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Deposition from SWIM Challenges Case No. 92-3038, 92-3039, and 92-3040 |
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Deposition from SWIM Challenges Case No. 92-3038, 92-3039, and 92-3040 |
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P R O C E E D I N G S
* * *
THE REPORTER: Ladies and gentlemen,
we're back on the record.
* * *
LONNIE L. JONES, Ph.D.,
having been first duly cautioned and sworn upon
his oath to tell the truth, the whole truth
and nothing but the truth, testified as follows,
to wit:
* * *
E X A M I N A T I O N
* * *
BY MS. STINSON:
Q. Would you please state your name and
address.
A. My name is Lonnie Jones. I live at
6866 Morgan Road, Bryan, Texas.
Q. That's your home address?
A. Yes.
Q. What's your business address?
A. Department of Agricultural Economics,
Texas A & M University, College Station, Texas.
Q. And how long have you been at Texas A & M?
A. About 25 years.
10
Q. What is your position there?
A. I'm a professor of Agricultural Economics.
Q. During that 25 years or so, have you had
intervening positions as well as visiting positions
elsewhere?
A. Yes, one. In 1979, I moved to Austin and
worked for about two years with the State Property
Tax Boards. At the time I went there, it was called
the School Tax Assessment Practices Board. The name
was later changed to the State Property Tax Board.
This was an interagency agreement between
Texas A & M University and that State agency, which
I was, in effect, rented out to go over there and
work. I was still paid by Texas A & M.
Q. Within the field of agricultural economics,
do you have any particular subspecialties?
A. I specialize in what is known as resource
economics and economic impact analysis.
Q. What is resource economics?
A. Resource economics deals with the economic
decisions related to management of natural and human
resources.
Q. You have been retained, isn't it true, by
the U.S. Department of Justice with regard to what
I'll call the Everglades litigation?
11
A. Yes, I've been retained by the U.S.
2 Department of Justice to assist them with the
3 Everglades cleanup and restoration project, I think,
4 usually referred to as the SWIM project.
5 Q. When were you retained?
6 A. I can't remember the exact date. It was
7 when the -- it was in the spring of 1992 when they
8 first contacted me.
9 Q. Who contacted you?
10 A. Mr. Keith Saxe and Mr. Bob Rosenberg.
11 Q. Do you know why you were contacted?
12 A. I'm not exactly sure of what the chain of
13 events were that led to them acquiring my name.
14 Q. What have you been retained to do?
15 A. They have asked me to assist them with
16 evaluating the work that's being done for the
17 South Florida Water Management District relating to
18 the SWIM plan in the area of secondary impacts of
19 the plan.
20 Q. You say "evaluating the work being done for
21 the Water Management District." What work is that?
22 A. Initially the request was to review and
23 evaluate the work being done by Hazen & Sawyer, the
24 contractor to the South Florida Water Management
25 District, with a request to be sure that the work
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1 was complete, that all data was considered and it
2 was a state-of-the-art analysis or economic impact.
3 Q. What did you do beginning in the spring of
4 '92 to carry out your duties?
5 A. The first thing we did was to receive some
6 documents of the SWIM plan, as well as some other
7 documents, and to review those to begin to try to
8 understand the problem, the issues involved in it.
9 Q. And then what?
10 A. I guess the next step is we met with
11 Hazen & Sawyer -- Dr. Grace Johns with
12 Hazen & Sawyer.
13 Q. Do you remember when you did that?
14 A. The first meeting?
15 Q. Yes.
16 A. I don't have an exact recollection of the
17 date. It was probably in -- I'm going to say in
18 April or May of 1992.
19 Q. Who met with her?
20 A. Dr. Ron Lacewell was at that meeting,
21 Dr. Dan Bromley, and me. That's -- and the
22 Hazen & Sawyer's staff. Those are the only ones I
23 recall in the meeting.
24 Q. What was the purpose --
25 A. Excuse me. Mr. Saxe was there.
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1 Q. What was the purpose of that meeting?
2 A. It was basically to gather information from
3 Dr. Johns as to her methodology and approach on
4 conducting the impact analysis.
5 Q. Did you provide any information to her or
6 suggestions on approach?
7 A. At that meeting I didn't provide any
8 information. There may have been suggestions that
9 came up in the normal course of discussion.
10 Q. At that point, where was she in terms of
11 developing the study, in the very preliminary stages
12 or what?
13 A. Fairly preliminary. I think she had sent
14 out a questionnaire to the producers in the area.
15 She was working on a questionnaire to some of the
16 other Ag-related industries in the EAA, suppliers of
17 inputs to farmers.
