DOUGLAS R NORTON, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
LINDA J. BLESSING, CPA
DEPUTY AUDITOR GENERAL
August 31 , 1989
Members of the Arizona L e g i s l a t u r e
The Honorable Rose Mofford, Governor
Mr. William Plummer, Director
Department of Water Resources
Mr. Pete Shumway , Chai rman
The Arizona Water Commi ssion
Transmitted herewith i s a report of the Auditor General, a Performance
Audit of the Department of Water Resources and Arizona Water Commission.
This report i s i n response to a June 2, 1987, r e s o l u t i o n of the J o i n t
L e g i s l a t i v e Overstght Commi t t e e .
The report addresses problems w i t h the groundwater code including i t s
safe- yreld, assured water supply and municipal conservation p r o v i s i o n s .
The report concludes that more e f f o r t i s needed t o protect the p u b l i c
from hazardous open wells. The r e p o r t a l s o i d e n t i f i e s areas i n which
several m ~ l l i o n d o l l a r s could be saved annually by r e q u i r i n g those
primari ly b e n e f i t t i n g from services to pay a greater share of the
prograin's costs. F i n a l l y , the report concludes that the Arizona Water
Commission should be allowed to terminate under the provisions of the
Sunset Law and be replaced w i t h an advisory council w i t h statewide
membership.
My s t a f f and I w i l l be pleased t o discuss or c l a r i f y items i n the r e p o r t .
Sincerely,
DRN : l mn
STAFF: William Thomson
Peter N. Francis
Arthur E. H e i k k i l a
Anthony James Guarino
Margaret McNamara Jackson
~ o&$ as R . Nor ton
Auditor General
2700 NORTH CENTRAL AVE, 0 SUITE 700 0 PHOENIX, ARIZONA 85004 O ( 602) 255- 4385
S MA4 ARY
The Office of the Auditor General has conducted a Sunset Review of the
Arizona Department of Water Resources i n response to a June 2, 1987,
resolution of the Joint Legislative Oversight Committee. This
performance audit was conducted as part of the Sunset Review set f o r t h i n
Arizona Revised Statutes ( A. R. S.) 9941- 2351 through 41- 2379.
The Department of Water Resources ( DWR) was established in 1980 when the
Groundwater Management Act became law. DWR administers a l l State water
law except those laws r e l a t i n g t o water qua1 i t y . Primary
r e s p o n s i b i l i t i e s include implementing the groundwater code, supporting
the adjudication of water r i g h t s , ensuring safety of dams, implementing
surface water law, surveying water resources statewide, and assessing
water q u a l i t y i n conjunction with the Department of Environmental
Quality. DWR i s funded p r i m a r i l y through general fund appropriations.
The Legislature appropriated approximately $ 12.7 mi I I ion and 223
f u l I- time equivalent s t a f f to DWR for f i s c a l year 1988- 89.
To Help Ensure More E f f e c t i v e Water Management, the Legislature Should
Address Several Problems That Have Surfaced Since the Groundwater Code's
Inception i n 1980 ( see pages 13 through 21)
The Legislature should consider addressing problems that have developed
since the groundwater code was enacted. Although the code r e f l e c t s
Arizona's need for strong water regulation and has resulted i n better
water management, several key provisions of the code may not always
provide for e f f e c t i v e water management. For example, the code's
safe- yield goal may not be a r e a l i s t i c or appropriate basis for
planning. I t i s u n l i k e l y that either Phoenix or Tucson w i l l reach
safe- yield by 2025 because the potential for further water conservation
and augmentation i s l i m i t e d . Further, achieving safe- yield may not even
be necessary because of the several hundred years worth of water i n
storage beneath both metropolitan areas.
In addition, p o t e n t i a l problems exist with the code's assured water
supply provision and municipal conservation measure. The assured water
supply provision could work against the code's safe- yield goal because i t
authorizes developers to use a d d i t i o n a l groundwater. The municipal
conservation measure may not t r u l y r e f l e c t c i t i e s ' e f f o r t s to conserve
groundwater because i t includes surface whier i n the measurement c r i t e r i a .
Other issues that might need to be reviewed include developing a more
comprehensive water management program; p r o v i d i n g i n c e n t i v e s for using
water other than groundwater; providing for increased water marketing
f l e x i b i l i t y ; and possibly e s t a b l i s h i n g metropolitan water d i s t r i c t s to
enhance water management i n large urban areas.
A Stronger Enforcement Program May Be Needed ( see pages 23 through 26)
A more e f f e c t i v e enforcement program may be needed. Adequate enforcement
of groundwater use i s necessary to ensure that groundwater users are not
using more groundwater than a l l o t t e d so that long- term water management
goals are reached. DWR review of annual groundwater w i thdrawal reports
has i d e n t i f i e d over 900 p o t e n t i a l v i o l a t o r s i n 1987 i n the Phoenix area
alone. Even more v i o l a t i o n s may be occurring because DWR's detection
methods are not comprehensive. Further, more s t r i n g e n t conservation
requirements i n the future may create an added incentive for increased
noncompliance. DWR w i l l need to study the extent of noncompliance and
underreporting, and determine whether a d d i t i o n a l s t a f f and stronger
enforcement e f f o r t s are needed.
More Effort I s Needed to Protect the Public from Hazardous Open Wel Is
( see pages 27 through 33)
In October 1988, an elementary school teacher from the town of Maricopa
reported a hazardous open we1 l near her school. The we1 l was three f e e t
i n diameter, 600 feet down to water, and unobstructed ( nothing to break a
f a l l ) . School c h i l d r e n were playing by the w e l l , dropping rocks i n t o
i t . This well i s j u s t one of what DWR estimates could be hundreds of
hazardous open wells i n the State. DWR has documented approximately 700
open we1 I s i n Arizona. Many of these we1 Is are hazardous because of the
p o t e n t i a l f o r people f a l l i n g i n and/ or because of the p o l l u t a n t s ( such as
f e r t i l i z e r s and p e s t i c i d e s ) entering the a q u i f e r . DWR estimates that
thousands more open wells are undiscovered.
Because these wells present a s i g n i f i c a n t health and s a f e t y t h r e a t to the
p u b l i c , more e f f o r t i s needed to address t h i s hazard. Although given the
r e s p o n s i b i l i t y for open well enforcement i n 1986, DWR does not have
s u f f i c i e n t s t a f f to perform the work. DWR estimates that i n i t i a l l y an
additional $ 240,000 i n c l u d i n g e i g h t s t a f f w i l l be needed. To support
increased open well enforcement, DWR and the L e g i s l a t u r e should consider
e i t h e r establishing a self- supporting funding method, using any a v a i l a b l e
DWR enforcement fund monies, or appropriating general fund monies.
The State Could Save A t Least $ 1.5 M i l l i o n Annually by Increasing the
Groundwater Withdrawal Fee ( see pages 35 through 36)
Though State law mandates that groundwater user fees finance h a l f the
cost of groundwater code regulation, a separate s t a t u t o r y provision
r e s t r i c t s DWR's a b i l i t y to do t h i s by l i m i t i n g the maximum fee amount to
one d o l l a r per acre- foot of groundwater used. As a r e s u l t , for f i s c a l
year 1990 an estimated $ 1.5 mi l l ion i n general fund monies w i l l be needed
to compensate for the s h o r t f a l l i n user fees. The L e g i s l a t u r e should
consider r a i s i n g the fee to provide s u f f i c i e n t monies for groundwater
code regulation.
Water Rights Claimants Should Support a Greater Share of the
Adjudications Costs ( see pages 37 through 43)
Claimants p r i m a r i l y b e n e f i t i n g from the adjudications of surface water
r i g h t s i n Arizona should support a greater p o r t i o n of the o v e r a l l cost.
DWR serves as the technical arm of the courts which are now a d j u d i c a t i n g
( or determining the nature, extent, and p r i o r i t y o f ) a l l r i g h t s to water
on the Gila River and L i t t l e Colorado River watersheds. While the
statutes provide for recovery of DWR's cost of legal process and service,
a l l of the agency's other a d j u d i c a t i o n a d m i n i s t r a t i v e expenses are
supported from the general fund. These expenses are substantial and w i l l
occur for at least the next ten years. DWR i s expected to spend nearly
$ 1.8 mi l l i o n i n general fund monies for these expenses i n f i s c a l year
1989.
The Legislature could amend current statutes to a l l o w f o r a more
equitable sharing o f DWR's adjudications costs between the State and
claimants. Precedents e x i s t i n both Arizona and other s t a t e s f o r greater
cost- sharing. Idaho, for example, has established a f u l l y
self- supporting adjudications process.
TABLE OF CONTENTS
' Page
INTRODUCTION AND BACKGROUND . . . . . . . . . . . . . . . . . . . . 1
SUNSETFACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
FINDING I: TO HELP ENSURE MORE EFFECTIVE WATER MANAGEMENT,
THE LEG l SLATURE SHOULD ADDRESS SEVERAL PROBLEMS
THAT HAVE SURFACED SINCE THE GROUNDWATER CODE'S
INCEPTIONIN1980 . . . . . . . . . . . . . . . . . . . . . . . 13
Statutes Include Groundwater Code in Sunset Review. . . . . . . 13
Groundwater Code Is Needed and Has Provided
BetterWaterManagement . . . . . . . . . . . . . . . . . . . . 13
Several Code Provisions May Not Provide
f o r Effective Water Management. . . . . . . . . . . . . . . . . 14
Problems with Code and Other Water Management
Issues Need to Be Reviewed. . . . . . . . . . . . . . . . . . . 17
Recomnendation. . . . . . . . . . . . . . . . . . . . . . . . . 20
FINDING I I : A STRONGER ENFORCEMENT PROGRAM MAY BE NEEDED . . . . . 23
Enforcement of Conservation Plans Is C r i t i c a l
for Successful Water Management . . . . . . . . . . . . . . . . 23
Numerous Violations Have
Been Identified . . . . . . . . . . . . . . . . . . . . . . . . 24
Limited Enforcement Capability and More Stringent
Requirements May Be a Formula for Future Noncompliance. . . . . 25
Recomnendations . . . . . . . . . . . . . . . . . . . . . . . . 26
FINDING Ill: WRE EFFORT IS NEEDED TO PROTECT THE
PUBLIC FROM HAZARDOUS OPEN WELLS. . . . . . . . . . . . . . . . 27
Large Numbers of Open Wel Is Present a
Significant Healthandsafety Hazard. . . . . . . . . . . . . . 27
More Effort Is Needed to Address
OpenWellHazards . . . . . . . . . . . . . . . . . . . . . . . 29
Open Well Enforcement Program Could
Be Funded Several Ways. . . . . . . . . . . . . . . . . . . . . 31
Recomnendations . . . . . . . . . . . . . . . . . . . . . . . . 32
Page
F l ND 1 NG I V: THE STATE COULD SAVE AT LEAST $ 1 - 5 MI LL l ON
ANNUALLY BY INCREASING THE GROUNDWATER
WITHDRAWALFEE. . . . . . . . . . . . . . . . . . . . . . . . . 35
A Provision i n the Groundwater Code Prevents
DWR from Collecting Sufficient Fees for
Administration and Enforcement. . . . . . . . . . . . . . . . . 35
A Change i n Statute Would Result i n
Only a Minimal Increase in Water Costs. . . . . . . . . . . . . 36
Recomnendation. . . . . . . . . . . . . . . . . . . . . . . . . 36
F l ND 1 NG V : WATER R l GHTS CLA l MANTS SHOULD SUPPORT A
GREATER SHARE OF THE ADJUDICATIONS COSTS. . . . . . . . . . . . 37
General Water Rights Adjudications. . . . . . . . . . . . . . . 37
Claimants W i l l Benefit from Adjudications . . . . . . . . . . . 38
Fees Collected Are Insufficient to
RecoverDWRCosts . . . . . . . . . . . . . . . . . . . . . . . 39
Statutory Revisions Could Require a
More Equitable Sharing of Costs . . . . . . . . . . . . . . . . 40
Reconmendations . . . . . . . . . . . . . . . . . . . . . . . . 43
AGENCY RESPONSE
APPEND I X
Legislative Council Opinion
LIST OF TABLES
TABLE 1 Department of Water Resources Statement of
Full- Time Equivalents and Actual and Budgeted
Expenditures Fiscal Years 1986- 87, 1987- 88, and
Budget Year 1988- 89 ( unaudited). . . . . . . . . .
