SOW EBID Surface Water Rights Programmatic Appraisal OCT 2024.pdf

SOW EBID Surface Water Rights Programmatic Appraisal, OCT 2024 1

Statement of Work for Appraisal of Surface Water Rights within the Rio Grande Canalization

Project in Southern New Mexico October 30, 2024

I. SUMMARY

Under this Statement of Work (SOW), the Contractor will conduct a Programmatic Appraisal for surface water rights within the Elephant Butte Irrigation District in USIBWC’s Rio Grande Canalization Project in southern New Mexico, in accordance with federal requirements for real property.

II. BACKGROUND INFORMATION

In the 1940’s, the United States Section, International Boundary and Water Commission (USIBWC) constructed the Rio Grande Canalization Project (RGCP) to facilitate compliance with equitable allocation of water between the U.S. and Mexico under the U.S.-Mexico Convention of 1906 (Act of June 4, 1936, 49 Stat. 1463). The RGCP spans a 105-mile reach of the Rio Grande from Percha Diversion Dam, Sierra County, New Mexico to American Dam in El Paso, El Paso County, Texas. On June 4, 2009, the USIBWC issued the Record of Decision for the River Management Alternatives for the Rio Grande Canalization Project (ROD). The ROD committed the agency to implement riparian habitat restoration and to develop an Environmental Water Transaction Program (EWTP) to provide water rights for restoration. The purpose of the EWTP is to acquire or lease surface water rights from willing sellers to support riparian habitat restoration sites in accordance with USIBWC's 2009 ROD.

From 2011 to 2014, under an Interagency Agreement with the U.S. Fish and Wildlife Service, Albuquerque Area Office, who in turn worked with the National Fish and Wildlife Foundation and Audubon New Mexico, the USIBWC developed a framework to implement the EWTP to acquire or lease water rights in the project area. The USIBWC subcontractors completed a Programmatic Appraisal of surface water rights within the Elephant Butte Irrigation District (EBID) in August 2014. In 2021, the USIBWC updated that 2014 Programmatic Appraisal. This SOW intends to have the Contractor update the 2021 appraisal to assist USIBWC in future water rights acquisition.

The subject property is a fee simple interest in either an EBID surface-only water right or a combined EBID surface with a supplemental groundwater right subject only to the laws of the state of New Mexico, federal reclamation law and the Rio Grande Compact. There may be more than one market value tier or value depending on the quantity of water rights to be acquired/sold, the priority date, the purpose of use, or the amount of water. The use of one or more market tiers should be market driven.

The appraisals will comply with the terms of this scope of work and the Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP), the Appraisal Institute’s

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Standards of Professional Practice, and the 2016 Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA, a.k.a. the Yellow Book).

III. DESCRIPTION OF WORK / SPECIFICATIONS

Questions and clarifications regarding this scope of work shall be immediately directed through the Contracting Officer.

III.A Task 1 – Project Administration The Contractor shall:

1. Provide monthly progress reports, which should include description of work performed, pending issues or concerns, work to be performed during the next two-month period, and associated detailed financial progress reports with the amount billed by task and percent task complete.

2. Conduct a teleconference kick-off meeting and provide meeting notes for kickoff meeting.

3. Ensure appraiser meets qualifications.

4. Submit deliverables as specified in the Tasks.

5. Provide overall project management and work coordination. Duties include project tracking, schedule oversight and contract administration. The Contractor shall maintain in close coordination and communication with USIBWC COR throughout the period of performance.

III.B Task 2 – Programmatic Appraisal The Contractor shall conduct a Programmatic Appraisal of unidentified, unspecific surface-only water rights located within the Elephant Butte Irrigation District (EBID) within Doña Ana or Sierra County, New Mexico, as described in Attachment 1.

The appraiser must hold a valid State Certificate as a Certified General Appraiser for the jurisdiction in which the subject property is located and be in good standing with the licensing authority where the credential was issued. The appraiser must also be familiar with the USPAP and the UASFLA. Finally, the appraiser must have experience appraising water rights or water righted lands within New Mexico, preferably southern New Mexico within the counties of Doña Ana and Sierra.

III.B Task 3 – Work with Review Appraiser The Government will conduct an appraisal review pursuant to UASFLA Section 3. The Government may hire a separate contractor for the appraisal review. The Contractor under this Contract shall work with the appointed review appraiser as necessary and shall address all deficiencies, if any, brought up by the review appraiser. The review appraisal is anticipated to be completed within 4 weeks of receipt of the appraisal.

