Arizona Drought Talks In Crisis As CAP Devises Controversial New Proposal

Lake Mead in 2017.
Lake Mead in 2017. Sergei Gussev/Flickr
With scarcely two weeks left for negotiations, Arizona's internal talks to stave off a disastrous drought on the Colorado River have entered a crisis of their own.

Two major public meetings of the Drought Contingency Plan Steering Committee have been canceled in the past three weeks. They've been replaced with private proposals and talks behind closed doors. Meanwhile, stakeholders and elected officials have been sending flurries of sternly worded letters to each other, trying to sway negotiations in their favor or prod them into progress.

On Thursday, the board of the Central Arizona Project plans to meet and vote on a new proposal over how Arizona's Colorado River water users will deal with the loss of hundreds of thousands of acre-feet of water in the event of a drought. (An acre-foot is about 326,000 gallons.) That proposal, which the CAP developed on its own, is intended to jump-start the stalled Drought Contingency Plan (DCP) talks.

But if the run-up to Thursday's meeting is any indication, the same sticking points remain unresolved. More than that, they're thornier than they were a few weeks ago, bringing back long-running disagreements over the past, present, and future of Arizona.

"Perhaps as a state we're not prepared yet — or completely willing — to take on" cuts under a DCP, said Warren Tenney, director of the Arizona Municipal Water Users' Association. Those cuts could mean 512,000 to 720,000 less acre-feet annually for the state's needs.

The new CAP board drought-planning proposal, which hadn't been made public as of Wednesday afternoon, was “bare bones,” board member Terry Goddard said. It wasn’t perfect, but would get things moving again, he said. “The idea is that it would give the statewide committee something to talk about,” he said. “They’ve had a hard time reaching any finite proposal.”

But critics of the proposal and the newly scheduled meeting say that CAP made its decision with scant input from other groups in the drought negotiations. One critic suggested that CAP could undermine what little incremental progress had been made on DCP negotiations in recent weeks.

The most recent public meeting of the 38-member DCP steering committee was more than a month ago, on October 10. The steering committee has just one meeting left on its schedule, for November 29, before it needs to be in Las Vegas on December 13 for a meeting of the Colorado River Water Users Association, with a plan in hand.

"No interest group, water user or water rights holder can get everything it wants." — Arizona State Sen. Lisa Otondo

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Since October 10, negotiations have wavered as parties remain unable to agree on how Arizona water users will share cuts to water from the Colorado River. Part of that disagreement hinges on the question of who will be compensated — in water lingo, "mitigated" — for those decreases, and by how much.

Fear that Arizona won't reach an DCP agreement by the end of the month has reached the highest levels of state government.

In an opinion piece in the Arizona Capitol Times Tuesday, Gov. Doug Ducey wrote that "some recent proposals are so short-sighted and unsustainable that it requires me to remind all participants why we began this process in the first place."

Without singling out specific stakeholders or plans, Ducey criticized demands for water and money that were "growing to insurmountable proportions — more than 1 million acre-feet of water and over $200 million through 2026."

"I will not sign...any bill that does not adequately help to secure our state's water future," Ducey wrote.

On Monday, State Senator Lisa Otondo of Yuma, who sits on the DCP steering committee, sent a letter to the other members of the committee saying that she was "deeply concerned about the breakdown of communication and the dire prospect of the impending failure to reach agreement."

"It is our duty to find compromise in order to protect all the citizens of Arizona. That means that no interest group, water user or water rights holder can get everything it wants," Otondo wrote. She concluded, "I implore you to put aside your differences and return to the table in a re-energized effort to do all we can to protect Lake Mead."

The early 2000s were extremely dry years, prompting the Secretary of Interior to nudge the seven states around the Colorado River — Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming — into coming up with a plan for a possible drought. In 2007, they developed guidelines that defined a shortage on the Colorado River and laid out who would take cuts if a shortage happened.

