City Council

CORRECTED COPY AGENDA GALLUP CITY COUNCIL SPECIAL MEETING FRIDAY, MAY 26, 2017; 10:30 A.M. CITY COUNCIL CHAMBERS Jackie McKinney, Mayor Linda Garcia Allan Landavazo Councilor, District #1 Councilor, District #2 Yogash Kumar Fran Palochak Councilor, District #3 Councilor, District #4 Maryann Ustick, City Manager George Kozeliski, City Attorney A. Pledge of Allegiance B. Roll Call C. Discussion/Action Topics 1. Approval of Settlement Agreement with the United States Department of the Army – George Kozeliski, City Attorney D. Motion to Adjourn Auxiliary aides for the disabled are available upon request. Please contact Alfred Abeita, City Clerk, at 863-1254 at least one (1) week prior to the meeting or as soon as possible in advance of the meeting to make any necessary arrangements. Pursuant to the “Open Meetings Act”, NMSA 1978, Section 10-15-1 through 10-15-4 of the State of New Mexico, this Agenda was posted at a place freely accessible to the public 72 hours in advance of the scheduled meeting.  DiscussionlAction Topic I Approval of Settlement Agreement with the United States Department of the Army George Kozeliski, City Attorney  CITY OF * GALLUP COUNCIL STAFF MEETING DATE: SUMMARY FORM May 26, 2017 SUBJECT: G-22 Settlement Agreement with the U.S. Department of the Army DEPT. OF ORIGIN: City Attorney’s Office DATE SUBMITTED: May 19, 2017 SUBMITTED BY: George W. Kozeliski, City Attorney Summary: Attached is a proposed Settlement Agreement with United States Department of the Army, the last remaining major protestant to the G-22 water rights application. The document has yet to be approved by all levels of the federal government, but we feel it is best that the City of Gallup approval should be on the agreement prior to it making the rounds of the federal government. This settlement is not related to the amount of water the City is allowed to pump as in previous settlements. This settlement centers on monitoring of possible, but highly speculative and unlikely, problems which might arise from the City’s pumping from the Hogback well field. The Army is concerned about water that might migrate off of the Ft. Wingate property, and the settlement sets out the duties and responsibilities of the United States Army and City of Gallup, should such highly unlikely event occur. (Please note, the wording on the final version for the meeting may have minor changes, including such items as signature lines) financial Impact: No financial impact other that what is already necessary to develop and monitor the G-22 requirements under other settlements and the New Mexico Office of the State Engineer requirements. Approved: Finance Department Attachments: Settlement Agreement with the United States Army Legal Review: Recommends approval. Approved As To Form:_____________________________ z’ Attorney Recommendation: Approval of Settlement Agreement with United States Department of the Army 42 / CITY CLERK’S USE ONLY COUNCIL ACTION TAKEN t Director ‘%) .____ RefeffedT Approved: Denied: Other: file:  SETTLEMENT AGREEMENT BETWEEN THE CITY OF GALLUP AND THE UNITED STATES DEPARMENT OF ARMY This Settlement Agreement (“Settlement Agreement”) is entered into this day of May, 2017, by and between the City of Gallup (“City”) and the United States Department of the Army (“Army”) (individually “Party” or collectively the “Parties”). Recitals WHEREAS, the City filed its Third Amended Application No. G-22 et al. with the New Mexico Office of the State Engineer (“OSE”) on September 22, 2010, seeking a new appropriation of groundwater in the amount of 5,000 acre-feet per year (“afy”) from the Hogback and Ciniza Well fields, with up to 1,000 afy diverted from the Ciniza Well Field, as those well fields are defined in Exhibits Nos. 1 and 2 of the City’s Third Amended Application, for municipal and related purposes as set forth more fully in the City’s Third Amended Application, for use in the municipal service area of the City of Gallup and adjacent areas in McKinley County, including the service areas of the Navajo-Gallup Water Supply Project; WHEREAS, the City filed its fourth Amended Application No. G-22 with the OSE on December 12, 2016 (“City’s Application”), as confirmed by Order of the Hearing Examiner on December 13, 2016, which amendment reduces the total average pumping quantities sought and makes other modifications; WHEREAS, all wells completed under the City’s Application will be in the confined aquifer in the San Andreas-Glorieta (“SAG”) aquifer system; WHEREAS, the Army filed a timely protest to the City’s Application; WHEREAS, the Army owns numerous non-production groundwater wells and one groundwater production well with related water rights within Fort Wingate Depot Activity (“FWDA”); WHEREAS, the Army’s one groundwater production well within the FWDA is set forth in OSE file No. G-00 191, which has a declared purpose of use for “domestic use in Fort Wingate Depot operational purposes” with a claim to divert up to 160 afy; WHEREAS, the Army will be transferring the administration of certain parcels of land within FWDA either in trust to the Department of Interior or in Restricted Fee to the Pueblo of Zuni and/or Navajo Nation. See Section 2829F of the National Defense Authorization Act for Fiscal Year 2017, Pub. L. No. 114-238, 130 Stat. 2000 (NDAA); 1 