Needmore Water LLC Contested Case Update

On Thursday, October 11th the BSEACD Board of Directors voted unanimously to remand the Needmore Water contested case back to SOAH, requesting that SOAH make a recommendation on whether the Board should grant or deny the permit. For background on the Needmore permit, please click here. This is a complicated administrative matter.

After TESPA contested the Needmore permit, we decided to limit the issues we were contesting to whether Needmore was eligible to apply for a permit under the House Bill 3405 process. We did this because we felt we had a stronger case related to eligibility as House Bill 3405 severely limited BSEACD's ability to reduce or deny a permit. Also, Needmore and the GM of BSEACD reached a settlement agreement together on the merits of the permit application. Last March, all parties (the BSEACD General Manager, Needmore, and TESPA) filed Motions for Summary Disposition arguing that the case should be disposed on various legal arguments. TESPA argued that the ALJ should recommend that the Board deny Needmore's permit because Needmore was not eligible to apply for a temporary permit under the HB 3405 process and eligibility was something BSEACD considered when they evaluated whether to convert Needmore's permit into a regular permit. Both the General Manager of BSEACD and Needmore argued that TESPA was prohibited from making these arguments because they were related to the temporary permit process (not the regular permit) and House Bill 3405 did not allow hearings on the temporary permit. TESPA argued that the GM considered eligibility when it recommended that the Board convert the temporary permit into a regular permit and that we should be entitled to challenge these issues now.

The Administrative Law Judge granted Needmore and the GM's motions. Click here to read the proposal for decision. She stated that because TESPA limited the issues in the case to issues that were related to the temporary permit (and HB 3405 prohibited hearings on the temporary permit) and because Needmore and the GM entered into a settlement agreement, there were no longer any contested issues. Thus, SOAH no longer had jurisdiction and she remanded the case back to the Board for a Final hearing.

Subsequently, both Needmore and the GM asked the ALJ to make a recommendation that the Board issue the permit, but the ALJ declined, stating that no evidence had been offered on the merits of the permit application as the subject of the hearing before her was limited to eligibly. She said that there was no legal impediment for the Board to issue a permit. However, at the Board meeting on October 11th, the attorney who represents the Board of Directors, recommended to the Board of directors that they remand the case back to SOAH and ask the SOAH ALJ to make a recommendation on permit issuance. To do this, the ALJ must have evidence before her, and so the thought is that Needmore and the GM of BSEACD will stipulate to facts related to the merits of the permit. The ALJ will then use these stipulations to issue a recommendation on permit issuance, which will likely be a recommendation to the Board to issue the permit. Both Needmore's attorney and the GM's attorney supported this idea.

TESPA, however, does not support this plan and we argued to the Board that we did not think it was necessary for them to remand the case back to SOAH. The SOAH ALJ already determined she no longer had jurisdiction. It is perfectly legal for the Board to consider public comments and the GM's recommendation related to the Needmore permit and then decide whether or not to issue the permit. Sending the case back to the ALJ for what is essentially an advisory opinion is not necessary nor is it really the purpose of SOAH--which is to make recommendations based on contested cases and substantial evidence. It provides the Board with more legal cover, as they can only depart from the ALJ's recommendation under specific circumstances, but in TESPA's opinion, it isn't in the public's best interest.

The Board voted to remand the case back to SOAH. We are awaiting a response from SOAH. The Board also voted to postpone the final hearing until they receive the ALJ's recommendation on permit issuance.

TESPA submitted a brief to the SOAH ALJ arguing why we disagree with the Board's decision to remand the case. You can read that here. Needmore filed briefs in support of the Board's decision (available here) and both the General Manager of BSEACD and Needmore submitted stipulations to the ALJ to use as evidence to make a recommendation on permit issuance. Click here to read. We are currently waiting for a decision from the ALJ.