18 She was still -- I don't think there was
19 anything at that time firm or set in concrete as to
20 the terms of her overall methodology. She was still
21 looking at a lot of different factors in terms of
22 the appropriate approach in handling those.
23 Q. Had she selected the FLIPSIM model at that
24 time to use?
25 A. I don't really recall whether she had or
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1 she was in the process of acquiring it at that first
2 meeting.
3 Q. Did you talk with her about the use of
4 FLIPSIM, whether that was a good approach or not?
5 A. I didn't. Personally I don't recall
6 discussing with her whether or not to use FLIPSIM.
7 We talked more in terms of the basic
8 methodology or the study than we did for any
9 particular tools of analysis.
10 Q. Did you discuss with her the concept of
11 discussing model size farms?
12 A. Model size?
13 Q. Or model farms. Excuse me.
14 A. I believe at that time, she did tell us
15 that she was planning to look at a stratification of
16 the EAA into belts, which basically run north to
17 south through the EAA, and to stratify the EAA by
18 yield belts.
19 A. Did you comment on her decision to do that?
20 A. I may have. I don't -- it seemed like a
21 good idea to me at the time.
22 Q. Do you still believe that that's a good
23 idea, good approach?
24 A. Yes.
25 Q. After meeting with Hazen & Sawyer in April
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1 or May, what did you then do?
2 A. There was a meeting in the funding council
3 somewhere about that same time. As a matter of
4 fact, I can't tell you today precisely whether --
5 which came first, the Hazen & Sawyer meeting or the
6 funding council meeting. I'd have to look at some
7 records for that.
8 But about that same time, there was a
9 meeting of the funding council. Mr. Saxe asked --
10 that, as I recall, his request was that either
11 Dr. Lacewell or I come to that funding council
12 meeting because they were going to discuss
13 Hazen & Sawyer's ongoing work; and I was available,
14 so I attended the meeting.
15 Q. What was discussed at that meeting, and did
16 you make any presentation?
17 A. No, I did not.
18 Q. You just listened in?
19 A. Yes.
20 Q. What was discussed at that meeting?
21 Q. There was -- they discussed -- Dr. Johns
22 gave a presentation at that time of her general
23 approach to the economic impact model. There was
24 discussion by the board and other members, funding
25 council and other members, other people that were
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1 there.
2 At that time, she also presented a request
3 and a proposal to extend the study to look into the
4 benefits of the Everglades; and that request for an
5 extension was subsequently approved by the funding
6 council.
7 Q. That was a proposal which came from
8 Hazen & Sawyer?
9 A. Yes.
10 Q. What was the rationale for that, that she
11 expressed at the meeting?
12 A. I don't recall.
13 Q. Was an entity or individual mentioned who
14 would do that part of the study?
15 A. I don't remember any entity being mentioned
16 at that funding council meeting.
17 Q. Do you know who, in fact, did that study?
18 A. It was subcontracted, as I understand, to
19 the National -- let me get this name right. NRDA,
20 National Resource Damage Associates, or a title to
21 that effect.
22 It was actually done by Dr. Hanneman and
23 another -- and doctor -- well, I know this
24 gentleman. I've drawn a blank on his name.
25 Q. If you think about it later, tell me.
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1 A. Okay.
2 Q. Are these people in California; is that
3 correct?
4 A. Yes.
5 Q. Do you know how it came to be that those
6 folks were selected?
7 A. No, I don't know that, the process that
8 Hazen & Sawyer used in selecting them.
9 Q. Did you have any interaction with those
10 people in doing the benefits part of the analysis?
11 A. No, I didn't.
12 Q. Did anyone, to your knowledge, on behalf of
13 the U.S. Department of Justice?
14 A. I can't -- I'm not absolutely certain of
15 this, but I think that Dr. Teofilo Ozuna, who was
16 also retained by the Justice Department, may have
17 interacted with them either during the process of
18 the study or immediately after that. I'm not sure
19 if they had published their draft report at the time
20 the he first interacted with them; but I think that
21 he did, at some point, communicate with them
22 directly.
23 Q. So you went to a meeting with
24 Hazen & Sawyer and you went to a funding council
25 meeting and listened in and then what?
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1 A. Well, there followed some interaction with
2 Grace Johns; and some questions that she would have
3 concerning some particular variables. I did some
4 work at the request of Counsel, also, to provide the
5 Justice Department some information on some of the
6 issues and variables that were being considered in
7 the overall analysis.
8 Q. What variables did Hazen & Sawyer have
9 questions about that you had input into?
10 A. Two that I recall. The first one she was
11 wrestling with, the problem of identifying the
12 impacts -- secondary impacts that would rest
13 specifically with the EAA, the immediate local area,
14 as opposed to those that might leak out or reside in
15 a more remote area, such as, maybe another part of
16 Florida or somewhere else because of either the
17 expenditure of consumer's income or the purchase of
18 inputs that are not sold locally.
