As part of its ongoing examination of Arizona groundwater policy, Â鶹´«Ă˝Ół»­ is visiting with water experts and policy leaders about their views on groundwater and what they believe are the defining issues for one of the state’s most pressing challenges.

Today CBN visits with Cheryl Lombard, president and CEO of Valley Partnership.

This interview has been edited for clarity and length.

Â鶹´«Ă˝Ół»­: Cheryl, tell us about your job and what your organization does.

Cheryl Lombard: I’m president and CEO of Valley Partnership. We’re an advocacy organization for real estate development across the Valley and in Arizona. We have all types of real estate developers. We have masterplan developers, and we have industrial & commercial, which includes office, retail and multifamily. We advocate for responsible development, which we’ve defined in terms of certain policy outcomes, which includes working on water, infrastructure, transportation, and consistency across cities in terms of their regulations.

CBN: Let’s say you meet a new legislator, maybe you meet a new city councilperson, and they say, “Cheryl, I want to know more about water. I want to learn more, but it’s a daunting subject. Where do I start?” What are some of the guideposts that guide your work in the water space that you attempt to convey to elected officials and regulators?

Cheryl: That’s a subject that when I joined Valley Partnership six years ago that I took on. The situation then was a little more certain in terms of water. It certainly wasn’t something my members were being asked or even thinking about from their investors. But now it is a question. We have worked over these past six years in developing policies. Those policies include getting new resources of water, protecting what we have, and determining how we pay for it.

We mainly engage in the Active Management Areas. We’re looking at how we pay for water now, how we have good water policy, how we built infrastructure. Real estate development is part of the solution. Many of our masterplan developers are building wastewater treatment plants, same with even our commercial office buildings. They are building infrastructure pipelines and they pay impact fees that pay for infrastructure in our cities that build our water infrastructure and help pay for supplies. We also pay water rates in our cities.

CBN: In Arizona, we read headlines about some big new investment – a development that’s going to result in a big building where lots of people are going to work. But in some corners those developments will face criticism that the project is too water intensive. How do you respond to critics who charge your industry is exacerbating the state’s water challenges?

Cheryl: Our urban areas have been planning, our whole state has been planning for years. We have great infrastructure. We have great bones in terms of water supplies, very senior water rights in our urban areas. Those are not big concerns. Major cities have invested in that water infrastructure, and they have done great work in terms of conservation. New development actually uses less water than any type of older infrastructure, older developments, residential and commercial office space.

CBN: You are in a high-demand industry. You are in a fast-growing state. Do we have the supply of water to keep up with that demand?

Cheryl: Yes. Obviously, with the Colorado River we’re entering a tier-one shortage. The first wave is something that we’ve expected. That was part of the Drought Contingency Plan, which we just negotiated two years ago.

We have a great history in our state of coming together, which is what we did with DCP. We knew that these tier-one cuts were coming. It just came a little sooner than anticipated. Arizona is working toward finding more solutions. There are other means of water, whether it’s using Harquahala water, which is already legally enabled to be transferred from that basin into the AMA (Active Management Area). If we’re looking at other supplies, there’s de-sal (desalinization). That’s quite a ways away. We’re now looking at some really important federal legislation that’s going to be introduced by Senator (Mark) Kelly, dealing with the Colorado River Indian Tribes. That’s going to be an important source. Salt River Project is looking to expand storage. Our cities are storing water underground. We have great supplies of water as we enter not only future reductions in Colorado River water, but as we transition away to other resources.

Just last session, Speaker (Rusty) Bowers led the way in terms of creating that drought mitigation fund. That is going to be an amazing tool for new sources of water. We’re hoping next session that gets expanded in terms of funding and other opportunities.

CBN: We’ve got Pinal County farmers who are now forced to rely less on the water in the canal and more on groundwater from wells. If your members were to build a building in Pinal County, would your members be using the water that comes out of the canal or would they be using groundwater?

Cheryl: Let’s remember the purpose of the Pinal AMA has a different purpose than the rest of the other AMAs. It’s an agriculture-heavy community that was hypothetically transitioning to development. So, it has what’s called “planned depletion.” They have had the legal right to go to groundwater.

For real estate development, though, we have to meet what’s called the assured water supply to enable development in the Pinal AMA or, really, anywhere. Right now in the Pinal AMA, because of the imbalance of the aquifer, real estate development is not able to get new certificates in the Pinal AMA.

CBN: Is that only homebuilders, or also other types of builders as well?

Cheryl: Only for residential do you have to get assured water supply. But where this is important, hypothetically, are these big industries that are going down in Pinal County. We have great concern about meeting the residential demands of those new employees that are coming there. We really need to start to identify new sources for Pinal County and, again, the rest of our state, which is why the Speaker’s fund last session was so important.

But this is not unique to all our AMAs. It’s not unique to the rest of our state that we’re struggling with these issues as we grow and determine how we manage our water resources. We do have water, we just have a few regulatory hurdles to move some water around, which is going to be an interesting discussion.

CBN: Let’s say you’ve got a member who wants to build a factory in Pinal County. Should they have to meet the assured water supply the same way homebuilders do?

Cheryl: I’m co-chair of the Post-2025 Committee, which is dealing with those issues. That question as to whether we should be strengthening the groundwater code — specifically in AMAs — in this time of crisis has come up.

It has been the majority sentiment of those on the committee that we need to first address additional supplies before we go amending the Groundwater Act. We need to have that certainty in place before we start adding new limitations to the Groundwater Management Act.

CBN: You are a development and growth booster, but you’ve also talked about the need for responsible growth. On a scale of 1 to 10, 1 being totally pessimistic, 10 being optimistic, do you believe Arizona can meet this desire and demand to grow?

