(Posted Jan. 28, 2014)
A bill introduced in the Arizona Legislature would bar the state from taking any action in the Pinal Active Management Area that would reduce the amount or quantity of the groundwater credits.
The proposed legislation is HERE
The Rose Law Group story about the legislation is HERE
(Posted Jan. 17. 2014)
The Arizona Department of Water Resources has released this announcement:
The Arizona Department of Water Resources developed Arizona's Strategic Vision for Water Supply Sustainability, which provides a comprehensive water supply and demand analysis for Arizona. Recent studies have identified the potential for a long-term imbalance between available water supplies and projected water demands over the next 100 years if no action is taken.
The Strategic Vision creates the framework for the development of potential strategies to address the projected imbalances. It provides context for maximizing the effectiveness of these strategies to address the needs of multiple water users across the State.
While, the State as a whole is not currently facing an immediate water crisis, Arizona is at a point where it must begin to face future water supply and management challenges. We are at the crossroads of having to decide what actions we will take to face those challenges. The Strategic Vision for Water Supply Sustainability is a necessary next step in continuing to ensure that Arizona has sufficient and sustainable water supplies.
Over the next 25 to 100 years, Arizona will need to identify and develop additional water supplies to meet projected growing water demands. While there may be viable local water supplies that have not yet been developed, water supply acquisition and importation will be required for some areas of the state to realize their full growth potential. The Strategic Vision is essential to guide and ensure Arizona's future economic stability.
(The report may be downloaded in its entirety or by sections of interest)
(Posted Sept. 17, 2013)
Action has been taken by the Arizona Department of Water Resources to delay a controversial ruling that would gradually do away with water extinguishment credits.
In a Sept. 13 letter to state representatives T.J. Shope and Frank Pratt, ADWR Director Sandy Fabritz-Whitney wrote, "I wanted to let you know that the department has filed a notice of proposed rulemaking with the secretary of state for the rulemaking designed to temporarily delay implementation of the annual reduction of extinguishment credits in the Pinal AMA that is currently set to begin on Jan. 1, 2014.
"The department proposes to adopt a new rule, R12-15-725.01, temporarily delaying by five years each annual reduction in the allocation factor. The new rule will automatically repeal effective Sept. 15, 2014, at which time the current reduction schedule will become effective again."
The delay is to give time for a committee from the Pinal Groundwater Users Advisory Council to consider alternatives to the gradual depletion.
"Thank you again for your help in resolving this issue," Fabritz-Whitney wrote. "The department is ready to assist with the process for reviewing the issue and developing an alternative."
The proposed rulemaking will be discussed during a public meeting Oct. 15 at 10 a.m. in Room T116 at Central Arizona College, 8470 N. Overfield Road.
The letter said written comments on the proposed rules may be submitted to ADWR until 5 p.m. on Oct. 15. The address is: Sharon Scantlebury, docket supervisor, Arizona Department of Water Resources, 3550 N. Central Ave., 2nd Floor, Phoenix 85012. The telephone number is 602-771-8472 and the fax number is 602-771-8686. The email is
In a side note in the letter, Fabritz-Whitney said that during the next Pinal GUAC meeting at 9 a.m. Sept. 26 in the City Council chambers at Casa Grande City Hall, ADWR will present its updated Pinal Active Management Area groundwater model.
(Posted Aug. 25, 2013)
If you want to be on a special committee to study alternatives to phasing out groundwater extinguishment rights credits, you will have to get in touch with T.J. Shope or Frank Pratt, the two Arizona House representatives from the area who will appoint the group.
“If anybody has interest in serving on that committee, then those would be the two people to contact,” Jeff Tannler, statewide active management area director for the Arizona Department of Water Resources, told the Aug. 22 meeting of the Pinal AMA Groundwater Users Advisory Council.
Contact information for Pratt and Shope:
Arizona House of Representatives
1700 W. Washington
Fax: 602-417-3123Toll-free 1-800-352-8404
(Posted Aug. 25, 2013)
Formation of a 15-member technical advisory committee to discuss changes in the grandfathered irrigation rights extinguishment credits rules has shifted from being put together by the Pinal County Groundwater Users Advisory Council to being in the hands of two state representatives.
A ruling scheduled to go into effect Jan. 1 would gradually reduce the credits until in 2054 there would be none. That has set off protests from area farmers and others, ranging from charges of illegal taking of property to predictions of economic disaster.
During the Aug. 22 GUAC meeting, Jeff Tannler, statewide active management area director for the Arizona Department of Water Resources, told the council that after the July 25 council meeting that decided to appoint the committee, the department was approached by state representatives T.J. Shope and Frank Pratt, both Republicans from District 8, offering an alternative.
Pratt is vice chairman of the House Agriculture and Water Committee. Shope is a member of the committee.
“Representatives T.J. Shope and Frank Pratt approached the department and they were seeking a solution to this issue and we would like to work with them on this,” Tannler said.
As background, Shope told the audience that, “I’ve not really seen an issue really galvanize people as much as this over the last several weeks.
“Rep. Pratt and I are two of 60 members in the House of Representatives and represent a rural area that a lot of folks, our colleagues, not their fault but they just happen to live in Phoenix and Tucson, they don’t really understand what happens in other places.
“We get called on as sort of the go-to folks on ag issues. And it’s enjoyable, I think we both enjoy working on what we consider local issues. And there’s not one that’s more of a local issue than this.
“So with that, we took the concerns that folks had to heart, spoke to people on all sides of the issue here and tried to learn as much about what was going on as possible and we came up with a proposal that we brought to ADWR formally last week, but have been having discussions ongoing for the past several weeks.”
Shope said the proposal would delay the extinguishment credits decline until September 2014, a nine-month grace period from the scheduled Jan. 1 start.
“And then the spring of next year, 2014, open up a rule package that would insure a five-year delay.”
Shope said that in the meantime, “I think the most important thing, however, is that there will be a local water group that will be established – and ADWR agreed to that – of 15 partners in a cross section of people in the Pinal AMA: farmers, business people, city council members from the AMA, a dairy operator and a feedyard operator and things like that, and then two members of the GUAC board, as well.
“Rep. Pratt and I, working with the ADWR, working with the other folks, will be appointing members to that local water group.
“One of the things that was expressed over and over again from ADWR’s perspective was the desire for a local solution to Pinal County’s issues dealing with water.
“So I believe at this point, that is where we’ll be going moving forward over the next several weeks. We’ll be coming forward with that local water group and that water group will then be meeting over the next several months, hoping to come to a conclusion on the rule of the extinguishment credits over the next year. And hopefully we’ll be able to get the situation taken care of at that point.”
While that probably sounds a bit short on actual details, Shope said, “I do look forward to working with several of you that brought these concerns forward, with the creation of this group. And I think … the makeup of it will be one where everybody’s concerns will be heard, and I think that that’s very important to everybody. And that’s definitely what we want to hear. After all, my title is representative and I feel like I have to represent everybody that’s in the room. So we’ll definitely be making sure that we do that, I look forward to working with everybody on it.”
Tannler told the group that, “on behalf of the director I really want to express the department’s appreciation for Rep. Pratt and Rep. Shope. This is good for us and we’ll look forward to working with you, providing all the technical information that we can.
“If anybody has interest in serving on that committee, then those would be the two people to contact.”
Pratt told the council that, “We believe the proper way is by engaging all of the stakeholders and coming to a solution that will benefit the county and the state of Arizona.”
(Posted Aug. 25, 2013)
Fuzzy language in a letter from the director of the Arizona Department of Water Resources about delays in reducing groundwater extinguishment credits has brought questions about what exactly does it all mean.
In the letter announcing formation of a local study group to be appointed by state representatives T.J. Shope and Frank Pratt, Director Sandy Fabritz-Whitney wrote, “The department will submit a request for a rule modification on Aug. 30, 2013, that puts in place a five-year delay in the reduction of extinguishment credits until Sept. 15, 2014.
“This initial delay will give the (new committee) time to examine the conditions and alternatives. The department will open another rule package in the spring of 2014 to give the department and the community adequate time to develop a permanent solution – either to continue the five-year extension or to develop an agreed upon alternative.”
A question from the audience during the Aug. 22 meeting of the Pinal AMA Groundwater Users Advisory Council was, “It says in here that we’re getting a five-year delay but then it gives us a date of Sept. 15, 2014. Are we getting a nine-month delay and we’re going to talk about it during that time?”
It all involves a lot of bureaucratic rules was the answer.
“The rule making process is tied up with a lot of rules that we have to follow,” Doug Dunham, ADWR legislative liaison and special assistant to the agency director, said.
“A temporary rule extending a rule package already in place is easier to get through that process, because you’re not really technically changing something,” he continued.
“So we put that in place and we fully intend next spring to draw another rule package that will take longer. And that way we can get this temporary rule in place before Jan. 1 when the cutoff would begin.
“So that’s the reason for the temporary. (Rather than) if we did all the public noticing and the hearings and stuff we would have to go through, we can do it quickly and then in the spring we’re going to draw a permanent rule package.
“Now what we hope, if that’s approved, is at that point we’ll have the final long term rule solution that they come up with that meets everybody’s concerns, instead of continuing to seek a five-year delay.
“We’d really like to see if we can’t get this done much sooner rather than later, so we have a solution. I’d like to see it done before the end of this year so we know where we’re going.”
Brian Betcher, general manager of the Maricopa-Stanfield Irrigation & Drainage District, said he had spoken the day before with Jeff Tannler, statewide active management area director for the Arizona Department of Water Resources.
“It is my understanding we have a temporary nine-month delay in the current rules so that you can get the group going,” Betcher said, “but you’re also opening a rulemaking procedure that anticipates a five-year delay and alongside that (could be) whatever the group comes up, which might be to replace that or move it parallel. Is that correct?”
That is correct, Dunham answered.
“Our intent is to drop the permanent rule early next year, if not sooner, and that will be the permanent five-year delay, but at any time we can strike that language and drop in whatever other solution that the committee comes up with.”
Betcher said, “I think as I originally read the letter, the goal was trying to get a five-year delay going and if you come up with something better or different, great.”
(Posted Aug. 25, 2013)
Meetings of the Pinal AMA Groundwater Users Advisory Council that are being held to discuss a state decision to gradually do away with grandfathered irrigation extinguishment credits are subject to the state’s open meeting law, meaning that public notice has to be given.
It was first decided that the GUAC would appoint a 15-member subcommittee to study possible changes to the extinguishment rule. That has now been changed to having state representatives T.J. Shope and Frank Pratt appoint the committee.
That throws into question the requirements for public notice, given that the committee would essentially be a private group because it was appointed by two lawmakers rather than an official government body.
A double question from the audience during the Aug. 22 GUAC meeting that discussed the two representatives appointing the group was will the agendas be made public and, if so, where will you find them?
There was no clear answer.
GUAC member Jackie Guthrie wanted clarification.
“Can you clarify for us will it be on the ADWR’s webpage?” she asked Jeff Tannler, statewide active management area director for the Arizona Department of Water Resources. “I think it’s a very valid question, where do people go to find out where these agendas are?”
Tannler responded that, “Again, this group is going to be convened by the two representatives and they’re basically in charge of this, but we can certainly help out with those things of the date and time of the meetings on our website, that shouldn’t be a problem.”
Pointing out that having the two representatives appoint the committee takes it away from the GUAC public requirements, Guthrie asked if it is no longer required to be a public meeting.
“I don’t know the answer to that,” Tannler replied. “It’s possible that if more than two GUAC members happen to attend a committee meeting, then you’ve got a quorum there, so it may be that we post that just in case there happens to be a quorum. Again, the group is not led by the GUAC.”
Guthrie responded that, “So at this point, we really don’t have an answer for the question, because we don’t know what representatives Shope and Pratt are proposing in terms of making the meetings public or not public.”
GUAC member David Snider said, “However, I would venture to guess, knowing both individuals as I do, that both representatives Shope and Pratt are supporters of the open meeting law and will do their very best to make sure that they are posted and adhere to the provisions of the open meeting law.”
Doug Dunham, ADWR legislative liaison and special assistant to the agency director, said, “We would be happy to put those announcements on our website. I hadn’t thought through that part, but Jeff makes an excellent point that if there happens to be more than two of the GUAC members at one of those meetings it would constitute a quorum. So probably out of an abundance of caution in compliance with the open meeting law we would go ahead and post it as an advisory that there would perhaps be the potential of a quorum just to make sure we don’t get afoul of that.”
