Needmore Water, LLC Update

House Bill 3405, which extended the jurisdiction of the Barton Springs Edwards Aquifer Conservation District (BSEACD) over previously unregulated areas of the Trinity Aquifer in Hays County (effective on June 19, 2015), created a process where landowners operating a well prior to passage of the law, could apply to BSEACD for a production permit for the “maximum production capacity” of the well. On September 19, 2015, Needmore applied to BSEACD for a Temporary Permit and a Regular Permit to produce 289,080,000 gallons of groundwater a year from the Trinity Aquifer. Click here to read the permit applications.

Needmore's request for 289,080,000 gallons of water a year is excessive. It would cover the 5,000 acre ranch in about 2 inches of water. It is enough water for over 39,000 head of cattle at 20 gallons per day per head. This magnitude of withdrawal is equivalent to 792,000 gallons a day, which would provide for 5,280 households assuming a daily average household usage of 150 gallons a day.

The aquifer test conducted by Needmore's hydrogeologist, Wet Rock Groundwater Services (the same hydrogeologist that works for Electro Purification) resulted in fourteen feet of drawdown from a monitoring well 1.95 miles from the well on Needmore Ranch. BSEACD's own modeling predicts that within seven years, pumping from the well on Needmore Ranch will cause 140 feet of drawdown in the Middle Trinity Aquifer as far as two miles from Well D. As with Electro Purification, BSEACD determined that pumping at this rate will cause unreasonable impacts to existing wells. Yet, rather than reducing or denying the permit, BSEACD staff recommended that the Board of Directors issue the permit for the full amount with special conditions designed to avoid impacts.

On December 19, 2016, TESPA submitted a contested case request to BSEACD protesting Needmore's proposed permit and requested that the case be referred to the State Office of Administrative Hearings (SOAH). BSEACD referred the case to SOAH.

Last Spring (2018), 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 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 Needmore and the GM of BSEACD have sent stipulated 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. 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.

The reason the District wanted a recommendation from the ALJ on whether or not to issue the permit, is that it provides the Board with more legal cover, because they can only depart from the ALJ’s recommendation if she has misinterpreted a law or did not consider a relevant piece of factual evidence.

After months of deliberation, the ALJ finally issued a decision in April 2019 agreeing with TESPA that SOAH does not have jurisdiction to issue a proposal for decision on whether or not the Board should issue Needmore a permit.

A final hearing before the BSEACD Board of Directors has been scheduled for July 29th at 4:00 PM at Buda City Hall. The Board will have no administrative record upon which to base its decision on whether to grant or deny Needmore’s permit. TESPA will make an argument that the Board should deny the permit because Needmore was never eligible to apply for a temporary permit under HB 3405. The Board will hear public comments at the outset of the meeting.