Decision to amend Niagara agreement postponed

LOS LUNAS — The Los Lunas village council chambers were filled to the brim at last week’s Los Lunas Council meeting where an amended agreement with Niagara Bottling company was considered.

Niagara is seeking to expand its production capabilities and are requesting an increase to how much they are allowed to pump from village wells. Currently, the company is limited to 285 acre-feet per year, almost 93 million gallons per year, but they are now requesting access to 782 AFY, which amounts to more than 254 million gallons per year.

The water Niagara uses is pumped from a well belonging to the village. The well pulls water from an aquifer stretching from Socorro to Santa Fe that serves all of Valencia County and surrounding areas.

Dozens of protesters, many holding “No to Niagara” signs, gathered outside village hall before the meeting. Several attendees, including a few local government officials, also spoke at the meeting in opposition of the proposed amended agreement.

The council first heard from Los Lunas Public Works Director Michael Jaramillo. He said if the proposed amended agreement was approved by the council it would still need to be approved by the New Mexico Office of the State Engineer before it could go into effect.

Jaramillo said he is confident the current water system infrastructure can support the request but, if approved, it would accelerate the need for additional infrastructure to sustain projected growth. He also said it could impact the village’s ability to expand water use for other developments until a larger water rights permit is obtained, which could take three to five years.

Larry Guggino, the village’s attorney, then presented some highlights and important additions to the new proposed contract, notably the addition of heavy annual and summer month penalty fees if the company goes over the allotted water use.

“We were also giving Niagara some preference, just like we gave Meta some preference, if we had water shortages,” said Guggino. “However, if this is approved they’re with everyone else. If we have a water shortage, or if we have an infrastructure problem, where everybody needs to conserve water, it would apply to them pro rata.”

Village Councilor Gino Romero asked Jaramillo if Niagara has been compliant with the water use limitations in the current agreement. Jaramillo said Niagara is exceeding the amount agreed upon in the current contract. Since the company began operations in  Los Lunas in 2017, he said there has only been one or two months where they have not exceeded the allotted amount.

Jaramillo further stated Niagara has paid required surcharges for the amounts they went over, but they are not adhering to the current water right requirement.

Niagara presents its case

Representatives from Niagara then provided a presentation on the request and why it should be granted.

John Krug, Niagara’s director of economic development and government relations, said the request to expand is due to increasing consumer demand within the state.

“The overwhelming majority of residents in Los Lunas and in Valencia County and throughout New Mexico are buying purified bottled water at record rates,” said Krug. “There are about 24,000 consumers in Los Lunas, there’s over two million consumers in New Mexico. They continue to choose purified bottled water for healthy hydration.”

He said Niagara’s direct tax contribution to the village has totaled about $1 million from business, personal property tax and special use taxes.

“Niagara has also remitted over $5 million in utility fees to the village and about another $3 million in electric fees,” said Krug. “With our expansion, the village can expect to see increased revenues in this regard as well.”

Krug said he anticipates an expansion would allow for 10-15 new employees to bring their total employment number to as much as 60. He said employees, which are mainly Valencia County residents, also volunteer regularly within the community and Niagara supports many organizations within the county, such as Los Lunas Schools, Valencia County Business Incubator, Los Lunas fire and police departments and more.

Krug said water stewardship is central to Niagara as, “every product we make begins with water; without it, we’re out of business.”

He said Los Lunas is a very key operational part of the company’s production network and the village has an opportunity to strengthen its position in a growing, stable industry by allowing the expansion.

“By wisely deploying the village’s assets and resources, and by encouraging business growth such as Niagara’s expansion, Los Lunas is in a position to strengthen its position as a leader in the manufacturing sector, and surely secure significant opportunities for future economic growth and more prosperity for its citizens,” Krug said.

One of the questions Councilor Romero asked Krug after the presentation was why Niagara was not respecting the current agreement, referring to the consistent overages.

“It doesn’t seem like you guys cared at all because, except for two months over the last six years, you’ve constantly gone over what you agreed upon,” said Romero.

In response, Krug said it’s not their intent to go over as there is a lot of variability in production. He said they’ve always looked at consumption on an annual basis because in the beverage industry it is very difficult to project on a month-to-month basis.

Councilor Christopher Ortiz also expressed concern about the overages.

“You’re basically stating that you didn’t know how much it is, that it’s hard to keep track of, but yet in this new agreement, you’re saying you’ll keep track of it,” said Ortiz. “So how is it that you can determine now, if the new agreement passes, but you can’t do it now with the current agreement?”

