Auditor General: Hit by Recession, Arizona's Water Department 10 Years Behind

The Central Arizona Project canal transports water from the Colorado River, which supplies Arizona with up to 40 percent of its water.
The Central Arizona Project canal transports water from the Colorado River, which supplies Arizona with up to 40 percent of its water. Elizabeth Whitman/Phoenix New Times
A decade after the recession cut its budget and staffing to the bone, the state agency tasked with making sure Arizona has a solid water supply is 10 years behind in key elements of groundwater management, according to a recent report by the state auditor general's office.

The Arizona Department of Water Resources also failed at times to follow up with well owners and drillers who did not file mandatory reports, or with people who could be pumping groundwater but not reporting it. Meanwhile, its most recent report on municipal water conservation was published in October 2011 — nearly eight years ago — despite a statutory mandate to put out the report every three years, according to the 43-page report published in late January.

The failings laid out by the auditor general were primarily procedural, but these gross delays and lapses in reporting could nevertheless hinder the state's long-term water management. They also reflected the heavy toll of the 2008 economic recession on the department.

"We're woefully behind," said Kathy Ferris, a former director of the Department of Water Resources and an architect of the 1980 Groundwater Management Act. Without updating groundwater management plans, the department had no way to assess how it was doing its job, Ferris said.

The Department of Water Resources, created by the 1980 law, is supposed to regulate groundwater, handle surface water rights, and generally plan for the future of water in Arizona.

Between 2009 and 2014, the Department of Water Resources lost 61 percent of its staffing due to budget cuts.

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That law also designated zones with the heaviest groundwater pumping as Active Management Areas, assigning each area a water management goal to achieve by 2025. In the Phoenix, Prescott, and Tucson Active Management Areas, for example, that goal is safe yield — pumping no more water from the area than is recharged into it.

By law, the Department of Water Resources has to create five management plans to fulfill those goals, one for every decade since 1980, plus the period of 2020-2025.

The fourth of those management plans should have been adopted by January 1, 2008, in order to take effect by 2010, the auditor general's report noted.

But as of October 2018, the department had developed and implemented those fourth-generation plans in just two of the state's five Active Management Areas, Prescott and Tucson, and even those were years behind schedule.

The slowdown set back the departments' ability to implement policies, including conservation measures, that could ultimately affect progress in water management, it warned.

Another issue was the department's assumption that water users in certain regions who are required to report groundwater pumping were simply doing so. "It is possible that some ... are pumping groundwater but not reporting as required," the report said.

The department does not face any penalties as a result of the auditor general's report.

click to enlarge Tom Buschatzke, the director of the Arizona Department of Water resources, in 2016. - GAGE SKIMORE VIA FLICKR
Tom Buschatzke, the director of the Arizona Department of Water resources, in 2016.
Looming large in the report's findings were the consequences of the 2008 recession.

From 1988 to 2008, the report noted, about 40 department staff worked on the Active Management Areas. Each area even had dedicated staff. In 2008, a total of 244 people worked for the department.

The Legislature eviscerated the department after the 2008 economic crash, cutting 61 percent of the staff under former Governor Jan Brewer. Staff working on Active Management Areas plummeted from 40 people to about 11 as of July.

The Department of Water Resources now has about two-thirds of the staff it did 10 years ago.

The audit specifically cited "reduced staffing" as a factor in the delayed active management plans.

Tom Buschatzke, the director of the Department of Water Resources, agreed, even as he downplayed the findings of the report.

He said that the gaps and uncompleted work spelled out in the report would not have serious consequences for Arizona's water management or quality.

In his view, the differences between the third- and fourth-generation active management plans were minimal, with the later plan heightening conservation requirements only for a few water-rights holders. Stakeholders like cities and farms continued to conserve water "because it is embedded in their business model," he maintained, adding that the problems indicated in the audit didn't lead to "meaningful loss in groundwater management."

The department has created two new positions dedicated to active management planning, he said.

"We're ramping up our staffing," he said, while acknowledging it wouldn't return the department to pre-recession levels.

"I don't see that that should be the goal," he said.

Before the recession, many sections of the department would review the same applications, asking stakeholders the same questions, he said. Now, duplication has been minimized.

Buschatzke said he couldn't provide a specific timeline for when the required management plans would be finished, "but we are moving forward in that regard."

Typically, the auditor general's office will follow up with an agency six months after publishing a report, according to Jeremy Weber, a performance audit manager who worked on the Department of Water Resources report. At that time, the target agency is supposed to provide a written report on the status of the recommendations.

State funding for the department has ticked up slightly under Ducey, who took office in 2015. General fund appropriations directly to the department stood at $11.9 million in 2016. It received a 2 percent increase the following year, and a 9 percent increase in 2018. This year, Ducey's request amounts to a 12 percent bump.

The governor has touted water management as a pride and strength of the state.

"Since 2015, we've added new dollars to the Department of Water Resources to address important needs and will continue looking for ways to increase funding for the Department where there is a need," Pat Ptak, a spokesperson for Ducey, wrote in an email.

The office of the auditor general carried out the performance audit as part of Arizona's sunset review process, under which the Legislature has to periodically examine state agencies to decide whether to keep them going, terminate them, or otherwise revamp them.

The last time the auditor general's office reviewed the Department of Water Resources was in 1999, Weber said.

Other than the noted lapses and delays, the department generally performed its duties well, the report noted. It laid out recommendations for the department to deal with its failings, which the department formally agreed with and promised to implement.

"We tested a lot of the regulatory functions they perform, and overall, we found that they comply with a lot of statutory requirements," said Weber.
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Elizabeth Whitman was a staff writer for Phoenix New Times from March 2019 to April 2020.