INTRODUCTION AND BACKGROUND
The O f f i c e o f the Auditor General has conducted a Sunset Review of the
Arizona Department of Water Resources i n response to a June 2, 1987,
r e s o l u t i o n of the J o i n t L e g i s l a t i v e Oversight Committee. This
performance audit was conducted as p a r t o f the Sunset Review set f o r t h i n
Arizona Revised Statutes ( A . R . S. ) $ 341- 2351 through 41- 2379.
The Department of Water Resources ( DWR) was established on June 12, 1980,
when the Groundwater Management Act became law. The department
administers a l l State water laws except those d i r e c t l y r e g u l a t i n g water
q u a l i t y . Key p r o j e c t s c u r r e n t l y underway include: e s t a b l i s h i n g new
conservation requirements for a g r i c u l t u r a l , municipal, and i n d u s t r i a l
water users; developing a program to augment the water supply for
s p e c i f i e d areas w i t h i n the State; su. pporting the a d j u d i c a t i o n of water
r i g h t s ; dam safety; and assessing groundwater q u a l i t y i n cooperation w i t h
the Department of Environmental Q u a l i t y .
H i s t o r y Of Water Regulation I n Arizona
Arizona's surface water code was enacted i n 1919. Arizona State
government f i r s t became a d m i n i s t r a t i v e l y involved i n water management i n
1948 when the f i r s t groundwater code was enacted and the Arizona
l n t e r s t a t e Stream Commission was established to secure the S t a t e ' s r i g h t s
to water from the Colorado River and other i n t e r s t a t e streams. In
a d d i t i o n , the commission's r e s p o n s i b i l i t i e s included statewide water
resource p l ann i ng .
The S t a t e ' s r o l e i n water management has c o n t i n u a l l y expanded since that
time. I n 1971, the Arizona Water Commission ( AWC) replaced the
l n t e r s t a t e Stream Commission and was given a d d i t i o n a l r e s p o n s i b i l i t i e s
including: the supervision of dam s a f e t y f u n c t i o n s , watershed management,
hydrologic data c o l l e c t i o n , and licensing of weather m o d i f i c a t i o n
p r o j e c t s . Two years l a t e r the Legislature gave the AWC extensive flood
control r e s p o n s i b i l i t i e s . I n 1979, l e g i s l a t i o n was passed t r a n s f e r r i n g
the administration of water r i g h t s from the State Land Department to the
AWC, g i v i n g the commission t o t a l responsibi l i t y for water planning and
r e g u l a t i o n . The 1979 l e g i s l a t i o n also authorized the superior c o u r t t o
conduct the general a d j u d i c a t i o n of water r i g h t s and designated the AWC
as the technical arm o f the court.
In June 1980, the L e g i s l a t u r e passed the Groundwater Management Act. The
Groundwater Management Act created the Department of Water Resources, and
made the department the focal p o i n t f o r water management and regulation
i n the State. Under the provisions of the a c t , DWR became responsible
for the a d m i n i s t r a t i o n and enforcement of the groundwater code which sets
two primary goals for the State: 1) to control the severe overdraft of
groundwater, and 2) to provide a means for e f f e c t i v e l y a l l o c a t i n g the
S t a t e ' s l i m i t e d groundwater. In a d d i t i o n , the a c t t r a n s f e r r e d the powers
and duties of the Arizona Water Commission to DWR, reducing the
commission's role i n water management to that o f an advisory counci I .
The code provides for s t r i c t groundwater r e g u l a t i o n i n the four i n i t i a l l y
- establ i shed a c t i v e management areas ( AMA) : Phoenix, Tucson, Prescot t , and -
P i n a l . AMAs are designated geographical areas r e q u i r i n g increased
management of groundwater. The code requires a l l AMAs except Pinal to
attempt to achieve the AMA's goal of safe- yield water use by the year
2025. Safe- yield means using no more groundwater than i s replaced e i t h e r
n a t u r a l l y or a r t i f i c i a l l y . Because of i t s p r i m a r i l y a g r i c u l t u r a l nature,
Pinal i s allowed to gradually deplete i t s a q u i f e r s , but the AMA must
s t i l l maintain enough groundwater f o r f u t u r e n o n i r r i g a t i o n uses. The
code requires DWR to develop and implement a series of f i v e management
plans for each AMA over a 45- year period for the purpose of achieving the
safe- yield goal. Management plans must e s t a b l i s h conservation
requirements for a l l groundwater users and may contain other water
management requirements.
Organization and Personnel
The Department of Water Resources was allocated 223 f u l l - t i m e employees
i n f i s c a l year 1989. The agency i s divided i n t o f i v e o f f i c e s : the
D i r e c t o r ' s O f f i c e , the O f f i c e of Administrative Services, the O f f i c e of
Planning and Adjudications, the O f f i c e of Engineering, and the O f f i c e o f
Water Management.
The D i r e c t o r ' s Office - In a d d i t i o n to preparing the annual budget and
providing information and educational services to water users and the
pub1 i c , the D i r e c t o r ' s O f f i c e , consisting of 16 f u l I- time employees
( FTEs), also contains a legal d i v i s i o n . DWR i s not represented by the
Attorney General's O f f i c e ; t h e r e f o r e , the department's in- house legal
s t a f f provides a l l legal support on issues of water management. The
legal d i v i s i o n reviews c o n t r a c t s , represents Arizona on water r i g h t
matters related to the Colorado River, and i s a key player i n the
enforcement of the groundwater code and management p l ans .
The O f f i c e o f Administrative Services - This o f f i c e i s responsible for
departmental purchasing, accounting, p a y r o l l , personnel, and Management
Information Systems ( MIS) support. I t operates w i t h 31 FTEs.
The O f f i c e of Planning and Adjudications - The o f f i c e consists of two
d i v i s i o n s , Adjudications and Colorado River Management. The
Adjudications D i v i s i o n has an i n v e s t i g a t i o n s s e c t i o n , a l i t i g a t i o n
support section, and a technical support section. The i n v e s t i g a t i o n s
section investigates claims to surface water r i g h t s and produces the
hydrographic survey reports used by the courts i n determining r i g h t s i n
adjudicated watersheds. The l i t i g a t i o n support section mai Is dockets out
monthly to a l l claimants, and handles public i n q u i r i e s and a e r i a l
photography. F i n a l l y , the technical support section provides technical
support to the i n v e s t i g a t i o n s section. The Colorado River Management
D i v i s i o n plans for and monitors Colorado River and CAP water usage. The
45 FTEs of the O f f i c e of Planning and Adjudications perform these various
functions.
The O f f i c e o f Engineering - This o f f i c e consists of 58 FTEs and i s
divided i n t o the d i v i s i o n s of engineering, hydrology, and remedial
action. The engineering d i v i s i o n ensures dam safety for almost 200 dams
throughout the State, and a s s i s t s counties w i t h the planning of flood
control p r o j e c t s . The hydrology d i v i s i o n i s a support group which
c o l l e c t s and disseminates water data throughout the department. The r o l e
of the remedial action d i v i s i o n i s to coordinate water q u a l i t y issues
w i t h i n DWR and with the Department of Environmental Q u a l i t y .
The O f f i c e o f Water Management - The o f f i c e ' s primary responsibi l i t y i s
water r i g h t s a d m i n i s t r a t i o n . Operating w i t h 73 FTEs, the o f f i c e oversees
the a c t i v i t i e s of the department's four a c t i v e management areas of
Phoenix, Tucson, P i n a l , and Prescott. Each AMA has i n i t i a l
r e s p o n s i b i l i t y for developing conservation requirements, enforcing the
groundwater code and management plans, processing water r i g h t s , and
issuing water permits and t r a n s f e r s w i t h i n t h e i r geographic boundaries.
In a d d i t i o n , the o f f i c e contains a planning/ compliance d i v i s i o n t o insure
that AMAs operate i n a uniform manner, and an operations d i v i s i o n , which
p r i m a r i l y c o l l e c t s and f i l e s groundwater and surface water a p p l i c a t i o n s ,
permits, and r e g i s t r i e s .
Revenue and Expendi tures
Department functions are funded p r i m a r i l y through general fund
appropriations. This funding includes some special a p p r o p r i a t i o n s f o r
such purposes as f l o o d warning, f l o o d c o n t r o l plans, environmental
q u a l i t y , and groundwater recharge. In a d d i t i o n , the department receives
federal monies for various water- related programs. Moreover, the agency
maintains several special fund accounts. For example, an enforcement
fund, comprised primari l y of c i v i l penalties col lected from v i o l a t o r s of
the groundwater code, i s a v a i l a b l e f o r departmental enforcement e f f o r t s .
Table I ( page 5) summarizes actual and a n t i c i p a t e d agency expenditures
for f i s c a l years 1987 through 1989.
Audi t Scope and Purpose
Our a u d i t o f DWR concentrated on several water management issues.
Detailed work was conducted to determine:
r Whether the L e g i s l a t u r e needs to address several groundwater code
provisions and other water management issues.
r Whether a stronger enforcement program i s needed.
r Whether DWR needs t o devote greater e f f o r t to p r o t e c t i n g the p u b l i c
from open wells.
a Whether groundwater withdrawal fees should be r a i s e d t o cover h a l f
the costs of groundwater code a d m i n i s t r a t i o n and enforcement.
a Whether a d d i t i o n a l fees should be assessed to recover the
a d m i n i s t r a t i v e costs of water r i g h t s a d j u d i c a t i o n s .
