Bill would block transfers of Colorado River water from rural areas to growing cities

A company’s proposal to take water from farmland along the Colorado River and sell it to a growing Phoenix suburb has provoked a heated debate, and some Arizona legislators are trying to block the deal with a bill that would prohibit the transfer.

The legislation introduced by Rep. Regina Cobb would bar landowners who hold “fourth-priority” water entitlements from transferring Colorado River water away from communities near the river.

Cobb said this water was supposed to be used for agriculture and if it’s diverted elsewhere would harm farming communities along the river.

“We just needed to get ahead of it and let them know that we’re not for this,” said Cobb, R-Kingman. “It would be detrimental to the communities. There is absolutely zero development that would happen in any of those communities once the water got transferred out of there.”

Cobb said without legislation, she’s concerned hedge funds will try to do more deals to use farmlands for selling off water.

“We need to create the wall against them and send a clear unified message,” Cobb said. “Our finite resources are not for sale.”

Cobb represents La Paz County, including the small farming community of Cibola, where the company GSC Farm LLC has proposed to stop irrigating its farmland and sell the water to Queen Creek.

Rep. Leo Biasiucci, R-Lake Havasu City, is co-sponsoring the bill.

Deal would send water to Queen Creek

GSC Farm has proposed to leave 485 acres of farmland dry and sell its annual entitlement of 2,083 acre-feet of Colorado River water — about 678 million gallons — to the town of Queen Creek for a one-time payment of $21 million.

The town and the company asked regulators at the Arizona Department of Water Resources last year to endorse the water transfer. Their representatives said the proposal would bring economic benefits and more tax revenues to the rural area and the state as a whole.

Officials from Queen Creek have pointed out that the town, which was founded in 1989, gets a relatively small allocation of Colorado River water from the Central Arizona Project Canal. They said buying water rights is part of a long-term effort to reduce reliance on groundwater pumping.

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Paul Gardner, the town’s utilities director, said there is sufficient water available in river communities.

“There’s plenty of water for them to grow,” Gardner said. “We think the 2,000 acre-feet that we’re trying to transfer over is de minimis to the river as a whole. The other side thinks it’s catastrophic, and that’s why there’s a big division between the two sides.”

The Arizona Department of Water Resources held four meetings in November — in Phoenix, Bullhead City, Parker and Yuma — to receive comments from the public on the proposed deal. The department also accepted written comments up until a Jan. 15 deadline.

Within 60 days, ADWR Director Tom Buschatzke plans to issue a recommendation on the proposal to the federal government, which manages Colorado River water. Shauna Evans, an ADWR spokesperson, said since the review process is underway, “we will reserve comment until the department reaches its final decision.”

The state’s decision to recommend approval or denial will then go to the U.S. Bureau of Reclamation for its decision.

“This bill is really not needed,” Gardner said. “There’s already a process in place and we’re right in the middle of the process.”

Gardner has said transferring water to the area southeast of Phoenix would help reduce the town’s groundwater pumping and would bring enough water to supply approximately 5,500 homes.

The costs for the town, on top of the $21 million payment, would include about $350,000 per year to deliver the water through the CAP Canal.

'It's important to protect the rural counties'

Queen Creek is one of the fastest-growing communities in Arizona. The 2010 census recorded a population of about 26,000. The town now estimates the population is 51,800. Its water service area is twice the size of the town’s boundaries, supplying an estimated population of 90,000.

The company that owns the farmland is a subsidiary of Phoenix-based Greenstone, which describes itself on its website as a water company that seeks to “advance water transactions that benefit both the public good and private enterprise by providing solutions” in the western U.S.

Greenstone’s parent company is the global financial services firm Barings, whose investors include pension funds.

Opponents say they fear if the deal goes through, it would open a door for more farmland-to-city water sales, undermining the local economy in farming areas that use Colorado River water to grow crops including alfalfa and cotton.  