of9  WHEREAS, past activities by the Army on the FWDA have resulted in soil and groundwater contamination currently limited to the shallow alluvial aquifer and the intermediate bedrock aquifer, and no contaminants have been identified in the SAG; WHEREAS, the known contaminates include nitrate, nitrite, perchtorate, explosive compounds, and volatile organic compounds, which consists of contaminants associated with chlorinated solvents, petroleum fuels, and other degradation products (see Exhibit No. 1 “Known — Contaminants from fWDA”); WHEREAS, the New Mexico Environment Department (“NMED”) is monitoring the Army’s remediation of the contamination of the soil, the shallow alluvial aquifer, and the intennediate bedrock aquifer pursuant to Resource Conservation and Recovery Act Permit (“RCRA”) No. NM6213820974; (NMID No, 2397; EPA Registry ID: 110001141345); WHEREAS, the Army’s hydrogeology experts have expressed their opinion that there is an aquitard between contaminated soil and contaminated groundwater, which contamination is presently limited to the shallow alluvial aquifer and the intenriediate bedrock aquifer, and the SAG from which the City’s Application wells will withdraw water; WHEREAS, the Army’s experts believe there is a possibility, but not a likelihood, that Known Contaminants from FWDA could migrate throtigh the aquitard for various geologic reasons and if pumping in the SAG is increased; WHEREAS based upon information provided by the Army, the City believes that migration of Known Contaminants from FWDA is a remote possibility, whether caused by geologic reasons, City pumping from the SAG from G-22 wells, or other water right holders’ pumping from the SAG, that does not need to be addressed beyond the acknowLedgements and mitigation measures set forth in this Settlement Agreement unless or until the evidence suggests that migration of contamination between the shallow aquifers and the SAG is likely or imminent; WHEREAS the City further believes that the Army will compLete its remediation of contaminated soil and groundwater pursuant to RCRA Pennit No. NM62 13820974; (NMID No. 2397; EPA Registry ID: 110001141345) before any Known Contaminants from FWDA might migrate to the SAG; and WHEREAS, the Parties believe that it is in their mutual interest to settle their differences through this Settlement Agreement. Covenants NOW, THEREFORE, in exchange for the mutual covenants, agreements and consideration described herein, the Parties agree as follows: I. The Army represents and warrants that it is the sole owner of numerous non-production groundwater wells (including monitor wells) and one groundwater production well with related water rights as set forth in OSE File No. G-00 191. Well No. G-00 191 is located in the Gallup 2 of 9  Underground Water Basin at Lat: 350 30’ 56,01’ North / Long: 1080 35’15.52” West, The Army also represents and warrants that it does not own any additional groundwater production wells or permitted or licensed water rights in the Gallup Underground Water Basin or the Bluewater Underground Water Basin. Except as may be necessary to enforce this Settlement Agreement, the Anny hereby waives any and all claims of impairment to any existing wells and water rights as a result of granting the City’s Application whether or not identified herein, and further agrees the City has no obligation with respect to any Army non-production groundwater well under this Settlement Agreement. 2. The Army agrees that it will not oppose approval of the City’s Application by the OSE, and by the courts, if appealed, granting the City the right to divert up to an annual aggregate amount of groundwater as set forth in the City’s Application. 3. The City’s obligations set forth in Paragraph Nos. 4-8, 10, 20, and 22 will not become effective or enforceable until the City diverts at least 1,000 afy for any two-year period from the Hogback and/or Ciniza Well fields. 4. If the potentiometric surface in Well No. G-00191 declines such that the average static pressure measured at the well head reaches 15 PSI (pounds per square inch), the City will install a pump in Well No. G-00191 sufficient to produce up to 3 afy with the pump set at approximately 350 to 400 feet below ground surface. If the average static water column in Well No. G-00 191 declines to within 100 feet above the pump set at 350 to 400 feet, the City will lower the pump to 900 to 1,000 feet below ground surface. The average static water column shall be based upon three measurements taken each year, with each measurement taken after at least 72 hours of non-operation of Well No. G-00 191. The acquisition, installation, and lowering of the pump, if any of those actions become necessary under this Settlement Agreement, shall be at the City’s sole expense. The Army will be responsible for all expenses related to the operation, maintenance, and repair of the pump. The City will coordinate with the Army prior to the acquisition, installation, and lowering of the pump assembly. As an alternative to lowering the pump under this Paragraph No. 4, the City may elect to provide a replacement water supply consistent with the terms and conditions in Paragraph No. 5. 