(June 21)  The county of San Bernardino’s legal costs as a consequence of its acquiescence in the Santa Margarita Water District’s approval of the so-called Cadiz Valley Water Conservation, Recovery and Storage Project last year have zoomed to near $1.5 million.
Eleven separate lawsuits challenging the  Cadiz Valley water project, which upon completion 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, have been filed in San Bernardino County, Orange County and in U.S. District Court. Two of those lawsuits have been litigated to completion or been dropped. Nine remain active.
The lawsuits allege that the project will drain the aquifer in both the Cadiz Valley and nearby Fenner Valley, wreaking environmental harm; that the approval process for the project which allowed a water district in Orange County more than 217 miles from the  project area to serve as the lead agency for the project and oversee its environmental certification violated state and federal environmental laws; that the county of San Bernardino failed to abide by its own desert groundwater management plan in approving the project; that the environmental impact report for the project was inadequate; and that approval of the project violated provisions of both the National Historic Preservation Act and the Federal Land Policy and Management Act, and that the Bureau of Land Management failed to conduct a proper review of the cultural and environmental impacts of the project; that the extraction of the water will interfere with salt mining and other pre-existing industrial operations in the area; and other issues.
Plaintiffs include 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 Orange County-based Santa Margarita’s assumption of that 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 October 1, 2012, the San Bernardino County Board of Supervisors gave approval to a groundwater monitoring plan to facilitate completion of the project.
The project generated a flurry of lawsuits in which San Bernardino County, Santa Margarita and Cadiz, Inc. have been named as defendants. Even before those lawsuits materialized, the county, on March 27, 2012, retained the San Francisco-based law firm of Downey Brand to assist county counsel in responding to any lawsuits it contemplated might be triggered by the project at what was then said to be a not-to-exceed cost of $449,322. 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 last December, 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 now exceeds the million dollar mark and this week the board of supervisors complied with the current county director of land use services Tom Hudson’s request “to increase the contract with Downey Brand by $500,000 from $949,332 to $1,449,332 for outside 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 the county ordinance for desert groundwater management.”
The county finds itself pressured inside and outside the courts 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 is 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. 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., insists 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.
According to the memorandum of understanding the county entered into, Cadiz, Inc. and the Santa Margarita Water District are to reimburse the county for any of its legal costs relating to the project.
The county has incurred legal costs related to the Cadiz water project of more than $1.1 million to date. The county has received at least $650,000 in reimbursements, $135,000 from the Santa Margarita Water District and $515,000 from Cadiz, Inc.
An issue in the lawsuit brought by Santa Margarita Citizens and Ratepayers Opposing Water Nonsense pertains to the Santa Margarita Water District’s assumption of the financial liability of other parties involved with the project approval. Opponents of the project have questioned whether Cadiz, Inc., an agricultural and landholding company that owns or has options to buy 45,000 acres in the eastern Mojave Desert overlying the Cadiz and Fenner valleys’ aquifers but which has nonetheless not shown a profit for more than 14 years, will be able to sustain itself in the face of mounting legal challenges to the project. Those inveighing against the project not on environmental grounds but financial ones have questioned who will assume the company’s liabilities if it folds or declares bankruptcy.
When she was still serving as land use services director,  Christine Kelly stated, “The county of San Bernardino is to be reimbursed by Santa Margarita Water District, Cadiz, Inc., and Fenner Valley Mutual Water Company for all claims, liabilities, damages, or costs arising from or relating to any administrative or judicial action brought by any third party against the county, its agents, officers, or employees, that may arise from or be related to the county’s approval of the memorandum of understanding and the groundwater management, monitoring and mitigation plan.”