Under those guidelines, if water levels at Lake Mead, the reservoir on the Colorado River that supplies Lower Basin states California, Nevada, and Arizona, dropped below 1,075 feet above sea level, a Tier 1 shortage would be declared. As part of the agreement, Arizona agreed to take cuts of 320,000 acre-feet of water per year in a Tier 1 shortage. That would come out of the state's annual water allocation of 2.8 million acre-feet.

The 2007 guidelines were intended to last until 2026. But then drought got much worse, much faster, than expected. The Colorado River is now in its 19th year of drought, and Lake Mead now has a 57 percent chance of falling into a Tier 1 shortage in the year 2020, according to the federal Bureau of Reclamation.

That's where the DCP comes in. Arizona and fellow Lower Basin states Nevada and California have drafted an agreement that would require them to contribute extra water for storage — i.e., take cuts — in Lake Mead. Under that framework, Arizona would take even greater cuts than those laid out in the 2007 guidelines, starting with losses of 192,000 acre-feet per year. That would grow to 240,000 acre-feet in any year Lake Mead levels are projected to drop below 1,045 feet above sea level.

But within Arizona, how various groups — namely, cities, tribes, and farmers — would do their part to share in those cuts has been bitterly contentious.

They are supposed to come up with a plan by the end of November that they would bring to a meeting with the other states in mid-December. If they cannot work out a DCP, the 2007 guidelines and its specified water cuts would remain in place, meaning that states would take more water from the Colorado River.

"As the river keeps dropping, those cuts would be as they were," said Kathy Ferris, an authority on water in Arizona and a key figure in the 1980 Groundwater Management Act. "You reach a point where the Secretary [of Interior] would probably step in and halt deliveries. And if not, if you reach dead pool" — 895 feet — "no water will be available for anybody.”

"Negotiations in Arizona are at a critical stage," said Patricia Aaron, a spokesperson for the Bureau of Reclamation. The bureau was "cautiously optimistic," she added, but, "in the event that Arizona is unable to support implementation of the DCP, Reclamation would need to consult closely with the Governor’s Representatives of the other six Colorado River Basin States."

For some, an offer last week from the Colorado River Indian Tribes to store additional water in Lake Mead to help stave off drought has renewed hope that a deal can be worked out. On November 9, the tribes offered Arizona 50,000 acre-feet of water per year, starting in January of 2020, for $250 per acre-foot.

Otondo said the offer helped relieve some of the pressure on negotiations, calling it "a first step in the right direction." She added, "It's really important to me, for the benefit of the state, that DCP gets through. If we don't get something done, the feds will do it for us. That's not an option that I want to see happen."

Farmers are first in line to receive water cuts because of a legal settlement in 2004 in which they gave up their contractual right to Colorado River water. However, they want to be compensated for those losses by having others contribute to a separate supply of water designated for agriculture, known as the agriculture mitigation pool.

The Gila River Indian Community, meanwhile, has firmly maintained that water cuts and any mitigation should be distributed equally across users, and not benefit agriculture at the expense of other groups.

click to enlarge Governor Stephen Roe Lewis of the Gila River Indian Community. - GAGE SKIDMORE/FLICKR
Governor Stephen Roe Lewis of the Gila River Indian Community.
Cities, including Phoenix, tend to agree with that point, since they too are at risk of taking water cuts without compensation. They are also reluctant to contribute water to farmers, based on the fact that the agricultural sector legally agreed to give up its water in the first place.

The Gila River Indian Community is entitled to the lion's share of Colorado River water — about one-quarter, or nearly 312,000 acre-feet each year. Even with the severe cuts it would take under a DCP, it could potentially help supply farmers with the additional water they are seeking. The community’s water supply makes it an extremely powerful player in these negotiations, as its representatives are well aware.

“Not only are we the most affected by the cuts, we’re the only ones who can supply wet water supplies to make any mitigation program work," Don Pongrace, an attorney for the Gila River Indian Community, said. "With all due respect, there is no one else to talk to."

