Dos Republicas Coal Partnership requests return of Rio Grande River Water Rights after City Agreement Lapses
By: Jose G. Landa, Copyright 2014, Eagle Pass Business Journal, Inc.
The City of Eagle Pass Water Works System Board of Trustees held their regular monthly meeting on Wednesday, May, 14, 2014, at the City of Eagle Pass Water Works System Office located on 2107 North Veterans Boulevard in Eagle Pass, Texas,
The highlight of the meeting was Agenda Item No. 4 regarding the “Discussion and possible action on the Water Rights Transfer Agreement and Assignment based on the 2002 Water Supply Agreement between the City of Eagle Pass and Dos Republicas [Coal Partnership].”
In 2002, the City of Eagle Pass Water Works System under the leadership of former General Manager Roberto Gonzalez entered into an agreement with Dos Republicas Coal Partnership (DRCP) to supply the coal mine with City water for a period of up to 10 years in exchange for DRCP transferring 176 Acres feet of Rio Grande River water rights it had purchased on the market to the City of Eagle Pass Water Works System. The agreement between the City of Eagle Pass Water Works System and DRCP lapsed in 2012. DRCP is now requesting the City of Eagle Pass Water Works System to return its 176 Acres feet of Rio Grande River water rights.
Although the agreement lapsed, the issue remains what are the terms, obligations, and rights between the City of Eagle Pass Water Works System and DRCP.
During the Citizens Communication portion of the public meeting, Rudy Rodriguez spoke on behalf of Dos Republicas Coal Partnership and stated: “The Texas Railroad Commission has awarded the permit, just to state the fact. It’s gone before a contested case hearing which was recommended by the hearings examiner to be awarded the permit. It’s gone through an appeal and there is a permit in hand. As far as the water rights are concerned, it’s not a matter of whether there for or against this mine. It’s more of a contractual matter of the water rights that were held by Dos Republicas that were transferred to the Eagle Pass Water Works, which our attorneys have discussed with EPPWW Legal Counsel. It’s just a matter of what’s contractually obligated.”
Upon opening of Agena Item No. 4, EPWWS General Manager Jorge Barrera gave the Board of Trustees a brief synopsis of the matter, stating: “About 12 years ago, there was a water supply agreement. There were certain things that needed to be done by Dos Republicas for the EPWWS to serve Dos Republicas water. Mr. Gonzalez is here because back then he was the EPWWS General Manager and was the one who accepted the agreement. Dos Republicas would facilitate their water rights to the Eagle Pass Water Works. If EPWW needed those water rights, they could use them. We never had to use those water rights. There was never any use for them but the contract always said that they would go back to Dos Republicas by the end of the 10 year contract that was in place. All they are asking now is for the water rights to go back to them. Those water rights do belong to them, they do not belong to the water works system.”
Barrera further stated that DRCP wishes are that the water rights be transferred or returned back to them as the owners of these water rights in question.
Barrera then turned the floor over to EPWWS Consultant and former General Manager Roberto Gonzalez to provide the Board of Trustees a more detailed explanation of the situation because he has a better recollection of the agreement and its terms since he was the EPWWS General Manager at that time in 2002.
