City Attorney Gary Kidd.

Coming up with a budget for an entire city is a demanding job for any small government. But Prescott has special challenges in the fact that they’ve taken on the task of trying to pump water from the Big Chino Water Ranch, which is outside their Active Management Area (AMA). It took a special act of the legislature in 1991 for the city to be able to do this, and still they are faced with legal challenges to the project. On May 22nd the city will meet off-site to start to bring together the budget, something city staffers have been working on since January. The current city budget is 444 pages long, and water related legal issues are one of the "big ticket" items.Why? Simply put, they are planning ahead.

The legal challenges to the city's goal of piping in that water from outside their AMA are numerous. Approximately four years ago, the Center for Biological Diversity filed a notice of intent to sue the city if they broke ground on the pipeline. And last February the Salt River Project (SRP) wrote a 10-page letter to the city of Prescott basically stating their position that the 1991 exception to Arizona’s AMA water laws was unconstitutional. This means the legal issues concerning water in general and the Big Chino Water Ranch in particular have the potential to be large and last for several years.

City Attorney Gary Kidd says the city decided to put the law firm of Fennemore Craig on retainer when the Center for Biological Diversity’s intent to sue was made known, and the relationship continues to this day. According to Kidd, a “retainer” for a city is different from what it would be for individuals. He says that generally law firms do not ask cities for cash up front, which is the case with individuals. Kidd says that usually the law firm knows, “the city isn’t going anyplace.” So they don’t have to use their retainer that way. He says that sometimes a firm will ask the city for a fee of approximately $5,000 up front, but usually not.

For the City of Prescott, two budget items are in place for legal issues relating to water. One, under Legal/Water on page 217 of the City of Prescott budget is, according to City of Prescott Finance Director Mark Woodfill, mostly for the Big Chino Water Ranch issues, although he says other water litigations could be pulled out of that budget item. That amount is $375,000. The other, on page 200 is under a separate Legal/Water Fund and according to Woodfill that could have some Chino Ranch issues in it but also includes Gila River and other water issues. That amount is $212,438. Total annual amount? $587,438 in available funds for legal issues relating to water.

The city pulls out the funds as they are billed for the items, and so far they are well under budget. For example the law firm of Finnemore Craig has billed the city for $24,162.95 so far this year. According to Kidd, Prescott is also working on several legal easements right now and they are using Mike Pierce at McGuire and Pierce for a lot of water law issues.

Attorney Norman James, who works for the firm Fennemore Craig, charges over $400 per hour, and Woodfill says his rate varies depending on what the details of the cases are. For example, James was recently hired to write a letter to the U.S. Fish and Wildlife Service’s Phoenix branch because of a presentation the group made to the Upper Verde River Watershed Protection Coalition. James, acting on behalf of the cities of Prescott and Prescott Valley, took issue with that presentation. The final bill for the letter, which was hand-delivered, is not in yet. But the reality is, attorneys who specialize in specific fields of law are simply expensive.

Kidd wasn’t sure how the legal billing is accounted for in the total costs for the Water Ranch. He believes it is in there, and if it isn’t, is should be “...part of the overcall cost. Definitely.”

When a legal issue comes up that includes both Prescott and Prescott Valley Kidd says the bill is split 55/45, with Prescott paying the 55%. Kidd says that each city has different water issues, and it just depends on what it is as to whether the bill is split or paid by one city or the other.

So, why did the City of Prescott choose not to use local attorneys to write the letter to U. S. Fish and Wildlife? For one basic reason. Kidd says, “I always give this example. It’s like a general practitioner versus a brain surgeon. You wouldn’t go to your GP to do brain surgery.” He feels that by hiring an outside expert like James, he is working in the city’s best interest. He says, “Water law is highly specialized. There are probably only 10 to 12 recognized experts in Arizona.” Though he says that Prescott has many good attorneys in town who are practicing in a lot of different areas of law, “James is a nationally known expert in the areas of the Endangered Species Act and federal laws. It’s a specialty area of the law.”

As for trying to work with legal issues specifically having to do with water, using in-house attorneys at the City of Prescott, Kidd doesn’t think it’s something they should do. He said, “We practice in a pretty broad spectrum, and try to do a lot of things in-house.” But no one on the city staff is trained in water law, and Kidd feels that to be good at it, it should be at least 95% of your practice. James also has federal practice experience and Kidd says, “You really need to know the area.”

Kidd says that budgeting the item is very hard to do. You have to figure, “How much might it cost if everything goes bad? And you try to be conservative, and then hope you don’t have to spend the money.”

Kidd also feels that by hiring an expert attorney the city will have someone there “at certain points in time when we want someone to clear up things they think are inaccurate. And where things are inaccurate we want to be made factual. “

When asked if he felt having a well-known and respected attorney like James could be considered as an attempt to intimidate the environmental agencies who are interested in the Verde River, Kidd said,  “The Center for Biological Diversity is not afraid of litigation. It [hiring James] means we’re going to deal with real legal issues. Maybe we can avoid someone filing a lawsuit because the information is out there. Sometimes it could prevent litigation. If you have a valid point, it doesn’t matter who the other side is. We want to make sure we’re following the legal process. It’s important to guide the project. It may save the city money with that knowledge. We have to follow the law. We need someone to guide us and prevent us from having an issue that would be a federal issue.”

Kidd says that James won’t be brought to Prescott on a regular basis because of the cost. But he thought having James speak to the Upper Verde River Protection Coalition would provide information not only to the public but also to five different local government agencies at the same time. We want to say, “These are the facts. This is what the law is” and not make mistakes.” He says the city will periodically use James to help them make informed decisions. “It’s a judgment call. We manage it as best we can.” Kidd feels they are judicious with the use of outside attorney’s time. He says, “We have a lot of issues and a lot on concerns. We’ve tried to do as much as we can publicly and be transparent. The more information we can provide, the better the project and more likely we will succeed.”

Mark Woodfill says the fiscal year for the city is July 1^st through June 30^th, and he believes the amounts set aside for legal issues in the water arena will remain approximately the same, though it’s not yet finalized.

Link: Arizona Fish and Wildlife Reply to Mr. James

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