The ADWR public notices website is http://www.azwater.gov/AzDWR/Legal/Public_Meeting_Notices/.
GUAC Chairman Oliver Anderson said, “Let’s put it this way, in the past all of the meetings have been governed by the open meeting law, all subcommittee meetings have been posted.
“Now whether the two representatives want to continue that process, evidently that’s up to you folks. Do you want to make a prediction?”
Shope replied that, “I’m on a school board right now, I have to do that all the time.”
Pratt said, “We would like to make this process very transparent and very open to the people that would like to give us input. We will work as facilitators, we will actually convene a panel of experts, if you will, that will handle the job.”
(Updated Aug. 19, 2013)
The resolution, with Councilwoman Lisa Fitzgibbons opposed, was approved Monday night, Aug. 19. Fitzgibbons said she is not against agriculture, but feels that more information needs to be brought out, especially from the Arizona Department of Water Resources.
(Posted Aug. 16, 2013)
A resolution urging the Arizona Department of Water Resources not to slowly do away with grandfathered irrigation rights extinguishment credits is the main item on the agenda when the Casa Grande City Council meets Monday.
The meeting, open to the public, is scheduled to begin at 7 p.m. in the council chambers at City Hall, 510 E. Florence Blvd.
Other agenda items include final approval for adding to captains to the Police Department and demoting the three present division commanders to lieutenants, purchasing grass seed for the golf course and a $748,636 contract for slurry sealing of city streets.
The water credits resolution, minus the whereas and therefore, says the Arizona Groundwater Code of 1980 assured Pinal Active Management Area grandfathered irrigation water rights holders the extinguishment conversion credits forever.
“In the Pinal AMA, where the economy is primarily agricultural, the management goal is to preserve that economy for as long as feasible while considering the need to preserve groundwater for future non-irrigated uses,” the resolution says, “Currently, when property owners cease agricultural activity the Pinal AMA issues extinguishment credits, which allow the existing water rights to be converted to municipal and industrial use. The existing conversation ratio provides roughly enough credits to prove a (100-year) assured water supply for development purposes. The extinguishment credits have significant value as a property right.”
The resolution continues that, “The goal of preserving an important part of the Pinal AMA economy is now being achieved with an agricultural economy that continues to experience growth while producing just under a billion dollars in receipts from crop and livestock sales annually, as well as creating many new jobs and attracting related industry.
“The goal to protect water for future non-irrigated use is being realized under the old system of extinguishment credits as investors often hold large swaths of projected development property, which are currently in productive agricultural use, until the time to convert arrives.”
Prior to 2007, the resolution says, “the Pinal AMA experienced unchecked and runaway growth which led to a special rulemaking effective in 2007 that, in part, purported to encourage early extinguishment of agricultural grandfathered groundwater rights in the Pinal AMA so extinguishment credits could be used by developers. The plan initially adopted in 2007 would systematically and eventually reduce the farmer’s amount and value of extinguishment conversation credits to zero without farmer compensation.
“However well meaning the plan was intended, it was ill conceived and based on faulty premises. Fear of the negative effects of this plan on the agricultural industry and existing irrigation districts led to an amendment to the plan in 2009 that stalled the implementation of the plan but did not change the formula which will eliminate the extinguishment credits for converting irrigated land. If allowed to begin Jan. 1, 2014, it may inadvertently render the goals of the Pinal AMA unachievable.”
The resolution says that, “The Pinal agricultural economy may be seriously jeopardized well in advance of any development if farmers must decide whether to retire their grandfathered agricultural water rights and get out early with full conversion credits or to continue farming and see their conversion credits and the credit’s associated value disappear to zero.
“The water protected for future development by investors holding agricultural land and water conversion credits until development might become feasible will also be forced to decide whether to hold the land in farming and lose the water conversion rights or to cash out now taking the conversion credits elsewhere in the Pinal AMA.”
In addition the resolution says, “the administrative rulemaking regarding these extinguishment credits in 2007 was conducted without the inclusion, or knowledge, of most Pinal AMA farmers, investors, communities, agriculturally related business, economic development organizations, lenders, Pinal legislative representatives, and community and county leadership.
“The rule may be counter-productive to achieving the Pinal AMA goals of protecting the Pinal agricultural economy as long as feasible while reserving water supplies for future non-irrigated use. The goals are being realized and accomplished efficiently in accordance with the grandfather groundwater irrigation water rights given Pinal AMA Farm-land in the original 1980 Arizona Ground Water Code and the administrative rules in place prior to 2007.”
The resolution contends that, “The reduction of farmland equity without compensation and a rule reducing the amount of extinguishment credits that forces both farmers and investors to make decisions now that they would otherwise not want or need to make until a more appropriate time is onerous and may be harmful to the economy of areas within the Pinal AMA.”
It says the mayor and City Council resolve that:
• “The City of Casa Grande hereby respectfully requests that the Arizona Department of Water Resources act to repeal the provisions of Rule 12-15-725, as first adopted in 2007, that use an allocation factor of less than 100 when calculating the extinguishment credits for extinguishing a grandfathered right in the Pinal AMA.
• “Casa Grande hereby respectfully requests that the Arizona Department of Water Resources maintain the original irrigation grandfathered water rights and extinguishment credit framework established in 1980 Arizona Groundwater Code, which has allowed the Pinal AMA to consistently achieve its
goals, benefitting all segments of the local economy while still protecting water for future non-irrigated uses.”
(Posted July 31, 2013)
The liveliest part of the July 25 Pinal Groundwater Users Advisory Council came after the panel agreed to form a new subcommittee to study the extinguishment credits rules, meeting the fourth Thursday of August to begin work on membership and discussion of the goal.
After formation of the subcommittee was unanimously approved by the five-member GUAC, Dick Powell asked to address the council and the audience. Powell has said before that when he speaks at such meetings it is personal, not as a Casa Grande City Council member or a city spokesman.
This is an unofficial transcript of the exchange between Powell and GUAC member Scott Riggins.
POWELL: Well, I’ve very disappointed today.
I have a very good way that GUAC can take care of the water issues.
In 1980, you froze farmland. Why don’t you freeze development land, and we’d all fine.
That won’t happen.
You’re trying to administratively take farming away and replace it by development.
We’ve been up to the state Legislature, visited with several of them, and they’re just aghast. One of them who is going to run for governor said the statement was made that in the Pinal AMA everybody is against farmers. He said the state of Arizona is not against, whoever said that? And he started looking.
All of those people (in the Legislature) are aghast that five people sitting here can take away your value on your farmland. Five people, most of who don’t have any skin in the game, can take away value systematically from your farm. Totally unelected, you had no voice in it. (Farmers and users) control 85 percent of the groundwater and you’re not represented. You should be 85 percent of the committee that talks about this if this happens.
This is just flat wrong.
We are proceeding, there will be a meeting next Wednesday night at The Property at 7 o’clock and we’ll bring you up to speed on both the legal and the political ramifications. Our goal, especially with what happened today, is make sure that we don’t have five people that can take value away from farmers systematically and scootch in development.
Development is fine, let them buy from the farmers, let the farmers have the water rights.
If you would leave things alone as they are right now, you have achieved everything that you wanted to do. You said that your priorities were to continue to farm as long as feasible. A farmer is certainly able to tell when it’s not feasible, make that decision.
You’ve said that you want to preserve future water. You’ve got that done. You’ve got investors that have got leasebacks that are holding on to huge amounts of water for development. And you’re taking it away from them, too. You’re destroying the development possibilities as well as you are the ag possibilities. You’re taking equity.
And I’m just ashamed that you did this and I’m ashamed that you five people are able to represent – Oliver, excuse me – the farm community here in Pinal County. I think it’s a travesty.
(The Oliver reference was to Oliver Anderson, the GUAC chairman. Both he and Riggins are listed by GUAC as involved in agriculture/real estate)
RIGGINS to Powell: Please come back up (to the microphone).
You know, there were just a lot of things you said that were incorrect.
POWELL: I don’t think there’s anything I said that was incorrect.
RIGGINS: There happens to be two farmers that sit on this board.
POWELL: OK, that means the majority don’t.
RIGGINS: And you know, there’s various represented sectors here in the Pinal AMA.
POWELL: Yes, but they don’t represent the majority of the use, Scott Riggins, and you know that.
RIGGINS: And by the same token, I’m a fourth-generation farmer.
POWELL: And I would expect you to stand up for the farmers, and you haven’t done that.
RIGGINS: And I have absolutely spoke to that every single time. And I will declare publicly that you have stated things that are absolutely misinformed and you’re also being incredibly incendiary.
POWELL: And I will say in public, sir, that you are uninformed and that you definitely don’t know what good for the community or the farm community, and that you don’t have many farmers that think you represent them.
RIGGINS: Mr. Powell, one of the reasons why it is so important to sit people down and to educate them about the realities is to prevent outbursts like you just had.
POWELL: You know, one of the most important things is not kill it by committee. You start one issue and maybe they go on forever. We have an issue that needs to be addressed by Jan.1 and we’re going to either do it legally or legislatively.
ANDERSON: Can I take back control of the meeting?
(Posted July 30, 2013)
The long and the short of it was that there was really no short of it.
During the July 25 meeting of the Pinal Groundwater Users Advisory Council, the Arizona Department of Water Resources state director of active management areas (including the Pinal AMA) asked that the council reestablish a subcommittee that was in play several years ago, with the idea of again examining extinguishment credits.
That could be called the short of it.
The long of it was how the council got to approving formation of the subcommittee and deciding to begin discussions about members and other details at the GUAC meeting on the fourth Thursday of August. The location has not yet been announced.
“What is pertinent and what we’d like to have happen is for the GUAC to establish a water management subcommittee that existed in the past,” Jeff Tannler, the ADWR director of AMAs, told the council. “There were 15 members in the past and they examined a wide variety of issues.
“The main issue that we would like for the (new) subcommittee to examine is the issue of extinguishment credits, whether the current mechanism is as equitable as it needs to be, and to get input as to whether there are any other ways that this could be accomplished that meets the needs of all the users.”
It’s ultimately up to the GUAC, Tannler said, but offered some suggestions from the ADWR.
“One is that time is of the essence,” he said. “The decrease in the amount of credits that you get from the calculations begins in 2014 and we are toward the end of July now. We would like to see this group meet in that very short period of time. I’m thinking maybe 90 days, if possible, definitely by the end of the year.
“Because of its short time frame, because there’s limited issues that is being discussed here, we’re suggesting 15 members. You might want a somewhat smaller group, it might be easier to convene the group and work through. The larger the group you get, the longer it can sometimes take. But we do recognize that we want good representation from all the users across the spectrum.
“So possibly instead of 15 members, a suggestion would be rather than all the districts you would just have just one district representative that would represent all the districts, one provider, one representative from a city or a town, a grower, a developer. We may not need to have all five members on the GUAC, that’s an option. We’d like to have at least three GUAC members to insure that we have a quorum, because this is an open process and we want to make sure that absolutely follows the open meeting law. You’re stuck with me, I’m from ADWR, I’m part of the group.”
Another suggestion from Tannler was that the subcommittee number be odd, preventing tie votes.
At that point, GUAC Chairman Oliver Anderson asked for nominations for such a subcommittee, drawing a caution from member Scott Riggins.
“I believe recommendations for individuals at this time is probably a little bit out in front of the process,” Riggins said. “I believe we need to discuss somewhat further exactly how this technical advisory committee will be formatted, the number of people that will be on it.
“If you will remember, due to many requirements and the decisions that were made the last time this happened, this technical committee was a group that reported to GUAC. And the GUAC made the recommendation to ADWR.
“In that process, the technical committee not only was unanimous in its advisory to GUAC, but there wasn’t even a vote taken. It was consensual. Everybody agreed on the direction things should go. GUAC reported that and it went forward up to ADWR in that fashion.”
Smaller is not always better, Riggins said.
“I believe the recommendation of making this a smaller committee at this time might not be the best idea,” he said. “There’s a reason why all five GUAC members were on it before, was because they needed to be involved in the process, because they were the ones that were ordered to make the decision, make the recommendation. That’s five people right there. I believe that structure is still important.”
Member David Snider agreed.
“I find myself concurring with Mr. Riggins,” he said. “Having participated in a number of water-related commission meetings and processes within this AMA, a number of similar let’s get together and talk about critical issues, the size of the specific group is inconsequential because water is so critical that the room will be packed regardless of how many official members there are on the subcommittee. I do believe that it is important that we have representation from all of the water consumers.”