Krug responded that they’re going to do their very best to meet the terms of the new agreement and if they don’t, there’s some “pretty dire” consequences for the company in terms of finance and long-term production.

Public comment

Tom Mraz, a former Valencia County commissioner, emphasized that New Mexico is a desert currently battling a long-term drought so, “this is absolutely the worst place to bottle water.”

Kathy McCord, a member of Valencia Water Watchers, said data in the aquifer study report the council is using to justify the amended agreement is outdated.

“This 2022 report is relying on data that was collected more than 60 years ago,” said McCord. “We urge you to table Niagara’s request until you have a chance to thoroughly review adequate, complete, contemporary and comprehensive engineering and science based information.”

Per the report, “The update is not to include new data collection or analyses.” The document further states, “The tables (e.g., hundreds of well records) are not up to date.”

“Your decision will affect everyone in Valencia County now and for generations to come,” another VWW member said.

Another VWW member noted, “(The report) completely ignores the effects of the climate crisis and how that will affect the future of the aquifer.”

Peralta Mayor Bryan Olguin told the council, “We’re all looking to provide more services for our residents and improve their lives. I do the same, but we own some of those water rights and other towns in the surrounding communities aren’t getting nothing from you guys.”

“Then there’s talk about surcharges,” said Olguin. “If this comes to fruition and this continues, you got to fine them until it knocks them out of business because that’s taking our God-given resources away from all of us here. If you want to look at their future behavior, look at their past behavior.”

Peralta Councilor Leon Otero told his Los Lunas counterparts that the water belongs to the entire valley.

“I want to reiterate that the aquifer is not centralized under (Los Lunas),” Otero said. “It’s the whole valley. You pump it here, but you’re taking it from the whole aquifer.”

Ann McCartney, an attorney at New Mexico Environmental Law Center, told the village council and mayor that the agreement is not a good use of “our precious water.”

“We already borrow from a watershed in the San Juan Chama project to feed our aquifer,” McCartney said. “The cognitive dissonance of this scenario is disturbing to say the least.”

Clint Lente, director of natural resources for the Pueblo of Isleta said, as neighbors, Los Lunas should think about how their decision will affect everyone.

“We are very close neighbors. Any of your economic development I think should be a collaboration with the surrounding communities and should keep them in mind,” Lente said.

“My department has been keeping track of groundwater monitoring and 85 percent of our range wells are already drying up,” he said. “The aquifers are lowering. On behalf of the pueblo, we request the village of Los Lunas postpone any action on this item.

“It’s not in our best interest to exploit every natural resource. I’m a firm believer we don’t have to cut down every tree, we don’t have to level down every hill, we don’t have to use every gallon of water.”

Councilors and mayor vote

After public comment, Councilor Ortiz said he wanted to get true figures from the village’s water rights consultants on how fast the aquifer is depleting.

“Another main topic is it’s not just Los Lunas, so I think it is something we do need to figure out with the surrounding areas as well,” said Ortiz.

Councilor Romero initially made a motion to deny Niagara’s request and Councilor Cruz Munoz seconded the motion. Councilors James Runyun and Chris Ortiz voted in opposition to the motion to deny the request, which left Mayor Charles Griego as the tie-breaker vote.

“Can we within our system accommodate the request?” Mayor Griego asked. “The answer, I think, is yes. I understand there are other issues to be discussed, but the overall approval as to the health of the aquifer is not the province of this body, that is the province of the state engineer. Because of that, I vote no.”

With that, the vote to deny the request failed.

Ortiz then made a motion to table the item until more information on the status of the aquifer is obtained. Romero and Munoz voted no, and Ortiz, Runyon and Griego voted yes.

A date has not been set for when this item would again come before the council.

Proposed amended agreement highlights:

• Annual penalty fees: If Niagara exceeds the annual limit by more than three acre feet, the company will owe the village a $50,000 penalty. If they go over by three to five acre feet they owe a $100,000 penalty. More than 5 acre feet is a $250,000 penalty. Anything more than 10 acre feet is a $500,000 penalty.
• Summer penalty fees: Niagara is allowed to pump 72 acre feet during summer months on average. If the company exceeds this amount by 1 acre foot in a month, the company owes $25,000, more than 1 acre foot in a month is $50,000, more than two is $100,000 and more than five acre feet results in a $250,000 penalty.
• If Niagara exceeds the limit for three years in a row, the contract is automatically terminated.
• Niagara would be required to pay an impact fee of $1,920,000 over the course of six years.
• Niagara will never be able to divert more than 782 AFY of water.