TABLE I
DEPARTMENT OF WATER RESOURCES
STATEMENT OF FULL- TIME EQUIVALENTS AND ACTUAL AND BUDGETED
EXPENDITURES FISCAL YEARS 1986- 87, 1987- 88, AND
BUDGET YEAR 1988- 89
( unaudited)
Actual Actual Budgeted
1987 1988 1989
FTEs 217.2 223.2 223.2
Personal services $ 5,565,041 $ 6,065,395 $ 6,140,700
Employee- related expenditures 1,132,561 1,161,216 1 ,426,300
Professional and
outside services 585,133 872,663 786,700
Travel, in- state 204,373 199,416 206,800
out- of- state 23,293 50,158 25,400
Aid to organizations 1 ,145,529 1,838,516 - 0-
Other operating 2,007,096 2,626,965 2,017,700
Capital o u t lay 216,287 118,707 2,700
Special l i n e items 2,160,000
Continuing a p p r o p r i a t i o n 6,672,838( a)
TOTAL EXPEND l TURES
( a) The " continuing appropriation" category i s f o r carryforward monies previous1 y
appropriated f o r various p l a n n i n g p r o j e c t s , primari 1 y r e l a t e d t o flood c o n t r o l .
Source: Arizona F i n a n c i a l Information Systems and J o i n t L e g i s l a t i v e
Budget Committee Appropriations Report
This audit was conducted i n accordance with generally accepted
governmental auditing standards.
The Auditor General and s t a f f express appreciation to the Director and
s t a f f of the Department of Water Resources for t h e i r cooperation and
assistance throughout the a u d i t .
SUNSET FACTORS
In accordance w i t h Arizona Revised Statutes ( A. R. S.) 941- 2354, the
Legislature should consider the f o l l o w i n g 12 factors i n determining
whether the Department of Water Resources ( DWR) should be continued or
terminated.
1. Objective and purpose i n e s t a b l i s h i n g DWR
The Groundwater Management Act of 1980 establ ished the Department of
Water Resources to focus r e s p o n s i b i l i t y for water management and
reduce groundwater depletion. The act t r a n s f e r r e d to DWR a l l
previous Arizona Water Commission ( AWC) responsi b i l i t i e s and also
established comprehensive groundwater r e g u l a t i o n administered by
DWR. The act c l e a r l y delineates the purpose for DWR's establishment:
I' 1. Focus the responsibi I i t y for water management and
a d m i n i s t r a t i o n of water- related programs w i t h i n t h i s
s t a t e .
2. S t a b i l i z e the use of water resources, p a r t i c u l a r l y
groundwater resources, i n t h i s s t a t e according to
management p r a c t i c e s , procedures, standards and plans
provided for by s t a t u t e .
3. Compile and maintain information which i s necessary for
i n t e l l i g e n t management, a d m i n i s t r a t i o n and planning for
water resources and programs."
2. The effectiveness w i t h which DWR has met i t s o b j e c t i v e and purpose
and the e f f i c i e n c y w i t h which the department has operated
DWR has generally been e f f e c t i v e i n implementing i t s groundwater
management and other r e s p o n s i b i l i t i e s . In regards to groundwater
management, DWR has implemented the groundwater code and developed
f i r s t and second management p Ians. Other important programs
implemented include a s s i s t i n g the court i n the a d j u d i c a t i o n of
surface water r i g h t s , monitoring and ensuring the safety of dams,
water r i g h t s conveyance, groundwater code v i o l a t i o n enforcement,
regulation o f w e l l s and well d r i l l e r s , and other programs. However,
our audit did i d e n t i f y two areas i n which DWR could improve i t s
effectiveness.
e A stronger enforcement program may be needed ( see Finding I I ,
pages 23 through 26).
More e f f o r t i s needed to protect the pub1 i c from hazardous open
we1 Is ( see Finding 1 1 1 , pages 27 through 33).
3. The extent to which the DWR has operated w i t h i n the p u b l i c i n t e r e s t
DWR has operated w i t h i n the public interest by performing a variety
of functions related to the management of both surface and
groundwater resources. DWR has implemented the groundwater code and
related programs requiring groundwater conservation. Other programs
such as ensuring safe dams, flood control, and well regulation, also
benefit the public.
4. The extent to which rules and regulations promulgated by DWR are
consistent with the Legislative mandate
DWR has s u f f i c i e n t a u t h o r i t y to promulgate rules and regulations;
however, not a l l required rules have been promulgated. DWR i s i n the
process of promulgating rules r e l a t i n g t o assured water supply,
inspections and a u d i t s o f groundwater user records, well
construction, and open well resolution. According to DWR, rule
making has been delayed for two reasons. F i r s t , other legal matters
having statutory or court imposed deadlines have had a higher
p r i o r i t y . Second, DWR has taken a cautious approach because of the
s i g n i f i c a n t impact of some of the rules.
5. The extent to which DWR has encouraged input from the public before
promulgating i t s rules and regulations and the extent to which i t has
informed the public as to i t s actions and t h e i r expected impact on
. .. the pub1 i c
DWR uses several methods to inform the pub1 i c of i t s proposed rules
and other a c t i v i t i e s . With proposed rules, DWR uses the s t a t u t o r i l y
required published notice and public hearing. DWR also keeps the
public informed of i t s a c t i v i t i e s through a newsletter, education
programs in schools, workshops, pamphlets, and audiovisual
productions, and by making i t s s t a f f available to representatives of
the news media.
6. The extent t o which DWR has been able to i n v e s t i g a t e and resolve
complaints that are w i t h i n i t s j u r i s d i c t i o n
DWR's a b i l i t y to investigate and resolve complaints has varied
depending upon the amount o f s t a t u t o r y a u t h o r i t y provided. For
groundwater code v i o l a t i o n s , DWR has f u l l a u t h o r i t y and has
established a complete process for complaint r e s o l u t i o n . Also, DWR's
a u t h o r i t y to r e c t i f y dangerous dams i s s u f f i c i e n t . However, DWR does
not have enforcement a u t h o r i t y f o r i l l e g a l uses of surface water or
floodplain management problems. For both of these types of
complaints, DWR only has the a u t h o r i t y t o refer the cases to the
applicable county a t t o r n e y .
7. The extent t o which the Attorney General or any other applicable
agency o f State government has the a u t h o r i t y t o prosecute actions
under enabling l e g i s l a t i o n
A. R. S. $ 45- 104. G authorizes DWR to employ i t s own legal counsel
rather than using Attorney General representation. This i s done
p r i m a r i l y because DWR may be involved i n legal matters w i t h other
State agencies that are represented by the Attorney General. In
addition, DWR's legal counsel represents DWR and the State i n
l i t i g a t i o n concerning a f f a i r s of the department.
DWR's a u t h o r i t y to prosecute actions v a r i e s . The statutes e s t a b l i s h
penalties for groundwater code v i o l a t i o n s , i l l e g a l f i l l i n g of
decorative lakes, operation of dangerous dams, and i l l e g a l recovery
or use of stored water. DWR can impose a c i v i l penalty through a
s t i p u l a t i o n and consent agreement or through a formal hearing
process. Criminal v i o l a t i o n s are referred to the County Attorney o r
the Attorney General. In c o n t r a s t , DWR has no a d m i n i s t r a t i v e
enforcement a u t h o r i t y for v i o l a t i o n s regarding the use or misuse of
surface water. I f DWR cannot persuade the v i o l a t o r to comply, the
case i s referred to the County Attorney or the Attorney General.
( Although untested i n court, DWR argues that i t can also b r i n g a
lawsuit d i r e c t l y to e n j o i n a water user from v i o l a t i n g the surface
water law.) Also, although DWR can delineate f l o o d p l a i n s , the
department lacks enforcement a u t h o r i t y for v i o l a t i o n s of f l o o d p l a i n
requirements. This enforcement a u t h o r i t y belongs to local zoning
a u t h o r i t i e s .
8. The extent t o which DWR has addressed d e f i c i e n c i e s i n the enabling
statutes which prevent it from f u l f i l l i n g i t s s t a t u t o r y mandate
DWR has c o n s i s t e n t l y sought l e g i s l a t i o n r e l a t i n g to i t s enabling
l e g i s l a t i o n over the past several years. For example, DWR has
requested i n t r o d u c t i o n of b i l l s r e l a t i n g to adjudications, dam
safety, f l o o d c o n t r o l assistance, a r t i f i c i a l lakes, groundwater
recharge, and others. In a d d i t i o n , DWR f a c i l i t a t e s an annual
groundwater omnibus b i l l that addresses necessary changes i n the
s t a t u t e s . This b i l l i s developed by an ad hoc group comprised of
members of the water community!')
9. The extent t o which changes are necessary i n the laws of DWR t o
adequately comply w i t h the factors l i s t e d i n the subsection
Based on our audit work we recommend that the L e g i s l a t u r e consider
the following changes to DWR statutes and the groundwater code:
a changing the code's safe- yield and assured water supply
provisions and provid i ng for comprehensive water management ( see
Finding I , pages 13 through 21);
a r e q u i r i n g open well information to be reported on a l l conveyance
reports ( see Finding 1 1 1 , pages 27 through 33);
a amending A. R. S. $ 45- 611.1 to allow an increase i n the
groundwater withdrawal fee ( see Finding IV, pages 35 through
36) ; and
a amending the statutes to a l l o w f o r a d d i t i o n a l assessments of
water r i g h t s claimants so that more of the costs of the
adjudications process are borne by those that are p r i m a r i l y
benef i t i ng from i t ( see Finding V , pages 37 through 43).
DWR has i d e n t i f i e d two areas for s t a t u t o r y change. DWR c u r r e n t l y
lacks a d m i n i s t r a t i v e enforcement a u t h o r i t y over surface water
v i o l a t i o n s and i s l i m i t e d t o r e f e r r i n g v i o l a t o r s t o e i t h e r the
Attorney General or the County Attorney. I n a d d i t i o n , the statutes
( ' 1 Water community i s a term used t o describe e n t i t i e s involved i n water p r o v i s i o n ,
use, r e g u l a t i o n , and pol i c y development.
do not address the r e g u l a t i o n of e f f l u e n t ( wastewater product from a
municipal sewage treatment plant that can be used i n l i e u of potable
water for some a p p l i c a t i o n s ) .
10. The extent t o which the termination o f DWR would s i g n i f i c a n t l y harm
the p u b l i c health, safety or welfare
Terminating DWR could cause s i g n i f i c a n t harm to the p u b l i c ' s health,
s a f e t y , and welfare. DWR was establ ished because of the recognition
that without focused management of water- related programs, the
general economy and welfare of the State and i t s c i t i z e n s would
s u f f e r . DWR i s charged w i t h the r e s p o n s i b i l i t y of ensuring that i n
the long- term, s u f f i c i e n t water i s avai l a b l e f o r use without f u r t h e r
d e p l e t i o n o f groundwater supplies i n the Phoenix, Tucson, and
Prescot t active management areas. For the Pi na l act i ve management
area, DWR must ensure that s u f f i c i e n t groundwater i s maintained for
future n o n i r r i g a t i o n uses. DWR plans to achieve these goals through
management plans r e q u i r i n g conservation and development of a d d i t i o n a l
water resources.
DWR also plays a c r i t i c a l r o l e i n terms of p u b l i c safety and health.