Cheryl: We already have a great basis. We do have the Groundwater Management Act. The most immediate struggle will be down in Pinal County and what the future looks like in terms of agriculture, responsible development, and industry in those areas, as well as across of all the AMAs. We’re really going to have those discussions.

Also, cities want to be responsible users of their water sources and determine the best type of businesses to attract. I think we’re going to see more of that in our cities. Those are good discussions for us to have.

How do we strike the right balance? What are some of those criteria for us to really look at so that we can have homes and jobs in one area?

CBN: In the years you’ve worked on water policy, what’s a misperception or something that gets reported that you hear over and over again that you most want to correct?

Cheryl: It’s all of these out-of-state news organizations starting with the perception that nothing is sustainable in Arizona. Whether it be that we’re too hot, or we don’t have water. Now we have other states that are trying to take our good fortune in terms of what’s going on with our economy and trying to leverage water against us. That is just really frustrating because, frankly, Arizona has been planning. We’ve had the Groundwater Management Act much longer. California just got it. So, getting those facts out to outside of our state is important. That’s my biggest pet peeve at this point.

There is a way to do all of this. There is a way for us to work with flowing rivers, agriculture, mines and development & industry, and all work together.

CBN: Do we need to revisit the Groundwater Management Act, or is it satisfactory the way it is?

Cheryl: It is satisfactory the way it is right now. We need to utilize the tools that are within the Groundwater Management Act, such as certain exceptions to transfer groundwater outside of the AMAs. Now is the time we’re going to need that. Now’s not the time to take those away.

We need to also actively work with tribal partners. Once that certainty is established, we can look at what’s next in terms of the Groundwater Management Act.

CBN: You’re an optimist in in that regard?Cheryl: Yes. I feel very strongly about that. We already have very good bones, much better than most states across the West. We need to demonstrate our ability to pull together so that we can have more certainty and then examine all of our regulations.

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As part of its ongoing examination of Arizona groundwater policy, Â鶹´«Ă˝Ół»­ is visiting with water experts and policy leaders about their views on groundwater and what they believe are the defining issues for one of the state’s most pressing challenges.

Today CBN visits with Chelsea McGuire, director of government relations for the Arizona Farm Bureau. 

This interview has been edited for clarity and length. 

Â鶹´«Ă˝Ół»­: Chelsea, tell us about your job at the Arizona Farm Bureau and Farm Bureau’s structure.

Chelsea McGuire:  I am the director of government relations at the Arizona Farm Bureau. It’s my job to put our Farm Bureau members who are farmers and ranchers in front of the right decision-makers they need to talk to when they’re facing an issue. That could be state legislators, other types of regulators, it could be state agencies.

One of the things that we are really proud of and really protective of is our grassroots structure. Every county in Arizona has an active county Farm Bureau. And those county farm bureaus are all members of the state Farm Bureau, which is the organization I work for. Those county members are the producers of food and fiber in this state who’ve come together and said they want to be part of an organization that can represent farmers from an advocacy perspective and then also from a communications and education perspective. Everything that we do is driven by our grassroots membership.

CBN: Is it fair to say that water and water policy is an issue that’s top of mind for Arizona Farm Bureau members?

Chelsea: Not only is it fair, but I can’t emphasize enough how top of mind it is. Every member that I talk to, it’s their issue number one. Why it’s such an important issue is a little bit different for every member, depending on what they raise, what they produce, where they’re located and what their operation looks like.

CBN: Would you say that farmers are good stewards of Arizona’s water resources?

Chelsea: I would and I do say that quite often, and there are a few reasons for that. The most obvious is that water is the most important resource that our farmers need. If you’re not a good steward of that resource, you’re not a very good businessperson because water is a finite resource – you must have it to grow whatever it is that you’re growing. If you waste water, it’s money out the door.

Another reason is that farming is such a generational industry. When I’m talking to ranchers or farmers or whoever it is, oftentimes their biggest goal and their deepest desire is that their children will be able to take over their operation. They know that for that to be possible their children are going to need those resources, too. So, it doesn’t make sense for them to take what they have and use it badly and ruin it for the next generation when what they want to see is that future generation being even more successful.

Water stewardship is the natural way of things when it comes to agriculture.

CBN: Do your members rely on a mix of surface water and groundwater?

Chelsea: It’s going to depend on where they’re located. The big topic of conversation recently has been central Arizona and the farmers located in Pinal County, especially. Their typical mix has been about 50-50 groundwater to surface water. In the next few years, it’s going to look extremely different because their surface water source is no longer available, thanks to the shortage on the Colorado River. They’re going to be transitioning much more heavily to a groundwater source.

In Yuma, you’re looking a lot more skewed to surface water because they’re located on the Colorado River. When we’re talking about our vegetables, our leafy greens capital of the world, most of that production is reliant on the Colorado river on surface water.

And if you go to the corners of the state when we’re talking the Wilcox basin or up in Mohave County or La Paz County, that’s going to be very heavily groundwater reliant because there’s not a great infrastructure to get that surface water to communities, making it more groundwater intensive there.

CBN: How do you respond when someone says agriculture and agribusiness is a big part of Arizona’s legacy, but it’s just too water-intensive and that we can’t continue to support farming the way we might have in generations past?

