(April 21) The county of San Bernardino’s legal costs in defending its 2012 acquiescence in the Santa Margarita Water District’s approval of the so-called Cadiz Valley Water Conservation, Recovery and Storage Project have now reached $2,349,332.
This week, the current county land use services director, Tom Hudson, asked the board of supervisors to increase by a half million dollars the fees to be paid to the legal firm of Downey Brand. The board did so.
Downey Brand had already been paid $1,849,332 for providing the county’s responses to legal challenges related to approvals of the memorandum of understanding by and among the Santa Margarita Water District, Cadiz, Inc., Fenner Valley Mutual Water Company and the county of San Bernardino related to litigation that the Cadiz Water Project has provoked. The $500,000 approved by the board ups the amount now paid to Downey Brand to the aforementioned  $2,349,332.
The county became embroiled in eleven separate lawsuits challenging the  Cadiz Valley Water Project in large measure because it opted out of challenging the Santa Margarita Water District’s assumption of lead agency status in overseeing the environmental certification of the undertaking. The project is based not in Orange County, where the Santa Margarita Water District is located, but in the East Mojave Desert in San Bernardino County.
Upon completion, the Cadiz Water Project will extract an average of 50,000 acre-feet of water from the East Mojave Desert annually and convey it via pipeline to Orange and Los Angeles counties for use there.
In reaction to the project and its approval, eleven lawsuits were filed in San Bernardino County, Orange County and in U.S. District Court, alleging the project will drain the aquifer in both the Cadiz Valley and nearby Fenner Valley, wreaking environmental harm. The lawsuits explore various issues, including questioning an approval process for the project which entailed a water district in Orange County more than 217 miles from the  project area certifying the environmental report on the project, the alleged violation of state and federal environmental laws,  the county of San Bernardino’s failure to apply its own desert groundwater management plan in accepting the Santa Margarita District’s approval of the project,  conflict between the project and provisions of both the National Historic Preservation Act and the Federal Land Policy and Management Act,   and the interference of water extraction with salt mining and other pre-existing industrial operations in the area.
Plaintiffs included Delaware Tetra Technologies, which operates a salt and mineral mine in the Fenner Valley, the Center for Biological Diversity, the National Audubon Society, the Sierra Club, the International Union of North America Local No. 783, the National Parks Conservation Association, the Colorado River Branch of the Archaeological Heritage Association, Santa Margarita Citizens and Ratepayers Opposing Water Nonsense, and Rodrigo Briones.
The project is an undertaking of Los Angeles-based Cadiz, Inc., which since the 1980s has operated a 500-acre organic grape, citrus, melon and pepper farm in the Cadiz Valley. Cadiz, Inc. arranged to have the Santa Margarita Water District, to which it is contracted to deliver a portion of the water to be extracted from the desert, to assume lead agency status for the project’s approval. Many of those opposed to the project considered that to be a conflict of interest. San Bernardino County contemplated, but in March 2012 ultimately elected against, challenging Santa Margarita’s assumption of lead agency status on the project and instead on May 1, 2012 entered into a memorandum of understanding with that district and Cadiz, Inc. and its corporate entities, including the Fenner Valley Mutual Water Company, allowing Santa Margarita to oversee the environmental impact report for the project and conduct the public hearings related to project approval.
On July 31, 2012, the Santa Margarita Water District Board of Directors approved the Cadiz Water Project and certified the environmental impact report for the Cadiz Water project.
On October 1, 2012, the San Bernardino County Board of Supervisors gave approval to a groundwater monitoring plan to facilitate completion of the project.