III.D Performance Period

1. The period of performance for this project will be from the Notice to Proceed (NTP) through 220 days. The main work is conducted within the first 90 days.

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2. Any project or schedule delays or unforeseen issues shall be addressed immediately by the Contractor.

III.E Deliverables and Deliverable Schedule Table 1 lists the deliverables and their due dates. All draft and final deliverables shall be submitted in electronic format (Word and pdf). Hardcopies are noted in Table 1.

Table 1. Deliverables and Targeted Schedule Tasks Deliverable Due Date Task 1 Project Administration

Progress reports with discussion of obstacles encountered and recommended solutions.

Monthly

Kick off tele Meeting Within 30 calendar days of NTP

Kick off meeting notes 14 calendar days after meeting

Admin record: CD of administrative record including electronic final appraisal; 2 hardcopies final appraisal

220 days

Task 2 Programmatic Appraisal

Draft (electronic submittal) 60 days Final (electronic submittal) 90 days

Task 3 Review Appraisal Final appraisal addressing Review Appraiser comments and/or deficiencies

220 days

IV. TASK ORDER LOGISTICS

IV.A Quality Assurance The Contractor performance and deliverables shall be subject to review by USIBWC technical staff and management to ensure adequacy, accuracy, and completeness. If project performance and deliverables do not meet the USIBWC acceptance criteria, the USIBWC reserves the right to issue corrective action to remedy the deficiencies. Corrective action may include withholding of payment and denial of schedule modifications until project deliverables are met. The USIBWC acceptance criteria may include: timeliness of scheduled deliverables; degree of technical accuracy & coverage of subject; compliance with legal requirements and industry standards; efficacy of design; legibility. In limited circumstances, the USIBWC may request that advance copies of specific sections of deliverables be provided for review prior to completion of the full deliverable.

USIBWC reserves the right to request multiple revisions of drafts until accepted. USIBWC may consult with stakeholders and/or other federal agencies for input prior to acceptance of deliverables. USIBWC reserves the right to request additional review time.

IV.B Changes

Changes to scope requirements shall be provided in writing to the CO for approval.

IV.C Government Point-of-Contact Information

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Contracting Officer Seone Jones

USIBWC

4191 N. Mesa, El Paso, Texas, 79902

Phone

(915) 832-4140

Seone.Jones@ibwc.gov

COR

Elizabeth Verdecchia, Natural Resources Specialist

Phone

(915) 832-4701

Elizabeth.Verdecchia@ibwc.gov

Technical Reviewer John Claudio, Realty Officer

325 Golf Course Road Mercedes, TX 78570

Phone

(956) 844-9296

John.Claudio@ibwc.gov

III.D Government Furnished Information and Property The Contractor shall furnish all labor, material, supplies, equipment, and personnel, unless otherwise noted.

IV.E Data and Information Management

All photos, data, reports, and information collected and developed under this contract including intellectual property shall become the sole property of the USIBWC.

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ATTACHMENT 1

DETAILS FOR APPRAISAL

1. Subject Identification Identification: The project name is the Rio Grande Canalization Project Environmental Water

Transaction Program. The purpose of the program is to acquire water right from willing sellers to support riparian restoration on up to 30 restoration sites totaling about 500 acres.

The unidentified, unspecific surface-only water rights are located within the Elephant Butte Irrigation District (EBID) within Dona Aña or Sierra County, New Mexico. There may be more than one market value tier or value depending on the amount of water rights to be acquired/sold. The use of one or more market tiers should be market driven. The property type is water rights. The proposed client agency action is for management decision purposes concerning proposed acquisitions of EBID surface-only water rights.

Client: U.S. Section of the International Boundary and Water Commission (USIBWC), Environmental Management Division (Engineering Department) and Boundary and Realty Office

Intended Users: USIBWC Intended Use: For use by the USIBWC for management decisions concerning proposed acquisitions of EBID surface-only water rights from current owners. The appraisal report is not intended for any other use.

Property Description: The subject property consists of generic or non-specific EBID surface-only water rights within the Rio Grande Project as managed by the EBID. Water rights relevant to the assignment are generally located within Dona Aña or Sierra County, New Mexico and are predominantly used for irrigation of agricultural lands in the area. The Farm Delivery Rate (FDR) for acreage irrigated with surface water only shall not exceed 3.024 acre-feet per acre per year (afay) except when the full annual allotment exceeds 3.024 afay.