5. If the average static water column in Well No. G-00191 declines to within 200 feet above the pump set at 900 to 1,000 feet, the City will provide a replacement water supply at the City’s expense capable of supplying up to 3 afy to the present location of Well No. G-00191 or another location upon agreement of the Parties. Potential water supply replacement remedies include providing water through the Gallup Regional Water Supply System or any other source of supply (surface water in most years, but potentially groundwater at times), deepening the well, replacing the well, providing supplemental storage, or proposing another alternative to provide up to 3 afy. The remedy will be determined by the City, after consultation with and approval by the Army, its successors and assigns, which approval shall not unreasonably be withheld. The replacement water shall be equivalent to the water quality presently produced by Well No. G-00 191. The City shall provide up to 3 afy at no cost to the Army, its successors and assigns, the remainder of water provided at 80% of the City’s base commercial rate. 3 of 9 6. Any pump provided pursuant to Paragraph Nos. 4 or 5 shall be efficient, effective, meet industry standards, and be capable of producing the same flow rate as the pump installed and used by the Army at the time Paragraph Nos. 4 or 5 are triggered. 7. If the City provides water from the Gallup Regional Water Supply System or any other source of supply pursuant to Paragraph Nos. 4 or 5, the Army will provide an easetuent across land owned or controlled by the Army for the construction of any infrastructure necessary to provide up to 3 afy from the Gallup Regional Water Supply System or any other source of supply to the present location of Well No. G-00191. The City shall obtain and provide all other necessary easements. A water meter will be installed near the FWDA property boundary. Once all infrastructure is installed, the Army, and/or its successors and assigns will be responsible for operation, maintenance, and repair of any infrastructure beyond the water meter and extending onto FWDA. 8. If the conditions described in Paragraph Nos. 4 or 5 of this Settlement Agreement are triggered and the City becomes responsible for or elects to provide a replacement water supply as set forth herein, the Army will permit access to City personnel and its contractors in accordance with applicable regulations and conditions on entry. The Army will be responsible for costs related to compliance with applicable environmental and cultural protection laws for such remedy. 9. If the Army, and/or its successors and assigns, notifies the City that it desires water service on FWDA without the provisions of Paragraph Nos. 4 or 5 having been triggered, the City will provide the Army or its successors and assigns with water at 80% of the City’s base commercial rate. The Army or its successors and assigns shall be responsible and pay for all related infrastructure from the end of the City’s then-existing water distribution line onto FWDA. 10. If the provisions of Paragraph Nos. 4 or 5 are triggered, and the Army, and/or its successors and assigns, seek construction of infrastructure capable of supporting a water supply in excess of 3 afy, the Army, andlor its successors and assigns will be responsible and pay for all related infrastructure incurred above the City’s cost of providing the necessary infrastructure to supply up to 3 afy. 11. Surface water from the Navajo-Gallup Water Supply Project, authorized by Pub. L. 111-11 (March 30, 2009) (“NGWSP”) shall be the City’s primary source of water as soon as it becomes available, presently anticipated to be in the year 2024. 12. The City shall not be responsible for the routine replacement of pumps, drop pipe, wiring and other materials as may be required to keep Well No. G-00191 operational, nor is the City responsible for routine maintenance or replacement of Well No. G-00 191. 13. If the Army, and/or its successors and assigns replaces Well No. G-00l91 with a similarly constructed well, the conditions set forth in Paragraph Nos. 4 and 5 shall be modified as appropriate and as agreed to by the Parties to take into account the different physical attributes of the replacement well. 4 of 9 14. if the Army replaces Well No. G-00191 or if the Army obtains water from the Gallup Regional Water Supply System or any other source of supply pursuant to Paragraph Nos. 4, 5, or 9, tile Army will consult with the City in an effort to continue to use Well No. G-00191 as a monitoring well, accessible to both Parties for the collection of data. 15. The City shall not object to, protest or otherwise challenge any claimed state-based water right or federal reserved water right or aboriginal water right for the diversion and use of up to 160 afy associated with FWDA, including any claims or applications made by the Army’s successors and assigns, in an inter se proceeding of an adjudication, and in any proceeding on application for permit filed with the OSE. 16. The City agrees to install and maintain a totalizing meter on each of the wells associated with the City’s Application. The City will provide the Army, its successors and assigns, upon request, data on diversions that it obtains from its G-22 wells. 