“The Colorado River is the way of life for these river communities. And as much as we want Arizona to grow as a state, it’s important to protect the rural counties,” said Cole Libera, a lobbyist with Dorn Policy Group who represents La Paz County. “They should have a supply of water and not have the fear that that water can be taken away.”

Those who oppose the deal stress that it’s not the first attempt to transfer Colorado River water from the area to cities in central Arizona. Previously, the agency that manages the Central Arizona Project had looked at buying farmland in Mohave County and leaving land fallow to put the water into the CAP Canal. But the agency’s directors voted to drop that proposal in 2018 after an outpouring of opposition.  

State water officials also turned down a proposal last year by the town of Quartzsite to lease Colorado River water for use in central Arizona.

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Transfer could open the door to others

Entitlements to Colorado River water in Arizona are divided into six tiers of priority. The first-priority entitlement holders at the top of the list range from the Colorado River Indian Reservation to the Yuma County Water Users’ Association.

Second- and third-priority entitlements include other irrigation districts, cities and wildlife refuges, among other entities.

Fourth-priority water users include private farm companies, the Mohave County Water Authority, Mohave Valley Irrigation and Drainage District, the town of Parker, the town of Quartzsite, and other entities.

Cobb’s bill focuses only on fourth-priority Colorado River water and not on other priority echelons.

The text of the legislation says the water was allocated by the Bureau of Reclamation for agricultural, municipal and industrial uses for communities on the river. It says people who hold these water entitlements “may not transfer or otherwise convey that claim for use of that water to any location or use other than an agricultural, municipal or industrial use in a Colorado River community.”

Former Gov. Bruce Babbitt recently floated a different proposal, suggesting the Legislature give the three river counties — Yuma, La Paz and Mohave — the ability to veto water transfers out of the area.

Grady Gammage Jr., a lawyer who represents GSC Farm, responded in an opinion article, saying Babbitt’s proposal is “a short-sighted, knee-jerk approach with long-term negative consequences for Arizona’s future.”

Representatives of GSC Farm declined to speak about the new bill.

Rhett Larson, a professor of water law at Arizona State University’s Sandra Day O'Connor College of Law, said he understands and appreciates the position of Queen Creek’s officials as well as the concerns raised by opponents of the deal.

Larson said the drive to prohibit water transfers is motivated by fear that “in the long run, urban Arizona is going to have the money and the political power to get their hands on rural Arizona’s water.”

If the deal goes through, Larson said, “it’s going to begin to show the market price for Colorado River water transfers to central Arizona," and more communities will follow Queen Creek’s lead to do similar deals.

While the dispute plays out, the Colorado River is also under growing strains.

This year, Arizona is starting to take less water from the river under a set of agreements aimed at reducing the risks of reservoirs falling to critically low levels. Arizona and Nevada agreed to leave a portion of their water allotments in Lake Mead under a deal with California called the Lower Basin Drought Contingency Plan, which the states’ representatives signed at Hoover Dam in May.

The Colorado River’s reservoirs have dropped dramatically since 2000. Years of drought and chronic overuse have taken a toll on the river, and scientific research has shown that climate change is compounding the pressures by pushing up temperatures.

For Arizona, the initial cuts under the deal represent 12% of the total water supply for the Central Arizona Project, which delivers water by canal to Phoenix, Tucson and other areas, and will eliminate much of the water that’s available for replenishing groundwater.

Facing tighter water supplies, “the incentive for urban Arizona to use their money and political power to go after Colorado River water is just going to grow and grow,” Larson said, and that’s why representatives who are concerned about farming communities along the river are mobilizing in the Legislature.

“For rural communities that have Colorado River supplies,” he said, “I think this is seen as a bulwark against those thirsty cities effectively making farmers offers they just can’t refuse.”

Have a tip to share? Reach reporter Ian James at ian.james@arizonarepublic.com or 602-444-8246. Follow him on Twitter: @ByIanJames

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