19 We had done and recently -- I say
20 recently -- within the last two years, had been
21 involved in working with the Texas Attorney
22 General's office in a case between -- it was a
23 lawsuit between the State of Texas and New Mexico,
24 water allocation between New Mexico and Texas on the
25 Pecos River.
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1 I had done some work at that time to look
2 at how much of the secondary impacts from New Mexico
3 might flow back to Texas as opposed to how much will
4 be contained locally and compared to how much may go
5 somewhere else.
6 And she asked me if I would send her
7 whatever material I had done there in that study,
8 and I did send that to her.
9 Q. Was that material used by her, do you know,
10 in her report?
11 A. In reviewing her report, I have not found
12 any indication that it was used directly.
13 Q. When you say, "she was struggling with the
14 issue of secondary impacts in the EAA as opposed to
15 elsewhere," when you say "EAA," do you include all
16 of Palm Beach County?
17 A. I would, yes.
18 Q. That was one of the questions. You said
19 there were a couple that -- do you recall?
20 A. At a later date, she was, also, concerned
21 about looking at a scenario projection assuming that
22 farmers in the -- that the federal support program
23 for sugar was eliminated.
24 And specifically what she wanted to look at
25 was what would happen -- what would be the price of
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1 sugar in the United States if all industrialized
2 countries in the world went to a free market and a
3 free trade relationship rather than the relationship
4 that exists at the present.
5 Q. And did you provide any input
6 on that question?
7 A. She asked me if I would review what
8 literature I had or could obtain, and see if I could
9 draw together some speculation as to what that price
10 level might be. And I did that, and I communicated
11 that to her in writing.
12 Q. What were your conclusions in that regard?
13 A. After reviewing several reports, different
14 people -- professionals who had attempted to project
15 that scenario, the -- well, the conclusion -- do you
16 mean in terms of -- I'm not quite --
17 Q. Either a general or specific conclusion
18 about the effect on the price or the effect on --
19 A. Okay. Well, the general conclusion, as far
20 as price is concerned, is that I think my statement
21 to her was that it would appear from the review of
22 these studies that the price of sugar in the
23 United States would probably reach an equilibrium at
24 some point in the future between 14 and 16 cents per
25 pound.
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1 Q. You say you communicated that to
2 Grace Johns in writing. Was that by a report or
3 letter?
4 A. It was a memo with a -- it was a long memo.
5 Q. And when was that, more or less?
6 A. I would say that was probably in the month
7 of June 1992. That's as close as I can get.
8 Q. Do you recall what literature you reviewed
9 to come to that conclusion?
10 A. Yes. There was a study done in 1995 --
11 Q. '85?
12 A. '85. I'm sorry. -- (continuing) by
13 Ron Knutson and Andy Schmitz and I think it's
14 John Earley that projected an estimate.
15 There were other studies that were studied
16 by Gordon Rausser which they looked at the sugar
17 program.
18 There was a report from the Sugar &
19 Sweetner Division of the ERS, U.S. Department of
20 Agriculture.
21 Q. Do you recall what edition of the
22 Sugar & Sweetner Report?
23 A. No. It was not a part of their normal
24 series. This was a special report, and I'm not
25 exactly -- I don't recall exactly what the title of
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1 it was, but it was done by Peter Buzzanell and
2 Ron Lord.
3 Then there was a Ph.D. dissertation
4 recently out of Purdue by a Mr. Greer, who had also
5 looked at liberalization of trade in sugar.
6 MS. STINSON: Keith, I have been
7 through these documents and the
8 reports he's mentioned, I recollect.
9 I do not recollect seeing the memo he
10 has referred to.
11 MR. SAXE: So far as I know, it
12 should have been produced.
13 MS. STINSON: If it wasn't, we
14 can --
15 MR. SAXE: I don't have a
16 privileged list in front of me to
17 consult; but I don't, at this point,
18 recall having withheld the document.
19 I don't -- I really can't, you
20 know, tell you. We could follow up on
21 it. If you want to take a break, I
22 could call back and see.
23 MS. STINSON: Well, maybe at noon
24 or something, we can do that.
25 MR. SAXE: Sure.
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1 Q. (By Ms. Stinson) Were there any other
2 variables that you provided input to Grace Johns, to
3 your knowledge, or to your recollection?
4 A. I talked to her on a number of occasions
5 about selection of a model for estimating secondary
6 impacts, for estimating indirect and indecent
7 impacts.
8 Q. What was your input into that discussion?
9 A. Well, I basically asked her what she had
10 been looking at and what she had available and what
11 she was going to use.
