More On Nestle’s Chaffee County Water Extraction

Chaffee County’s fifth public meeting over Nestle’s water extraction project ran from 1pm to 11pm, and while Nestle imported some seriously expensive legal talent, the news for the world’s largest food & beverage multinational isn’t all that good.

While Nestle desperately tries to put the wheels back on their Chaffee County extraction project (they seemed to fly off a couple weeks ago when independent consultants started shooting factual holes in Nestle’s proposals), the comment count from residents – and the number of documents submitted – temporarily overwhelmed the county’s computers.

The Salida Citizen’s Lee Hart wrote a comprehensive article detailing the issues facing the project, focusing on eight key issues still in contention.

Two of the issues fall in familiar territory to those who follow’s Nestle’s extraction efforts – the lack of real baseline water data, which could presumably be used to force Nestle to curtail their pumping activities.

Frankly, it’s classic Nestle, who make a lot of noises about stewardship of the resource, but – as we saw in Mecosta County – have to be forced to stop pumping.

From the Salida Citizen story:

Bighorn Springs exclusion. Citing a lack of adequate baseline data, County water counsel Jim Culichia said he recommends excluding the Bighorn Springs from the project. Culichia explained that Nestle is required to “demonstrate no impact” but can’t do so because of a lack of baseline data, which Culichia said is a problem that can’t be remedied by simply monitoring after the  start of the project. Pumping will have some impact on the springs, Culichia said. Without adequate baseline data, when changes to the spring do occur, Nestle could argue that the change was natural rather than a result of Nestle operations which would mean Nestle could avoid mitigating the impacts. Resolution: Unresolved.

Ruby Mountain Springs additional data. Culichia concurred with hydrology consultants Geomega that additional tests would be needed to provide the county with a better idea of the impact to the aquifer under conditions that more closely resemble Nestle’s proposed operational plan. To date, Nestle pump tests have only been performed on one test well while the operational plan indicates two wells will be pumping at the same time. Culichia said Nestle did note it had recently performed a pump test of that well at higher rates but had not shared the data with the county. Importantly, Culichia said the other proposed well that has not undergone tests is closer to the river and the aquifer could, and likely will, react differently when both wells are pumping. Resolution: Unknown at press time.

More importantly, it’s now clear that Nestle’s initial promises of economic benefits to Chaffee County were at best smoke and mirrors – and at worst, the kind of outright fabrication that has dogged the company’s projects in the past.

A sterling example? Nestle initially claimed their project would generate $80,000 in property tax revenue. The real number? Less than $17,000 annually.

It would add $2.4 million in assessed property value, generating more than $18,000 in property taxes for 2010 and more than $500,000 during the next 30 years. [ED: That’s less than $17,000 per year]

Nestle clearly expected an easy ride in Chaffee County, and with multiple extraction projects already in the planning stages for Colorado, they simply can’t afford to lose in Chaffee County. Accordingly, their original promises of “support” to the community were limited to donating cases of bottled water to worthy causes (uhh, gifting the community its own water?).

Now – in the corporate equivalent of a gunslinger’s quickdraw – they’re reaching for their wallet (a good lesson for those communities who are only starting to talk with Nestle; their first offer to you is a sucker deal):

In addition to a $500,000 community endowment, Nestlé committed to an annual giving program and reimbursement of extraordinary county expenditures not covered by tax payments.

Gone completely is the “economic benefit” whereby Nestle’s trucks would buy diesel in the county, supporting the area with fuel taxes. As a consultant pointed out, the county doesn’t receive direct fuel tax payments.

Oops.

Nestle can still pull this project out of the fire – small rural communities simply lack the kind of regulation needed to say “no” to a multinational with Nestle’s legal firepower – but it’s instructive to look how far the county’s residents have come from the initial stages, which were characterized more by misinformation than real facts.

Given the minimal economic benefits to the area (most of which are fairly short lived) and Nestle’s newly exposed lack of veracity, it’s clear that the company is in the midst of creating yet another PR mess for itself (Fryeburg, ME ring any bells?).

We leave you with an insightful comparison of Nestle’s legal team and Chaffee County residents (from the Salida Citizen):

Nestle SA: $16.61 billion in net profits in 2008; 265,000 employees worldwide.

Brownstein, Hyatt, Farber and Schreck (Nestle legal counsel): 245
attorneys, 450 employees in 12 offices around the US. Billing rates for
legal counsel range from $275 – $750 per hour; average hourly rate
$340, median $325.

Chaffee County: 2009 budget, $22 million; 186 full-time equivalent employees, mean salary, $39,000.

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