Snider said he agreed with Anderson’s statement that the original subcommittee had many more items to consider than just the extinguishment credits.
However, he continued, “there is still one other leftover issue which is still hanging out there, and that has to do with the physically available water supply in this active management area.
“And to that point, we have been waiting for a report from the Department of Water Resources on its groundwater modeling. I, for one, am going to want to know how much water we have before we get to make these types of decisions. Because as Mr. Tannler says, protecting the aquifer is part of a long term concerns of this GUAC and I think for everybody who gets thirsty in this active management area. So I’m appreciative of the desire for haste, but when you make haste sometimes you make mistakes.”
Member Jackie Guthrie wanted to know when the groundwater modeling would be done. “Are we talking months?” she asked. “We don’t have months to sit around and make this decision.”
Tannler replied that, “It’s likely that the groundwater model would not be ready within the timeframe that we had discussed. I believe it will be next year sometime.”
Member Bill Collings then said, “I would like to express my concern that this report was supposed to be done a year and a half ago. It was promised a year ago in January, then July, then October and now next year. And yet we’re supposed to be making command decisions in respect to water users without what I consider significant information. I would like to see some steps taken to accelerate and get that model back on track.”
Doug Dunham, ADWR legislative liaison and special assistant to the agency director, told the council later in the meeting that, “I just got an email from our chief hydrologist. The technical portion of the hydrologic study is available at this point. They’re finishing the supporting report. That should be available within a month or so. By your next meeting or two, that new model would be available to begin review.
Having that hydrologic study, the technical committee of the GUAC and any member of the audience will know exactly the kind of demand and supply situation that we’re aware of at this point.”
Anderson has earlier said that the subcommittee from several years ago had some knockdown, drag out fights over issues.
“That’s fairly accurate,” Riggins said. “But to really understand that in context, we went from having knockdown fights to having 15 various people from different regulated sectors all agree by consensus the way to go forward.
“And that wasn’t because of negotiations, it wasn’t because one person took this, one group took that, one person took this. That wasn’t what led to it, in any way, shape or form.
“What led to it was four years of education, to where all the parties that sat there finally looked at the numbers and looked at the laws and looked at the realities of water use and land ownership and businesses and realized, oh, didn’t know that before.”
Riggins also agreed with Snider that the water modeling needs to be in hand.
“The thing that hasn’t been discussed at all yet, and it’s the most important one of the entire discussion, is the concept of physical availability in the Pinal AMA and how it plays in the extinguishment credits and any other decision,” he said.
“And likewise, the groundwater law that would hit the Pinal AMA. Without the definitive rule, the definitive report being issued, we’re all shooting in the dark.
“Now, one of the things that allowed us to go forward last time was the fact that we all finally understood that the thing could be off by 100 percent and it’d still make no difference. The way you formatted the directions to go forth still existed the same way.
“But we truly this time need to have that done. For everybody to sit down and really understand that we don’t need to argue over that number. We need to have it.”
Riggins added that, “I will say right now that I don’t believe having a short term fix without people understanding issues done in the next three or four or five months is an important finding. I don’t believe so at all. If it takes a year or a year and a half, it’s not going to impact things. Things can be modified to make things happen when the decisions are there.
“And during that period of time that we put the greatest emphasis as possible to get this report finished, we can begin holding these meetings with this group that we can select and we could get that education process going again where people can understand the way all this fits together. Unless you’re right in the middle of it and been in the middle of it for a long time it’s really hard to understand how it fits together.”
Anderson asked Riggins if he had a motion to make.
“It’s not a motion, it’s a suggestion,” Riggins replied. “What I suggest is this GUAC put on its agenda for its next regular meeting that a major item is to format and start making nominations for the next assured water supply technical advisory committee, to be in place, hopefully, within the month after, to get all those nominations up, get everybody to be able to agree if they want to be on it, that in itself is a tough timeline.
“These things don’t happen like that, they take a little time. But we start progressing to make the body of landowners and residents and business owners, citizens of the Pinal AMA who can sit down once again and do the very best they can to grapple with this very, very difficult problem, which it sometimes seems to be simple to see but it never is simple to see. There’s too many pieces of it. That education process is paramount to get people understanding how it all works.
“So I suggest that as an agenda item for next month and to be the most important thing that we do, do nothing other than deal with that.”
Guthrie told those in the audience that they should give Tannler the names of persons who might be interested in sitting on the subcommittee.
She added that it needs to be understood that the meetings might be every two weeks or once a month.
“People need to make a commitment to be in attendance,” she said. “If they’re interested in being put on the committee, understand that they are making a commitment at that time. It could be a six-month process, a nine-month process.”
There’s no way at present to gauge how long the subcommittee might meet or how often, Riggins said.
“We’re going to need to have very sincere, deep discussions with ADWR about when we truly can expect the modeling plan, when we can expect a knowledge of physical availability. That’s something we need to know. We might need to get a commitment to change their schedule somewhat so we can make this happen. I’m sure they’re absolutely thrilled to hear that concept.
“One other thing that I would suggest, right from the front, for consideration. The size of this committee, I believe, is manageable more or less in the size that we had it last time. But the one thing I would suggest right from the front is all those people have named alternates behind them so meetings do not have lack of representation.
When this thing starts rolling, it’s an education process. There needs to be people that are representing the sectors that are there each the discussion is aired.”
Tannler said it would be better for a formal motion and vote, rather than consensus.
Riggins responded that, “I move that the Pinal GUAC commence the reformation of a assured water supply technical advisory committee that acts with recommendary powers to the GUAC and begin that process of formatting that committee at our next meeting on the fourth Thursday of August 2013.” Guthrie seconded the motion.
Snider said he believed the motion also needed to include the water modeling report.
“I think it needs to be said that along with the motion we also strongly advise the department that as we sit in August to format this technical advisory committee, to schedule, etc., we will need to know when, date certain, we can have the groundwater modeling report in hand and explained to us,” he said.
Riggins then recast his motion to include that.
The vote was unanimous.
Riggins then told the audience that, “It was my belief and my intent when I made the motion to this committee that I did that we afford more than anything else 100 percent transparency and 100 percent participation.
“The desire to take time on this is the desire to have clarity, have transparency and have the results fit within the realities that are there.
So all I can say to those folks that have said things about a lack of transparency and a lack of representation, that’s what is desired, nothing else.”
Guthrie added that, “For the previous subcommittee, as well as the GUAC, these
are all public meetings, they’re advertised as public meetings, there’s always small notice pasted in the local newspaper, it’s on ADWR’s web page, so I don’t think that these meetings were in any format other than transparent.”
Anderson then said, “These meetings are all governed under the open meeting laws. And folks, at the original technical committee there was probably as many people there at some of those meetings as there are here today. Those folks were concerned and wanted to get in on the issue and they did.”
(Posted July 28, 2013, updated July 29)
Farmers Against State Takings, formed by Pinal County growers, dairies and feedlots, along with supporters of the agricultural community, to try to repeal the extinguishment credits ruling meets Wednesday, July 31, at 7 p.m. at
The Property Conference Center, 1251 W. Gila Bend Highway in Casa Grande.
The group has so far not released additional information about the meeting.
However, Dick Powell told the July 25 meeting of the Pinal Groundwater Users Advisory Council that, "There will be a meeting next Wednesday night at The Property at 7 o’clock and we’ll bring you up to speed on both the legal and the political ramifications. Our goal, especially what happened today (agreeing to form a committee to study the issue) is make sure that we don’t have five people (the GUAC) that can take value away from farmers systematically and scootch in development. Development is fine, let them buy from the farmers, let the farmers have the water rights."
FAST has an Internet site at www.pinalwater.com and a Facebook page at https://www.facebook.com/PinalCountyExtinguishment.
A page with petitions to be circulated by both residents and farmers is at http://pinalwater.com/2013/07/15/petitions/
(Posted July 30, 2013)
At the beginning of the July 25 Pinal Groundwater Users Advisory Council meeting Jeff Tannler, statewide AMA director for the Arizona Department of Water Resources, and Doug Dunham, ADWR legislative liaison and special assistant to the agency director, gave a brief history from 1980 until today on how the state groundwater code was created and how extinguishment credits fit into the picture.
“As we all know,” Dunham, said, “in 1980 the groundwater code was established and under that, it created irrigation grandfathered rights. And those uses were based on the existing use at the time and that authority was limited to ag irrigation only.
“The code also created the ability to change IGFRs to a Type One right and that IGFR allowed the use of that water to change from ag irrigation to non ag uses, primarily municipal and industrial uses. The code also created Type Two rights. Those are based also on existing uses at the time and those were the existing groundwater users that were irrigating, those were non ag uses, primarily industrial. And also in the code was the authority to withdraw and deliver groundwater within a municipal service area, limited to non ag uses.”
The code also created active water management areas, including the Pinal AMA, Dunham said.
“The code froze the number of irrigated acres within the active management areas, created a statutorily mandated management for each AMA,” he said. “And each AMA is unique.
“In Pinal, that goal is to preserve the ag economy as long as feasible while preserving supplies for future non irrigation uses.”
The groundwater code also created the assured water supply program, Dunham said.
“Basically that initial structure grandfathered in existing municipal uses at the time and then required any new land use and new development to show the 100-year renewable water supply,” he said.
“In 1995, the assured water supply rules were first adopted. Those rules basically fleshed out the requirement for developers showing the 100-year supplies were physically, legally and continuously available, that the water supplies were of adequate quality, that the developer had the financial capability to complete all of the infrastructure, that the water use was consistent with the goal of the AMA, essentially forcing developers to rely on renewable water supplies instead of continuing to mine native ground water.
“At this time was when the extinguishment credits were created in the rule for assured water supply use. And they were created to help the transition from groundwater use to renewable water supplies.”
In 1995, the Arizona Legislature created the Central Arizona Groundwater Replenishment District,” Dunham said.
“The GRD allows the developer to join when they don’t have enough renewable water supplies to met the demand for their proposed development. And the basic concept of this program is that it forces new growth to create the replenishment of groundwater after it’s used within the subdivision.”
In 2000, the state Water Management Commission was created, tasked to review the water management conditions across Arizona. It made recommendations for modifications to the groundwater code and any of the existing programs in the code.
“Among several of the recommendations that they came up with,” Dunham said, “one was that the Pinal GUAC look at the existing assured water supply rules at the time for compliance with the statutory requirements of the Pinal goal.
“In 2001, the Pinal GUAC began to earnestly review the assured water supply rules. They established a water management subcommittee to look at the water supply versus demands within the AMA and to look at the assured water rules versus the statutory mandated goal.”
The subcommittee was tasked with putting together a comprehensive water management plan and sending a recommendation to the GUAC, Dunham said.
“In January of 2006, the Pinal GUAC unanimously accepted the recommendations and forwarded a new modification request to the Department of Water Resources,” he said.
“Beginning in 2006, ADWR initiated a formal public rulemaking process based on the GUAC request. The rule modification was formally adopted and became effective on Oct. 1, 2007.”
By then, the national economy had slumped and residential and other construction had ground down.
“Due to the economic downturn several irrigation districts approached ADWR with some requests and ADWR agreed to do two things,” Dunham said.
“One was to allow for the renewal of extinguished IGFRs. Previous to that, once you extinguished an IGFR it was permanently retired. What they were finding in both Maricopa and Pinal counties was that a great deal of the development of the plan (was based on anticipated growth) and then when the downturn hit those developments stopped. We had a lot of land that was just sitting fallow, so we allowed those retired rights to be renewed so the farming could begin again.
“Second, was a request by the districts to delay the implementation of the Pinal AMA extinguishment rules specifically. We agreed to do that (until 2014). And the agreement at that time was the districts would not seek any further delays in implementing the decline in the extinguishment credits regardless of economic conditions and that they would work to prepare their systems for eventually retirement of IGFRs.”
Tannler said the economic situation has meant that much development is still basically on hold.
“There has been, I think, one grandfathered right extinguishment since 2009 and that was about 6,000 acres,” he said.
Delaying phasing out extinguishment credits until 2014, Tannler said, means that “if you decided to extinguish a grandfathered right in 2013 you would get 100 percent of the allocation value of the extinguishment credits. Beginning in 2014, that would start to ramp down until the year 2054,” when it becomes zero.