12 Q. And what did she determine to use?
13 A. She selected the RIMSII model from the
14 Bureau of Economic Analysis, U.S. Department of
15 Commerce.
16 Q. Do you have an opinion as to whether that's
17 the appropriate model to use?
18 A. I think it is appropriate, yes.
19 Q. Do you believe the multipliers that she
20 selected from that analysis were appropriate?
21 A. I had reviewed the RIMS printout, and I
22 think she picked the right ones.
23 Q. Anything else?
24 MR. SAXE: Objection to form.
25 Q. (By Ms. Stinson) You can answer anyway.
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1 MR. SAXE: If you understand the
2 question, you can answer it.
3 A. I assume you're asking me if there was
4 anything else that we talked about that I had input
5 on on the analysis?
6 Q. (By Ms. Stinson) Right.
7 A. Those were the three things that are -- or
8 however many there were -- that I remember
9 specifically talking with her about. There were a
10 number of, I guess, other things that we talked
11 about, in general, along with other participants;
12 but I don't know that I would say that I have any
13 particular specific input into those.
14 Q. Let me back up a minute. Have you ever
15 testified as an expert witness?
16 A. Yes.
17 Q. Can you tell me the circumstances?
18 A. I most recently testified in hearings
19 before the Texas Water Commission on behalf of a
20 company; the name is TexCor, Incorporated.
21 Q. What was your testimony?
22 A. My testimony related to the economic
23 impacts of NORM, N-O-R-M, which stands for Naturally
24 Occurring Radioactive Material, a disposal facility
25 that was proposed to be located at Brackettville,
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1 Texas in Kinney County, Texas; and I was testifying
2 as to the economic impacts of that facility on the
3 City of Brackettville in Kinney County.
4 Q. Was it TexCor who wanted to put the
5 facility in?
6 A. Yes.
7 Q. Was that a judicial-type proceeding or more
8 of a legislative-type?
9 A. It would be judicial. As I understand it,
10 there had been a challenge filed by a local group
11 of -- I think it's called CARE, Communities Against
12 Radioactive Environments and --
13 Q. Were you qualified as an expert witness?
14 MR. SAXE: Objection to form.
15 Q. (By Ms. Stinson) If you know what I mean
16 by that.
17 A. The way this transpired was that we had
18 done a study for TexCor in 1988 for another purpose.
19 It was for their purpose of acquiring a permit
20 through the -- at that time, the Texas Department of
21 Health. The jurisdiction for this type facility was
22 later transferred to the Texas Water Commission and
23 we had done that study for them and given it to them
24 and, I presume, they had used it in their normal
25 course of acquiring a permit.
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1 Then later in 1992 -- and this is winter
2 and early spring of 1992 -- they contacted me again
3 and this challenge had been and requested I testify.
4 Q. Was it a proceeding where you were on the
5 stand and lawyers asked you questions, that type of
6 proceeding?
7 A. It was in the Brackettville Community
8 Center, and there were two attorneys -- no, four
9 attorneys for the CARE group and then TexCor had an
10 attorney from Austin.
11 Q. And in your testimony on the stand, was
12 there was an exchange where they went through your
13 qualifications and then one of the lawyers said, "I
14 proffer him as an expert witness," something to that
15 extent?
16 A. Yes.
17 Q. In what field were you proffered as an
18 expert?
19 A. Economic impact analysis.
20 Q. And were you accepted as an expert in that
21 field?
22 A. Yes.
23 Q. Have you done any other testimony in
24 judicial-type proceedings?
25 MR. SAXE: Objection to form.
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1 Counsel, I'm not sure whether the
2 witness understands what you mean by
3 "judicial-type proceedings."
4 MS. STINSON: He can tell me if
5 he doesn't understand the question.
6 A. Well, there was a follow-up, a second
7 hearing related to this same subject in Austin.
8 Again, attorneys were there for both sides.
9 There was cross-examination and so forth. I think
10 that's all related to that case.
11 Several years ago, we did a study of the
12 economic impacts of land subsidence in the Houston,
13 Harris County and Galveston area. Following the
14 publication of that study -- and that study was --
15 it was a part of my normal activities of Texas A & M
16 University.
17 But following the publication of that,
18 there was a lawsuit that was filed by -- I think it
19 was a class-action suit -- by a group of homeowners.
20 It was filed against Friendswood Development
21 Corporation, which is -- they're a developer in the
22 Harris area -- for negligence in the development of
23 some certain subdivisions there. And I was asked to
24 testify in court in Houston as to the economic
25 impacts. Again, I was offered as an expert witness
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1 there.
2 Q. (By Ms. Stinson) Tell me a little bit
3 about that study. What were you looking at?
