Water bottling proposal stirs debate in tribe

An ongoing $35 million proposal to tap an aquifer at Indian Township and bottle the water, which could generate $10 million a year for the Passamaquoddy Tribe, is continuing to stir debate among tribal members, particularly at Sipayik, where there are concerns about the deal that includes non-Native partners, the sale of water as a commodity and whether tribal members are being given a sufficient voice in the proposal.
Because the groundwater aquifer is on tribal trust land, approval is needed from the entire tribe for the project to move forward. While the Passamaquoddy Joint Tribal Council did approve the project in 2014, in recent weeks a public hearing at Sipayik and a vote by the joint council on using additional tribal funds for the proposal have been scheduled and cancelled. As of August 7, new dates for the hearing and vote had not yet been set.
The project would be undertaken by Tomah Water LLC, a partnership formed in 2010 between the Passamaquoddy Tribe at Indian Township, which owns 60.8% of the company, and HTwoO LLC, a non-tribally owned company that was formed by Michael Dugay. He had proposed to the Indian Township tribal government the idea of bottling and selling the water at Tomah Stream. Dugay, who was living in Florida at the time but has since moved to Maine, is a brother to Eddie Dugay, a former state representative who lived in Cherryfield and has worked on economic development projects for the tribe.
The aquifer covers about 1,200 acres, with approximately 1,000 acres in tribal trust land on the northern side of Indian Township, according to Ernest Neptune, tribal planner at Sipayik who was formerly on the board of directors of Tomah Water. The remaining acreage is in the Sunrise Easement held by the New England Forestry Foundation and the state. It's estimated that the aquifer holds 300 to 500 million gallons of water, and state tests of the water determined it is of excellent quality. The water will only need to be filtered and undergo an ultraviolet light treatment in order to be ready to be bottled.
As for possible drawdown of the aquifer, Neptune says there are 22 "blowout" springs from the aquifer that drain into Tomah Stream, so there's "more water here than it can handle." He says only between 8% and 24% of the natural aquifer overflow would be used. Neptune explains that the springs are like pin holes, releasing the water pressure in the aquifer. He says the area is "totally isolated" from any sources of drinking water for Indian Township or Princeton, and no private wells are in the area. Tomah Stream flows into Grand Falls Flowage and then into the St. Croix River.
The proposed bottling plant, which would be located in Indian Township off Route 1 on the Telephone Road, would create about 73 jobs, with another 70 indirect jobs. Annual wages would amount to $3.7 million. Construction and initial operating costs are estimated to be between $35 and $38 million. Annual production would gradually reach 20 million cases, or 64 million gallons of water. The tribe also is looking at refurbishing the former Gates plant in Quoddy Village to make pallets for the cases of water, with an estimated 267,000 pallets to be produced annually. The company would then like to ship the pallets of water through the Port of Eastport to markets primarily in the U.S.
The tribe would market the water under the brand name Passamaquoddy Blue, and Neptune notes that word had gotten out about the plan and the Federal Emergency Management Agency, not realizing that production had not begun, ordered 30,000 cases. Along with the federal government, other potential customers are tribal casinos, supermarkets and possibly military bases overseas. The tribe's share of sales is estimated at $10 million a year.
So far a little over a million dollars has been spent on the project, according to Neptune, with HTwoO having paid about $800,000 on drilling and water quality and engineering studies, and the tribe having spent about $250,000 to $300,000, partly for board members to attend meetings.
With the project now in its 10th year, Neptune says both financing issues and the land leasing process took time. He notes that HTwoO has sold equity shares to attract private investors but "as time went on it's been hard to find more interest." The private investors include Smart Money LLC, a Florida company owned by Lorrie Jackson and Patricia Campion, and also John and Cynthia Zappone. Bank financing couldn't be obtained, without any collateral, but this year the project received approval for the Bureau of Indian Affairs' loan guarantee program, which covers 90% of the financial risk.
Although the endeavor was initially a project of the Indian Township tribal government, it was later determined that joint tribal council approval was needed for leasing the tribal trust land. Pleasant Point tribal council members had opposed the land lease, and an offer for Pleasant Point to be a project beneficiary was turned down. In 2014 a new offer was accepted in a 7-1 vote by the joint council, with one abstention and five members absent. Under the new offer, Pleasant Point would receive 30% of the tribe's profit, with another 10% going into a joint economic development fund. Also, Pleasant Point would receive 50% of the land lease payments from Tomah Water, which would be about $400,000 annually.
According to Neptune, an investment of approximately $3 million is now being requested from the tribe to meet requirements by Camden National Bank for a "backstop" account in case the project costs go over budget. Tomah Water is proposing that the funding come from the over $30 million in carbon credit funds that the tribe has received and has been using for community service projects.

Concerns raised about project
Some tribal members, though, don't support the project. Dwayne Tomah of Sipayik says he objects to using water as a commodity "because of the connections we have to water. It's really sacred and has always been that way." He adds, "It's sad to use water as a source to negotiate. It should be non-negotiable that it shouldn't be sold."
Tomah is also concerned that there are "too many cooks in the kitchen," with the tribe not in complete control of the project. "The tribe is really going to lose out in the end, the way the deal is set up." He believes "resources belong to the entire tribe" but are being sold off and exploited for the benefit of others.
Another tribal member, Colleen Dana-Cummings, agrees with Tomah that the tribe shouldn't be selling water for profit and notes that there are places both locally and throughout the country that are in need of good sources of drinking water. She also believes the project will have a negative effect on the environment, with plastic used for bottling the water, fuel for transporting it, traffic and a large bottling facility to be built in a beautiful location.
In addition, Dana-Cummings notes that Michael Dugay was working as a consultant for the tribe during the project's development but also is a partner, which she thinks may be a conflict of interest. She also believes that off-reservation tribal members will not see any of the funds paid to the tribal governments. She would like to see a percentage of revenues disbursed to all tribal members.
Madonna Soctomah, a former tribal representative and tribal councillor, points out that back in 2014 many at Pleasant Point had opposed the project because they felt that too much of the revenues would be going to the non-tribal partners. Neptune says that initially 51% of Tomah Water had been owned by the tribe at Indian Township and 49% by HTwoO, but he was able to renegotiate the deal so that the tribe now owns 60.8%.
Soctomah also notes that the proposal was approved by the joint council during a time of ongoing changeover in leadership at Pleasant Point, which also was suffering from the drug epidemic. She believes that not enough information is being released to tribal members about the project. "Tribal resources belong to the people," she points out. "That land at Indian Township is owned by every Passamaquoddy." She feels that tribal members are not being given the chance to have a voice on the proposal.
Neptune understands that many have a spiritual belief in water. "Water is life, water is everything," he says, noting that he feels the same. "I am a conservationist. I think we can conserve for the betterment of our communities and future generations." But he says economic development will support tribal members. "We can't sit back and keep wishing for more money from the clouds." If the tribe doesn't move forward with this project, he says it "will be another opportunity sailing by the reservations."
Neptune points out that the latest U.S. census data indicate that the poverty rate at Pleasant Point is 45.6%, compared to 14.6% in the U.S. and 21.1% in Washington County. Noting that disturbing figure, he says, "We want to combat that with the resources we've got and the programs there to make things happen."