“Note that this is similar to how grandfathered rights, the extinguishment process, is in the Tucson AMA and the Phoenix AMA,” Tannler continued. “They’re still ramping down in those AMAs also and it’s a lot quicker. The rampdown point where you get zero credits if you extinguish that year, that’s 2025, so that’s a lot sooner than 2054.”
Tannler noted that in mid June, a town hall was organized in Casa Grande to discuss the assured water supply provisions that dealt with extinguishment credits.
“One of the concerns out in the community,” he said, “is that if the reductions in the calculation begin next year, 2014, then they’re concerned that some farmers will extinguish their grandfather rights right away in order to the maximum amount of extinguishment credits.
They believe what that would lead to is a number of farms being fallowed and possible lost to the local economy from that. The other side of the coin is you need to have water for the future, both agricultural and for non irrigation uses.”
Tannler said that leaving extinguishment credits at 100 percent indefinitely “means that there’s much more groundwater that can be used and does not need to be replenished by renewable supplies. So that takes some incentive away from bringing in a renewal supply, which is vital to the keeping the area going as long as possible.”
Tannler said he wanted to make these points:
• “The irrigation grandfathered rights do not go away automatically and they do not reduce in size. As long as the farmer wishes to continue to farm that irrigation right stays in place. That’s perpetual, and it doesn’t go away through non use.
• “When you’re talking about extinguishment credits, if a developer buys an irrigation right and then decides to extinguish that and get the credits, he can do so.
• “If the farmer who own land decides to extinguish the right and sell the land and the credits, either together or separately, he may do so.
• “Credits can be moved, they’re not tied to the land. They can be moved to different parts of the active management area to be used.
• “We do not set a value, monetary value, of what extinguishment credits are worth.”
One value for extinguishment credits would be for a developer who has to prove an assured water supply, Tannler said.
“To that extent that if they are already a member of the Central Arizona Groundwater Replenishment District, much or most, possibly all, of their replenishment is going to be done by this. So extinguishment credits are one possible option for a developer to prove an assured water supply.”
Tannler said some groups want to discuss altering the assured water supply rules, possibly to extend the length of time that extinguishment credits would be granted at 100 percent.
“We are open to discussion,” he said, “but you want to keep in mind that we have some goals.
“If there were any change, if there was a different solution, then we want it to be a solution that the whole community agrees on. And we need it to be something that does not harm the aquifer any more, doesn’t increase the harm to the aquifer.
“And finally, it needs to meet the management goal of the Pinal Active Management Area, and that is to preserve the ag economy as long as feasible, consistent with the necessity to preserve water supplies for nonirrigation uses.
“So what that says to me is we need to preserve water supply as long as possible in the future for irrigation and nonirrigation uses. We want to extend that as long as possible.”
(Posted July 29, 2013)
It was just one paragraph at the end of an agreement between the Arizona Department of Water Resources and irrigation districts in the Casa Grande area, but it became a point of contention in the protests against changes in the way grandfathered irrigation rights extinguishment credits are calculated.
As it stands now, the credits begin declining in 2014, reaching zero in 2054.
The paragraph says:
“The irrigation districts will not seek any additional amendment to the allocation factors for extinguishment credits … even if development in the Pinal AMA does not significantly increase by Jan. 1, 2014, nor will they encourage any other persons to seek such an amendment or assist any other persons in seeking such an amendment.”
Dick Powell, a Casa Grande City Council member, has termed the paragraph as both a gag order and a reason why he says so few farmers knew about the plan to eventually end extinguishment credits.
Powell has pointed out several times that he speaks only for himself, not as a City Council member or a spokesman for the city.
The subject arose again during a July 25 meeting of the Pinal Groundwater Users Advisory Council called, in part, to discuss the extinguishment issue.
Ryan Hurley, an attorney with the Rose Law Group in Scottsdale which has been hired to represent Farmers Against State Takings, was asked by GUAC member Bill Collings if he feels that farmers are represented by the irrigation districts.
“Not adequately, no,” Hurley replied. “And in particular because of the agreement that was made in the last delay the irrigation districts were prevented from advocating anybody to change or delay the ruling even further. So in the last few years there’s been really no alignment between the irrigation districts and the farmers on that particular issue.”
Jeff Tannler, statewide water active management areas director for the Arizona Department of Water Resources, then told the GUAC that the agreement is no longer in force.
“The agreement that this gentleman was referring to where the irrigation districts agreed not to pursue delaying the rules any longer, we believe that’s no longer in effect,” he said. “The irrigation districts have satisfied their obligation, so we do not have any problems with irrigation districts.”
Oliver Anderson, the GUAC chairman, said such gag rule charges have “been brought up as not only a challenge but a statement. Could you verify that, bring that back to the council next meeting so we can verify the fact that the ADWR agrees to that?”
“Agree to (what)?” Tannler asked in return.
“That the irrigation districts have satisfied all their (obligations),” Anderson said.
“I can confirm that right now,” Tannler replied.
Posted July 22, 2013)
Another meeting to discuss the contentious issue of the extinguishment of grandfathered irrigation rights credits will be held Thursday, July 25.
The meeting, open to the public, begins at 9 a.m. in the council chambers at Casa Grande City Hall, 510 E. Florence Blvd.
The agenda includes:
• A discussion of the history of calculating extinguishment credits.
• A discussion about forming a Pinal Technical Advisory Committee to evaluate the extinguishment credit calculations.
• A presentation on the water use agreement between Salt River Project and the Gila River Indian Community.
There will also be time for public comments.
(Posted July 8, 2013)
(This is the final story in the series)
Among those making presentations during the June 19 meeting in Casa Grande on the issue of extinguishment credits were Brian Betcher, general manager of the Maricopa-Stanfield Irrigation and Drainage District, and Bill Garfield, president of Arizona Water Co.
Betcher said that as a young engineer in 1980, he began working on water projects for irrigation districts.
“That’s right when the groundwater law was being implemented and we worked directly with (people) down here, because we were trying to figure out what land was going to be eligible and what land we were going to be able to provide Colorado River water to while they were developing and implementing the groundwater laws.
“I had the opportunity to be part of that subcommittee group that worked on behalf of the GUAC with all different sorts of water sectors to try to develop something that made some sense.”
In the original 1980 law, Betcher said, “you had a value of extinguishment credits, with the idea and the intent that when farmland developed, development would be placed on farm land, and so you probably would reduce overall water use, hopefully, and that was a good for the aquifer, great.
“What I think has been understated is in 1995 when the assured water supply rules were passed, statewide, and it was mentioned (earlier in the meeting) correctly that in the Phoenix AMA and Tucson AMA their reductions in extinguishment credits are very severe. By 2025, they’re completely gone. So agricultural land in those AMAs has no extinguishment credits left.
Pinal AMA is much better off, going all the way out to 2054, that we have right now.
In 1995, a time when there was not much development was happening, it was determined that 125 gallons per capita per day was granted for any land anywhere in the county on which to develop.
“I don’t know that anybody understood what it meant,” he said.
“One of the main goals in 2000 when we sat there was to try to set that right,” Betcher continued. “That was a huge error that was being perpetrated on this particular county and this AMA. That was undone completely, to where there is now a smaller groundwater allowance that is available to everybody, with the idea of bring the value back to ag land. That’s number one.”
Number two – “I think this is very important” – Betcher said, is that, “One of the things we looked at was if you kept the 1.5 acre-foot per acre extinguishment credit that you had in 2000 and did not reduce it over time and you had a strong development occur, the Department of Water Resources has to determine how much groundwater there is left underground to dedicate to subdivisions as you go along to grant a hundred-year water supply.
“They were looking at projections that said very quickly we will get to a point where there’s no more groundwater to allocate, so either you bring 100 percent renewable supplies with you to develop or you cannot develop.
“Part of the goal, and whether or not this group hit it right, was to try to say how do we get as much renewable water into this county as we possibly can, because we’re already starting behind the 8 Ball.”
A smaller population is also a difficulty, Betcher said.
“We didn’t have the big cities to get the long term contracts to begin with,” he said. Arizona Water Co. has some, Florence has got some, Eloy has got some. Casa Grande does not. City of Maricopa does not.
“So you’ve got a finite supply of water underground, this is your birthright, how do you manage it?”
Another goal of the group, Betcher said, was “how do we provide the greatest benefit for the most amount of land for the greatest period of time, how do we do it?
“We ended up with this product. Is it perfect? Probably not, but that’s the goal of what we tried to do.”
Betcher said he also wanted to make a statement on behalf of the irrigation districts.
“We are so much farther better off now and the ag economy has been extended and its vitality maintained far beyond what was anticipated in the early ‘80s when the feasibility reports were written saying we’re going to build these canal projects to bring CAP water in here,” he continued.
“You have left, so much water remains underground now that never would have been there. We were on track to pump ourselves dry. And some people had, because they couldn’t afford to pump it.
“So we’ve extended that vitality. This law was an intent to make that better.”
Betcher said he would dispute an earlier comment by Dick Powell on future property values.
“If you’re holding farmland and you keep it at 100 percent and you don’t allow that extinguishment credit to reduce over time to incentivize bringing in CAP water, there will be a point in time where ADWR will say you can’t develop, there’s no more groundwater, that everybody else’s land has no extinguishment credit value, it goes away completely, it’s gone, it’s completely gone.
“Or, you extend it as far out as you can and try to get as many people to benefit. And there’s always going to be that first person that somebody says no to.
“And I don’t know who that’s going to be and I don’t know where that location’s going to be.”
Will public policy change and more surface water is brought for ag? Betcher asked.
“Boy, I hope so,” he continued. “We’ve got to do it, but I can’t say that’s going to happen.
“I could argue that maybe future values are greater because of this law and this rule in the future than they would be if there’s no water to give for development.
“So that may be a rhetorical question for you folks to think about.”
Betcher also had a warning for those who want to change the state’s extinguishment decision.
“If you’re going to change it, don’t it make it worse,” he said. “Make sure if you’re going to try to change it, work with the department, you get something that provides what you’ve got. But I think your future values are better than you think they are.
“And I can’t tell you what that relative thing is, but I will tell you that when you get to 2025, you’ll have a groundwater extinguishment credit if you want to develop; Tucson and Phoenix will not.”
“I couldn’t let Brian be the only one up here speaking on behalf of people who participated in the subcommittee,” Garfield told the audience.
“The process was about three years or more in length. And we struggled with how do we keep and bring water into this AMA. We need water.
“And what I saw happening to some of the other active management areas through the groundwater replenishment, I participated in their stakeholder process in 2005, 2004.
“All the water the replenishment district is bringing into the state is going to Phoenix and Tucson. And I thought we needed to do something here to bring water into this AMA.”
Garfield said the allotment here was under 11,000 acre-feet, with Eloy and Florence getting three or four thousand between the two.
“That’s not nearly enough water for what we’re going to need in the future to sustain homes and businesses,” Garfield said.
“So on the subcommittee, we really were trying to find a solution the best we could within the regulatory framework of the Department of Water Resources.
“I hate regulations. As a business, we have way too many regulations. But we were trying to find within that framework something that would work in this AMA that would be able to say where is the water going to come from.
“Maybe there’s only enough water for one million people and maybe we’re looking at 6 million people.”
There can be discussions about credits and how to account for that in the regulatory framework, Garfield said, “but ultimately we need water here for what the future of this county and this AMA is going to be. And that’s what the subcommittee was trying to do.
“I agree with Brian, is it the perfect system? From what I’m hearing, probably not.”
Garfield said he also agrees with having a public process.
“We had meetings for years,” he said. “I was on the committee, I was the chairman of the subcommittee. The first chairman died in the process. So I was tagged with, next, you’re it. I’m hoping that wasn’t my death sentence here.
“I can tell you that the subcommittee worked in all good faith to try to find a solution for this AMA and not be a problem.
“But maybe this is a better solution. I’d more than welcome hearing another view of how we might achieve a solution.”
“I think you can kind of hear a consensus here that some of this is done without a lot of people at the table,” Richie Kennedy, who moderated the meeting, said.
“I think that a lot of issue that people have right now is that only certain people were at the table. And I think that’s a big fear for a lot of people out there, rightly so.
“And with that being said, and I’m speaking on behalf of just myself, I’m not a farmer, I’m a feedlot operator, so I don’t deal with the farms directly as most of you guys do. And so I don’t have to deal with the irrigation districts, but looking forward into the future, irrigation districts are going to be here with or without you guys.