Chelsea:  I think I respond that legacy is a lot less important than security. And there’s a reason that Arizona has the economy that it has. Having agriculture as a part of our economy isn’t just good from a dollars and cents aspect. It’s good from a food security aspect. We’re able to grow so much of what we rely on right here in our state. I understand the complexity of the agricultural economy and that we’re not just eating things in Arizona that we grow here in Arizona. But we are able to have an extremely robust local food supply because of the agricultural economy that we support. And if COVID-19 taught us anything, it’s that supply chains are very fragile, especially when we’re talking about agricultural supply chains, which are just-in-time supply chains, because that’s the way that they’re most efficient.

So, if we’re talking about whether agriculture is too water-intensive and whether we ought to put that water to higher, better uses, my argument is actually that agriculture is one of the highest and best uses of water not just because of the economic prosperity it provides, but because of the ability that it gives our state and our country to feed itself.

CBN: Thinking about groundwater, does agriculture have a strategy or methods to replenish aquifers?

Chelsea: One of the great things about irrigation is that it delivers a natural recharge. When you’re irrigating a crop, it’s going into the ground, the plants aren’t using the entirety of that water. Some of that water is naturally going to recharge the aquifers beneath the ground. Now, is that the same as a developer who’s intentionally pumping thousands of acre-feet into a recharge facility? No. But there are other environmental benefits that agriculture has as well.

Air quality is a huge issue in this state. We have several non-attainment areas for air quality that are mostly related to dust. When you have a fallow field, that’s where dust comes from a lot of the time. But, if you have something that’s covering that field, a crop that you’re growing, that’s really important for that air quality because it keeps the soil healthy. Soil health is another big thing that agriculture doesn’t get enough credit for considering all the carbon sequestration that happens through agricultural production.

We’re using water to grow plants that are taking carbon from the atmosphere to do what it needs to do, putting some of that carbon back into the soil, which has incredible benefits to your soil structure. Plus, we’re taking greenhouse gas out of the atmosphere where we don’t want it and putting it somewhere where we do want it. It also creates wildlife habitat, creates insect diversity, and attracts pollinators. Agriculture doesn’t get the credit that it should have for what it does.

CBN: Central Arizona and Pinal County specifically is a hot area for industrial development and new job creation. Does the Farm Bureau believe we can strike that balance between development in the region and agriculture, or does one sector necessarily need to win out?

Chelsea: I think we can strike that balance. I think it’s really hard to do. And it’s hard to do without the perception that someone is a winner, or someone is perceived as the loser, but there are certain principles that you can use to guide that development. One of the things that our policy states is that we believe development should drive to where there is water. That may seem a little counterintuitive because agriculture is where there is water, but driving development to agriculture does a couple of things.

The first is that it helps maintain agricultural land values. In a business like agriculture that is so capital intensive and has very narrow profit margins, you’re borrowing against that land value most of the time. If we know that there’s development happening in that county, that land value is going to increase and actually allows farmer to have a little bit more cushion there to keep producing the food that they produce until they decide it’s the right business decision for them to move on to something else.

The other thing is that you still need agriculture to support development, and you do to some extent need development to support agriculture. We want rural communities to have great schools to send their kids to. We want them to have great hospitals when they need medical care. All of those things work together. And there’s really no reason that we have to be one or the other. We just have to make sure that those incentives and those policies are there to support both of those things, which are both critical to our economy and our state.

CBN: Is it a frustration for the Farm Bureau that development and agriculture are pit against each other?

Chelsea: I think it is. One, it doesn’t have to be that way, and two, just because the two do really need to work together well to make the decisions that need to be made. You’ll find that we agree a lot more often than we disagree.

CBN: Let’s say a newly elected legislator comes to the Farm Bureau and says, “I know I need to learn more about this topic of water. I need to learn more about groundwater and the difference between groundwater and surface water hydrology, but I’m not really sure where to start. What are some key principles that you recommend I adhere to as I try to figure this topic out?”

Chelsea: In terms of general principles, I would say most of Farm Bureau’s water policy is really underpinned by the idea that water is a property right. The use of water belongs to the land. It should not be taken from a landowner without proper compensation. Of course, that can be really tricky with what Arizona’s water law looks like. That statement that water rights are inviolate and water is a property right goes against some of what Arizona water law says. That automatically puts us in a somewhat strange position, but that’s really what we start with. This is a right. This is an important integral inviolate, part of land ownership.

The other aspect I would say underpins our policy is that one size does not fit all. When we try to create regulation to manage a resource that blankets the state, that doesn’t really work because the water situations look so different from basin to basin. We really appreciate our current Legislature recognizing the uniqueness of our local communities and trying to figure out what regulatory structures can look like that respect and work within those communities.

Third, because of the unique situations of our local communities and because every water user has a different need in that conversation, there has to be meaningful representation of the water users whenever you’re talking about water regulation. You’re not going to know what those local needs are if you’re not actually talking to the people using water in those localities. Farmers and ranchers believe they have to have a seat at the table as someone whose opinion is respected and valued and reflected in the ultimate decisions that are made.

CBN: In central Arizona we’re asking farmers now to shift to greater reliance on groundwater from surface water. Does that sometimes mean drilling new wells, or is it relying on existing wells?

Chelsea: It’s a combination of both. Agriculture in Pinal County prior to the 1980s was entirely dependent on groundwater because there was no such thing as the CAP (Central Arizona Project) canal. They couldn’t bring Colorado River water to the county. There was a lot more agriculture in Pinal County then. It was a lot of water being used, and they were starting to see some detrimental environmental effects of that. Subsidence is the thing you’re always going to hear about. That was one of the things that spurred the Groundwater Management Act and got Pinal County onto this increased mix of water sources. So, they began using a whole lot less groundwater and a whole lot more surface water.