EBID sets the annual allotment before commencement of the irrigation season. The annual allotment is variable depending on the available supply in the Elephant Butte Reservoir.

Legal Description: The legal characteristics, proof of ownership, etc. of water rights are identified and established through the New Mexico Office of the State Engineer (OSE) and the Elephant Butte Irrigation District.

Property Interest: The property interest to be appraised is: Fee Simple, subject only to the laws of the state of New Mexico and federal Reclamation and IBWC laws and the oversight and administration of EBID.

Any information or observations that are found to be contrary to the above described property rights must immediately be brought to the client’s attention as a request for possible amended instructions.

Larger Parcel: Every appraisal that conforms to UASFLA must address the larger parcel(s).

However, in this assignment the larger parcel is not applicable as the appraisal problem is to opine a current market value for a generic/non-specific water right acre within the Elephant Butte Irrigation District of the Rio Grande Project. The total acreage of water rights acquired is unknown. All acquisition of water rights will be on a willing seller basis.

Ownership: Various—there are numerous individual owners of Elephant Butte Irrigation District surface-only water rights. Potential willing sellers have not been identified.

Provided Subject Property Information: The following documents and reports will be provided

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• General location map

• 2013 Waiver Valuation

• 2014 Programmatic Appraisal and corresponding SOW and Review Appraisal

• 2021 Programmatic Appraisal and corresponding SOW and Review Appraisal

• other identified appraisals

• Final Judgment, entered August 22, 2011, in Lower Rio Grande Adjudication, SS-97-101

(CIR, FDR) ("Final Irrigation Order"). This Final Judgment determines the so-called consumptive irrigation requirement ("CIR") and the farm deliver requirement ("FDR") for all irrigated crops within the Lower Rio Grande adjudication.

B. APPRAISAL REQUIREMENTS AND INSTRUCTIONS

Appraisal Standards: The appraisal report must be consistent with standards established by the

USPAP and the UASFLA. No other supplemental standards are applicable.

Market Value: “The amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither compelled to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal.” [UASFLA Section 4.2.1]

Date of Value: The date of value is the date of the last property inspection, which must be no later than 30 calendar days prior to the submission of the completed appraisal report, unless other arrangements are approved in writing in advance by the Client.

Extraordinary Assumptions (EA’s): The water right acre opinion(s) of market value are predicated on the extraordinary assumptions that: (a) the water rights are in good standing and (b) the EBID will approve any changes in place of EBID surface-only water rights sold/purchased. The use of these extraordinary assumptions may have affected the assignment results. If the appraiser determines that other extraordinary assumptions are necessary for the completion of the assignment, the appraiser must contact the Client for prior written approval.

Hypothetical Conditions (HC’s): No hypothetical conditions have been identified which are necessary for the completion of this assignment. If the appraiser determines that hypothetical conditions are necessary, the appraiser must contact the Client and obtain prior written approval to employ any such conditions.

Jurisdictional Exceptions (JE’s): USPAP requires that a reasonable exposure time must be reported in all assignments in which an opinion of reasonable exposure time must be developed. Contrary to USPAP, the UASFLA definition of market value does not call for the estimate of value to be linked to a specific exposure time estimate. When conducting appraisals for federal land acquisition purposes under the UASFLA, it will be appropriate to invoke USPAP’s Jurisdictional Exception Rule to adhere to UASFLA. If the appraiser perceives that USPAP’s Jurisdictional Exception Rule should be invoked to meet additional standards in UASFLA, the Appraiser must contact the Client to obtain prior written approval.

Location of EA’s, HC’s and JE’s in Report: All Extraordinary Assumptions, Hypothetical Conditions, and Jurisdictional Exceptions, when authorized by Client, must be clearly identified, labeled and communicated wherever the final value conclusion is stated. At a

SOW EBID Surface Water Rights Programmatic Appraisal, OCT 2024 7 minimum, this will include the letter of transmittal and the summary of salient facts. In addition, these same items must be communicated in conjunction with any General Assumptions and Limiting Conditions within the body of the report.

Property Inspection: Since the assignment involves water rights, a property inspection of the subject property and the comparable market properties used in the analysis may not be applicable.

Pre-Work Meeting: The appraiser will be required to attend a pre-appraisal teleconference/virtual meeting with the Client, and/or other agency representative(s). The date and time of the meeting will be coordinated by the Contractor in coordination with the

COR.