4 A. The land subsidence study?
5 Q. Yes.
6 A. The problem there is one of -- it was a
7 problem of overdrafting in an underground reservoir,
8 water, pumping water. That whole area -- the whole
9 coastline of Texas, in fact, is underlying by --
10 it's very nice aquifer. It has good clean water.
11 You an use it right out of the ground without having
12 to treat it. Add a little chlorine, I guess, is
13 what they do.
14 The aquifer is unique in the sense that
15 it's -- as you look at it vertically through the
16 aquifer, you have a layer of sand and then you'll
17 have a layer of clay, a clay lens that runs
18 throughout the aquifer. This all, I understand, is
19 from the USGS people that I was working with.
20 The problem that they had -- and this goes
21 back to -- I guess it was first noticed back in the
22 40's -- is as they draw water out of this aquifer,
23 if you draw down -- as long as you're drawing water
24 and drying out the sand part of the formation, you
25 don't have much of a problem. But once you draw
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1 water past this clay lens and allow it to dry, it's
2 a very elastic soil and it collapses.
3 So what was happening was they were
4 overdrafting the aquifer, drawing the water table
5 down, as these clay lenses collapsed, because of the
6 overburden of the soil and surface on top, they were
7 sinking.
8 And there had been some homes that were
9 built there that were -- wound up in the Galveston
10 Bay, offshore; and someone said in violation of
11 Coast Guard regulations, they weren't equipped to
12 navigate the Trinity Bay.
13 But this was happening throughout the area;
14 and so we got involved in it to take a look at what
15 the -- this is what the resource economists call an
16 "externality." In other words, you're performing
17 some certain activity; and that activity is imposing
18 a cost on another party or another factor.
19 We went in there to look at what the
20 magnitude of the externalities were, what were the
21 external costs related to this pumping.
22 We estimated those and then we compared the
23 total cost -- the direct cost of pumping water,
24 added to that the external costs from the loss of
25 use of property and we compared that to the cost of
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1 surface water, which directly was more expensive;
2 but we found that if you quantify it and added the
3 external costs to the direct pumping costs, then
4 they far exceeded the alternatives, source of
5 surface water.
6 Now, that's the study. The suit, of
7 course, is something else.
8 Q. But did your testimony in that suit relate
9 to your work on that study?
10 A. Yes.
11 Q. Is anything in that study transferable or
12 relevant to your work on the Everglades?
13 A. There are no numbers or values or estimates
14 that I would say are directly transferable. I would
15 say that in terms of general concept, that there is
16 a theoretical or conceptual transference, in that,
17 not unlike the Houston area, it would appear that
18 there is a problem of externality apparent in the
19 case relating to the Everglades.
20 Q. What is that relevance of that
21 relationship?
22 A. As I understand it from the biologists and
23 the soil scientists and other who have put together
24 the foregoing documents that I have studied, that
25 the problem in the Everglades, in relationship to
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1 agriculture, is one of a pollution runoff or, in
2 particular, phosphorus runoff from the farming area
3 into the Everglades, which is changing the ecosystem
4 of the Everglades. And that, we would call in
5 economics, resource economics, an externality.
6 Q. Well, in your work on the Everglades, have
7 you looked at quantifying the externality involved
8 there?
9 A. No, I have not.
10 Q. But that essentially is what you did in the
11 Galveston study, correct?
12 A. Yes.
13 Q. Has anyone, to your knowledge, quantified
14 the externalities that you've mentioned in the
15 Everglades?
16 A. I believe that was the attempt of the South
17 Florida Water Management District of what they had
18 in mind when they approved the extension requested
19 by Hazen & Sawyer for the well, let me back up here
20 a minute.
21 That would be a part of that process of
22 quantifying externalities with the -- what they did
23 in terms of trying to estimate the value of the
24 Everglades.
25 Q. Are you referring to the so-called benefits
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1 report?
2 A. Yes. That, I wouldn't -- I wouldn't say
3 that that is a complete answer to that question, but
4 that would be a part of the process of getting
5 there.
6 Q. Has anyone, to your knowledge, done a
7 complete analysis of the quantification of the
8 externalities in the Everglades?
9 A. Not to my knowledge, no.
10 MR. SAXE: Counsel, it's 10:00. I'd
11 like to take a short break.
12 (WHEREUPON, a recess was taken.)
13 Q. (By Ms. Stinson) I had just asked you
14 about the analysis of the externalities in the
15 Everglades. To your knowledge, is anyone now doing
16 a complete quantification of the externalities
17 related to pollution runoff into the Everglades?
18 A. Do you mean an economic quantification?
19 Q. Yes. Yes.
20 A. I don't know of anyone at this point in
21 time who is trying to estimate the dollar value or
22 the dollar loss of the Everglades ecosystem from
23 this specific action, from this specific case that's
24 covered by the SWIM plan.