“I think there’s a model out there that these irrigations districts are after, and I’m going to call it the SRP model.
“That’s going to be here whether you’re here or not, and so whether or not their true interest is in with you right now, that’s up to you guys, the members, the board members, the end users of that water to determine. And I hope you take that home and think about it and show up to the next meeting.
“And hopefully that next meeting will be with the GUAC board and hopefully we’ll have a direction as to which way we want to go with this. It takes people to make things happen and that’s why you’re all here.”
As Dick Powell summed it up, “I think if we continue to work on this issue we can make it better. I don’t think we could make it much worse.”
(Posted July 7, 2013)
During an extinguishment credits meeting June 19 in Casa Grande, questions were taken from the audience and answered by Casa Grande City Councilman Dick Powell; Jeff Tannler, statewide AMA director for the Arizona Department of Water Resources; Doug Dunham, ADWR legislative liaison and special assistant to the agency director, and Joe Singleton, executive director of the Pinal County Water Augmentation Authority. Clarification questions were sometimes asked by Richie Kennedy, president of the Pinal County Farm Bureau.
QUESTION: Is it easier to oppose the law or to oppose the individuals who are manipulating the law?
“We recognize that not everyone will agree with the law and we are happy to have conversations with anyone who wants to debate the law or understand it better or possibly make changes,” Tannler responded.
QUESTION: A farmer must extinguish ag use water rights in order to convert. Will the state wait for attrition in ag or will it start distributing the 6 percent (cut in 2014) as it acquires it, putting more pressure on our water resources?
Powell clarified that by asking, “Six percent I think is the reduction they’re referring to. You had 100 credits this year, next year you’re down to 94, so you have a 6 percent loss in water credits. Where do those go?”
Tannler responded that, “Well, there is a schedule for how the allocations reduce over time. And initially it goes from a hundred in 2013 to 94 in 2014, so there is initially a 6 percent. The ramping down kind of levels off a little bit more as you get closer to 2054.
“I’m not sure what the other part of the questions involves.”
Powell answered that, “I think the main part of the question was if next year I lose 6 percent of the water extinguishment credits, what happens to that (water)? You’ve got 6 percent gone from a whole lot of acreages. Is that converted into more water availability for the AMA or what happens to that?”
Tannler responded that, “That goes to the aquifer, to benefit the aquifer.”
QUESTION: Will it be distributed, or does it just disappear, that’s the question. Who’s going to take ownership of the 6 percent every year, or are we going to let it evaporate? Is it going to the state of Arizona and do they get to distribute it instead of us? It’s going to be remarketed. That’s the same as stealing. That’s what we want to know.
“Simple answer is, it goes back to the aquifer,” Tannler answered.
QUESTION: Will it be redistributed?
TANNLER: I don’t have an answer for that.
BRIAN BETCHER, general manager of Maricopa-Stanfield Irrigation and Drainage District, stepped to the microphone to say:
“My understanding of what happens to that 6 percent is that it goes to no one. It does not go to the state, it doesn’t go to a developer, it doesn’t go to a farmer. If you have a whole group of ag land that chooses not to exercise their right to extinguish that credit, all that means is the next year you have 6 percent less groundwater that you can use for your development if you choose to develop.
“So what happens is, it requires someone to bring in more surface water to develop as years go by. That water is not 6 percent of your water as a farmer that goes to somewhere else.”
Regarding the statement that the water stays in the aquifer, Betcher said, “What happens is the water that’s still underground, that’s been left there, is still available for all those pumping rights that have the ability to come in and pump that groundwater, both farmers and developers.
“It’s just that a new development is going to have to come in and probably bring a little bit more surface with them to go with the reduced amount of groundwater that they can pump.
“That groundwater, some at 6 percent does not get taken and given to anybody, it just stays underground. It means you can’t rely as much on groundwater for your development as you used to.”
QUESTION: What is the formula to be used for compensating water right holders for the taking of their equity, per the Prop. 207 rule?
“Well, obviously at this point in time there’s no method to do that,” Powell answered. “And it’s still a legal question whether that would even apply or not.
“But to me, you’re devaluing your land annually. And it would seem it would be worth exploring that venue (Prop. 207).
“But certainly I don’t think anybody up here can answer a legal question with authority.
QUESTION: To whom do we direct our letters and phone calls who can effect a policy change?
“Me,” Tannler replied. I’ll be the contact for Arizona Department of Water Resources, so feel free to contact me if you wish.”
That information is:
Jeff Tannler, statewide AMA director. Phone 602-771-8424. Email at email@example.com.
The mailing address is ADWR, PO Box 36020, Phoenix AZ 85067-36020.
POWELL: We also have two state representatives (Frank Pratt and T.J. Shope) in the room right now that are on the water and ag council, I think, so I think we’re very fortunate to have them both present right now.”
Contact information for them is:
Arizona House of Representatives
1700 W. Washington
QUESTION: Prior to the formation of the Department of Water Resources, didn’t the water rights go with the land? If that is true, why don’t we abolish the Department of Water Resources?
Tannler responded that, “Technically, before the Department of Water Resources there were no groundwater rights. At the same time in 1980 that the Groundwater Management Act created ADWR, it also created grandfathered groundwater rights.”
QUESTION: What is your opinion about leaving extinguished conversions at 100 percent and just let agriculture phase out as it becomes less sustainable?
“I’m not likely to give an opinion answer,” Tannler replied.
QUESTION, FROM KENNEDY: How about what is the validity about leaving extinguished conversations at 100 percent and just let agriculture phase out as it becomes less sustainable? That’s what they were looking for (in asking the question).
“That’s one way of looking at it,” Tannler responded.
“Our mission is to preserve groundwater both for ag uses and for municipal and industrial in the future. And that’s what we’re trying to do.
“That’s why the changes in the assured water supply rules were put into place, to try to reduce the amount of groundwater that was going to be withdrawn and try to slow down the withdrawal of groundwater so that there is some for the future. That is what the intent of the assure water supply rule is, and that’s what our agency’s commission is.”
QUESTION: If there are too many extinguishment credits to fill currently, why are you creating a new market for them? This will obviously stimulate exchange and use. We can still farm if existing credits are sold. After 2054, we will not have any.
Tannler responded that, “If you extinguish a grandfathered right after 2054, then there are no extinguishment credits that results from that. But the credits that are being created before then, those don’t automatically expire in 2054.
“I’m not sure if that’s what the question was, but I wanted to make that point.
“Extinguishment credits do continue that exist now, those can continue to exist after 2054 unless they are used to pledge toward an assured water supply.”
QUESTION: What can we do to stop this from going into effect?
“It is already in effect,” Tannler answered.
“We’ll be happy to discuss alternatives with folks, but the things we would be looking for would be, is everyone in agreement and is the aquifer going to be damaged? Is it going to protect the aquifer, that’s the thing that we’re after.”
Powell said, “Depending on the comments and kind of the direction of the crowd, we would probably entertain having a future meeting, maybe at The Property or somewhere, exploring what methods we could work with the Arizona Department of Water Resources. And maybe meet with GUAC members that could at least hear some comments from the group and what their concerns are.”
(NEXT: The views of two water managers)
(Posted July 6, 2013)
During an extinguishment credits meeting June 19 in Casa Grande, questions were taken from the audience and answered by Casa Grande City Councilman Dick Powell; Jeff Tannler, statewide AMA director for the Arizona Department of Water Resources; Doug Dunham, ADWR legislative liaison and special assistant to the agency director, and Joe Singleton, executive director of the Pinal County Water Augmentation Authority. Clarification questions were sometimes asked by Richie Kennedy, president of the Pinal County Farm Bureau.
QUESTION: Who benefits from reclaimed water?
“Anyone could benefit from reclaimed water,” Tannler responded. “If a water provider is able to also provide treated effluent or reclaimed water, that’s water that’s not just sent down a wash, say, not wasted. It is reuse of water.
“I could be used for landscaping uses in a subdivision. In some cases, if the price were right, it could be used for farming, depending on the crop. It could be used for golf course waterings. So it could benefit any of the sectors.
“And it can be recharged for future withdrawal and use, so it can be stored for the future.”
Singleton added, “And I think those are all good things.
“The other thing that reclaimed water has going for it is generally there’s almost a hierarchy in the way water is regulated in this state. And the most regulated water in this state is groundwater inside of an active management area. I’ll say that’s my opinion, but I think most people would probably tell you the same thing.
“For a lot of the state regulation concerning water, what you’ll find is the further you get away from the groundwater in an active management area, the more lenient some of the things that might restrict groundwater use in an active management area become.
“So, in my mind one of the benefits to being able to use reclaimed water is, it’s accounted for differently under a lot of state law.
“For example, if you’re trying to live under an allotment for a golf course that’s allowed to use so many acre-feet of water per year in order to comply with it requirement, you can use more effluent than you could groundwater, just by the way the state accounts for that.”
Tannler added that, “And there’s currently an incentive where if you use 100 percent effluent on a golf course, then you are basically freed from the conservation requirement. That was an incentive from years ago to get effluent used and not just wasted.”
There are other ways to use reclaimed water, Powell pointed out.
“Chandler and Gilbert and some of the others have settlement ponds which also serve as riparian areas and are part of their parks and recreation,” he said.
“”We have plans here in Casa Grande to have settlement ponds, which we would get recharge credits for. We would get storage credits.
“The Santa Cruz River goes through Casa Grande and we turn some of the effluent into it to be recaptured at the other end. If you have an injection well, you can get 50 percent of what you store between the release point and the capture point, and the rest through an injection well. So there’s some really good ways to use reclaimed water.
“Some people are drinking it right now, believe it or not. That’s happening. And some of it’s cleaner than the water coming out of your tap. But the thought of it doesn’t go very good.”
QUESTION (for Singleton): How is Pinal County going to augment water?
“The quick answer is, anyway I can,” Singleton replied.
“Some of the things we have been looking at is talk to Casa Grande about how we might be able to interact with the project that Councilman Powell just spoke of. We’ve had some preliminary discussions with some of the M&I subcontractors in this area on how we can maximize those supplies that they already have available to them under contract. And we continue to work with our contract holders and the irrigation districts on putting as much water down here as we can. And in my mind, the best kind is the kind that stays under our long term control and not somebody else’s.”
QUESTION: When agriculture loses its extinguishment credits, where do those go, or who do those credits go to?
Tannler responded that, “If the owner of an irrigation right chooses to extinguish that right, then the credits would go to the person that extinguished them, i.e., the irrigation right holder. Then at that point, the person holding the extinguishment credits can hang onto those or they can sell them to anyone they wish within the same AMA.
“So, if the question is kind of asking do the extinguishment credits automatically go to a developer, not automatically. They can be held by the person that extinguished the irrigation right, and if that’s a farmer, the farmer can hold those.”
QUESTION: When they automatically leave our land in 2054, where have they gone?
“I guess if they go anywhere, where they’re going is back to the aquifer to account for groundwater that is already done,” Singleton replied.
QUESTION: If it disappears, where does it go?
Singleton responded that, “I don’t that there’s necessarily a good answer to your question. But I think conceptually that the way things are structured, and the way I’ve always look at it, is like this:
“Right now, I think through some of the process that we described earlier in looking at the water budget down here and activities like that, what it looks like is that the Pinal AMA, at least for the time being, was actually a net gain on water every year in terms of we’re not losing outflows in a negative way to the Tucson AMA to the south or losing water to the north to the Phoenix AMA. Between what we’re getting from mountain front recharge, streams, recharge and some other things like we’re actually a net gain.
“And for a long time, if you talk to folks who were involved in the process, the number we were using the represent that gain was about 82,000 acre-feet a year. Later, it looked like it was probably actually closer to 92,000 acre-feet a year, so even a little better than some of what we were initially looking at.
“I think the issue with the extinguishment credits going down over time, to me recognizes this: We’re already using a whole lot more than 90,000 acre-feet of groundwater a year. I think probably five years ago when I was still working for the state (ADWR) and I talked to the districts, let alone what they’re able to do now where they can augment a lot of their activities through CAP water, that’s going to go away for a time.
“But even when they just have to rely on groundwater for the growers to grow the crops, I think the two bigger (irrigation) districts, I think when I asked them what they thought they could sustain from long term pumping, I think they both told me probably about 200,000 acre-feet a year.”
If that is true, Singleton continued, “I think it’s not entirely inconsistent with what we’re seeing for water use out of the ag sector now, at least in the bigger districts. If that’s true we’re using up maybe in excess of 300,000 acre-feet a year beyond what all those net gains are.