Controversies/Issues: The water rights may be impacted by the ongoing Texas vs. New Mexico Supreme Court case regarding water rights. Appraiser may consider the current litigation climate. Should additional controversies or issues be identified by the appraiser during the course of the assignment, the Client must be immediately notified.

Legal Instructions: None.

Special Appraisal Instructions:

USIBWC is the appraiser’s client. Even though communication is encouraged with the property owner, no appraisal instructions or modifications thereof may be received from any party except USIBWC. No assignment results or appraisal reports may be communicated to any party except USIBWC until authorized to do so in writing by USIBWC. Appraiser should evaluate whether there are any damages, cost to cure, or other appropriate method for severance of water right from property.

General Appraisal Requirements & Instructions:

1. The appraiser must hold a valid State Certificate as a Certified General Appraiser for the jurisdiction in which the subject property is located and be in good standing with the licensing authority where the credential was issued. The appraiser must also be familiar with the USPAP and the UASFLA. Finally, the appraiser must have experience appraising water rights or water righted lands within New Mexico, preferably southern New Mexico within the counties of Doña Ana and Sierra.

2. The Statement of Work must be included in the Addenda to the appraisal report.

3. The appraiser’s scope of work must result in credible assignment results for the intended use.

4. The appraisal standards call for consistency with the UASFLA, so the presentation format of the report must meet the basic requirements of sequence and content in the UASFLA.

5. The appraisal shall follow the recommend format in the UASFLA Appendices.

6. The appraiser must appraise the subject in its “As Is” condition by all valuation approaches that are appropriate.

7. The appraiser must be knowledgeable in how to determine the “highest and best use value.”

The appraiser’s conclusion of highest and best use must be an economic use, per USPAP.

8. Documentation of comparable sales and other market data utilized in the appraisal must comply with reporting requirements of UASFLA and the Uniform Relocation Assistance & Real Property Acquisition Policies Act of 1970 including identification of which sales are most comparable to the property interest under appraisal and have been relied upon in estimating the parcel’s value. A comparative analysis between each of the selected comparable sales and the subject property shall be included.

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9. When appraisals for federal land acquisitions are conducted, “sales to the government should not be used as comparable sales unless there is such a paucity of private market data as to make a reliable estimate of market value impossible without the use of government purchases,” UASFLA 2016 at p. 61. If sales to governmental entities are included in the appraisal report, they are subject to extraordinary verification and treatment. They must be documented, in accordance with the guidelines in the UASFLA Section 1.5.2.4. Each of the items in Section 1.5.2.4 must be specifically addressed when communicating the confirmation of any governmental sales.

10. The preferred method of adjusting comparable sales is through supported Quantitative Adjustments (percentage, $/acre, etc.) with support; Qualitative Adjustments (similar, inferior, or superior) are to be used only when the market variables cannot be quantified and support must be more extensive and described in detail in the discussion. All adjustments must be supported by clear, appropriate, and credible analysis based on documented market research. Mere references to undisclosed trends or reliance on the Appraiser’s opinion or judgment without market support is an unacceptable practice. Market support includes discussions with buyers/sellers, potential investors, brokers, etc. The Appraiser must also recognize that variances in sale prices may be caused by multiple factors and should not over adjust a comparable by double-counting overlapping items.

11. The appraisal report will be reviewed for consistency with the terms of this Statement of Work, UASFLA, and USPAP Standard 1—Real Property Appraisal, Development; and Standard 2—Real Property Appraisal, Reporting. Findings of Inadequacy, in any, will require clarification and/or correction to the report.

12. When the appraiser has performed any services regarding the subject property within the three prior years, he or she must appropriately disclose this information following the direction of the USPAP Ethics Rule, Conduct Section. The disclosure must be made within the proposal and also in the combined report. The appraiser must also disclose in the certification either the presence or absence of any current or prospective interest regarding the subject or the parties involved.

13. The appraisal report and all information furnished to the appraiser are USIBWC internal documents and are to be considered confidential by the appraiser. All requests for information concerning the appraisal must be referred to USIBWC. The general public is not an intended user of the appraisal report; however, the appraiser must also be aware that the Freedom of Information Act (FOIA) and Agency policy may result in the release of all or part of the appraisal report to others.

14. Where UASFLA and USPAP conflict, the contractor shall use UASFLA.