25 Q. You qualify that somewhat. Do you know
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1 anyone who is doing some kind of economic analysis
2 or quantification?
3 A. No.
4 Q. What was the purpose for your work
5 regarding the externalities of soil subsidence in
6 the Houston/Galveston area?
7 A. It was a purpose that's consistent with the
8 mission of Texas A & M University and the Texas
9 Agricultural Experiment Station and, that is, to
10 conduct research and provide information on issues
11 and problems to assist decision-makers throughout
12 the State.
13 Q. When you say "assist decision-makers," in
14 what regard, assist them to do what? What was the
15 decision that needed to be made?
16 A. This was a perceived problem by a number of
17 people. We -- it was actually -- the project was
18 actually funded by the Texas Water Resources
19 Institute, which specifically funds research and
20 education and is oriented toward water problems in
21 the State of Texas.
22 And it had, through whatever communication
23 channels, had been listed as a top priority research
24 project by that institute. We submitted a project
25 proposal to them to attempt to quantify those
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1 externalities and do the comparison, as I testified
2 to earlier; and that project was approved and --
3 Q. Well, was there some -- you mentioned that
4 you were comparing the cost of surface water to the
5 cost of pumping out the ground water and launching
6 houses.
7 Was there some public policy decision that
8 needed to be made in that regard that your research
9 was designed to assist?
10 A. Yes, in the case of as in most
11 externalities.
12 Q. I guess my question is: What is the public
13 policy decision that needed to be made in that
14 instance?
15 A. Well, let me answer that by telling you
16 what subsequently was made.
17 Q. All right.
18 A. Following the work that we did, as well as
19 a lot of work done by others, the Texas legislature
20 created what is called the Harris/Galveston
21 Subsidence Control District, and they're empowered
22 to monitor and approve permits for wells into the
23 aquifer, to manage well spacing, and a number of
24 other -- to tax, and a number of other
25 administrative authorities in order to stop the
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1 problem.
2 Q. Was there also a provision made for
3 developing surface water, supplies of water to
4 alleviate the problem?
5 A. That has been done, yes. They are now
6 using surface water from several available sources,
7 sources which were and have been available for some
8 time.
9 Q. To -- in those types of public policy
10 decisions, as to, I guess, allocation or use of
11 resources, as a resource economist, is it important
12 to understand the costs and the externalities and
13 benefits of those actions?
14 A. In this particular case, I think it was
15 helpful in the Houston case to be able to show that
16 it was less expensive to the area in general, the
17 water users in general, to use the available surface
18 water that was already available in the area and to
19 reduce pumping to a level that would not mine the
20 aquifer; and in doing so, it gave the legislature
21 some information that they could use in a decision
22 as to whether or not public policy needed to be
23 created to handle this problem.
24 Q. You've responded by saying that in this
25 instance it was important to consider the costs and
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1 externalities. Would you not agree, you as a
2 resource economist, for public policy
3 decision-makers that that is generally a good thing
4 to consider?
5 MR. SAXE: Objection form.
6 Counsel, I think you've truncated a
7 fairly extensive and qualified answer
8 with a very oversimplified restatement
9 of the witness' testimony.
10 Q. (By Ms. Stinson) You can answer my
11 question.
12 A. I guess my opinion would be that it
13 depends. It depends primarily upon whether or not
14 there exists legislation or any policy from whatever
15 source that is paying attention to the problem.
16 In the Texas case, in the subsidence case
17 in Houston, there was no vehicle by which
18 individuals that are -- that were pumping water and
19 mining the aquifer could be -- there was no way the
20 problem could be addressed.
21 We had, in the Houston area, I think there
22 was something like 800 municipal urban water
23 districts, each of which had the right under Texas
24 law -- and Texas has the full capture law, unlike a
25 lot of other states.
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1 There was nothing to prevent these people
2 from drilling a well or you or me, to go into the
3 area and drill a well, pump as much water as we
4 wanted to, do with it as we wished.
5 Now, so that we had no -- there was no
6 jurisdiction here to direct individuals in their
7 operations and the problem was continuing. Some of
8 the areas have subsided as much as 9 feet since
9 1945.
10 So in that case, it was a total lack of any
11 kind of law or legislation in order to direct the
12 problem. Now, what do you do in that case? Well,
13 one of the things you can do is to take a look at
14 the alternatives, what are the costs of the
15 alternatives. If we allow it to continue and the
16 subsidence continues, then we're going to have this
17 stream of damages into the future.