“So I think that’s what the extinguishment credit, to me, represents, is when you look at the conversion factor on that water right through time, if you’re going to continue farming, fine, but if you’re going to turn it into development, which needs to show that there was a hundred year water supply there in a way that was consistent with the long term management goal of the AMA it’s going to lose some value through time, because what it represents is groundwater you don’t have to put back, and the actual groundwater it has to call on in our aquifers through time looks like it’s getting less and less every year.”
Powell added that, “the Notice of Final Rulemaking says that when a grandfathered ground right is extinguished, the department issues credits that can be used by a developer to meet the consistency with the management goal requirement of an assured water supply determination. And that’s to assume that you couldn’t sell it to another farmer.”
Tannler said that where he was headed with his answer was, “Yes, ultimately the developer is going to be the one who has the most need for the extinguishment credits.”
Powell asked Tannler, “But would you be able to sell and extinguish an ag right? Do you have to convert it to get extinguishment credits?”
Tannler responded that, “If you take an irrigation right and extinguish that, you get credits. You could sell those credits to another farmer to hold. You could hang on to them for speculative value.”
Powell’s next statement was, “If you converted them and when you extinguish to M&I, though, you couldn’t do that.”
Tannler said he wasn’t sure if he understood what Powell meant.
Powell then said, “If when you extinguish, you’re saying I extinguish my ag water rights and I get so many credits for that because I’ve converted them to M&I. So you couldn’t sell back to agriculture, could you?”
Tannler responded that, “Well, I guess the distinction, I’m saying you’ve got a bunch of credits which can be held by a particular party who happens to be a farmer, the farmer could not use those credits to farm with.”
(NEXT: Additional questions and answers)
(Posted July 5, 2013)
During an extinguishment credits meeting June 19 in Casa Grande, questions were taken from the audience and answered by Casa Grande City Councilman Dick Powell; Jeff Tannler, statewide AMA director for the Arizona Department of Water Resources; Doug Dunham, ADWR legislative liaison and special assistant to the agency director, and Joe Singleton, executive director of the Pinal County Water Augmentation Authority. Clarification questions were sometimes asked by Richie Kennedy, president of the Pinal County Farm Bureau.
QUESTION: The credits can be moved away from the ground that they were on. How does this stop that from happening?
“I guess I would say that an extinguishment credit can be moved apart from the land,” Tannler responded.
“If you’ve got cases where someone purchases property and it’s got an irrigation right on it and then the developer has the irrigation right and if they extinguish it, then I would say it’s likely that they would use the extinguishment credits for development on that property that they already bought. They could conceivably use those credits in another location, though."
Powell responded that, “That’s one of the reasons that there’s a great value in extinguishment credits, is because it is a way to bring, to get an assured water supply.
“One of the things that is problematic, it started out basically where the suggestion was that a developer bought the farmland, he had the extinguishment credits with it, which would just about give him enough water to develop his property. And that changed with some of the water banks and the credits and the different things that allowed a developer to go out basically on bare land.
“A case in point, and it’s not here in Pinal County, is the Superstition Vistas development, which is an area the size of Tempe, Mesa, Chandler and Gilbert – and doesn’t have a drop of water on it.
“They’re wanting to develop it. It’s state land, they can buy it at a good price. And so what they have to do is find water availability to transfer from where it is to where they want it to be.
“And that’s one of the big issues with using water. We would rather the farmers sell it to the developers here so the developers develop here and we have local development instead of having those credits end up somewhere else, that they’re more desirable and more marketable.
“Right now, you can buy bare desert and if you can get the paperwork done on it, can get water transferred to it. Some of it’s Indian water. Salt River Project just came in possession of 130,000 acre-feet of Indian water to be used in the SRP areas. And some of that is earmarked to be used in the Superstition Vistas to develop on land without water.
“Wouldn’t it make a lot more sense to be developing down here where you have interstate highway, infrastructure and everything in place and use it where the water is instead of transferring water to where there isn’t water?”
Tannler responded, “One thing I’ll add to that, in case the question comes up, is a small, or a relatively small, chunk of Superstition Vistas is located within the Pinal AMA. Most of it is located in the Phoenix AMA.
“To the extent that extinguishment credits were used to help prove an assured water supply (at Superstition Vistas) that would be able to be used for the portion that’s in Pinal AMA. And so in other words, extinguishment credits can’t be transported over to Phoenix AMA to prove that part of the development.”
Powell responded that, “but that was indication of what some of the developers want to do, is buy bare desert and bring the water to it.
“And what it does is, we only have so much water in the state of Arizona. And when the water is transferred into an area that big, they could put a million people or more there, when they take up that water, that’s water that can’t go anywhere else.
“And so basically we’re taking our water supply and we’re saying we’re going to put it over here to make a lot of money on cheap state land and develop this thing, and it’s close to the East Valley and it’s convenient for developers in that area.”
One of the things that has happened, Powell continued, “is some of the developers and some of the planners started saying I don’t want to pay that damned much money for farmland, they’re getting too much money for their farms, and I’d rather buy desert and move water to it.
“And one of the things you can kind of compare that to, if you had a $300,000 house and they told you that if you sold your land you had to take the house off of it because that was the value added part of having the water there, when it’s finally extinguished you wouldn’t like it very much. And that’s kind of the boat that the farmer’s in right now.”
Dunham added that, “When the Pinal Groundwater Users Advisory Council was examining the old assured water supply rules there were two pieces to calculate how much water a subdivision could use without having to replace that. Those two pieces would be the basic groundwater allowance, which in the old rules were based on your population of that subdivision in combination with any extinguishment credits that may come from an IGFR.
“When they looked at the total numbers of that, what they found was that you could extinguish one acre of farmland and there was enough credits generated that you could develop two more additional acres of raw desert land. That’s what they saw. Retiring one acre of ag, there’s enough credits being generated to support two additional acres, so you get a three-to-one bang.
“And that was part of the fear, that these credits were being over calculated, over allocated and eventually that would cause more groundwater use that what’s currently going on instead of slowly decreasing it. And that ultimately would impact the farmers that wanted to stay here, because more groundwater would be pumped out from underneath them, thus speeding up when it would no longer be economically feasible to pump.
“So you’re absolutely right, Mr. Powell, that moving that water off farmland was one of the concerns and one of the reasons that the rules have changed.”
QUESTION: What other groundwater user gave up water to avoid the over allocation?
Singleton responded that, “I don’t know that you’ll at all find this a satisfying answer, but Type 1 water rights that somebody owns that might want to go extinguish to put a subdivision in would be in exactly the same situation as these irrigation rights on those kind of lands that we’re talking about.
“But I think one of the substantive differences in there is when land comes in as a subdivision, there’s separate rules that basically say you have to account for the groundwater you’re using and you may have to put some of it back. That’s kind of one of the overarching things we’re talking about with the extinguishment credits.
“When you look at the agricultural sector, they have never been subjected to any of that.
“So a lot of the back and forth I’ve heard over the last 15 years is, OK, but the farmers don’t have to replenish any water. And then what you’ll hear back a lot of times from the ag community is, yeah, but we paid all the property taxes to make sure you could put the CAP canal in. And there’s something to both sides of that argument.”
Q: Part of a handout here tonight states that one method of demonstrating that groundwater use is consistent with the management goal of the AMA is through a mechanism for the extinguishment of grandfathered water rights. What were the other methods?
Tannler responded that, “Other methods include ways of either using renewable supply, something other than groundwater, or joining the Central Arizona Groundwater Replenishment District, who would replenish the excess groundwater that’s withdrawn. Another way is if it’s a designated provider, if the provider has a groundwater allowance then that in a sense works like extinguishment credits, where that water does not have to be replenished and so is found to be consistent with the management goal in the AMA.
QUESTION: Instead of preserving water for possible development on desert land, why not require the conversion of ag land for M&I (municipal and industrial)?
“In my opinion,” Singleton responded, “the only water that I think is necessarily being preserved for the desert land is what is now in rules as a much smaller and modest portion for a groundwater allowance that every development would get, whether it’s on raw desert land or agricultural land.
“In the previous version of the rules between 1995-2007, there was a significant groundwater allowance that could almost bring the whole development in without an additional means needed to meet the consistency with the management goal requirement, whether it was getting the extinguishment credits or enrolling in the GRD.
“The first rule change in 2007, I think did a fairly good job of addressing that, so the groundwater allowance today is much more modest. So to me, that’s the only amount of water really being preserved for development.
“On the second part of the question of why not require M&I development on agricultural land, I think the original groundwater management act kind of contemplated that that’s what would happen.
“I think that for most of us that have been involved in the past or still are involved with the Department of Water Resources, what we found wasn’t exactly what the folks probably intended in 1979-1980 when they were putting some of that stuff together.”
QUESTION: I plan on passing my family farm to my children. Is it going to be too expensive for my children to farm our land in 20 years? What is the future for our young farmers in Pinal County?
“That’s a good question,” Tannler responded. “I cannot predict the future, so I will be watching with you all to see what the future holds.”
(NEXT: Questions and answers continues)
(Posted July 4, 2013)
QUESTION: What is the difference between Type 1 and Type 2 water rights? Please explain this.
Tannler responded that, “If you irrigated property between the years 1975 and 1980, then you qualify for an irrigation grandfathered groundwater right. And that stays with the property, that goes with the property if you sell it.
“If you decided that you wanted to retire that land for a non irrigation use, such as put a golf course on it, there are a few restrictions, but in general you could retire that irrigation right to a Type 1 non irrigation right that stays with the land and you would get a certain amount of water, roughly three acre-feet per acre, maybe a little bit more or less depending on a few factors. But that would let someone use the water that had been used for irrigation and put that to use for a non irrigation purpose, like a chili packing plant or a golf course or something like that. Again, that stays with the land.
“A Type 2 non irrigation right is one that was based on historic, 1975-1980, use of water for a non irrigation purpose.
“Type 1 comes out of an irrigation right and you’re converting it for non irrigation use. Type 2 is for historic non irrigation use.
“So between 1975-1980, let’s say you had a sand and gravel outfit or something like that. You would get a Type 2 right for the amount that you historically used annually.
“What you need to think about a Type 2 right is, it’s not tied to the land. You can essentially move it or use it to withdraw water from anywhere within the same active management area. And also, it’s considered personal property, not real property, so it can be sold apart from the land.
QUESTION: Are extinguished credits portable?
“Yes, they are, within the same active management area,” Tannler replied. “If you took property and extinguished the grandfathered right you would end up with extinguishment credits. Those are no longer tied to the land. You could use those to develop or you could sell those to a developer to develop anywhere within the active management area. They would be able to use that for proving an assured water supply.
Once it’s an extinguishment credit, it’s not tied to the land.
QUESTION: How does this affect the 100-year assured water supply certificate?
Tannler replied that, “If someone wants to subdivide and create a development, they need to provide a 100-year assured water supply. They need to prove that the water is going to be there for the next hundred years.
“One of the things they have to do is prove physical availability, make sure the water supply itself is there. They cannot use 100 percent groundwater to prove where the water is going to come from. However, they do have a couple of ways of using some groundwater toward their assured water supply.
“One is, if a developer has extinguishment credits, then they can use those toward proving the assured water supply. The other is, if it’s a designated provider, they get a particular groundwater allowance.
“The extinguishment credits and the groundwater allowance, the idea behind those, was to allow for a transition from pumping groundwater to getting renewable supplies, because it can take some time to get access to renewable supplies in the future.”
Singleton added that, “The extinguishment credits basically represent a portion of the groundwater demand for the hundred years that the subdivision is going to need to use water.
And the extinguishment credits represent a portion of that groundwater use that does not have to be replaced.
“So if it looked like the subdivision was going to need to use a thousand acre-feet a year, its hundred-year demand would 100,000 acre-feet of groundwater. And it would have to replenish that volume in excess of a groundwater allowance in those extinguishment credits.
“So the bigger that number is on the extinguishment credit, added to the groundwater allowance, the less replenishment you’re going to actually see.
QUESTION: Can San Carlos Irrigation and Drainage District be extinguished and still be irrigated, since it is a federal water right?
“We do not have a provision for extinguishing an irrigation district,” Tannler replied. “The extinguishment provisions are only for grandfathered groundwater rights, which would be irrigation rights, Type 1 rights and Type 2 rights.
