!

• Grab a pencil. Please ask the Mayor, City Manager and City Commissioners tomorrow to apply for a 90-day extension of the August 4th water rights deadline. This extension will protect our historic water rights and give time for additional research to prove up the rights. This may be the LAST CHANCE we have!

Mayor Stebbins phone number is 761-4108.
City Manager, Greg Doyon can be reached at 455-8450 or leave a message there for the Commissioners.

Water Rights Review

At the Commission meeting Tuesday night, the Commissioners will decide to object, file an extension or accept its previously filed amended 1889 water right. (If I remember correctly, August 4 is the deadline for action, so tabling this is not an option since the next Commission meeting is August 5).

Guess who's coming to the work session to discuss this before the vote?

That's right. Water Right Solutions (they have a conflict of interest) and an attorney from Luxon and Murfitt (SME is also their client). Hmm. Nobody invited to speak who might be considered a "critic".

Same old baloney. They keep listening to the folks who tell them what they want to hear.

Water Rights Working Group Meeting

In today's business section of the Tribune is an announcement that the Water Rights Working Group will meet on Wednesday, June 25 from 8:00am to 9:30am at the Holiday Inn.

According to the announcement, The Water Rights Working Group is part of the Great Falls Development Authority. I googled the group and found nothing. I visited GFDA's website, and guess what, it STILL isn't updated. (When they can't get a website online, especially after they were offered help, it really makes one wonder about their competency level to accomplish anything else).

Dave Schmidt of Water Rights Solutions will give a presentation on a report he recently prepared for the city of Great Falls titled, "A Water Strategy for the Future".

This is the same business that has been working with the city for about six years and also has a conflict of interest, which wasn't a problem for John Lawton.

This sounds no different than the ECP board and the City Commission only receiving information (other than from public comment) about the coal plant from the guy who wants to build it.

Seems Too Cozy

At the City Commission meeting Tuesday night, after Stuart Lewin talked about the problems with the indemnification clause (15) included in the water rights consulting agreement, Coleen Balzarini said that the clause was included on the recommendation of the risk manager.

Risk manager? I don't know what the job description is of this position, but I thought maybe it was part of the legal department. It's not. According to the City of Great Falls Telephone Directory, our city's risk specialist works in the Fiscal Services department, which as we all know has as its director, Coleen Balzarini, who just so happens to be the person who presented this consulting agreement to the City Commission on Tuesday night. (I have a copy of the City Telephone Directory, but the link online is broken).

Did city attorney, Dave Gliko, see the agreement and not challenge the indemnification clause or was the commission meeting the first time he heard of it?

If he knew nothing of this, why not?

Bronson Denies Recommendation

Here I posted about Commissioner Bronson evidently reviewing and concurring with the agreement proposed between the City and Water Right Solutions: "based upon staff's recommendation and Commissioner Bronson's review and concurrence of the recommendation, the Commission is asked to approve this agreement and first amendment".

After Stuart Lewin discussed why he was not in favor of item #15 of the agreement, Indemnification, and after the city manager requested the motion to pass the agreement be withdrawn until further review of the agreement could be undertaken, Commissioner Bronson made it clear his recommendation had nothing to do with the agreement, but with an e-mail that was sent by staff to the commissioners at the end of February.

So, one of two things happened:

1. Coleen Balzarini misunderstood Bronson's concurring and recommending and thought it meant he concurred with the agreement, or

2. Bronson did concur and recommend the agreement, but once he found out that he may not have paid very close attention to certain wording, he denied his recommendation.

No matter what happened, it ain't good.

Water Files Fiasco

What started the heated discussion last night between Commissioner Jolley and Fiscal Service Director, Coleen Balzarini, was the location of the water rights files. All along, folks have been told they have to set up a time to travel with a city employee to Helena to view the files.

Commissioner Jolley asked Coleen if the city had the files. Coleen said no. Jolley said she asked because she was told the city did have them. Coleen got quite defensive and said that the original documents are with the State because the State is the actual owner of the water.

Jolley was told files were in the office of Martha Cappis, a fiscal service department employee. Coleen denied it and wanted to know who told her that. It turns out that Martha Cappis said it.