18 We can compare that with the cost of the
19 alternative, which is to bring in the more expensive
20 surface water. It's more expensive because it has
21 to be treated extensively, and look at what is our
22 least cost alternative for supplying water to this
23 area. That's what we did, and it was then
24 subsequently used in creating a vehicle by which
25 ground water withdrawal could be managed. So I
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1 guess that's why I think it depends. It depends on
2 what exists in terms of law.
3 Q. Can you give me instances of when it would
4 not be wise for public policy-makers to consider the
5 externalities and costs of alternative ways of
6 proceeding?
7 A. Well, I guess I would say that it is always
8 at some point important to consider all of the
9 costs. I would assume that in passing a law,
10 legislature would do that.
11 Q. You give our legislature a lot of credit.
12 MR. SAXE: Objection to form.
13 MS. STINSON: Editorial comment.
14 Excuse me.
15 Q. (By Ms. Stinson) You mentioned your work
16 on the New Mexico/Texas dispute involving the Pecos
17 River. Did you testify regarding that information
18 at any point?
19 A. No. I was -- there was an out-of-court
20 settlement before I was asked to testify.
21 Q. Other than the instances you've talked to
22 me about regarding the work for TexCor and the work
23 on the soil subsidence, have you in any other
24 instances given testimony?
25 A. I think that's it.
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1 Q. We got in the middle of your discussion in
2 your involvement with the Hazen & Sawyer report.
3 You were telling me about issues that you had had
4 input on. We had gotten up to, I think, when
5 Hazen & Sawyer was developing a draft report and you
6 have described to me those issues on which you had
7 had input.
8 Can you tell me just generally next, or
9 throughout the development of that report, what your
10 input was, what involvement you had with
11 Hazen & Sawyer?
12 MR. SAXE: Objection to form.
13 Counsel, that's an extremely broad
14 question.
15 MS. STINSON: Well, let's take it
16 through the time frame.
17 Q. (By Ms. Stinson) Do you know when the
18 first draft report was issued?
19 A. I think it was toward the end of June.
20 Q. Were there preliminary drafts that you
21 reviewed and commented on?
22 A. Could you be more specific in terms of
23 preliminary drafts?
24 Q. There is actually a semi-official document,
25 as I understand, called the "draft final report."
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1 Were there any editions, either partial
2 pieces of the report or a more preliminary draft
3 than that, which you reviewed?
4 A. In terms of reports, I recall a draft
5 report -- it's called a final report -- and then a
6 completion report.
7 Q. Are those the only reports that you
8 actually reviewed? I mean, my question is pretty
9 simple. Did you get any pre-publication either
10 chapters or sections or, in fact, an entire report
11 from Hazen & Sawyer that you looked at?
12 A. Not that I recall.
13 Q. Did you review the draft final report after
14 it was issued in June and make comments on that?
15 A. Yes.
16 Q. And did you make written comments?
17 A. Yes.
18 Q. To whom were those given?
19 A. They were sent to Dr. Grace Johns.
20 Q. Did you have any interaction with
21 Grace Johns with regard to your comments?
22 A. If memory serves me correct, I think there
23 was one meeting after that draft report.
24 Q. And before the final report?
25 A. I think that's correct.
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1 Q. Other than meetings, did you have telephone
2 conversations with Grace Johns regarding that?
3 A. I think there were some, yes.
4 Q. What was the purpose or subject of the
5 meeting that you had between the time of the draft
6 final and the final report?
7 A. The best I recall, it was just to go over
8 the draft to look at the methodology, the
9 assumptions and so forth; but mainly to get an
10 explanation and information from her.
11 Q. Did you -- strike that.
12 Did you notice any information or
13 explanation in the final report based upon what you
14 had commented on or you had had input on?
15 MR. SAXE: Objection to form. I don't
16 understand the question.
17 If you understand, you may answer
18 it.
19 A. Well, I think I understand. I think you're
20 asking me if anything that I told her in our meeting
21 subsequent to the draft report showed up in the
22 final report?
23 Q. (By Ms. Stinson) Right.
24 A. Nothing specific, except for one thing.
25 There was question in my mind as to how they had
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1 handled property tax estimates through the -- using
2 the FLIPSIM model that they used. And I asked to
3 check that, and I think there was a change made
4 subsequent to that.
5 MR. SAXE: Excuse me. Could you read
6 that back.
7 (WHEREUPON, the requested
8 portion of the record was read
9 by the court reporter.)
10 Q. (By Ms. Stinson) Who was at this meeting
11 you mentioned?
12 A. It would have been Dr. Lacewell, I believe,
13 and Mr. Saxe and me.
14 Q. And the Hazen & Sawyer people?
15 A. Yeah. I think Chris Moline and Grace.
16 Q. Subsequent to the issuance of the final
17 report, did you have any input or interaction with
18 Hazen & Sawyer between that time and the time of the
19 so-called contract completion report?