Even before the lawsuits materialized, the county, on March 27, 2012, retained the San Francisco-based law firm of Downey Brand at what was then said to be a not-to-exceed cost of $449,322 to assist county counsel in responding to any lawsuits it contemplated might be triggered by the project.  Within four months, however, those funds had been exhausted and on July 24, 2012, the board authorized a $250,000 amendment to the Downey Brand contract, increasing the amount to $699,332.  Legal billings to the county by Downey Brand ate up that funding by December 2012, and Christine Kelly, who was then county land use services director, asked the board to give approval for the expenditure of another $250,000 to cover continuing legal costs, pushing the Downey Brand contract to $949,332. Downey Brand’s total billing to the county exceeded the million dollar mark before 2013 was half over and on June 18, 2013 the board of supervisors complied with a request by Tom Hudson, who succeeded Kelly as the county director of land use services, to increase the contract with Downey Brand by $500,000 from $949,332 to $1,449,332. In January 2014, Hudson called upon the board of supervisors to increase the existing contract with Downey Brand LLP for legal services to $1,849,332.
Because of an overlap in plaintiffs, the eleven cases were consolidated into nine cases. Three of the nine cases, those involving plaintiffs  Archaeological Heritage Association, Santa Margarita Citizens and Ratepayers Opposing Water Nonsense, and Rodrigo Briones, were dismissed in 2012 and 2013. The remaining six cases proceeded to trial before  Orange County Superior Court Judge Gail Andler  over twelve days in December 2013, and January and February 2014.
On May 1, 2014, Andler issued a ruling denying the petitions filed in all six remaining actions. Andler’s  ruling affirmed the county’s approval of the Groundwater Management, Monitoring and Mitigation Plan and the memorandum of understanding. Notices of appeal were filed in all six cases and those cases are now pending in the Fourth Appellate District.  On the record in the trial court proceedings is the following statement by Andler: “The court finds that the Santa Margarita Water District should not have been designated the lead agency for the project. The California Environmental Quality Act’s underpinnings of accountability and stewardship support the conclusion that the county should have instead served as the lead agency. The county was in the best position to objectively balance the benefits and risks of the project rather than the purchaser of the water.”
Whatever ruling the appellate court makes, the county finds itself under withering criticism for having relinquished oversight over the project to the Santa Margarita Water District, which approved the environmental impact report for the project despite data provided by biologists and hydrologists contradicting that report. Among those inveighing against the project is U.S. Senator Dianne Feinstein, who has publicly stated that the project’s proposed extraction of more than one million acre-feet of water from the Eastern Mojave Desert over the 50-year life of the project will significantly exceed the United States Geological Survey’s estimate of the area’s recharge capability.
Environmentalists insist Cadiz has cynically overrepresented the amount of annual precipitation recharging the groundwater basins in the Cadiz and Fenner valleys, and that springs linked to those ground water basins within the Mojave National Preserve and the plants and animals that depend on them are thus under threat.
Among those condemning the county’s approval of the project was the late John Goss, a former assistant administrative officer with San Bernardino County who drafted the county’s desert groundwater management ordinance before it was adopted in 2002. Prior to his death, Goss said that ordinance was violated when the memorandum of understanding between the county, Cadiz, Inc. and the Santa Margarita Water District had been entered into before a groundwater management plan for the Cadiz project was adopted.
A prime mover in the county’s acquiescence in Santa Margarita’s approval of the project was former First District Supervisor Brad Mitzelfelt, who left office after he did not run for reelection in 2012 when he instead unsuccessfully vied for Congress. Mitzelfelt, whose district included the Eastern Mojave, received $48,100 in political donations from Cadiz, Inc.
The project’s proponents, including Scott Slater, the general counsel for Cadiz, Inc., insist the project is a “responsible and environmentally safe” one that “protects the desert” and provides thirsty Southern California with “an innovative water supply option.”
County officials maintain the county’s taxpayers are not being hurt by the litigation.
In keeping with Section 24 of the memorandum of understanding and the conditions of approval adopted on October 1, 2012, the county is indemnified against any action challenging the county’s acceptance of the Santa Margarita decision, the Groundwater Monitoring Management and Mitigation Plan or the memorandum of understanding. The Cadiz Water Company is supposed to reimburse the county for its legal expenditures.