There’s always been a groundwater delivery infrastructure in Pinal County, and that’s still there, it’s still functioning, it’s still efficient, but now we need to ramp that up significantly to make up for hundreds of thousands of acre-feet of surface water they’re not going to get anymore. So, they’re going to rely on their existing wells, they’re going to drill new wells, and they’re going to revamp some old wells that maybe aren’t as efficient as they need to be.

CBN: What are the limits on what farmers can take out of their well?

Chelsea: That’s another one of those questions that it depends on where you are in the state. When we’re talking about Pinal County, or in any of the Active Management Areas across the state, agricultural land has associated with it certain pumping rights. Those rights are going to look a little bit different across the AMAs, but that’s what the farmer is limited to. And that’s what the Arizona Department of Water Resources measures and manages and lets farmers know whether they’re within their allotment. Or, if they’re in a best management practices program, the farmer reports on their management practices they’ve put into place to make sure they’re not pumping more than they need to.

CBN: If you were to ask members of the Farm Bureau, are farmers satisfied operating under the current groundwater code? Does it need to be updated? Does it need to be thrown out and we need to start over, or is there no prevailing opinion on the Groundwater Act?

Chelsea: I would say we have a complicated relationship with the 1980 Groundwater Management Act. We definitely recognize what it did to help us manage this resource more effectively and put into place an expectation of what wise water use looks like.

There are aspects of that code, like the irrigation non-expansion areas, that are focused solely on agriculture. We think that there’s an issue there. If you talk to some of my members, they would also tell you that agriculture is subject to stricter provisions under the code than some of the other industries. Then again, if you talk to the other industries, they’re going to say the same thing.

There are some building blocks of that Act that make a lot of sense and have done some really good things for the state and have helped industry stay successful within the state.

Sometimes when you put big, landmark legislation into place, you don’t always think about what the worst possible scenario that could happen under the act. You have to make exclusions or make exceptions to get policy passed. That’s just part of politics.

Are all of the specifics of the Act what we would like them to be? No. Are the building blocks and the principles that guide the Act essential to wise water management for the areas where it’s in place? Yes. Does that mean it’s going to work in Wilcox or Mohave County to have an AMA? No.

CBN: What about criticisms from people who talk about water-intensive crops and that farmers ought to grow something else? What is the response to that? Is that a fair criticism, or is it a lot more complicated than simply just growing something else?

Chelsea: It’s so much more complicated. Sure, we can grow something that’s less water-intensive, but can we actually sustain a business growing that crop? Additionally, what kinds of industry do those water-intensive crops support? Alfalfa is the one that I always use as an example because alfalfa is responsible for our dairy industry. Dairy is a great, highly nutritionally dense protein source. It’s something that we want local because it’s also highly perishable. Importing dairy products from other places is extremely expensive and makes the products less readily available. Moreover, having that feed source close to the dairy makes it an extremely efficient business as well, because you’re not transporting a feed source all the way to the dairy and not transporting the dairy products all the way to the retail customer.

As for the argument that we need to grow less water-intensive crops because that’s more sustainable, I believe that’s a very narrow way of looking at sustainability. If something is not producing a product that humans need, is it really sustainable?

I think alfalfa is a good example, because, yes, it requires a lot of a particular resource, but it also means that we’re saving resources and things like fossil fuels because we’re not transporting that alfalfa a far distance and we’re not transporting the milk on the other end. It also means that we have things that are more locally available and meeting the consumer preference for a local food supply. If you look at sustainability on a much more holistic view, just because something is resource-intensive does not mean it’s not sustainable.

CBN:  Do you have members who would be interested in bringing more high-tech irrigation technology on board? What is your reaction to those who say it’s time to get some new technology into the fields?

Chelsea: I think agriculture is often criticized as not being an early adopter of technology, and there’s some fairness to that criticism for sure. But there are also some farmers who really break that mold, and necessity is also the mother of both invention and innovation. When you’ve got a farmer who’s facing what Pinal County farmers are facing, absolutely, they’re going to be willing to do whatever they can to keep their business model alive.

But that next best, greatest irrigation technology has to make sense for the farmer’s soil profile, their geography, for what they’re growing, making sure that they can get water to a seed to germinate it and then get water to a plant to grow it. They also have to be able to afford it, because if you’re going to sink all of your money into the technology and then not actually have enough of it to produce the crop that the technology is supposed to help you with, that’s not a great business model.

So, yes, farmers are absolutely willing to adopt that technology, whether it’s irrigation technology, whether it’s seed breeding technology, whether it’s chemical application in a more precise way, all of those things, but they have to be able to prove that it works and they have to be able to prove that it’s worth the money that it’s going to take.

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As part of its ongoing examination of Arizona groundwater policy, Â鶹´«Ă˝Ół»­ is visiting with water experts and policy leaders about their views on groundwater and what they believe are the defining issues for one of the state’s most pressing challenges.

Today CBN visits with Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Central Arizona. 

This interview has been edited for clarity and length. 

Â鶹´«Ă˝Ół»­: Tell us what your job is and what the Home Builders Association does.

Spencer Kamps: I’m Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Central Arizona. We are a business trade organization representing residential homebuilders here in central Arizona — Pinal, Maricopa, and Yavapai County. Our board of directors typically consists of the publicly traded companies and the high production builders that engage in that kind of activity in Arizona.

CBN: Give readers a sense of what you have seen over the course of your career as it relates to water policy and homebuilding.

Spencer: I probably worked on water issues for maybe 10 hours a year when I started. Now water issues take up to 60% of my time. It’s a very complicated issue. It’s a big issue in Arizona for reasons like in Pinal County and concerns that there isn’t enough groundwater to grow, and the Colorado River facing cuts.