QUESTION: Why can a developer buy desert land with no water, but a farmer cannot do the same? Wouldn’t a solution be to make it more beneficial for a developer to buy the land already being used for farming?
Tannler replied that, “With the 1980 Groundwater Management Act, one of the restrictions that was put in place is if you irrigated between 1975 and 1980 then you have a grandfathered right. Your irrigation is grandfathered in.
“The flip side is, you cannot bring in new or raw desert land for irrigation. That was one of the provisions of the groundwater code, to try and get a handle on how much groundwater is being used.
“A developer can potentially take raw desert land and develop that, if they can show that they have access to water, either through groundwater that gets replenished or through a renewable supply, such as CAP surface water.
“As Joe explained, if a developer has extinguishment credit those can be used to offset the amount of water that has to be replenished.”
As far as the beneficial part of the question, Tannler answered that, “We’d like to see that from a water management standpoint, because then the water that had been being used for irrigation is now used for a development rather than additional land being used for a development.
“So, we’d like to see that, but a developer could, however, develop raw desert land under the right circumstances.”
(NEXT: Further questions and answers)
(Posted July 3, 2013)
QUESTION: How does this affect domestic wells?
“Domestic wells are not affected by this,” Tannler replied. “Domestic wells typically are ones that pump 35 gallons per minute or less. And because of that relatively low pumping capacity, those are termed exempt wells. They’re exempt from the needs for any kind of grandfathered groundwater right, you don’t have to measure or pay a pump tax. So the extinguishment credits would not affect exempt wells.
QUESTION: How does Prop. 207 apply, when it is exempting cases of law that do not directly regulate an owner’s land.
Tannler replied that, “The one thing I will say, I believe there have been a couple of suits in the past that had determined that groundwater is a public resource. So would there be a taking if it’s involving groundwater? That’s unlikely. We can look at that further. That’s about all I’ll say on that.”
Powell added that, “I’m sure not a lawyer, but I think that basically the extinguishment credits constitute value of your property when you convert. The ability to convert and have the extinguishment credits available are what determine value on your property.
“And if any rule reduces the value on your property, I think that you have the right to ask to have them pay for it. If you want to take the extinguishment credit away, have the state pay for it each time they take them. Pay the guy back, don’t take them, because that adds to the value of it.
“So, I think very definitely that a lawyer, and I’m not one, could make a very strong case that basically in 1980 you had groundwater rights and you had the rights to extinguish them and that’s where the value was, in extinguishment credits as well as the water rights. The water rights may not belong to anybody, but the extinguishment credits belong to the owner. If you reduce the amount he has, you reduce the value of his land, I think he might be eligible to be compensated.
QUESTION: How do extinguishment credits affect Type 2 water rights? If I have a certificate with 150 acre-feet, when I sell my certificate in 2030 am I selling 150 acre feet?
Dunham replied that, “The reduction is only for the extinguishment process. If you hold a grandfathered right of any type, be that a irrigation grandfathered right, a Type 1 or a Type 2, the values associated with those rights never decrease; they’ll stay in place forever.
For example, if you did try to sell the right to Type 2, because those are portable, and if you did try to sell that to another party the volume of that certificate will remain in place, it does not change.
QUESTION FROM KENNEDY: If someone had a Type 2 right and wanted to extinguish that, is there a reduction over time for the amount of extinguishment credits that they get for extinguishing a Type 1 or a Type 2?
Dunham replied that, “Off the top of my head, I don’t remember. I know the language was pretty clear for the IGFRs, but for the Type 1 or Type 2, I actually don’t remember off the top of my head if that was the same reduction as the IGFR.
The old original rules from 1995 had it together. The rules were changed.
QUESTION: Why only Pinal County? If this is a law, it should be all of Arizona. Why is a developer more powerful about land that is not his?
Tannler responded that, “The way I would answer that is, in the Tucson and Phoenix active management areas there are provisions for extinguishing a grandfathered right for extinguishment credits. They are much more strict, and in Prescott. They’re much more strict than what you’re finding in the Pinal AMA. So, if anything, there’s much more generous allowance for extinguishment credits in the Pinal AMA.
QUESTION: In 2054, when the extinguishment credits are reduced to zero, will farmland be worth the same as desert land?
Tannler answered that, “That’s a narrow way of looking at the question. Let me answer that a little more broadly.
“If someone is going to buy property to develop it, there’s a number of factors that would go into the value – location, being close to infrastructure, a number of different things.
If the developer was being served by a designated (water) provider or if they had already gotten a certificate of assured water supply, proved on joining the Central Arizona Groundwater Replenishment District, then they would not need the extinguishment credits.
“If there was property that had extinguishment credits versus property that did not have those, it may or may not make a difference to a developer or to a purchaser of that property.”
Powell added that, “I would just comment on the market value if you take it out of agriculture.
“If you leave in agriculture you can continue to use the water as long as you can get wet water. If you take it out of agriculture, you’re looking at basically the value as bare desert. Then the factors you’re talking about come into effect on location and infrastructure and those type of things that can help control the value of it. But basically in either case you’re buying land without any water.”
Tannler added a final comment.
“Is there value to extinguishment credits?” he asked. “Yes, definitely. What is that value? It’s going to depend on when in time and a number of other things. We don’t have a set value of what extinguishment credits will go for. That’s free market, basically.
QUESTION: What was ADWR’s rationale for requiring the irrigation districts to not pursue changing the extinguishment credits in return for the 2007 extension?
Dunham replied that, “I’ve got to admit I wasn’t in the room when that happened, I don’t know specifically what the discussions were.”
He asked if anyone in the audience from an irrigation district could answer. No one spoke.
“The discussion that I had with other folks within the department,” Dunham continued, “is that the concern was that at some point the agricultural production, or land, is going to change over and there is going to be an impact to the districts when that happens. And so, instead of changing the rules, what needs to happen is economic planning on how to minimize those negative impacts.
“That was the intent of the letter. It wasn’t intended to be a gag rule, it wasn’t intended to be anything like that.”
(NEXT: Further questions and answers)
(Posted July 2, 2013)
Councilman Dick Powell made these comments at the end of the Casas Grande City Council meeting on Monday, July 1:
I just wanted to thank everybody that attended and helped support the city and the Pinal Farm Bureau on the water extinguishment issues meeting we had (June 19).
It was standing room only. I think it was estimated at 150 people. I know we had the city manager hauling chairs, so that was pretty good to see.
I think it went real well, there was a lot of information put out, there’s a lot of people who were unaware of what was happening.
The Farm Bureau will probably be having another meeting, maybe at The Property, in a couple of weeks to talk about what the next step is to try to affect the impending extinguishment process from starting.
(Mayor Bob Jackson then asked that the City Council be advised when a date has been set.)
(Posted July 2, 2013)
Dick Powell, a Casa Grande businessman and member of the City Council, helped put the meeting together. He said he was acting on his own, not as a city official presenting a city viewpoint. The second part of his presentation covered what he said he believes are potential impacts that extinguishment credits may have on agriculture and the community.
“What started this,” Dick Powell told a June 19 meeting on grandfathered irrigation water right extinguishment credits, “is last year I went to a Farm Bureau meeting and Tiffany Shedd, who’s a farmer, got up and shared that one of her concerns was that this (extinguishment) process was going to begin happening.
“And I think everybody thought she was smoking something, because nobody knew what was going on. There was a lot of, she doesn’t know what she’s talking about. Well, we found out she does know exactly what she’s talking about.”
Powell then read from part of the document on final rulemaking (found here).
“It talks about the new rules in our water active management area,” he said, “and it says the management goal in the Pinal AMA, where predominantly agricultural economy exists, is to allow development of nonirrigation uses and preserve existing agricultural economies for as long as feasible, consistent with the necessity to preserve future water supplies for nonirrigation uses.
“And that, in the working papers, was made to understand that ‘reliable’ means dependable and available water supply for future development.”
One method of demonstrating that groundwater use is consistent with management goals, Powell continued, is through extinguishment of grandfathered water rights.
“When a grandfathered groundwater right is extinguished,” he said, “the department issues credits and they can be used by a developer to meet the consistency with the management goal requirements for the AWS. The AWS is the assured water supply, which you have to have before you can develop.”
Prior to 2007, Powell read from the document, “the existing assured water supply rules for the Pinal AMA allowed for the amount of credits issued for the extinguishment of a grandfathered water right in the Pinal AMA to remain the same each year with no reduction over time.
“The assured water supply rules for the Pinal AMA were amended in 2007 to provide for a gradual reduction in the amount of credits given for the extinguishment of grandfathered rights, depending on when the extinguishment occurred. And this one was set to take place in 2010 but was postponed until 2014.”
Powell continued, “One of the major reasons – I think this is important – for the 2007 amendment was that development in the Pinal AMA was increasing rapidly and the rate of development was projected to continue into the foreseeable future. Some of the development was anticipated to result in the extinguishment of irrigation grandfathered water rights for extinguishment credits.
“The growth, combined with the rapid development, was going to lead to an over allocation, and that was one of the concerns.”
Another part of the document, Powell said, reads that, “Due to the downturn in the Arizona real estate market, development in the Pinal AMA has slowed dramatically. However, with the first reduction in allocation factors approaching several irrigation districts in the AMA have expressed concerns.”
Those concerns were twofold, Powell said.
“One, they had bond issues to pay off. And number two, there was some of the big developers and they were afraid if they left it at 100 percent and left fallow ground there that you’d take a big chunk out of an irrigation district, which affects the ability to deliver water to everybody in that district. That was a huge concern.”
The new plan
Powell told the audience that, “Basically, under the new plan, this year you get an acre and a half acre-foot times the number of acres that you have times an allocation factor. And the allocation factor goes from 100 percent to zero over a number of years. So this year if you convert, you get 100 percent credit.
“And the water credits available would be roughly enough credits to develop with. You’d have basically the amount of water that you would need to develop your property or if a developer bought it that he would need to develop the property.
“In year one (of the new rules), which is next year, you have 94 percent. In year 5 you have 72 percent. In year 10 you have 62 percent. In year 15 you have 52 percent. In year 20 you have 42 percent. In the year 2054, there’s nothing.”
An major impact as he sees it, Powell said, is that, “It just systematically devalues your property, because anybody that goes to a bank, one of the things that they really will loan money on is the fact of the conversion ratio there, that you can provide enough water if you convert it. If the bank has to take the property, they can convert it into the water credits.”
Farmers may stay on the land as long as they wish, Powell said.
“If you continue to farm and you can continue to get wet water, you can farm as long as you want,” he said. “You just won’t have any value from extinguishment credits. If you can get wet water is going to be a big issue as time goes on if the irrigation districts fall apart and can’t deliver and those kind of things. That is a huge issue.”
Powell said he was surprised that few farmers knew about the changes.
“One of the things that surprised me so much is the lack of transparency,” he said. “It was certainly was not intentional, but was a lack of transparency as far as knowledge of people in the irrigation districts on what was going to happen and what would happen to their land values.
“There’s a gentleman here who went to his banker, who said 60 percent or more of what I count as your equity is the ability to be able to convert those credits. I’m scared if they start being reduced.”
It was basically a matter of agencies doing what they thought they had to, Powell said.
“The irrigation districts agreed that nobody should beat up anybody on any of the things that are happening,” he continued. “The Arizona Department of Water Resources, they’re doing their job, they’re doing what they’re asked to do. The irrigation districts, they did their job, they got us an extra five years before this started.
“And for doing that, they said the irrigation districts will not seek any additional amendments to the allocation factors for extinguishment credits, even if the rate of development in Pinal County does not significantly increase by January, nor will they encourage any other person to seek such amendment or assist any other persons in seeking such an amendment.
“So, I think that whether they felt it or not, I think that’s part of the reason that so many people weren’t informed and didn’t understand what you’re looking at.”
It’s an ag economy
“The central part of Pinal County, as one report notes, enjoys predominantly agricultural economy, unlike Phoenix and Tucson AMAs where they have metropolitan economies,” Powell said. “Pinal AMA’s major industry is agriculture. The ag core businesses are hugely invested and others are planning to locate here.
“Right now, we have two mega businesses that building here in Casa Grande that are dairy related and are here because of the dairy business and the availability of milk.
“Dairies themselves are considered industrial, but the fields that they grow their alfalfa or their feed in aren’t. So they’re in the same boat.”