17. The City shall take groundwater level measurements three times each year in March, July, and November (in those months or as close as possible), from the following wells, or comparable wells, as follows: the City will measure non-pumping water levels in Well Nos. G-894 or 895 (Rehoboth), G-l91 (Fort Wingate Depot), G-85 (NMDOT well across 1-40 from Refinery), G-22 Exp. 1 or G-22 Exp.2 (at Ciniza, choice of well to be permanent, as specified by City), G-l000 (Continental Divide between Coolidge and Thoreau), and B-3$6 (near Thoreau). The City will provide the Army, its successors and assigns, upon request, data on groundwater levels that it obtains from these monitoring wells. 18. To the extent the Army retains right of entry, the Army agrees to provide the City access to any wells owned or controlled by the Army on FWDA that are completed into the SAG for measuring and monitoring diversions and groundwater levels, including, but not limited to Wingate Well Nos. 68, 69 (also known as USE Well No. G-OOl9l), and 340, until or unless these wells are abandoned and closed, in accordance with applicable regulations and conditions on entry. The City will coordinate with the Army prior to accessing any such wells. The City will provide the Army with any and all data collected from these wells if requested by the Army. If the Army elects to measure and monitor diversions and groundwater levels from these wells, it agrees to provide the City with any and all data coLlected on these wells at the request of the City. 19. If the Army suspects or believes that Known Contaminants from FWDA will or have migrated from tile shallow alluvial aquifer and intermediate bedrock aquifer to the SAG prior to the soil and groundwater remediation being complete under RCRA Pennit No. NM6213820974 (NMID No. 2397; EPA Registry ID: 110001141345), the Army will begin water quality monitoring and testing any and all wells it has in the SAG on the FWDA, including, but not limited to Wingate Well Nos. 68, 69 (also known as USE Well No. G-00 191), and 340, as long as those wells remain open, for the Known Contaminants from FWDA, and the Army has right of entry. At its discretion, the Army may also monitor other wells at other depths on FWDA. The Anuy will notify the City if and when it begins any water quality testing for any Known 5 of 9  Contaminants fiom FWDA in any SAG wells on FWDA and provide the City with all related data. 20. If the City suspects or believes that Known Contaminants from FWDA will or have migrated from the shallow alluvial aquifer and intermediate bedrock aquifer to the SAG prior to the soil and groundwater remediation being complete under RCRA Permit No. NM6213$20974 (NMID No. 2397; EPA Registry ID: 110001141345), the City will collect water quality data from groundwater monitoring and production wells outside of the FWDA to assess potential groundwater contaminant migration to the SAG or any other formations, including, but not limited to, OSE Well No. G-894 or G-895 (Rehoboth Wells) and Rosebrough Well No. 2. If the City wishes to conduct its own testing on FWDA, the Army will cooperate with and assist the City in obtaining access for City personnel and its contractors to FWDA for groundwater quality sampling purposes, as long as the Army has right of entry and access to the monitoring sites sought to be accessed by the City and in accordance with applicable regulations and conditions on entry. Upon request, the Army shall provide the City any necessary information to ensure consistency of water quality data collection and testing. The City will notify the Anny if and when it begins any water quality testing for any Known Contaminants from FWDA in any SAG wells on or off FWDA and provide the Army with all related data. 21. The City will continue to conduct water quality tests and ensure all water provided for municipal and domestic purposes from wells pumping under the City’s Application meet the standards of the Safe Drinking Water Act, and any other applicable state, federal, or local law. If the City suspects that shallow groundwater contamination from FWDA might threaten its municipal wells which produce from the SAG, either as a result of the shifting of tectonic plates, diversions from the SAG by other water uses, diversions from the SAG by the City, or for any other reason, the City will enhance its water quality testing to ensure any Known Contaminants from FWDA are not present in the City’s drinking water. 22. Both Parties agree that if either Party believes any of the Known Contaminants from FWDA have begun to migrate such that any remediation efforts being undertaken by the Army increase in difficulty or expense or are otherwise thwarted, or such that either party believes contamination of the SAG is likely, either on or off FWDA, or if any of the Known Contaminants from FWDA are found in the SAG, either on or off FWDA, the Parties will meet and confer on an appropriate action. Such action may include, but is not limited to: enhanced testing, analysis of causation, the treatment of groundwater to applicable standards, notification of other groundwater users that produce from the SAG, the possibility that the City may need to reduce or curtail pumping the Ciniza and/or Hogbacks Well Fields, joint requests for other SAG producers to reduce or curtail pumping, or any other agreed upon action, until appropriate measures can be implemented to halt or mitigate the migration of Known Contaminants from EWDA impacting the