DWR i s responsible for helping to ensure that many of the dams i n the
State are safe. In a d d i t i o n , DWR regulates well construction. Open
wells can be both a safety and health hazard. Not only can people
fa1 I i n t o open we1 I s , but open we1 I s are a l s o a d i r e c t conduit for
p o l l u t i o n to reach aquifers used f o r d r i n k i n g water. DWR shares
responsibi I i t y w i t h the Department of Environmental Qua1 i t y ( DEQ)
regarding water q u a l i t y . Although DEQ has primary water q u a l i t y
r e s p o n s i b i l i t y , DWR provides technical data and analyses. DWR i s
required by s t a t u t e t o assess groundwater qua1 i t y i n the AMAs and to
develop groundwater q u a l i t y p r o t e c t i o n programs. DWR along w i t h DEQ
implements r e s o l u t i o n of Superfund s i t e s ( hazardous waste and
groundwater p o l l u t i o n s i t e s ) i n Arizona.
11. The extent to which the level of regulation exercised by DWR i s
appropriate and whether less or more stringent levels of regulation . . would be appropriate
DWR's only l i c e n s i n g function i s the licensing of well d r i l l e r s . The
level of r e g u l a t i o n i s appropriate regarding l i c e n s i n g o f well
dr i l l e r s .
12. The extent to which Dm has used private contractors i n the
performance of i t s duties and how effective use of private
contractors cou l d be accomp l i shed
DWR contracts f o r a v a r i e t y o f services from the p r i v a t e sector. For
example, DWR contracts for hearing o f f i c e r s , e l e c t r o n i c data
processing ( EDP) services, var i ous technical studies and analyses,
flood c o n t r o l c o n s t r u c t i o n and maintenance, legal counsel,
audiovisual productions, and other services. DWR s t a t e s t h a t p r i v a t e
sector services are most c o s t - e f f e c t i v e for short- term p r o j e c t s and
for when DWR lacks the necessary e x p e r t i s e .
FINDING I
TO HELP ENSURE MORE EFFECTIVE WATER MANAGEMENT, THE LEGISLATURE SHOULD
ADDRESS SEVERAL PROBLEMS THAT HAVE SURFACED SINCE
THE GROUNDWATER CODE'S INCEPTION IN 1980
The Legislature should consider addressing problems that have developed
since the groundwater code was enacted. Although the groundwater code
r e f l e c t s Arizona's need for strong water r e g u l a t i o n and has resulted i n
better water management, several key provisions of the code may a c t u a l l y
work against i t s goal. The L e g i s l a t u r e should consider addressing these
code d e f i c i e n c i e s and other water management issues. In doing so, the
Legislature may wish to create a study commission.
Statutes Include Groundwater Code
in Sunset Review
A. R. S. 541- 2374.15 includes the groundwater code as a p a r t o f the sunset
review of the Department of Water Resources ( DWR). The code along w i t h
DWR i s scheduled for termination on July 1, 1990, and i t s enabling
statutes are automatically repealed on January 1, 1991, unless continued
by the Legislature. A review of the agency's enabling l e g i s l a t i o n ,
including the groundwater code, i s a part of the sunset review process.
A. R. S. 941- 2354 requires the l e g i s l a t i v e committee of reference to
consider the extent to which changes are necessary i n the laws of the
agency.
Groundwater Code I s Needed and Has
Provided Better Water Management
The groundwater code i s needed because i t has provided b e t t e r water
management i n Arizona. E f f i c i e n t water use i s a basic tenet for
communities, industry, and a g r i c u l t u r e coexisting i n a desert
environment. Recognizing t h i s , i n 1980 the L e g i s l a t u r e adopted the
Groundwater Management Act. The act established DWR to implement i t s
provisions and provide for general water management i n the State. The
code's provisions include strong conservation and other measures to be
implemented for the purpose of attempting to achieve safe- yield
groundwater use by the year 2025.
The code's implementation over the l a s t nine years has resulted i n
generally b e t t e r water management. The code's conservation requirements
have been a factor i n reducing the amount of groundwater used. For
example, i n the Phoenix area groundwater pumping has been reduced from
1,365,000 acre- feet i n 1980 to an estimated 870,000 acre- feet i n 1988.
DWR has recently developed a new series of management plans that require
even less groundwater use.
Several Code Provisions May Not
Provide for E f f e c t i v e Water Management
Several of the key provisions i n the groundwater code have not i n some
instances provided for e f f e c t i v e water management. The code's safe- yield
provisions probably w i l l not be a t t a i n e d and may not be necessary. The
code's assured water supply provision may, i n p r a c t i c e , a c t u a l l y work
against the goal of safe- yield. The municipal conservation measure
requi red by the code may not i n a1 l cases accurately r e f l e c t groundwater
use reduction and may i n practice be applied improperly.
Several problems w i t h the code's s a f e - y i e l d p r o v i s i o n s - The safe- yield
goal of 2025 may not be a r e a l i s t i c and appropriate basis for planning.
F i r s t , i t i s u n l i k e l y that the goal can be met i n e i t h e r Phoenix or
Tucson. Second, achieving the goal by 2025 may not be necessary.
Safe- yield may not be achieved i n the Phoenix and Tucson active
management areas. According to DWR's Second Management P l a n , b o t h the
Phoenix and Tucson AMAs w i l l f a l l short of achieving safe- yield even w i t h
the implementation of Second Management Plan requ i rements. Depending
upon the category of the user ( municipal, a g r i c u l t u r a l , e t c . ) ,
implementation of the F i r s t and Second Management Plans w i l l only produce
from 6 to 31 percent of the t o t a l reductions needed to achieve
safe- yield, according to DWR's deputy d i r e c t o r for water management.
Those f i gures are s i gn i f i cant because the Second Management P l an i nc l udes
accounting for full use of the Central Arizona Project ( CAP) water, the
largest new non- groundwater supply, and requires maximum conservation
from a g r i c u l t u r e , the primary groundwater user i n the Phoenix AMA. The
Second Management Plan s t a t e t h a t s a f e - y i e l d w i l l not be achieved without
further conservation and augmentation e f f o r t s ! ' )
However, the p o t e n t i a l for f u r t h e r conservation i s l i m i t e d . Although DWR
can impose conservation requirements, i t cannot stop r i g h t s holders from
pumping groundwater. The code has established several types of
groundwater pumping r i g h t s which e s s e n t i a l l y " grandfathered" i n a l l
e n t i t i e s l e g a l l y using groundwater p r i o r to the Groundwater Management
Act. The t o t a l amount of groundwater associated w i t h these r i g h t s i s
s i g n i f i c a n t , well over one m i l l i o n acre- feet for the Phoenix AMA and over
300,000 acre- feet for the Tucson AMA.
The p o t e n t i a l for s i g n i f i c a n t augmentation also appears to be l i m i t e d
under e x i s t i n g code p r o v i s i o n s . For s a f e - y i e l d to occur, other
non- groundwater supplies must be developed and used i n l i e u of
groundwater, or groundwater r i g h t s must be purchased and r e t i r e d . The
code provides DWR a u t h o r i t y to c o l l e c t fees for the purposes of
augmentation and for the purchasing and retirement of groundwater
r i g h t s . I n e i t h e r case, fee amounts t h a t could be c o l l e c t e d may f a l l
well short of any amounts needed.
F i n a l l y , achieving safe- yield by 2025 may not be necessary h y d r o l o g i c a l l y
because of the large amounts of groundwater i n storage beneath the
Phoenix and Tucson AMAs. According to DWR, the Phoenix AMA has
approximately 160 m i l l i o n acre- feet of groundwater i n storage, whereas
Tucson has approximately 71 m i l l ion acre- feet. According to experts i n
the water community, there i s enough water for several hundred years for
the Phoenix AMA and for 700 years for Tucson. Further, according to DWR,
pumping has decl ined. Much less groundwater was pumped i n 1988 as
compared to 1980 i n both the Phoenix and Tucson areas.
Assured water supply provisions can work a g a i n s t s a f e - y i e l d - The
code's assured water supply provisions can, i n p r a c t i c e , work against the
( 1 ) " Augmentation" here means to supplement a water supply.
code's goal of safe- yield. Before they can develop an area, the code
requi res that developers demonst rate an assured water supply ( s u f f i c i e n t
water of adequate qua1 i t y continuously avai lable to s a t i s f y needs) of at
least 100 years. The code, however, a1 lows both groundwater and surface
water to be used to demonstrate an assured supply. This s t a t u t o r y
language has, i n practice, allowed for a very l i b e r a l p o l i c y of issuing
permits seemingly i n a manner not consistent w i t h the AMA management goal
of safe y i e l d . By allowing groundwater to be used, the code f u r t h e r
increases the number of groundwater r i g h t s and the p o t e n t i a l amount of
groundwater pumped. As of e a r l y 1989, nearly 190,000 acre- feet of
groundwater has e i t h e r been granted, applied f o r , or projected i n the
AMAs, mainly i n the Phoenix area. This works against the code's
safe- yield goal i f the land being developed did not have previous
a g r i c u l t u r e water r i g h t s because an even greater amount of groundwater
w i l I have to be replaced through f u r t h e r conservation and augmentation
e f f o r t s by other users.
Currently, the use of groundwater for assured supplies i s determined by
DWR based on guidelines established i n 1973 which take i n t o account the
impact on the level of the water t a b l e . However, DWR believes that
through the rulemaking process the groundwater code and the assured
supply provisions can be i n t e r p r e t e d j o i n t l y to require a l l new assured
supplies to be consistent w i t h the goal of safe- yield. DWR i s c u r r e n t l y
developing rules which w i l l phase i n a reduction i n the use of
groundwater for assured supplies. These r u l e s may allow the department
to address the assured water supply problem a d m i n i s t r a t i v e l y .
Problems with code's municipal conservation measure - The code's
measure of municipal conservation may not accurately r e f l e c t groundwater
use reduction and may i n practice be appl ied improperly. The code and
DWR management plans require " reasonable reductions i n per c a p i t a use" as
part of the municipal water provider conservation program. Per capita
use, however, has two problems. F i r s t , i t may not be a true i n d i c a t i o n
of e f f i c i e n t groundwater use and may not work i n concert w i t h the code's
safe- yield goal. A c i t y can reduce i t s reliance on groundwater and s t i l l
be out of compliance w i t h per capita use requirements because DWR also
includes surface water i n the c a l c u l a t i o n . For example, one c i t y has
reduced i t s reliance on groundwater from 99 per cent of t o t a l supply down
to 40 percent since 1980 by using CAP water instead of groundwater.
However, that c i t y i s c u r r e n t l y over i t s per c a p i t a use rate according to
DWR and may be subject to f i n e s o r other enforcement a c t i o n s .
Second, DWR may have improperly applied the per c a p i t a use measure of the
groundwater code. Per c a p i t a computations have included both surface
water and groundwater components of a c i t y ' s water use and are subject to
mandatory plan requirements. According to l e g i s l a t i v e Council only the
groundwater components of a c i t y ' s water use are s u b j e c t t o mandatory
plan requirements ( see Appendix). However, DWR maintains i t must
consider surface water use to be able to properly i n t e r p r e t whether the
statutory c r i t e r i a of " reasonable reductions'' i s met. DWR notes that
surface water supplies are more v a r i a b l e than groundwater which could
cause a greater or lesser use of groundwater depending on conditions.