In 2018, after more than a century of sharing water with newcomers to the area, the Gila River members seek equity that they consider long overdue. This position became especially pronounced after new water order numbers presented during the October 10 meeting indicated that agriculture would receive more water from mitigation under a DCP than it would without the plan.

At the same time, users that stood ahead of farmers in the Colorado River water priority system would lose water without being compensated, because the new order numbers would cut more deeply than initially expected into the Non-Indian Agriculture, or NIA, pool. To some stakeholders and observers, mitigating agriculture under these circumstances would not only be unfair, but it would also effectively overturn the priority system for Colorado River water.

Nevertheless, in that meeting, Stefanie Smallhouse, president of the Arizona Farm Bureau Federation, gave an impassioned plea for an agriculture mitigation pool, calling the farmers' request "temporary" and "perfectly reasonable."

She also said, "We're exactly 150 years from the first farmer starting with a settlement in the Phoenix area planting wheat, barley, and corn," she said.

Governor Stephen Roe Lewis of the Gila River Indian Community pushed back.

"We've been farming for over 1,000 years," he said. "The only time that was disrupted was when our water was taken away from us."

Little headway seems to have been made since that meeting. The Gila River Indian Community seeks equitable mitigation. Farmers, especially those in Pinal County who have substantial political backing, still want an agriculture mitigation pool. Cities are not going to cease storing water to which they have contractual rights.

No one seems willing to budge, although the Gila River Indian Community has made some compromises in private negotiations in recent weeks.

On October 19, Governor Lewis sent a letter to the co-heads of the steering committee — Tom Buschatzke, the director of the Arizona Department of Water Resources, and Ted Cooke, General Manager of the Central Arizona Water Conservation District — rejecting their latest mitigation proposal, issued October 17.

"The Community is very concerned about the concepts that are emerging with your DCP Steering Committee discussions," Lewis wrote. He was especially concerned that farmers, last in line to receive water, would be compensated for water cuts even as others, like tribes and cities, would not be.

"We've been farming for over 1,000 years. The only time that was disrupted was when our water was taken away from us." —Governor Stephen Roe Lewis, Gila River Indian Community

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The Community would reject any proposed mitigation plan that put "a CAP water user in a better position" under the DCP than they would be otherwise, Lewis wrote. The Community would also reject any mitigation plan that "does not provide for equitable mitigation to the NIA priority pool."

According to lawyer Don Pongrace, the October 17 proposal offered to mitigate farmers 250 percent of what they'd been cut, and 50 percent for cuts to the NIA pool. He declined to share written records of that proposal or others, saying they had been rejected and thus were no longer relevant.

A week later, the Gila River Indian Community met with the CAWCD, ADWR, and the federal Bureau of Reclamation, according to Pongrace. At that meeting, he said, the Gila River Indian Community presented an alternative: Mitigate farmers 133 percent and everybody else 100 percent.

Pongrace said another meeting took place on November 1, when the CAWCD and ADWR responded with a counter-offer of 150 percent mitigation for farmers and 75 percent for others. He called that offer more reasonable, even workable, until last week, when the meeting for Thursday was suddenly scheduled.

"On Thursday, unbeknownst to us or the state or the feds, CAWCD announced a board meeting to come up with its own new proposal, without talking to anybody," he said. That fresh proposal came even as the Gila River Indian Community had been in the midst of negotiations with the CAWCD. "What they're forgetting is, they can't do DCP without us."

DeEtte Person, spokesperson for the Central Arizona Project, of which the CAWCD is part, said that the board had decided on November 8 to schedule the meeting for November 15. On that same day, CAP posted a meeting notice on its website and sent an email to its stakeholder mailing list. Emails were also sent to members and alternates on the DCP Steering Committee.

Besides having enough water to help with mitigation, the Gila River Indian Community has another source of leverage: a proposal to provide hundreds of thousands of acre-feet of water, at an initial cost of $97.5 million, to the Central Arizona Groundwater Replenishment District, which falls under the purview of the CAWCD.