Army’s rernediation effort or threatening entry into the SAG. If the City believes that migration of Known Contaminants from FWDA to the SAG is likely or imminent, either on or off FWDA, and if the City believes such migration has been contributed to by the City’s pumping of its G-22 wells, the City agrees to reduce or curtail pumping the Ciniza and/or Hogbacks Well Fields on an emergency basis until the Parties can meet and confer in accordance with the remainder of this paragraph to identify an appropriate and mutually 6 of 9  agreeable action. The City will not be obligated to curtail or cease pumping if there is no other adequate source of potable water for customers dependent on the City’s potable water source and the City can still provide safe drinking water in accordance with all laws and regulations through treatment of the water being produced from the G-22 well or wells at issue. The City agrees that it is the ultimate responsible party to provide safe drinking water to its customers. The Army reserves the right to seek contribution from the City pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 should it believe the City’s actions have rendered the City a potentially responsible party or otherwise liable for damages under the statute. The City reserves the right to assert all defenses and counterclaims it has available to it if the Army seeks a contribution from the City purscLant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. 23. The Army will conduct a one-time baseline water quality test of Well No. G-OOl9l to include the Known Contaminants from FWDA. The City will also conduct a one-time baseline water quality test of one of its wells in the Hogback Well Field to be determined at a later date to include the Known Contaminants from FWDA. The Parties will confer on the method of testing to ensure standardization and the cost will not exceed $10,000 for each Party. Testing shall be completed and the results shared with the other Party no later than 180 days after the signing of this Settlement Agreement. 24. Nothing in this Settlement Agreement alters or revises the Army’s existing liability or responsibility under its RCRA Permit No. NM62 13820974 (NMID No. 2397; EPA Registry ID: 110001141345), or any applicable federal or state law. 25. The Army will withdraw its protest to the City’s Application within 10 days of the execution of this Settlement Agreement. In the same letter, the Army will state that it waives any claims of impairment to any existing wells and water rights as a resuLt of granting the City’s Application. 26. The Parties represent and warrant that they are authorized to execute this Settlement Agreement on behalf of themselves and do so freely and voluntarily. 27. Execution of this Settlement Agreement by all institutional entities signifies that all provisions of this Settlement Agreement have been approved by those entities’ respective governing bodies and that those entities bind themselves to the obligations and benefits of this Settlement Agreement. 28. Where necessary or appropriate to apply state law, this Settlement Agreement shall be governed by the laws of the State of New Mexico. 29. The Parties represent that they have carefully read and reviewed the Settlement Agreement and that they understand it. 30. The Parties acknowledge that this instrument constitutes the entire agreement of this compromise settlement and all of the terms hereof are contractual and not mere recitals. 7 of 9 31. In the event that any provision contained in the Settlement Agreement shall be held void, unenforceable, invalid or illegal by a court of competent jurisdiction, the remaining provisions of this Settlement Agreement shall not be held void, unenforceable, invalid or illegal and all such other provisions shall continue in full force and effect. 32. This Settlement Agreement shall inure to the benefit of and be binding upon the Parties’ respective successors and assigns. 33. This Settlement Agreement may be executed in counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute one and the same instrument. 34. In the event of a breach of the terms of this Settlement Agreement, the Party alleging breach may seek relief in a court of competent jurisdiction, including any remedy provided by law or equity, including claims for damages, specific performance and such other equitable relief as may be appropriate. 35. If the City’s Application is denied by the OSE and such denial becomes final through appeal or failure to appeal, this Settlement Agreement shall be null and void and no Party shall thenceforth have any right or obligation hereunder. 36. In the event of an action to enforce the terms of this Settlement Agreement, each Party shall bear its own costs. For the City of Gallup: Jackie McKinney, Mayor ATTEST: Alfred Abeita II, City Clerk F or the United States Department of Army Its______________________________________ 8 of 9 STATE OF NEW MEXICO ) ) ss. COUNTY OF MCKINLEY ) The foregoing instrument was acknowledged before me this day of May, 2017, by of the City of Gallup. Notary Public My Commission Expires: STATE OF VIRGINIA ) ) ss. COUNTY OF FAIRFAX ) The foregoing instrument was acknowledged before me this day of May, 2017, by for the United States Department of Army. Notary Public My Commission Expires 9 of 9