Treated wastewater is the subject of a dispute between the city of Santa Fe and the owners of the Santa Fe Horse Park.

The city says the horse park skipped out on payment for more than 152 million gallons of treated effluent between 2001 and 2003 and between 2005 and 2006. Charlie Kokesh, one of the park's four owners, claims the city owes him money, and the conflict is rooted in another disagreement between the two parties.

"There is a lot more to the story," he said by phone from his office at Dakota Arms in Sturgis, S.D. "The city has made a terrible mistake by moving to a litigious position."

Kokesh is also negotiating a transfer of water rights that the city has protested and wrote in a recent letter that the threat of a lawsuit is "further effort to undermine" the transfer, which is still pending before the state engineer.

City Council discussed the matter Wednesday during a closed executive session, then voted to allow City Attorney Frank Katz to take the legal action to pursue collection on the effluent debt.

Katz said Thursday that it would take a few days for his department to determine its exact course. Since the park had a contract with the city, a breach-of-contract complaint could be filed in state District Court.

The city contends that the horse park owes about $189,481 for the effluent, according to Wastewater Division Director Costy Kassisieh, who said he cut off flows to a pipeline between the treatment plant and the horse park in 2007. The city has also already filed a lien against the horse-park property, about 80 acres that includes an indoor arena and outdoor facilities as well as other buildings.

Kassisieh also reported that payments were received for effluent delivered to the park in 2004. He said discussions with Kokesh did not produce results.

Kokesh said he had an oral agreement with the city during drought years to provide potable water for irrigation from the privately owned horse park well outside the city limits in exchange for waiver of payment for the effluent. So, why is that agreement forgotten or ignored?

"I think they'd like to have people overlook the fact that they used potable water during that period to water the parks and recreation areas," he said Thursday.

Katz said Thursday he was aware of an oral agreement and was determining how that would play into potential litigation.

In correspondence to the city, Kokesh writes that the horse park does owe the city about $61,000 in unpaid bills, calling the other claims "extremely bad faith." Kokesh also offered in writing to transfer water rights to the city to make up for some of the debt.

City Hydrologist Claudia Borchert confirmed that the city is protesting the horse park's attempt to transfer water rights that belong to Public Service Company of New Mexico because the rights, in the city's opinion, are not valid. The city's protest is based on the idea that the water rights in question were not used for a period exceeding 20 years. That protest is unrelated to the effluent contract, she said.

"Our basic position is that we would like to make sure that all water rights that are used and transferred in the basin are valid," she said.

On the subject of effluent, Borchert said the city values its contracts and has no immediate plans to change the way it sells the treated wastewater.

"We think that's a good use of water," she said, noting that effluent for golf courses, fields and parks keeps potable water from being used for those areas.

The wastewater treatment plant's output is about 5,800 acre feet of water per year. According to 2005 data, about 73 percent is returned the river, 16 percent goes to private users such as the Santa Fe Country Club, Santa Fe Downs and Las Campanas, and 7 percent is used to water the city golf course and Municipal Recreation Center.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.