20 A. I attended the funding -- well, let's see.
21 There were two things. There was a
22 workshop. I don't remember the exact date on one
23 day; and the next day, she gave her report to the
24 funding council in West Palm Beach. I attended that
25 meeting.
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1 Q. The workshop and the funding council
2 meeting?
3 A. Yes.
4 Q. Do you recall what month that was?
5 A. It must have been July or August. Perhaps
6 it was August.
7 Q. What was the topic of discussion at the
8 funding council, at that meeting?
9 A. She was presenting the results of her
10 analysis.
11 Q. The workshop was before the meeting?
12 A. Yes.
13 Q. And what was the purpose of the workshop?
14 A. I don't know what the stated purpose was,
15 except to present the results of the report.
16 Q. Were you invited to the workshop?
17 A. Yes.
18 Q. By Hazen & Sawyer?
19 A. I'm not sure how the invitation came about.
20 I was asked by the Justice Department's Counsel to
21 attend.
22 Q. Who all was at that meeting, the workshop?
23 A. I'm having trouble distinguishing between
24 the workshop and the funding council because there
25 was a large group in both. There was a staff of the
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1 South Florida Water -- some of the staff of the
2 South Florida Water Management District was there.
3 There was some representatives, I think, from the
4 sugar industry and from the vegetable industry,
5 unless I'm confusing it with the funding council.
6 I'll have to tell you. I'm not real clear
7 as to who was at each one.
8 Q. All right. Was there any other interaction
9 with Hazen & Sawyer prior to issuance of the
10 so-called completion report?
11 A. No.
12 Q. And subsequent to the project completion
13 report --
14 MS. SAXE: Object to form.
15 Counsel, I don't think there is a
16 project completion report.
17 MR. BURGESS: Contract.
18 MR. SAXE: Contract completion
19 report, is that what you're referring
20 to?
21 Q. (By Ms. Stinson) Excuse me. Contract
22 completion report. Did you understand me to mean
23 the contract completion report?
24 A. Yes, yes.
25 Q. Subsequent to the contract completion
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1 report, what interaction or involvement have you had
2 with Hazen & Sawyer?
3 A. There have been some phone conversations
4 and there was two meetings.
5 Q. When were the phone calls? Have there been
6 a series of them over the months?
7 A. There have been probably -- yeah, three or
8 four, maybe a half a dozen over the time frame since
9 that contract completion report was submitted to the
10 board.
11 Q. What two meetings?
12 A. Well, there's been more than two meetings.
13 MR. SAXE: Excuse me. Was your
14 question, meetings before the contract
15 completion report and after the final
16 report or just --
17 Q. (By Ms. Stinson) My question now relates
18 to the time period subsequent to submission of the
19 contract completion report. That's as you
20 understood it; is that correct, Dr. Jones?
21 A. I think so.
22 Q. The meetings.
23 A. We met with Dr. Johns at her offices in --
24 I think it was in early January.
25 Q. Who's "we"?
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1 A. Dr. Lacewell and Dr. Bill Boggess and me.
2 Q. What was the purpose of that meeting?
3 A. The purpose of the meeting was to discuss
4 the criticisms that had been raised specifically by
5 Dr. Polopolus and Dr. Richardson concerning her
6 study.
7 Q. Who called the meeting?
8 A. Well, let me just tell you my best
9 recollection of the scenario.
10 Q. Okay.
11 A. There had been an attempt by the board, or
12 a request by the board, to have a meeting of all of
13 the economists involved in this economic impact
14 evaluation of the SWIM plan. And there had been a
15 meeting scheduled, and then it was canceled.
16 Q. When was it scheduled for?
17 A. I think the first one was very early
18 January.
19 Q. Okay.
20 A. And that meeting was canceled. And then
21 the decision was made that we would meet with -- I
22 guess, then I was asked to meet with Hazen & Sawyer,
23 individually, just us, not with any other
24 participants from any other -- from the sugar
25 industry.
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1 Q. Were there participants from the Water
2 Management District?
3 A. Not in this first meeting.
4 Q. Do you know why the meeting of all the
5 economists was canceled?
6 A. I don't really have any specific
7 knowledge. It's my understanding that Dr. Polopolus
8 was unavailable and presumably Dr. Richardson, too.
9 Q. So you met in January then with the
10 Hazen & Sawyer folks privately, individually?
11 A. (Witness nods head.)
12 Q. And the purpose was to discuss the
13 criticisms by Polopolus and Richardson?
14 A. Yes.
15 Q. Did you provide to Hazen & Sawyer any
16 written documents at that time or comments?
17 A. No.
1