Arizona is blessed in a lot of ways. We’re a very competitive market. That’s good for the consumers. We’re still a somewhat affordable market compared to some other regions. But all markets change as well.

CBN: You’ve seen your industry evolve in a fast-growing state in a fast-growing region. Have you and your colleagues ever questioned whether Arizona can sustain this level of demand here in an arid desert region?

Spencer: I think it’s always been in the back of everybody’s mind, but not at the front. Arizona is very, very fortunate, which is a story that I don’t think gets told enough. We have had very serious and thoughtful leaders when it comes to water management and water policy in the state of Arizona. We have a very rich history of being at the forefront of managing this very limited resource.

The Groundwater Management Act was adopted in 1980. California adopted theirs something like six years ago. That’s a great example of how far ahead of the curve we’ve been in Arizona. But I think the drought, the Colorado River supplies, have brought this much more in the forefront.

In my industry, I think people always felt water to some degree would work itself out – that the problem would always be solved. We might pay a lot more for water, costs might go up, but water will be attracted to money. But we know from the Pinal County situation that the issue isn’t necessarily solved through money, so it’s much more of an issue today for my members to make sure that they’ve obtained their water supply. Early in the process, it’s required by law that we have water supply, so nobody’s avoiding that requirement, but we try and solve our water problems much sooner rather than later, because it can really hold you up.

CBN: Let’s say that you meet a new legislator who knows that they need to learn more about water, but they don’t really know where to start. From your perspective, where do you like to start with a legislator, whether you’re talking surface water or groundwater?

Spencer: I start with talking about the importance of managing a limited resource in an arid environment. The other thing I tell them is the first bucket of water we had in Arizona was groundwater, and we were depleting that resource, hence the adoption of the Groundwater Management Act.

The second bucket of water we received as a state was the CAP (Central Arizona Project) canal and the Colorado River supplies that are delivered through that canal.

Both those buckets have allowed us to grow immensely to the point where we use the same amount of water we used in 1957. The reason we’re able to grow so much with using the same amount of water in 1957 is because of two reasons, primarily.

Number one is residential growth. We have retired agriculture pumping rights. The ag industry doesn’t have unlimited pumping rights, but close to it. Development falls under the Groundwater Management Act. We do one major thing that doesn’t get talked about a lot, which is we’re able to use groundwater at the location of the development instead of bringing it in, which is a massive infrastructure cost. We’re able to use groundwater and pump it at the location as long as we meet the hundred year assured water supply.

The second thing we do is we replenish it — we put that water back into the ground. So, not only are we retiring ag pumping rights and using less water to serve residential growth, but we’re also replacing the groundwater with reuse to service that growth. It’s a double win for the aquifer. That’s one of the main reasons residential growth is good if it’s done on ag land.

There are also conservation measures. We don’t irrigate residential lots anymore, like we do in old north-central Phoenix. So those first two components are big, and conservation, quite honestly, is the cheapest way to grow because conserving and doing more with what you have is cheaper than going to buy new water supply.

But the most important thing for legislators to understand is we don’t have a third bucket of water. We really don’t. We need a third bucket of water. That’s Colorado River water supplies, which is highly controversial. You have the Harquahala Valley, which is a recognized transfer base, and by state law it’s designed to be transferred into central Arizona, but there’s been challenges there.

And then we have other entities here in central Arizona who have more water than they need, and whether they put that water on the market for the right cost is challenging at best. So, we’re facing growth issues and supply issues here in central Arizona about how we grow as an economy. The Pinal County situation is a prime example of what can happen when we don’t have enough water. 

CBN: You contend that a housing development on what is currently farmland could be less stressful on the water supply than that current farm?

Spencer: It’s just a fact. With residential growth you use significantly less water than an ag operation.

Again, in the AMAs (Active Management Areas) that I represent, we’re required to replenish one hundred percent of that water. Maybe you’ve heard me talk in the past about the Central Arizona Groundwater Replenishment District. That is the entity that my industry created when the ADWR (Arizona Department of Water Resources) proposed that we’re not allowed to grow our industry on groundwater. There was a compromise that we can grow on groundwater, but we have to replenish it all. So, we created the GRD, the CAGRD, to fulfill that obligation. It’s the only entity in the entire state of Arizona whose sole job is to go buy water, find supplies, and put it in the ground.

CBN: When we talk about recharging an aquifer, the CAGRD does that?

Spencer: That’s exactly what it does. It has numerous recharge basins located within Maricopa County and literally buys water and puts it in the ground to meet that replenishment obligation, to buy a hundred-year supply.

CBN: Before your members can go and build a new neighborhood, a new master plan community, a new development, they need to get some sort of certificate that says there is a one hundred-year assured water supply at that project?

Spencer: There are only two ways we can grow in the AMAs. I am referencing, Maricopa, Pinal and Pima. One, a city or private utility can go to the Department of Water Resources and get what’s called a designation. That means they go in and say, “We have X amount of water that falls under the one-hundred-year test and satisfies the Department.” That designation says you can grow X amount under that designation. And then when my builders go into those communities, they draw down that water out of that designation which satisfies the hundred-year test. And then we grow under that scenario.

The second way is in unincorporated areas predominantly or non-designated cities and private utilities. There are many, like Buckeye and Queen Creek. Those communities are non-designated communities. In those cases, we go to the department directly and get a certificate of assured water supply, which is the hundred-year test. And that means that if we drop a well, we can pump it for a hundred years and it will last for a hundred years, but also that we won’t affect surrounding wells in any negative manner. Once we meet that test, we go join the CAGRD and the CAGRD replenishes the water that we’re going to pump to serve that development.