During its monthly meeting November 1, the CAWCD board approved the deal, which Goddard said was "very attractive." The following week, the Gila River Indian Community Council tabled the proposal.

Due to the lack of progress on DCP negotiations, Pongrace said, that deal was "in substantial jeopardy.”

click to enlarge Cotton fields in Pinal County, Arizona. - RAQUEL BARANOW/FLICKR
Cotton fields in Pinal County, Arizona.
Meanwhile, farmers still want 595,000 acre-feet of compensatory water in order to sustain what they say is a $23 billion industry in the state. From the perspective of farmers and their advocates, water should go to agriculture before it goes to cities that store it for future use.

In a letter to Ducey on October 24, Arizona Representative David Cook of Globe, in Pinal County, warned that farms’ long-term contracts with companies like Walmart and Costco would be jeopardized “if we cannot come to an agreement to provide the 595,000 acre feet to this critical growing region.”

Products like melons and cotton, Cook wrote, were “shipped across the western United States from Oklahoma to California and to Canada.” He added, “The dilemma for me is: why would we allow someone to store water tomorrow for some unknown purpose, when we need the water today for existing businesses that make Arizona thrive? I believe we share this common vision and goal for the State of Arizona.”

Smallhouse, the Arizona Farm Bureau Association president, said via email Tuesday that "the GRIC holds higher priority rights along the CAP and they would like their loss of water in the Non-Indian Ag Pool, which is often stored for future use and credits, to be mitigated before Central Arizona farmers receive water,"

"We feel that since the benefit of the DCP will be entirely for higher priority users long into the future, a temporary shared shortage on the part of these beneficiaries would be in the state’s best interest," she added.

Smallhouse described the call for equity in mitigation as "a race to shortage." She pointed to the increase in water orders from higher-priority users, saying that they weren't directly using the water. "The farmers are putting the water to direct use right now growing food," she added.

"The farmers are putting the water to direct use right now growing food." — Stef Smallhouse, president of the Arizona Farm Bureau Federation

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Cities have indeed been stocking up on water from the Colorado River — for the first time ever, the city of Phoenix last year ordered its full allocation of water from CAP — and storing it for the future, as is their legal right. They describe this storage as an essential part of a carefully thought-out, long-term strategy not just to ensure they have water to make it through future extreme droughts, but also to reassure developers.

“Municipal storage activities have been characterized by some as hoarding, suggesting that we are not using this water and that we do not need it,” Tenney, the director of the Arizona Municipal Water Users Association, which includes ten municipalities in Maricopa County, wrote in a letter to State Representative Russell Bowers of Mesa on October 22. At the October 10 meeting, Bowers had questioned how much water cities consumed in comparison to what they stored.

Storing water underground ensures cities can meet requirements under Arizona’s 1980 Groundwater Management Act, Tenney continued.

“Losing the ability to store available renewable supplies underground, even temporarily, would significantly weaken our 100-year water supply guarantee to homes and business. Any wavering on this guarantee would send a negative signal to new and relocating businesses and industries as well as homeowners,” he wrote.

As groups try to protect their own interests, they have a little more than two weeks to agree on a plan. Given the claims that the board acted unilaterally, whether the CAWCD board's proposal Thursday will spark progress or more controversy remains up in the air. The Arizona Department of Water Resources, which leads DCP talks with the CAWCD, did not respond to a query about whether it was involved in the latest proposal.

Observers and participants remain hopeful, at least publicly. "Hopefully we're going to see some movement, because there is some pressure from elected leaders," said Ferris, the Arizona water expert.

Goddard, the CAWCD board member, said he was optimistic. He added, “The tough thing about this whole deal is that it involves everybody. It has to."

(CORRECTION: An earlier version of this story stated inaccurately that the Colorado River Indian Tribes offer to provide Arizona more water would have to be approved by Congress.)

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Elizabeth Whitman was a staff writer for Phoenix New Times from March 2019 to April 2020.