EPWWS Consultant Roberto Gonzalez told the Board of Trustees: “ What it boils down to is when Dos Republicas started at this particular point the Water System did not have the water plant and distribution system that it does now. It also did not have the elevated tanks on Thompson Road. We did not have the capacity to serve Dos Republicas. When they came before the Board that they were going to need water for offices, showers and things of this nature, we did not have the water pressure because we did not have an elevated tower on Thompson Road. So, we said we do not have the volume and we do not have the pressure. And on top of that we were limited with water rights. When we did the $103 million dollar water project, we bought $5 million dollars of water rights from Presidio. Before we bought those water rights, Dos Republicas said we have water rights. They had the water rights but we did not have the volume and pressure. We can serve you or start discussion serving you when we build the necessary lines and tanks to adequately have the volume and pressure. They then said meanwhile we have these water rights, what we can do is assign them to Water Works at no charge and you all use them. But as you all know, Dos Republicas stopped its activities for close to 15 years. Meanwhile, Water Works had the right to use those water rights if needed. In that period of time, Water Works bought $5 million dollars of Run of the River water rights. What that means is those type of rights are not guaranteed. So what you do with those rights they are used on the first day of the calendar year. We bought 3,500 acre feet. After you use those 3.500 acre feet, you start using your regular municipal acre feet of water. We have always had enough and we have always kept buying water rights as a municipality. We never had to use these particular acres feet of water. In the contract, these acres feet of water do belong to Dos Republicas. The contract stipulates that at the end of their contract or if they ever decided to abandon the project or to end the project that Eagle Pass Water Works System could make an offer to buy those particular water rights. At this particular point they are saying that they intend to use those water rights. And that is what their petition is at this point.”
Gonzalez further stated that DRCP was indeed asking for their water rights to be reverted back to them and that they do in fact belong to Dos Republicas.
Board Trustee Larry Martin then asked what would be the consequences if EPWWS refused to hand over the water rights.
City of Eagle Pass City Attorney Heriberto Morales of Langley & Banack then answered that the city could possibly face litigation against them.
EPWW General Manager Jorge Barrera then intervened and explained to the Board of Trustees that the amount in question was 176 acres feet of water.
“During the Railroad Commission hearing, we took the position at that time when we were arguing that Dos Republicas should not be provided with this permit, our argument was that they did not have the adequate water supply in place that was required for the permit to be issued. They (Dos Republicas ) kept pointing to this contract as the basis to show that they did have the necessary water supply. But the contract had an initial term of 10 years,” said City Attorney Heriberto Morales.
City Attorney Morales then stated that as legal counsel for the City of Eagle Pass at the contested Texas Rairlroad Commission hearing, he had Mayor Ramsey English Cantu and EPWW General Manager Jorge Barrera testify that under that contract Dos Republicas failed to perform certain requirements that were necessary in order for them to comply and for them to be able to extend the contract past the 10 year initial term. Morales added that DRCP had failed to adequately perform the necessary infrastructure that was necessary for the Eagle Pass Water Works System to try to even extend the initial term of the 10 year contract.
“From 2002 to 2012, the City of Eagle Pass was taking the position that the contract was only going to be good through 2012,” said City Attorney Morales.
Morales then explained that a few months before the June 2012 date of the expiration of the initial contract, testimony during the Texas Railroad Commission hearing noted that Dos Republicas had failed to comply with the requisites of the initial contract regarding the infrastructure setup and any of the other necessary work in order for the contract to be extended beyond the initial contract period.
Morales advised the Board of Trustees that “The position is since they hadn’t [complied], the contract had lapsed. Therefore, all they are asking for and they are aware and all they are asking is to have their water rights back.”
Morales added that they were never the City’s water rights and that they were just assigned to the City temporarily and that Dos Republicas just wants their water rights back.
“There are 2 documents, the assignment of water rights and the water rights transfer agreement. Both counsels took a look at and we made changes to protect Eagle Pass Water Works. My recommendation is that the Board consider and possibly approve these documents where we are transferring the water rights back to Dos Republicas,” said Morales.
Eagle Pass Mayor Ramsey English Cantu then stated that he had some legal questions that could possibly be answered by legal counsel in Executive Session in regards to the matter at issue on the Agenda and requested the Board go into Executive Session to consult with legal counsel.
The EPWWS Board of Trustees then moved and approved to go into Executive Session to consult with legal counsel under the Texas Open Meetings Act, Section 551.071 et al.
Upon return from Executive Session into Open Session, the EPPWS Board of Trustees motioned and unanimously approved tabling Agenda Item No. 4 regarding the DRCP water rights and authorized legal counsel Heriberto Morales and Administration to enter into discussions and negotiations with DRCP regarding the possibility of purchasing their 176 Acres feet of Rio Grande River water rights and report back to the Board at their next meeting.