Accordingly, DWR has adopted a p o l i c y of including surface water i n the
per capita use c a l c u l a t i o n s to determine when a c i t y i s over i t s per
capita goal. I f a c i t y i s over i t s goal, DWR then bases i t s enforcement
action on the amount of groundwater used.'" However, DWR's
i n t e r p r e t a t i o n of the statutes regarding t h i s issue i s arguably subject
to challenae and has not y e t been tested i n court.
Problems w i t h Code and Other Water
Management l ssues Need t o Be Rev i ewed
Now may be an appropriate time for the L e g i s l a t u r e to address problems
with the groundwater code. In doing so, the L e g i s l a t u r e may wish to
create a study commission.
Many w i t h i n the water community indicated that i t would be appropriate to
begin a review o f the code and other water issues. They stated four
reasons. F i r s t , a c t i o n should be taken before any p o t e n t i a l a d d i t i o n a l
time, money, and water i s l o s t . The Second Management Plan marks the
( 1 ) To illustrate how this works, DWR gives the following example: If a city has a
goal of 200 gallons per capita per day ( gpcd), and actual usage of 400 gpcd, OWR
would look at the surface and groundwater usage. If the city used 350 gpcd of
surface water and 50 gpcd of groundwater, DWR would take enforcement action based
on the 50 gpcd.
beginning of a number o f s i g n i f i c a n t expenses which w i l l have to be met
to comply w i t h the code. For example, the c i t y of Phoenix estimates i t
w i l l spend nearly $ 515 mi l l ion over the next 50 years to address the code
and other water requirements. Second, the discussion should occur before
any a d d i t i o n a l controversies surface, such as the water t r a n s f e r issue.
The water transfer issue, which involves the moving of r u r a l Arizona
groundwater to the metropolitan areas, i s a d i r e c t r e s u l t of current code
provisions. Third, because of the nonseverability clause i n the code ( i f
a p o r t i o n of the code i s challenged and struck down i n court, the e n t i r e
code i s struck because the code i s intended to be nonseverable), problems
should be addressed before they are chal lenged i n c o u r t , and the e n t i re
code i s l o s t . F i n a l l y , problems and issues should be addressed now so
they can be addressed comprehensively rather than on a piecemeal basis.
There may be a d d i t i o n a l issues that need a t t e n t i o n that e i t h e r were not
i d e n t i f i e d o r t h a t we d i d not have time to develop. ( ' I However, based
on our analysis, at least the f o l l o w i n g code problems and issues should
be reviewed.
a More reasonable approach t o safe- yield may be needed - C u r r e n t l y ,
a l t h o u ~ ht he code reaui res safe- yield, i t does not ~ r o v i d et he tools
to ach- ieve i t . i4any'people i n - t h e water community recognize that
safe- yield probably w i l l not be achieved by the year 2025. However,
i n response to the code, c i t i e s have begun to purchase water farms
outside of AMAs f o r the purpose of supplementing t h e i r supply. These
types of actions taken to achieve safe- yield can be c o n t r o v e r s i a l ,
are expensive, and may not be necessary because of the large amount
of groundwater i n storage i n both the Phoenix and Tucson AMAs. The
safe- yield goal should be reviewed to determine i f i t i s a c t u a l l y
needed, needed by 2025 or l a t e r , or i f a slow depletion of the
aquifer i s acceptable.
a Assured water supply provisions should be reviewed - The assured
water provisions may need to be modified to work i n concert w i t h the
~ a f e - ~ ' i e l gdo al. AS discussed p r e v i o u s l y , the assured water supply
requirement works against the safe- yield goal by e s t a b l i s h i n g
a d d i t i o n a l groundwater pumping r i g h t s that have to be made up w i t h
a d d i t i o n a l conservation and augmentation e f f o r t s . I f safe- yield i s
retained as a goal, the current assured water supply p r o v i s i o n may
need to be r e s t r i c t e d .
( ' 1 Two other issues t h a t we d i d not have time t o develop include p o t e n t i a l problems
w i t h the a g r i c u l t u r e conservation requirement found i n the Second Management Plan
and the possi bi 1 i t y o f 1 imi ti ng growth because of the 1 ack of new water suppl i es.
r The code's municipal conservation measure should be reviewed - The
code's measure of municipal water use and conservation ( gallons per
capita per day) should be reviewed. The goal may not r e f l e c t
m u n i c i p a l i t i e s ' e f f o r t s to lessen dependence on groundwater because,
as noted e a r l i e r , i t includes both surface and groundwater. I f the
primary purpose o f the code i s to reduce groundwater use and reach
safe- yield, the measure may ~ e e dto be changed to r e f l e c t groundwater
used.
r The need f o r more comprehensive water management should be reviewed
Currently, the s t a t u t e s l i m i t comprehensive water r e g u l a t i o n to
groundwater. Therefore, according to the Arizona L e g i s l a t i v e
Council, only groundwater i s regulated by DWR management plans.
Surface water i s a major component i n Arizona's water supply.
E f f l u e n t was recently declared by the Arizona Supreme Court to be a
t h i r d type of water, not under r e g u l a t i o n by the code. E f f e c t i v e
management of Arizona's l i m i ted water resources may requi r e t h a t a l l
water types be subject to planning and conservation requirements so
that the t o t a l resource i s used most e f f e c t i v e l y .
Statewide water planning and management may also be needed. The code
focuses on water management i n the AMAs. However, areas outside of
the AMAs also have water management challenges, as witnessed by the
recent water t r a n s f e r issue. In a d d i t i o n , the large amount of
Colorado River water allocated to western Arizona, 1.3 m i l l i o n
acre- feet, has been viewed by some o f f i c i a l s as a possible
augmentation source f o r c e n t r a l Arizona. Statewide planning and
management may be needed to help ensure that water i s allocated
wisely and f a i r l y .
r Incentives f o r non- groundwater use and increased water marketing
f l e- x i - b i l i t v should be examined - Two related issues. incentive. s. fo- r
non- groundwater use and increased water marketing f l e x i b i l i t y , should
be examined. According to water o f f i c i a l s at a l l l e v e l s , there are
no incentives f o r m u n i c i p a l i t i e s or other e n t i t i e s to use other water
or to recharge ( pumping water back i n t o the aquifer for future use)
surplus water. Instead, i t i s much less expensive to pump
groundwater. For example, much of Arizona's CAP a l l o c a t i o n i s not
being used because of the l i m i t e d incentives to e i t h e r use or
recharge the water. According to DWR, unused CAP water goes to
C a l i f o r n i a or down the r i v e r to Mexico. This involves p o t e n t i a l l y
mi l l ions of acre- feet of water.
Increased water marketing f l e x i b i l i t y ( less r e s t r i c t i v e b a r r i e r s to
water transfer or sale) may be needed to help ensure that water i s
available and used most e f f i c i e n t l y and e f f e c t i v e l y . Marketing water
from the CAP and Arizona r i v e r s i s l i m i t e d because o f the federal
Colorado River law and State surface water law. The State has to
work w i t h the federal government for any changes i n Colorado River
management. However, the Department of I n t e r i o r has recently
acknowledged the need for water marketing.
r Provisions f o r metropolitan water d i s t r i c t s could enhance water
management i n large urban areas - Including provisions i n the code
for the establishment of metropolitan water d i s t r i c t s could enhance
water management i n large urban areas. Currently, the Phoenix AMA
has many m u n i c i p a l i t i e s and other water using e n t i t i e s separately
addressing water supply , conservat ion, and augmentat ion chal lenges.
Some i n the water community have indicated that competition for
l i m i t e d supplies has been and w i l l be a c o s t l y p r o p o s i t i o n . Smaller
communities do not have the resources to acquire a d d i t i o n a l
supplies. Several water o f f i c i a l s i d e n t i f i e d b e n e f i t s that may
r e s u l t from the establishment of a municipal water d i s t r i c t including
a united e f f o r t for securing a d d i t i o n a l supplies; less cost due to
more e f f i c i e n t a c q u i s i t i o n , t r a n s f e r , and treatment costs; and a
val leywide uniform conservation requirement. I f t h i s concept i s
considered, the current DWR and i t s AMA r e s p o n s i b i l i t i e s and
s t r u c t u r e may need to be reexamined.
Legislature may wish t o create study comnission - The Legislature may
wish to create a study commission to review p o t e n t i a l problems w i t h the
code and other water management issues. A precedent for t h i s was the
establishment of the Groundwater Study Commission by the Legislature i n
1977 to develop the groundwater code. The primary b e n e f i t o f a study
commission would be t h a t , i f s t r u c t u r e d p r o p e r l y , i t would b r i n g together
the various i n t e r e s t s w i t h i n the water community to resolve the problems
and issues. H i s t o r i c a l l y , water p o l i c y development has been most
successful when consensus was forged w i t h i n the water community. Another
benefit of a study commission i s that i t could be given a l i m i t e d ,
focused mission of addressing s p e c i f i c issues rather than the e n t i r e code.
RECOWENDATION
The L e g i s l a t u r e should consider e s t a b l i s h i n g a study commission to
address the f o l l o w i n g groundwater code problems and other water
management issues including whether:
a. changes are needed i n the safe- yield, assured water supply, and
the municipal conservation measure provisions of the code;
b. the State needs 1) more comprehensive water management including
r e g u l a t i o n of surface water and e f f l u e n t , and 2) a statewide
approach to water planning and management;
c. the code should provide incentives for using water other than
groundwater;
d. the code should increase the a b i l i t y of water r i g h t s holders to
market water; and
e. the code should allow for the establishment of municipal water
d i s t r i c t s to manage water supplies and usage i n metropolitan
areas.
FINDING I I
A STRONGER ENFORCEMENT PROGRAM MAY BE NEEDED
A more e f f e c t i v e enforcement program may be needed. DWR's review of
annual groundwater withdrawal reports and other independent analyses
indicates that noncompliance w i t h management plan requirements could be
s i g n i f i c a n t . Moreover, t h i s noncompliance may increase i n the f u t u r e as
conservation requirements become more s t r i n g e n t .
Enforcement o f Conservation Plans I s
C r i t i c a l f o r Successful Water Management
E f f e c t i v e implementation of DWR's water management plans would be
severely hampered without adequate provisions for enforcement. To
determine i f conservation goals are a c t u a l l y being achieved, DWR must be
able to monitor groundwater usage and enforce compliance w i t h plan
requi rements.
Recognizing t h i s need, the framers of the Groundwater Management Act
included provisions designed to ensure user compliance. Most water r i g h t
holders are required to " maintain current accurate records of . . .
withdrawals, transportation, d e l i v e r i e s , and use of groundwater," and to
report t h i s information annual l y to DWR.") Over 11,000 water r i g h t s
holders are expected to f i le reports w i t h the department for 1988.
Moreover, the agency can conduct any inspections, i n v e s t i g a t i o n s , o r
audits i t deems necessary to ascertain compliance w i t h s t a t u t o r y
requirements. I f v i o l a t i o n s occur, DWR can conduct a d m i n i s t r a t i v e
hearings, issue cease and d e s i s t orders, assess c i v i l penalties of up to
$ 10,000 per day, and/ or seek i n j u n c t i v e r e l i e f .