For every square mile of farmland, an average of $500,000 is spent in the local economy, Powell said. “For every rooftop developed, it costs the community $1.50 to $2 (for police, fire and other city services) for every dollar of construction related revenue realized,” he added.
Development is fine, Powell said, but limitations have to be realized.
“We’re happy with growth, we want people to come and be part of our community, but people need to understand that development does not equal improving an economy in a lot of ways,” he said.
“We have people interested mainly in a lot of situations because of our agriculture and commercial and industrial investment. The malls, the commercial and general businesses could see a reduction of 40 cents on the dollar without agriculture, if agriculture just disappeared in our community.
“It’s a real concern to the cities for this type of reason: Declining economies and the loss of jobs is catastrophic for communities. Reduction of land values and migration of extinguishment credits both north and south closer to the Phoenix and Tucson AMAs where developers are putting more pressure would spell disaster for the futures of Casa Grande, Coolidge, Eloy, Red Rock and the surround county areas. That’s pretty scary.
“Here’s something else: In 2010, the cash receipts from the crop and livestock in Pinal County totaled $845,495,000. How would you like to have an industry like that go away?”
Powell again pointed out that the management goal of the Pinal AMA says that where predominantly agricultural economy exists, it is to allow development of non irrigation uses and preserve existing agricultural economies for as long as feasible, consistent with the necessity to preserve future water supplies for non irrigation uses.
“That the supplies for non irrigation were changed to preserve future water supplies for non irrigated areas should be interpreted as insuring a long term reliable supply of water for municipal and industrial uses,” he said.
“The only way I can see that we can meet this goal is to go back to the former 100 percent credits for extinguishment of water rights.”
The situation can be looked at from two sides, Powell continued.
“Truthfully,” he said, “it’s happening at one of the very worst times it could happen to us. We don’t have development going on. Farmers, if they wanted to sell, who are they going to sell it to? A lot of land has been put by investors into ag land right now and they’re holding it.
“When they talk about the water preservation, this is happening. I think it’s up to 85 percent in the Central Arizona Irrigation and Drainage District of investor owned land with leasebacks for farmers. So they’re able to continue. Instead of fallowing any land, they’re able to continue to farm it until the reasonable time comes to convert it, if that times every comes. If it doesn’t, they can continue to farm it.
“But if the investors are forced right now to have to sell that land, their tax rates go way up and their land value goes way down with the conversion rates. If you only bring half the water credits to your property, your value of your property is about 50 percent of what it would have been before.
“And if I was a developer and I’m going to people, I’d say I’m not ready for five or 10 years but I’ll offer you half of what your land’s worth, because that’s what it’s going to be when I’m ready to develop.”
Powell said farmers will farm until it’s no longer feasible and then will make a decision on selling their land.
“They need to be able to continue to get 100 percent conversion credits, as do the agriculture that’s related to the investment community that’s tied up a lot of property,” he said.
“And the only way you can tie up and guarantee reliable water for municipal and industrial uses is to have some land that you own right now that you’re protected on. You can’t do it according to this.
“You need to be able to convert that. Developers are sitting there, they want to develop when the time comes, but now’s not the time. You’ve got farmers and investors both over the fence.”
What worries him about the future, Powell said, is that if farmers and other landowners are forced to make a decision now, “you’re going to have people that aren’t going to be financed as easily, you’re going to have people that by the time that they may be able to convert – and every acre in Pinal County is certainly not going to go into development – they can’t. We need agriculture.”
Powell also asked the audience to consider Proposition 207, passed by voters in a statewide election, and known as the Private Property Rights Protection Act.
“It requires the government to reimburse landowners when regulations result in a decrease in the property’s value and also prevents governments from exercising eminent domain on behalf of a private party,” he said.
“The act provides that if the existing rights to use, divide, sell or possess private real property are reduced by any land use enacted after the date of the property is transferred to the owner and such reduction reduces the fair market value of the property, the owner is entitled to just compensation.
“I don’t want to see this happen,” Powell continued, “but I also don’t want to see the water credits go away, because it’s a taking of value.
“If somebody can struggle and farm forever and has the water, yeah, they can do that. But you have to be able to get wet water and you have to be able to have it delivered to you. And when you sell it, if you eventually do, you have the same value as bare desert. You can sell water rights for farming, but if you sell it for anything else, the key is you’re the same value as bare desert is.”
(NEXT: Questions and answers)
(Posted July 1, 2013)
Dick Powell, a Casa Grande businessman and member of the City Council, helped put together the June 19 meeting on extinguishment credits. He said he was acting on his own, not as a city official presenting a city viewpoint. He began his presentation with a brief history of water in Arizona.
Powell looked back through Arizona history and its rapid growth, especially since World War II ended.
“This will probably sound pretty shocking to some people, but I think perhaps Arizona’s biggest issue is to not overpopulate our state,” he said. That’s a real issue, a lot more than people think.
“John Wesley Powell, who was one of the first ones to bring the Powell name to Arizona, turned around and had an astute grasp of the obvious and said there’s not enough water to water the land.
“Which is very true. There’s been fights over water from the beginning of time here in Arizona. There’s a saying that whiskey’s for drinking and water’s for fighting. And that’s how it’s been a lot of the time.”
(John Wesley Powell is remembered for the 1869 Powell Geographic Expedition, a three-month river trip down the Green and Colorado rivers that included the first known passage through the Grand Canyon.)
“The ancient Hohokam who were here and had to leave in the 1400s basically had too many people and not enough water,” Dick Powell continued.
“If we look back at the early leaders in our state with water, they had more opportunity than we have as I see it right now. And I think the additional move with the federal government to put in the dams system to have flood control, to have water storage, to generate power and all those things was a tremendous move forward.
“Carl Hayden (a U.S. senator from Arizona) followed that up, and he had had a dream of bringing water in to irrigate central Arizona and really boost the ag economy, which he accomplished (the Central Arizona Project canal system).
“One of the things that needs to be recognized is that the agricultural component has paid for most, or a very good portion, of the CAP project debt.”
When tract homes began appearing in Arizona after World War II, Powell said, “it was off to the races after that.”
That type of growth continues today throughout the state.
“The Arizona leadership – and this is an opinion – has become addicted to residential development in preference to any of the other opportunities we have, as being one of the primary economic engines of our state,” Powell said. “And to a fault. I think they’re in denial about how much water we actually have to work with.”
Powell said state leaders have embraced the concept of a Sun Corridor, an outgrowth of studies during the mid 2000s building boom that identified areas in the United States that would basically be sprawling dense growth.
“They identified Arizona as having one that would go from Prescott to Sierra Vista,” he said. “There’s obviously not any amount of water close to being able to accomplish that.
“I wish we would address basically the water we have and what we can do for the economy with what we have.”
Powell said Pinal County’s comprehensive plan projects six million people in the county in the future, “and that’s almost the amount of people we now have in the state of Arizona; we have more than that, but it’s a huge Pinal amount.
“And some of the water projections said we had basically 750,000 to just over a million people that we could water.”
Powell said state and county officials need to grasp the concept that there isn’t sufficient water to supply the land.
“We live in an arid area,” he continued, “and I think we really need to plan strategically and sustainably and I think agriculture has to be a really important component of the picture.
Other Western states right now are realizing the importance of agriculture and beginning to protect it and make sure it gets water again.”
Powell said a story in the Arizona Republic newspaper reported that cities that depend upon water from the Colorado River will face severe shortages in the next 50 years.
“University of Arizona Prof. Robert Gledden stated that the handwriting is on the wall that the growth in Central Arizona will outstrip the water supply. A 3.2 million acre-foot shortage on the Colorado River is projected within the next 50 years, which is basically even more than we take right now. Arizona, because of the CAP, is subordinate on the Colorado River, so in a shortage we’re the first to take the shortage. We’re subordinate to Nevada and California.
“In a recent study of the Colorado Demand and Supply by the Bureau of Reclamation, they concluded that under the worst case scenario, demand could exceed supply by as much as 50 percent within the next 50 years.”
Powell also said that The Future of Pinal, a study put out by the Morrison Institute for Public Policy at ASU when the mid 2000s building boom was going on, noted an important difference in water use.
“It noted that M&I water, municipal and industrial water, is different from ag water,” Powell said.
“In a drought time or a shortage time, you can cut back the ag water, but if the residential component is completely dependent on our water supply we’re not going to fallow fields, we’re going to fallow homes. And that’s something I think they should get pretty serious about.”
(NEXT: Powell’s views on the extinguishment credits controversy)
(Posted June 29, 2013)
(Joe Singleton is executive director of the Pinal County Water Augmentation Authority, a group that serves as a resource and partner for the development and augmentation of water resources for the benefit of users in the Pinal Active Management Area. He was director of the Pinal AMA when the current extinguishment rules were created.)
Joe Singleton was with the Arizona Department of Water Resources in the Pinal AMA during the time that the assured water supply rules were twice amended.
“This issue has kind of percolated up through everybody’s consciousness this year,” he told those attending a June 19 meeting about grandfathered irrigation right extinguishment credits.
“It actually goes back to about 2000, when Gov. Hull commissioned a blue panel water unit. That commission, through about a good two, two and a half years worth of work, at least, came up with a set of recommendations.
“And one of the recommendations for the Pinal AMA was to kind of get our house in order in terms of our assured water supply rules.”
Rules that had been in place since the mid 1990s, Singleton said, “allowed for a very generous portion of groundwater to be used on any piece of land, including desert land that had no water rights at all, for development that would never have to be replenished at all under the assured water supply rules.
“That is the main goal of the assured water supply rules, to look for a portion of groundwater use that development might be using in the future and cause it to be replenished into the aquifer for the long term benefit of all the water users.”
Singleton said a local group, taking the recommendations to heart, began discussing and researching what they might want to do with the Pinal AMA assured water supply rules.
“And there was a lot of discussion over quite a bit of period time, during which the AMAs water budget was reviewed,” he continued, “a lot of discussion by a lot of parties. There were representatives from the cities, the county, the irrigation districts, even some industrial water users.
“The Groundwater Users Advisory Council had put together a sub group to work on some of the more technical aspects of that and that group finally came up with a recommendation.
“They went back through the GUAC with a white paper that basically laid out a cause to go revise those assured water supply rules.”
Singleton said after hearing from the community, the state director of water resources started a process in 2006 or 2007 to look at amending the rules, which later happened.
“They took a good portion of that unreplenished groundwater, the groundwater allowance, out of the rules, put a much more modest piece in its place,” Singleton continued. “And a reason I think a lot of you are here tonight, they revised the way that extinguishment credits work in the Pinal AMA.”
Singleton said one of the things the GUAC white paper said was, “hey, we looked at this but think the current rules are actually consistent with our long term water management goal down here, which is of a concern and a statutory requirement for the Department of Water Resources to take a look at.
“Part of the issue was that, between the initial groundwater allowance and the way that the extinguishment credit process resulted in an additional value of groundwater that didn’t need to be replenished, if all of those things were to happen you are actually talking about more water than there actually really was, which means none of it is going to be replenished at all.
“In fact, it was quite a bit more than what was actually there.
“Under the assure water supply rule, to develop not only do you need to be consistent with the management goal, which is what some of those extinguishment credits would speak to, it’s the volume of water you won’t have to replenish. But we need to reserve some supplies for future nonirrigation users, too.
“And so that’s what folks were looking at at the time, that was determined wasn’t real consistent with the long term water management goal.”
An additional concern, Singleton said, was that “if you continue along with the implementation of those rules you may wind up in a situation where you’re using up a significant portion of all the groundwater down there, which isn’t really all that good for anybody.”
Singleton said the modified rules had been in a place for about two years when in early to mid 2009 another group went to ADWR and asked that the rule again be changed to take a look at the way the extinguishment credits were valued at that time.
“There was a subsequent modification to that part of the rule that kind of pushed back at the top the way in the initial years that the value on that extinguishment might decrease through time,” he said. “I believe it was caught up with the original one later.
“So the way that the values on those credits work is after 2054 there is no subsequent value for extinguishment credits on farm land in recognition of the long term water management goal of the AMA, which is to be at some point of sustainability somewhere in the future to where you’re not overdrafting your aquifers down to zero where there’s no water in it.
“The actual statutory requirement reads to allow for the agricultural economy to continue as long as feasible, while recognizing that you have to save water for future municipal and industrial uses.”
(NEXT: Dick Powell recites some Arizona water use history)
‘Whiskey is for drinking; water is for fighting over’
-- Attributed to Mark Twain (among others)