So, those are the two steps to the process outside designated service areas. You have the well test at ADWR, and then the second is to join the CAGRD.

CBN: Can your members get these one-hundred-year assurances in Pinal County right now? 

Spencer: No. Absolutely not. We can only grow in Pinal County in those designated providers that I mentioned earlier, like the EPCOR service area in San Tan, the town of Maricopa, Casa Grande, Eloy, Florence, and I believe Arizona Water has some designated areas. We’re only growing in those areas right now.

CBN: Let me ask you about farmland in Pinal County that is now using less surface water and is relying more on groundwater. Couldn’t a homebuilder come along and say, “If I were to build on this land, I would be putting less stress on the water supply than the existing farm”? If a home puts less stress on the water supply, that provides a water benefit and meets the demand for housing that we see in central Arizona, couldn’t it?

Spencer: Yes, and that’s what we’re saying as it relates to Pinal County. The Groundwater Management Act does, I think, a very good job of managing growth and water supplies in these AMAs. I think it does an exceptional job.

What the Act doesn’t do well is envision what happens in an AMA that has unmet demand, like Pinal County. It doesn’t tell you what happens next. And that’s where we find ourselves in Pinal County.

Agriculture is the predominant industry in Pinal County right now. We made some calculated strategic negotiations during DCP about how we’re going to manage that industry as they lose their access to the Colorado River supplies. And it was to help them with infrastructure needs and drill, and basically mine more groundwater to serve ag. But they’re still going to have to fallow a significant amount of property.

As I mentioned earlier, if you’re in a designated provider, you’re okay, and homebuilding can come in and take down that property and turn it into homes. If you’re not, you’re in a world of hurt.

One big solution for Pinal County is to allow growth to continue. The state doesn’t have the resources to compensate farmers to have them not farm. But development is a natural way for that to happen, and we’ve done it in Maricopa County.

In the Maricopa County AMA, the original rules were originally designed for farmers to get out of farming and sell their property to homebuilders to allow for growth to happen. So, this isn’t a model that hasn’t been tested – it’s been done in Maricopa County.

If we do nothing in Pinal County, agricultural eventually is just going to use as much groundwater as it can. There are limitations to how deep they can go. There are cost issues about how deep they can go, but they’re going to access that groundwater as much as they can, and rightly so because they’re trying to stay afloat. But under our regulations, we’ve not allowed development to retire as much ag land as possible. We need to allow that to happen. The only way to do that is to introduce a new, renewable supply, a new surface water supply to satisfy ADWR’s modeling and we need to do more. I think curtailing development hurts groundwater as much as doing nothing.

CBN: Talk a little more about the unique situation in Pinal County as it relates to the AMA.

Spencer: The Pinal AMA has been uniquely managed through its assured water supply rules. They are in a “planned depletion” AMA, whereas Maricopa and Pima are safe yield. So, we’ve had a different goal in Pinal. I think that’s led to some of the problems.

Pinal County for all intents and purposes is one of the last affordable housing markets. It’s one of the reasons San Tan is one of the hottest housing markets in the country. It’s because that entry level product’s so easy to build out there and it’s in high demand. So, something needs to change down there. And this has been a problem for going on eight years. We haven’t had a certificate (of assured water supply) issued since 2015. We had some 30,000 to 40,000 lots that were put into production in 2008 in the heyday that had been sitting there. We’ve grown through those, and we have massive lot supply problems. Land prices are going up because there’s limited areas you can grow. We need to solve this problem. My industry’s very frustrated by it. It’s very, very difficult. If this issue is not solved soon, you will see the lack of housing activity in Pinal start to impact Arizona’s economy in a negative way. 

CBN: But isn’t agriculture an essential Arizona industry?

Spencer: Oh, yes, and we’ve never denied that. We’ve never tried to get in the way of the ag industry accessing the water. We partnered with them on many occasions. And we will continue to partner with them. We’ve had some conceptual discussions with securing water supplies with the ag industry and letting them use it until we get there. There are challenges with doing that, but they can be overcome and hopefully, we’ll get there soon.

CBN: For homebuilders who cannot get a one-hundred-year assured water supply today, will they be able to tomorrow, or in five years, 10 years? Will this issue ever change?

Spencer: That is the million-dollar question. If you had asked me that six years ago, I would’ve told you that we would have this problem solved by now. So, from the perspective as someone who has been involved in the homebuilding industry, I’m very frustrated. The solution is not limited to introducing new surface water supplies to Pinal County. It is a complicated mix of reforms within the system and introducing new water supply.

CBN: What do we do about water supply? You’ve talked about the CAGRD as way of replenishing aquifers, but is there something more we need to be doing to address the supply side other than praying for rain?

Spencer: I think Speaker Bowers did a big first step last session when he allocated $140 million for the drought committee. That is a good first step that’s focused on out-of-state supplies, but I think we also need to focus on in-state supplies, both desalinization, which is a long-term play, and also looking at bringing in the Harquahala water, which is a designated transfer base, and it can go a long way to solving a lot of problems.

There are a lot of entities that have water, more water than they would ever use. And those individuals need to put it on the market either to sell it or lease it. If you bought a house next to ASU when your child was 10 years old for a good investment, you wouldn’t let it sit there until they went to college – you would rent it out. Leasing water is a very good option for people to put water out on the market that they’re not using today.

We need to have a massive discussion about whether we’re going to bring in water from the farthest areas of the state to central Arizona. The ultimate decision could be that we don’t do that, but we wouldn’t grow as a state. Those are the consequences.

