(January 14)  The county of San Bernardino’s legal costs precipitated by its 2012 acquiescence in the Santa Margarita Water District’s approval of the so-called Cadiz Valley Water Conservation, Recovery and Storage Project last year have now exceeded $1.8 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.
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,  that approval of the project violated provisions of both the National Historic Preservation Act and the Federal Land Policy and Management Act,  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 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 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 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.
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 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 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. This week, nearly seven months later,  Hudson called upon the board of supervisors to “increase the existing contract with Downey
Brand LLP for legal services by $400,000, from $1,449,332 to $1,849,332.”
Hudson told the supervisors Downey Brand’s services are needed “as a result of on-going legal challenges relating to the 2012 Groundwater Management, Monitoring and Mitigation Plan and the memorandum of understanding by and among the Santa Margarita Water District, Cadiz, Inc., the Fenner Valley Mutual Water Company and the county.”
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.
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 approval of the
Cadiz Project, Groundwater Monitoring Management and Mitigation Plan or the memoranducm of understanding,” Hudson said. “The indemnity includes, but is not limited to, damages, cost of suit, attorneys’ fees, expert consultant or witness fees, and other expenses incurred in connection with any such action. To date, the county has been reimbursed by the Santa Margarita Water District, Cadiz, Inc., and the Fenner Valley Mutual Water Company in the amount of $1,301,726.”
The county’s legal costs growing out of the Cadiz Water Project are now mounting. While two of those lawsuits have been litigated to completion or have been dropped, nine remain active and proceeded to trial on December 3, 2013.
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 15 years, will be able to sustain itself in the face of the 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.