At the Petitions and Communications portion of the meeting, a member of the audience mentioned that a consultant from Water Right Solutions told folks at a work session that the city has 30" of water files at the fiscal department. So, does this mean they have been moved?

Coleen got caught and I think the way she wanted to get around it was to pitch a fit about the location of the original files. I don't think it's a stretch to say that everybody understands the State would have the originals, but it's a huge stretch to think the City wouldn't have copies pertaining to its own water rights. But that is what Balzarini was claiming.

It's time to fork over the files.

Working Together?

At tomorrow's night City Commission meeting, the commissioners are going to vote on whether to approve or deny a consulting agreement with Water Right Solutions, Inc. out of Helena. This would not be the first agreement the City has had with this company.

I admit I'm confused by this whole water rights thing. I don't know if approving this agreement could cause problems down the road or not. Are there legitimate reasons for this agreement or is the City up to something? Maybe tomorrow night we will learn more.

What I find interesting is that "based upon staff's recommendation and Commissioner Bronson's review and concurrence of the recommendation, the Commission is asked to approve this agreement and first amendment".

Is it normal procedure for staff to consult with only one of the commissioners and based upon that commissioner's "concurrence" place something on the agenda? I know Commissioner Jolley was not aware of Bronson's involvement in this.

Isn't the City Commission supposed to be working together?

Water Right Solutions-Conflict Of Interest

This is the Conflict of Interest document that has been discussed here.

Water Right Solutions

In June 2002, the city contracted with Water Right Solutions from Helena to investigate and analyze the city's existing water rights. What follows are the payments made to this company and the funds from which said payments were taken:

2002:
Jun18: Water - $1,000.
Jul 16: Water - $2,467.
Aug 06: Water - $3,109.
Oct 01: Water - $1,050.
Nov 05: Water - $1,538.
Dec 17: Water - $3,263.

2003:
Apr 01: Water - $ 618.
May 06: Water - $1,108.
Jun 03: Water - $3,788.
Jun 24: Water - $1,109.
Aug 05: Water - $ 581.
Sep 02: Water - $1,575.

2004:
Jul 06: Other Admn. - $3,136.
Aug 03: Other Admn. - $ 625.
Sep 07: Other Admn. - $2,380.
Dec 07: Fiscal Svcs. - $5,374.

2005: (beginning in March 2005, payment only in excess of $5,000 were to be reported. Prior to that time, payment in excess of $500 were to be reported).

Jan 04: Electric - $4,194.
Feb 01: Electric - $1,881.
Oct 04: Electric - $4,388; Fiscal Svcs. - $ 1,842.

2007:
Oct 16: Fiscal Svcs. - $9,465.

2008:
Feb 19: Electric - $1,239; Fiscal Svcs - $5,407

Total reported: $61,137.00

Breakout per fund:

Water - $ 21,206.
Fiscal - $ 22,088.
Electric - $ 11,702.
Other - $ 6,141.

A few questions:

1. How many payments were made that were not reported?

2. Really, no payments made to them in 2006? Seems odd.

3. Why were four funds used?

4. I'm assuming this is the company with the conflict of interest. If so, how could they and the city ethically enter into a contract?

ECP; Water Rights

At last night's city commission meeting, during the public comment portion, a commenter remarked that when he attended the ECP board meeting this month, there were three new agreements mentioned between ECP and SME about which he previously knew nothing.

He asked the city, especially in light of it being Sunshine Week, to make those agreements available to the public. We'll see.

Secondly, during the same comment portion, local attorney, Stuart Lewin, discussed the loss of 50% of the city's historic water rights and how serious of a situation this is. It is my understanding from his comments that the city has until the first week of August to appeal current decisions. He recommended the city hire a water rights attorney to defend these rights.

One comment he made, which I had not heard before, was that the company hired by the city to be the city's consultant in these matters (I'm assuming Water Right Solutions), had a conflict of interest and had previously indicated such.

What was that conflict of interest and what role, if any, did it play in the current state of affairs in which we find our water rights?