A. R. S. 545- 632. C provides t h a t persons who withdraw groundwater from some wells,
and many noni rri gation customers of c i t i e s , towns, p r i v a t e water companies, and
i r r i g a t i o n d i s t r i c t s are exempt from t h i s requirement.
Numerous V i o l at ions Have
Been I d e n t i f i e d
DWR's review of annual withdrawal reports has i d e n t i f i e d many p o t e n t i a l
v i o l a t o r s of plan requirements. Other DWR analyses also i n d i c a t e that
noncompliance may be s i g n i f i c a n t enough to warrant concern and f u r t h e r
study.
DWR i d e n t i f i e d many p o t e n t i a l v i o l a t o r s by reviewing annual withdrawal
reports f i l e d for the 1987 r e p o r t i n g period. For example, s t a f f i n the
Phoenix AMA, who monitor the S t a t e ' s largest r e p o r t i n g area, i d e n t i f i e d
over 900 p o t e n t i a l v i o l a t o r s through an i n i t i a l review of annual
reports. More extensive f i l e reviews were conducted for 579 r i g h t
holders. As a r e s u l t of these reviews, 397 f i l e r s were chosen for
a u d i t s . ( 1 )
However, reviewing annual reports can only detect instances of
noncompliance i f f i l e r s , i n e f f e c t , " v o l u n t a r i l y confess1' to overuse of
groundwater. F i l e r s are not required to submit supporting documentation
w i t h t h e i r reports. I f f a l s e o r erroneous data i s c a l c u l a t e d o r used on
an annual report, a f i le review o r exception report w i l l not detect a
problem. Although a u d i t s can uncover inaccurate r e p o r t i n g , they are
generally conducted only i f a report review reveals a problem. According
to the deputy d i r e c t o r of water management, DWR can only conduct a
l i m i t e d number of random a u d i t s o r on- site inspections due to
i n s u f f i c i e n t s t a f f . Further, although power records would be useful i n
v e r i f y i n g reported information, power companies have not made the records
avai lable to DWR.")
Analyses by DWR's basic data section have found that underreporting i s
not always detected by reviewing annual f i l i n g s . The analyses also
provide f u r t h e r evidence of noncompliance with groundwater management
( 1 ) Potential v i o l a t o r s i d e n t i f i e d and i n v e s t i g a t e d by DWR included a l l types of water
users such as c i t i e s and towns, i r r i g a t i o n d i s t r i c t s , p r i v a t e providers, and t u r f
f a c i l i t i e s ( e. g., go1 f courses).
( 2) Power records can be used t o help c a l c u l a t e approximations of the amount of water
t h a t has been pumped.
plan requirements. A recent study conducted by the department on a
sample of users i n the Eloy sub- basin of the Pinal AMA revealed t h a t :
I' . . . there are undoubtedly many bona f ide cases of
unintentional and i n t e n t i o n a l underreporting.
On the basis of t h i s i n v e s t i g a t i o n , withdrawals were
underreported by owners for 1985 by approximately 7.9 percent
( i n the area evaluated). This figure i s s i m i l a r to the 7 percent
underreporting f i g u r e computed for 99 wells i n the Hassayampa
sub- basin i n the Phoenix AMA."
The report concluded that the agency could i d e n t i f y " more than a t h i r d "
of the State's p r i v a t e i r r i g a t i o n wells as p o t e n t i a l v i o l a t o r s . Since
the analysis r e l i e d on some estimated data, agency o f f i c i a l s stressed
that these r e s u l t s are not conclusive. Differences i n pump e f f i c i e n c i e s ,
pump I i f t s , and discharge pressures can also a f f e c t the r e s u l t s .
However, the r e s u l t s of the study are s i g n i f i c a n t enough to warrant
f u r t h e r study and concern by DWR.
Limited Enforcement C a p a b i l i t y and More
Stringent Requirements May Be a Formula
f o r Future Noncompliance
Weaknesses i n current procedures for detecting noncompliance combined
w i t h more s t r i n g e n t conservation requirements may create both the
opportunity the incentive for future noncompliance. DWR w i l I need to
study the extent of noncompliance and underreporting, and determine
whether a d d i t i o n a l s t a f f and stronger enforcement e f f o r t s are needed.
More s t r i n g e n t conservation plans could increase users' incentive to
underreport unless c u r r e n t d e t e c t i o n methods are strengthened.
Conservation requirements under the F i r s t Management Plan are r e l a t i v e l y
l e n i e n t . The Second Management Plan, however, which w i l l be implemented
i n 1990, i s more s t r i c t . The second plan w i l l require a s i g n i f i c a n t
monetary investment on the p a r t of water users, and perhaps economic and
other hardships, to comply w i t h i t s conservation provisions. Those not
wishing to make the necessary investment or changes i n water usage may be
tempted to avoid complying by misrepresenting water consumption i n t h e i r
annual reports.
Consequently, the department needs to continue to assess the accuracy of
water users' r e p o r t i n g and the impact i t has on the S t a t e ' s conservation
goals. Although the analysis conducted to date has been very valuable,
more work i s needed. As noted e a r l i e r , estimated data used i n previous
research requires t h a t r e s u l t s and conclusions be q u a l i f i e d . Determining
the extent and impact of inaccurate r e p o r t i n g , however, may require
a d d i t i o n a l s t a f f i n g .
I f f u r t h e r a n a l y s i s determines that inaccurate r e p o r t i n g i s a serious
t h r e a t t o achieving the current safe- yield goal, then DWR should consider
strengthening i t s enforcement e f f o r t . I n s t i t u t i n g a system of more
frequent random a u d i t s and o n - s i t e inspections are two a l t e r n a t i v e s . DWR
could also require f i l e r s to provide documentation supporting power usage
information contained i n t h e i r f i l i n g s . F i n a l l y , DWR w i l l need to
determine what a d d i t i o n a l s t a f f i n g and resources would be needed to
implement t h i s enhanced enforcement program.
1. The department should determine the impact underreporting has on the
State's conservation goals. I f necessary, the agency should request
additional s t a f f i n g from the L e g i s l a t u r e to perform the required
analysis.
2. I f DWR determines that inaccurate r e p o r t i n g i s a serious threat to
safe- yield, DWR should take steps to strengthen i t s enforcement
e f f o r t . Possible a l t e r n a t i v e s include: a) i n s t i t u t i n g a system for
conducting random audits of water users, b) increasing the number of
o n - s i t e inspections, and c) r e q u i r i n g f i l e r s to provide supporting
documentation f o r power usage data contained i n reports.
FINDING Ill
MORE EFFORT IS NEEDED TO PROTECT THE PUBLIC
FROM HAZARDOUS OPEN WELLS
In October 1988, an elementary school teacher from the town of Maricopa
reported a hazardous well near her school. The well was three feet i n
diameter, 600 feet to water, and unobstructed ( nothing to break the
600- foot f a l l ) . School c h i l d r e n were playing by the w e l l , dropping rocks
into i t . This well i s j u s t one of what DWR estimates could be hundreds
of hazardous open wells i n the State. Because these wells present a
s i g n i f i c a n t health and safety threat to the p u b l i c , more e f f o r t i s needed
to address t h i s hazard. The L e g i s l a t u r e should consider several ways to
fund the s t a f f i n g needed for t h i s e f f o r t .
DWR was given open well enforcement r e s p o n s i b i l i t i e s i n 1986. A. R. S.
545- 594 gives the d i r e c t o r o f DWR the r e s p o n s i b i l i t y to determine whether
an open well i s dangerous to property or t o p u b l i c health or s a f e t y . The
d i r e c t o r has the a u t h o r i t y to require the well to be capped. During the
course of the a u d i t , the department adopted emergency rules enabling the
d i r e c t o r t o exercise t h i s a u t h o r i t y .
Large Numbers of Open Wel I s
Present a S i g n i f i c a n t Health and Safety Hazard
Public health and safety are threatened i n Arizona by the presence of
thousands of open w e l l s . DWR has documented approximately 700 open wells
i n active management areas and other regions of the State. Many o f these
wells are hazardous because they are located close to inhabited areas. I n
a d d i t i o n , these wells provide a d i r e c t route for f e r t i l i z e r , p e s t i c i d e s ,
and other p o l l u t a n t s t o enter the a q u i f e r .
Hundreds o f open wells found - Hundreds of open wells have been
i d e n t i f i e d but remain uncapped i n Arizona. DWR d i r e c t e d i t s f i e l d s t a f f
to record a l l open we1 I s found i n the Pinal AMA during the course of
performing other d u t i e s . During a two- week period i n November 1988, 488
open wells were documented. Forty- eight of these wells are categorized
as " high hazard" i n d i c a t i n g that they present a threat to the p u b l i c .
Subsequently, DWR found 100 open wells i n the Phoenix AMA during a
two- day period. DWR also found 52 wells i n Harquahala and B u t l e r Valley.
DWR estimates that thousands more open we l I s have yet to be discovered.
The Pi nal AMA may have approx imate l y 500 add i t i onal uncapped we l l s, and
the Phoenix AMA may have hundreds more. In a d d i t i o n , DWR estimates that
there are hundreds of open we1 I s i n the Tucson and Prescott AMAs, where
there have been no e f f o r t s to discover them, and i n the southeast section
of the State near Safford and San Simon.
Open wells threaten p u b l i c safety - Many open wells are hazardous
because they have openings large enough f o r c h i l d r e n to enter and are
located near inhabited areas. For example, DWR s t a f f found:
a An open well w i t h a 20- inch diameter along a road i n the Pinal AMA.
An occupied home was located across the road 50 yards away.
0 A well with a 14- inch diameter located on r e s i d e n t i a l property where
a small c h i l d l i v e d . A rusty o i l drum was covering the hole.
a An open well of unknown size covered only by a mattress spring.
0 Another open we1 l located between two bushes. This we1 l was 30 feet
away from a residence.
Even wells small i n diameter can be dangerous. In a w e l l - p u b l i c i z e d
Texas case, Jessica McClure f e l l down a well only 8 inches i n diameter.
Forty- eight of the wells found i n the Pinal AMA are at least 8 inches i n
diameter and are located w i t h i n 300 feet of inhabited areas. These wells
present a c l e a r t h r e a t to the community.
Groundwater can be p o l l u t e d - Further, open wells threaten p u b l i c
health because these w e l l s provide a d i r e c t conduit through which
p o l l u t a n t s may enter a q u i f e r s . In a g r i c u l t u r a l areas, p e s t i c i d e s ,
herbicides, and f e r t i l i z e r s can enter aquifers through open wells located
on or near farmland. In l i m i t e d t e s t i n g since 1979, the Department of
Health Services ( DHS) and l a t e r , the Department of Environmental Quality
( DEQ), have found p e s t i c i d e contamination i n groundwater. Unhealthful
concentrations of DBCP and EDB ( two a c t i v e ingredients i n p e s t i c i d e s )
have been discovered i n Yuma, the East Salt River Val ley, and the West
Salt River Valley. While there i s no evidence to date that t h i s
contamination occurred due to open w e l l s , DEQ o f f i c i a l s recognize the
r i s k s these wells present for s w i f t contamination of groundwater.