We need to figure this out because Maricopa, Pinal and Pima, all the taxpayers of those areas pay for the CAP canal. And the supplies delivered by the CAP canal were given out decades ago and not everybody got a piece of the pie. The CAGRD is the one way to balance that equation because no matter where you are in Pima, Pinal or Maricopa County, if you meet that a hundred-year assured water supply test, you can access the CAGRD and develop and any landowner can join, and any farmer can join if they wanted to put their property into development, and any city can join, and any private utility can join. It’s fair and equitable for everybody to get a benefit of the CAP canal. If we don’t do that, the only people who benefit are the ones who got water out of the CAP canal.

So, we need to figure out how to get the CAGRD more water in my opinion, and to get more renewable supplies down in Maricopa, Pinal and Pima, with Pinal being the priority, and the state needs to make a critical decision about whether we want to invest in these new supplies or not. We need to have those conversations to figure out how to solve this.

CBN: Pinal County’s a very hot area for job growth right now. Not just homes, but people going to work there in good-paying, attractive jobs. Where are they supposed to live?

Spencer: We’d love to solve that puzzle. We’d obviously love to be the provider of all those homes. We don’t want to be like California. We don’t want high, high housing costs where the middle class can’t engage in the economy by making one of the biggest investments that anybody ever makes, which is buying their own home and creating value and assets in their lives. We don’t want to get to that spot, but we’re fearful that we will.

CBN: Would growth rely on a mix of water sources?

Spencer: I don’t see how as a state we grow without groundwater. As it relates specifically to homebuilding, there’s no reason we should be prohibited from using groundwater because we replenish it all. We’re a positive asset to the groundwater tables when we grow. The cost of not growing on groundwater is so expensive that it would destroy housing affordability. We would have to somehow put a big pipe from the CAP canal and direct deliver that to the development. Those costs are astronomical.

CBN: You mentioned the 1980 Groundwater Act, and we did the Drought Contingency Plan a couple of years ago. Do you think it’s time to do another sweeping groundwater bill that is reflective of the here and now?Spencer: I don’t think so. I think the Groundwater Management Act is a good foundation. It can always be improved upon, but I think it’s an excellent foundation. The AMA model is a great one. I think what the state needs to focus on is conservation, reducing use of groundwater without replenishment, and introducing new supplies.

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As part of its ongoing examination of Arizona groundwater policy, Â鶹´«Ă˝Ół»­ is visiting with water experts and policy leaders about their views on groundwater and what they believe are the defining issues for one of the state’s most pressing challenges.

Today CBN visits with Todd Reeve, CEO of the Bonneville Environmental Foundation and co-director of Business for Water Stewardship.

This interview has been edited for clarity and length.

Â鶹´«Ă˝Ół»­: Tell us about the Bonneville Environmental Foundation and Business for Water Stewardship.

Todd Reeve: BEF, the Bonneville Environmental Foundation, is a nonprofit organization that’s a parent organization for several core pillars of work. Perhaps the largest pillar of work is Business for Water Stewardship. Business for Water Stewardship is BEF’s platform where we collaborate with the private sector, with businesses, large and small, to help advocate for and reinforce proactive and progressive water solutions. The goal for Business of Water Stewardship is to understand private sector and business needs and help build out policies, projects, platforms that can help stretch the benefit of every drop of water to support environment, community, and business needs. We’re very committed to our business partners, but we also see water security as having enough water to support business, community, and environment.

CBN: It’s central to the premise of Business for Water Stewardship that your organization believes that private employers can improve Arizona’s water standing?

Todd: Absolutely–in really, really big ways. Obviously, they all can do a great job of conserving water in their operations and facilitating reuse and water efficiency, which is fantastic and really important. But I think the real potential is when we think about how Arizona has evolved from a very rural kind of pioneering, ranching, farming, mining state to a place where Fortune 50 businesses are increasingly locating and growing. Businesses are critically important. They are massive employers in the state, they’re bringing investment. And so business influence has the potential to influence policymakers, community members, stakeholders. So, just seeing businesses step up, build awareness around these issues and come to the table has unbelievable influence. I sincerely believe that activating business influence is one of the biggest levers that we can push on to advance positive water policy and action needed to achieve long term water security for Arizona.

CBN: One of the things that we’ve heard as part of these conversations with representatives from industry is the belief that development in and of itself doesn’t necessarily need to be a negative for Arizona’s water position. Would you agree with that position?

Todd: I do agree. And I think what we’re talking about is changing the narrative to say, if we do things right, we’ve got incredible promise and upside in the state of Arizona. This isn’t just a dire crisis and things are going to get worse from here. This is an opportunity to really shift the narrative and say, we’ve got the technology, we’ve got the capacity, we’ve got the vision. We can create the policy and practice to really support and grow business investment and maintain adequate water for environment and for communities.

I would have to mention that it can also go the wrong way. Presumably any business use of water, any development, can certainly lead to negative consequences around water, but I think development and business engagement on this is about recasting the narrative and doing it in the right way. And there are examples from Las Vegas and Israel and other places where people continue to do more with less. I think that’s what the opportunity is here.

CBN: There seems to be an emerging opinion that there might be a technological solution here, that there are other arid regions in the world that are figuring out how to still sustain agriculture in arid regions. Is that your experience?