F e r t i l i z e r s and other contaminants may also enter the aquifers through
open wells. The Arizona State Chemist estimates that approximately
300,000 tons of a g r i c u l t u r a l f e r t i l i z e r s are used i n the State every
year. Even i n urban areas, v a r i o u s r u n o f f p o l l u t a n t s may enter the
aquifer by way of open we1 I s .
More E f f o r t I s Needed t o
Address Open Well Hazards
More can be done to address the problem of open w e l l s . Due t o l i m i t e d
s t a f f and other p r i o r i t i e s , DWR does not have an organized program for
discovering open w e l l s . Once w e l l s are discovered, i n v e s t i g a t i o n and
follow- up need to be more comprehensive and timely.
Discovery - DWR does not c u r r e n t l y have an organized program for
discovering open w e l l s . Several d i v i s i o n s of the department s p o r a d i c a l l y
f i n d and report open we1 Is during the course of performing other d u t i e s .
As a r e s u l t , discovery i s haphazard and l i m i t e d to areas where DWR i s i n
the f i e l d for other reasons. A more comprehensive and systematic e f f o r t
to f i n d open wells would require assigning s t a f f s p e c i f i c a l l y to t h i s
e f f o r t and organizing a broader sweep of areas to be observed.
DWR also could use other innovative methods to discover open w e l l s . For
example, conveyance of water r i g h t s reports are a p o t e n t i a l source of
open w e l l i n f o r m a t i o n . DWR already requires that a l l land t r a n s f e r s
involving water r i g h t s be reported to the department. DWR could require
that open wells be i d e n t i f i e d , capped, and reported to DWR on the
e x i s t i n g report before the land t r a n s f e r can take place. This technique
i s used i n Iowa to i d e n t i f y open w e l l s . According to o f f i c i a l s there,
land owners discover t h e i r own open wells while preparing t h e i r
conveyance reports.
DWR's well r e g i s t r y i s also a p o t e n t i a l l y useful discovery t o o l . A l l
well owners must r e g i s t e r t h e i r wells w i t h DWR. Approximately 77,000
we1 I s are on record presently with the department. The r e g i s t r y has
never been used to help i d e n t i f y wells which are no longer i n use and
need to be capped.
lnvestigation and follow- up - More also needs to be done to i n v e s t i g a t e
and follow up on p o t e n t i a l l y hazardous w e l l s t h a t have been discovered.
Due to l i m i t e d s t a f f and competing planning and enforcement p r i o r i t i e s ,
follow- up has been l i m i t e d .
l n v e s t i g a t i o n of an open w e l l involves f i n d i n g the owner of the w e l l and
ensuring that i t i s properly capped. Determining ownership may require
researching records at the county assessor's o f f i c e . I n a d d i t i o n , s t a f f
may need to v i s i t the well s i t e to determine what must be done to
properly and safely cap or abandon the we1 I .
C u r r e n t l y , o n l y h i g h hazard open wells are given a t t e n t i o n by DWR and the
AMAs: other p o t e n t i a l l y hazardous ones are n o t b e i n g addressed. For
example, the Pinal AMA i s now i n v e s t i g a t i n g the 48 most hazardous of the
500 wells found i n i t s area. The Phoenix AMA does not presently have
resources to follow up on any of the 100 wells found i n i t s area. Other
open we1 Is discovered outside the a c t i v e management areas are also a low
p r i o r i t y for DWR f o l low- up.
A recently drafted p o l i c y d i r e c t i v e on open wells does not ensure that
a l l hazardous wells w i l l be addressed i n a timely manner, i f at a l l . The
d i r e c t i v e s use distance from inhabited areas as a c r i t e r i a for
categorizing open wells by hazard l e v e l . A well a t least 8 inches i n
diameter which i s w i t h i n 100 feet of an inhabited area i s considered the
most hazardous and w i l l receive immediate a t t e n t i o n . A s i m i l a r well
w i t h i n 300 feet w i l l not to be addressed immediately but w i l l be
scheduled for follow- up along w i t h other p r i o r i t i e s . Wells f a r t h e r from
inhabited areas may not be addressed at a l I . To chi ldren playing near
these wells, the d i f f e r e n c e s i n distance between 100 feet and 301 feet
may not be s u f f i c i e n t t o prevent an accident.
Open Well Enforcement Program
Could Be Funded Several Ways
DWR and the L e g i s l a t u r e should consider several methods to fund a more
e f f e c t i v e open well enforcement program. Other revenue sources may be
a v a i l a b l e to supplement general fund monies.
Cost o f program - DWR has estimated that an open we1 l enforcement
program would require $ 239,000 to fund i n i t s f i r s t year. The program
would employ eight s t a f f ( i n c l u d i n g three l imi ted p o s i t ions) who would
work i n the Phoenix, Tucson, and Pinal AMAs and i n the central o f f i c e .
These s t a f f would be responsible for discovering open w e l l s , p r i o r i t i z i n g
wells based on hazard l e v e l , performing ownership searches, n o t i f y i n g and
working w i th owners t o cap we l l s , and conduct i ng fo l l ow- up.
Funding would be reduced i n subsequent years as the backlog of open wells
requiring follow- up i s reduced or eliminated. DWR estimates that
$ 148,600 would be s u f f i c i e n t to operate an adequate open well enforcement
program in i t s f o u r t h year.
Funding - In a d d i t i o n t o using general fund monies, DWR and the
Legislature should consider other methods for funding an open well
enforcement program. The department's enforcement fund i s one source of
additional support. Arizona's groundwater management code permits the
use of enforcement fund money for the capping of high hazard w e l l s . DWR
has proposed using some of these monies for we1 l capping. The department
can l a t e r seek reimbursement from well owners. The enforcement fund,
which c o l l e c t s monies from code v i o l a t o r s , c u r r e n t l y has a balance of
$ 215,850 and generates approximately $ 100,000 annually. However, the
amount of enforcement funds a v a i l a b l e f o r the open well program may be
l i m i t e d . DWR has i n d i c a t e d t h a t some of these monies are needed to h i r e
an enforcement attorney and support s t a f f to address the backlog of other
enforcement act ions.
Another innovative way to fund a t least a p o r t i o n o f the program would
involve p l a c i n g a tax or surcharge on f e r t i l i z e r s and/ or p e s t i c i d e s sold
i n Arizona. Iowa has adopted t h i s method to fund a s u b s t a n t i a l p o r t i o n
of i t s groundwater management program. "' This approach i s based on
the philosophy that f e r t i l i z e r s and p e s t i c i d e s pose a threat to the
aquifers through open we1 I s , and therefore, users of substances which may
enter and p o l l u t e the a q u i f e r through open w e l l s should help pay to
remove the t h r e a t .
A tax on f e r t i l i z e r could raise a s i g n i f i c a n t amount of revenue w i t h
minimal impact on the p r i c e of f e r t i l i z e r . According to the Arizona
State Chemist, approximately 300,000 tons of f e r t i l i z e r s are used i n the
State each year. A charge of 80 cents per ton, which represents less
than one percent of the purchase p r i c e of a ton of f e r t i l i z e r , would
generate $ 240,000 i n enforcement funds. ( 2 ) A lower f e r t i l i z e r tax
could be imposed i f p e s t i c i d e s were also taxed.
RECOMUENDAT l ONS
1. DWR should improve e f f o r t s to discover open w e l l s by:
a. Assigning employees who spend time i n the f i e l d s p e c i f i c
r e s p o n s i b i l i t y for i d e n t i f y i n g and documenting open w e l l s , and
b. Using the we1 l r e g i s t r y to a s s i s t i n e f f o r t s to locate open
we1 I s .
2. DWR should reevaluate i t s c r i t e r i a for determining open well hazard
levels to determine i f these c r i t e r i a adequately protect the p u b l i c .
Iowa taxes a l l f e r t i l i z e r s c o n t a i n i n g n i t r o g e n a t the r a t e of 75 cents per ton. I n
a d d i t i o n , p e s t i c i d e manufacturers are charged o n e - f i f t h of one percent o f t h e i r
gross annual sales ($ 250 minimum and $ 3,000 maximum charge), and p e s t i c i d e dealers
are taxed one- tenth of one percent of gross annual sales.
( 2 ) A tax o r surcharge on f e r t i l i z e r would not be d i f f i c u l t t o administer. The State
Chemist already c o l l e c t s a s i m i l a r tax of 25 cents per ton o f f e r t i l i z e r sold.
This e x i s t i n g tax, which supports operations of the State Chemist's o f f i c e , i s paid
by licensed dealers who r e p o r t sales on a quarter1 y basis t o the State Chemist.
3. The Legislature should consider r e q u i r i n g open w e l l i n f o r m a t i o n to be
reported on a l l conveyance reports processed by the department.
4. The Legislature and DWR should consider several d i f f e r e n t methods for
funding an open well enforcement program.
FINDING IV
THE STATE COULD SAVE AT LEAST $ 1.5 MILL l ON ANNUALLY
BY INCREASING THE GROUNDWATER WITHDRAWAL FEE
The State would save at least $ 1.5 m i l l i o n annually i f the Department of
Water Resources were allowed to raise i t s groundwater withdrawal fee.
Although groundwater withdrawal fees were intended to finance h a l f the
cost for administration and enforcement of the groundwater code, a
separate provision i n the code p r o h i b i t s the agency from c o l l e c t i n g t h i s
amount. A change i n s t a t u t e to allow DWR to c o l l e c t s u f f i c i e n t monies
would r e s u l t i n only a minimal increase i n water costs.
A Provision i n the Groundwater Code Prevents
DWR from C o l l e c t i n g S u f f i c i e n t Fees for
~ ~. Administration and Enforcement
Though State law mandates that groundwater user fees finance h a l f the
cost of groundwater code r e g u l a t i o n , a separate provision r e s t r i c t s DWRts
a b i l i t y to do t h i s . Arizona Revised Statutes ( A. R. S.) $ 45- 612 s p e c i f i e s
that the d i r e c t o r of DWR each year:
It . . . s h a l l estimate the t o t a l amount of groundwater withdrawn
i n a l l active management areas.. . and set the a d m i n i s t r a t i o n and
enforcement fee . . . to produce an amount equal to one- half of the
amount budgeted by the d i r e c t o r for administration and
enforcement purposes for the f o l lowing f i s c a l year ." ( emphasis
added)
However, A. R. S. 945- 611.1 p r o h i b i t s the agency from assessing a user fee
of more than one d o l l a r per acre- foot. According t o former Commission
s t a f f , t h i s cap on fees was a compromise agreed to by the Groundwater
Management Study Commission to help insure the support of a g r i c u l t u r a l
i n t e r e s t s f o r the groundwater code. A representative from the
Agri- Business Council of Arizona agrees that farmers at the time
supported the one d o l l a r l i m i t to minimize the economic impact of a
withdrawal fee. Consequently, the fee was l i m i t e d to one d o l l a r even
though 1) i t was not demonstrated that a higher fee would produce
f i n a n c i a l hardship for water users; and 2) the costs for r e g u l a t i n g
groundwater use were unknown at the time.