Todd: Absolutely. I think we’re really at the tip of the iceberg in terms of turning the corner on better, wiser water use. There’s no question that technology and agriculture can provide unbelievable gains, and we’re seeing articles every day and analysis showing that there’s new technology that allows agriculture to do more with less water. In some areas of the state agriculture is already very efficient, however, there are still large gains to be made in many regions. It’s interesting to reflect on this and think about our pioneering heritage. Most of our irrigation systems were hand-dug by pioneers a century ago, and because water flows downhill and because water rights exist–if you have access to it, water can be relatively cheap. We really haven’t upgraded some of these systems in significant ways. I think that’s one of the signals we’re seeing–it’s really time to make those investments. Leverage federal funding for infrastructure, leverage state, federal private programs that can put money into long-term irrigation, modernization, and really shore up the ag sector for long-term profitability and success. I think that’s at the top of the list: How do we invest in and deploy technology and infrastructure to sustain agriculture, to sustain ranching and use less water?

CBN: You’re also saying that about the agricultural sector as well. We don’t necessarily have to get rid of agricultural or ignore Arizona’s agricultural legacy. We can do it, but we might need to do it in a different way.

Todd: I think that’s right. Agriculture has evolved in many ways over the last century, and you look at some of these basins in the West and they’ve shifted what types of crops they plant, they’ve shifted how they use water over time. I think we’re at that stage where we’ve been using water in a certain way for a certain type of crop and we really don’t want to change. But I think opportunities are just around the corner and the demographic shift that exists in ranching and farming—combined with the technology–I think we’re right on the cusp of making that shift. That’s where I think there’s incredible opportunity, and I’m optimistic both in the municipal, urban setting and in the ag setting that we will make that transition and will use water where it provides high value to rural communities and farming interests and be able to sustain our agricultural heritage.

CBN: Let’s say that you encounter a new legislator and they say, “Todd, I know I need to get smarter on this, but where do I start? What do I need to know? Or at least what sort of guidepost should I adhere to as I think about groundwater?”

Todd: Given the conversation in Arizona today, I would say it’s really important to understand that Arizona was a pioneer in groundwater management 40 years ago in a small portion of the state. As a result, about 20% of the state has rigorous, active management of groundwater, primarily some of the urban areas, particularly Phoenix and Tucson. And I think the most important thing to know is that outside of those areas, in roughly the remaining 80% of the state, groundwater is open access, unmanaged. And what has shifted is the demands for that groundwater have changed dramatically because there’s open access, there’s risk of overexploitation, there’s risk of outside parties that are better capitalized, drilling deeper, pumping more, undermining existing farmers and ranchers or ones that even were there a hundred plus years ago. So, for me, that’s a central issue right now: 80% of Arizona’s groundwater, mostly in rural areas is unprotected, unmanaged, and the tools don’t exist to allow local communities to create their own pathway to understand, manage, protect, ensure groundwater supply, whether it’s for businesses, small farms, large farms, period.

Number two from my perspective is this matters! Whether you’re a big business or your district is in Phoenix or Tucson, the overall perception of water management and water security in Â鶹´«Ă˝Ół»­atters to everyone. Even if you’re in Phoenix and you feel that water is relatively well managed in your region and you’re protected, I don’t think we can afford to have articles in the New York Times and other national outlets every week saying that Arizona’s running out of water, because I see our business partners scrutinizing water risk—and public perception of risk IS water risk for businesses and companies. So, understanding that Arizona is comprised of an integrated water story is important, and it would be very advisable for us to be sure that we’re taking care of water in the rural areas in the same way that we’re taking care of water in the urban areas.

CBN:  Is Arizona groundwater policy still doing its job or do we need to reimagine a whole new regime of groundwater policy?

Todd: I don’t think we need to reimagine a whole new regime, but I do think we need to reflect on fundamental changes that have occurred over the last 40 years. We anticipated that the Colorado River would be a reliable input of renewable water supply to the state that, in concert with groundwater, could be managed to sustain long term water availability. We’re now seeing with 20 plus years of drought, with climate change and aridity, that renewable freshwater supply from the Colorado will not be able to provide what we thought it would. So, that puts additional pressure on groundwater, which increases the stakes. That has changed how we need to reflect on long-term water supply.

I think Arizona put a lot of quite amazing management pieces into the groundwater puzzle in 1980 and many — probably most — of those pieces are valuable and should remain. There certainly are questions about how the current Active Management Areas are functioning and whether there might be some tuneups that could enhance those region’s ability to sustain long-term water supply for business and communities. That’s important.

I think most important is not to throw those systems out. They’ve worked well, and we need to sustain them and maintain those systems so that they can continue to be refined and protect those water resources.

CBN: Will water supply necessarily always be depleting, or can we increase water supply?

Todd: The answer is yes, we can change the supply picture. Some of it is through management actions. If we think about aquifer storage projects, if we think about reuse projects, efficiency, that can be seen as increasing water supply. And sometimes we think about if there were federal or state incentives for more reuse and water recycling—right out of the gate, we’d have potential for more water available for more uses. And certainly Arizona is exploring other pathways that could increase water availability in the state. And conversations about desalinization, about brackish water, there are pathways out there that have potential to deliver more water.

I think there’s a lot of room to do more with less, with a clearer pathway to water security and water benefits at less cost for the near term. And there are some very compelling pathways that potentially could free up additional water. These should be explored and evaluated, however, it’s important to note that some of these solutions could take many decades to implement. 

CBN: Got it. That’s all I’ve got for you. Is there something else I should have asked?Todd: I personally feel like we don’t want to put pressure on anyone to jump into some really complicated policy that no one understands. It’s about building awareness so that ultimately, we can make better decisions. There are near-term opportunities. There are longer-term opportunities. There’s growing the supply side. There is managing the demand side. And I just think changing the narrative, that’s where we want to be. Let’s turn the corner and get ahead of this. I think what’s inspiring to me.

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