The one d o l l a r per acre- foot l i m i t has i n fact prevented DWR from
c o l l e c t i n g monies s u f f i c i e n t to cover h a l f the cost of groundwater code
regulation. For example, the cost for code regulation i n f i s c a l year
1988 was an estimated $ 5,252,804. Because of the current l i m i t on fees,
the department was only able to assess approximately $ 1 ,712,000 i n fees,
or 33 percent of the cost to regulate the groundwater code. The
department's budget o f f i c e p r o j e c t s a greater s h o r t f a l l for f i s c a l year
1990, and estimates t h a t o n l y 27 percent of DWR's expenses for
code- related a d m i n i s t r a t i o n and enforcement w i l l be covered.
Funding not derived from groundwater users i s supplemented through other
general fund appropriations. For f i s c a l year 1990, DWR estimates that
approximately $ 1,500,000 i n a d d i t i o n a l revenue w i l l be needed from the
general fund to compensate for the s h o r t f a l l i n user fees. The
department estimates that user fees would have to be raised an a d d i t i o n a l
$. 87 per acre foot to e l i m i n a t e t h i s s h o r t f a l I.
A Change i n Statute Would Result in Only
a Minimal Increase i n Water Costs
Our analysis indicates that r a i s i n g the groundwater withdrawal fee to
cover h a l f the cost of code administration and enforcement would r e s u l t
i n only a minimal increase i n water costs. ' I' The current average
cost for pumping groundwater i n the Phoenix a c t i v e management area i s
$ 32.73 per acre- foot. For example, r a i s i n g the groundwater fee $ 1 . OO an
acre- foot to cover current costs would only increase users' per acre cost
by approximately three percent and would not s i g n i f i c a n t l y add to the
overal I water cost incurred by i r r igat ion users'!'
RECOWENDAT I ON
The Legislature should consider amending A. R. S. $ 45- 611 . I to raise or
remove the current l i m i t on groundwater fee assessments so that DWR can
c o l l e c t monies s u f f i c i e n t t o finance h a l f the costs for administering and
enforcing the groundwater code as required by A. R. S. $ 45- 612.
( I) Derived from economic data compiled by DWR.
( 2 This analysis does not i n c l u d e any a d d i t i o n a l w e l l or other enforcement costs that
may be approved by the L e g i s l a t u r e and funded from the general fund as a r e s u l t of
t h i s r e p o r t .
FINDING V
WATER RIGHTS CLAIMANTS SHOULD SUPPORT
A GREATER SHARE OF THE ADJUDICATIONS COSTS
Claimants who w i l l b e n e f i t from the outcome o f general adjudications
should support a greater p o r t i o n of t h e i r costs. F i l i n g fees paid by
claimants are i n s u f f i c i e n t to recover most of DWR's a d m i n i s t r a t i v e costs
which are c u r r e n t l y supported by a general fund a p p r o p r i a t i o n . Because
claimants w i l l b e n e f i t more than the general p u b l i c from water r i g h t s
adjudications, the L e g i s l a t u r e should consider amending current law to
allow for a more equitable sharing o f t h i s growing and long- term cost
burden .
General Water R i g h t s A d j u d i c a t i o n s
According to State law, a l l surface water belongs to the p u b l i c but i s
subject to appropriation for b e n e f i c i a l uses. B e n e f i c i a l uses include
i r r i g a t i o n , mining, power generation, watering of s t o c k , r e c r e a t i o n , and
municipal and other uses. Water r i g h t s , which are r e a l p r o p e r t y r i g h t s
s i m i l a r to r i g h t s to land, are established and based on appropriations of
water for b e n e f i c i a l uses. The extent and p r i o r i t y of each water r i g h t
depends on the nature and amount of water use and when the water was
f i r s t appropriated for t h i s purpose. In times of shortage, the oldest
water r i g h t s take precedence.
Adjudication of surface water r i g h t s i s needed i n Arizona to s e t t l e
Indian claims. Therefore, i n 1979, the Legislature enacted s t a t u t o r y
provisions ( Laws of 1979, Chapter 139) a u t h o r i z i n g a general a d j u d i c a t i o n
i n State courts. This l e g i s l a t i o n was intended to permit settlement of
Indian water r i g h t s claims w i t h i n a framework established by federal law
and the U. S. Supreme Court. For example, S t a t e a d j u d i c a t i o n s must be
j u d i c i a l , not a d m i n i s t r a t i v e , determinations. Therefore, the 1979
l e g i s l a t i o n t r a n s f e r r e d a d j u d i c a t i o n a u t h o r i t y from the State Land
Department to Super i or Court.
Two a d j u d i c a t i o n s a r e c u r r e n t l y i n progress. The largest i n v o l v i n g the
G i l a River system ( w i t h over 62,000 claims) i s before the court i n
Maricopa County. An a d j u d i c a t i o n of the L i t t l e Colorado River ( i n v o l v i n g
approximately 11,000 claims) i s underway i n Apache County Superior
Court. These a d j u d i c a t i o n s are expected t o take at least ten years to
complete. Claimants i n b o t h a d j u d i c a t i o n s are d i v e r s e ; they include
State and federal agencies, c i t i e s and towns, p u b l i c u t i l i t i e s , mining
companies, i r r i g a t i o n d i s t r i c t s , as well as many i n d i v i d u a l s and small
water users.
Dm's r o l e - DWR i s responsible f o r p r o v i d i n g s t a f f support to the
courts. The department handles legal service and process ( legal not i ce) ,
maintains records o f claims, and conducts technical s t u d i e s ,
i n v e s t i g a t i o n s , and analyses. Water r i g h t claims must be i n v e s t i g a t e d
and v e r i f i e d by DWR s t a f f .
One of DWR's major tasks i s to prepare h y d r o l o g i c a l survey reports ( HSRs)
f o r each a d j u d i c a t i o n . These r e p o r t s i n v e n t o r y water uses, r i g h t s ,
claims, and hydrology w i t h i n watersheds. Each a d j u d i c a t i o n generates
m u l t i p l e volume HSRs which are subject to review and comment by claimants.
Claimants W i l l B e n e f i t
from Adjudications
While the general p u b l i c may b e n e f i t from a d j u d i c a t i o n s of surface water
r i g h t s , water r i g h t s claimants c l e a r l y have a more d i r e c t i n t e r e s t i n the
process. Claimants have more to gain or lose from the a d j u d i c a t i o n s .
According to DWR o f f i c i a l s , a d j u d i c a t i o n of water r i g h t s i s important to
remove u n c e r t a i n t y over what water i s a v a i l a b l e to the State and to
permit management of t h i s v i t a l resource. Water r i g h t s claimants,
however, appear to have a more d i r e c t i n t e r e s t i n , and more to g a i n o r
lose, from a d j u d i c a t i o n s than the general p u b l i c .
According to a professor of law a t the U n i v e r s i t y of Montana who i s
knowledgeable i n western water r i g h t s a d j u d i c a t i o n s , water r i g h t s can
a f f e c t the value of land and influence land transactions. I n a recent
a r t i c l e , he s t a t e d :
I' Throughout the West, l e g i s l a t u r e s recognized the d e s i r a b i l i t y of
a permanent record of water r i g h t s so that people could t e l l how
many r i g h t s there were on a p a r t i c u l a r source and t h e i r amounts
and p r i o r i t y dates. Such information was e s s e n t i a l to current
holders of water r i g h t s , people who might be considering a new
appropriation and those contemplating purchase of property to
which a water r i g h t i s attached. The l a t t e r was p a r t i c u l a r l y
important because the p o t e n t i a l buyer would want to know the
value of the r i g h t , which would depend on i t s volume and i t s
p r i o r i t y i n r e l a t i o n to other water r i g h t s . " ( ' 1
Since claimants b e n e f i t from the a d j u d i c a t i o n s process, r e q u i r i n g fees or
assessments to support the cost i s accepted p u b l i c p o l i c y i n Arizona and
same ~ t h e r ! vestern s t a t e s . The o r i g i n a l l e g i s l a t i o n a u t h o r i z i n g
adjudications i n Arizona required a f i l i n g fee which was intended to be
used to support DWR's costs for service and process and for masters
( hearing o f f i c e r s who w i l l be appointed and compensated by the
court^).'^' A. R. S. 545- 254 requires t h a t i n d i v i d u a l s f i l ing a water
r i g h t claim pay a one- time fee of $ 20 for each claim f i l e d .
Corporations, c i t i e s , State agencies, p o l i t i c a l subdivisions,
associations, and partnerships must pay $ 20 or 2 cents per acre- foot
claimed, whichever i s g r e a t e r . I n d i a n t r i b e s are the only p a r t i e s
s p e c i f i c a l l y exempted from the f i l i n g fee requirement.
Fees Collected Are I n s u f f i c i e n t
to Recover DWR Costs
Fees c o l l e c t e d w i l l be i n s u f f i c i e n t to recover even the l i m i t e d DWR costs
i d e n t i f i e d by law. As of March 1989, DWR has c o l l e c t e d $ 1,788,867 i n
f i l i n g fees for the G i l a and L i t t l e Colorado a d j u d i c a t i o n s . Since most
claimants have f i l e d , l i t t l e a d d i t i o n a l fee revenue i s a n t i c i p a t e d .
These monies w i l l be i n s u f f i c i e n t to cover DWR's c o s t s i n c u r r e d i n
e f f e c t i n g legal n o t i c e . DWR's costs f o r legal process and service
( 1 ) A l b e r t W. Stone, " Montana Water A d j u d i c a t i o n : A Centennial H i s t o r y ," Western
Wildlands ( Winter 1989): 18- 24.
( * ) Masters w i l l conduct hearings and r e p o r t to the court on l e g a l and f a c t u a l matters
involved i n d e c i d i n g e n t i t l e m e n t s and p r i o r i t y of water r i g h t s .
totaled $ 1,859,412 as of December 30, 1988. These costs already exceed
the amount of fee revenues col lected. Moreover, court master costs must
be reimbursed f i r s t . Therefore, i t i s u n l i k e l y that a l l DWR costs for
legal process and servi ce w i l l be recovered !"
While statutes provide for recovery of DWR's cost for legal process and
service, none of the agency's other a d m i n i s t r a t i v e expenses are subject
to cost recovery under current law. DWR's costs for administering
adjudications have increased g r e a t l y i n recent years. Since 1983,
s t a f f i n g has grown to 42 f u l l - t i m e equivalent p o s i t i o n s . The department
expended over $ 1.4 mi l l ion on adjudications i n FY 1988 and expects to
spend nearly $ 1.8 m i l l i o n during the current f i s c a l year. According to
one DWR o f f i c i a l , no one a n t i c i p a t e d a d m i n i s t r a t i v e expenses would be so
s u b s t a n t i a l .
Unless claimants support a greater p o r t i o n of the burden, adjudications
w i l l continue to require s u b s t a n t i a l general fund revenues annually w i t h
no known or c e r t a i n ending date i n s i g h t . DWR has requested four
a d d i t i o n a l p o s i t i o n s f o r FY 1990, and o f f i c i a l s i n d i c a t e that the agency
may eventually need 50 or more s t a f f t o properly f u l f i l l i t s
r e s p o n s i b i l i t i e s .
Statutory Revisions Could Require
a More Equitable Sharing o f Costs
The Legislature could amend current statutes to allow for a more
equitable sharing of DWR's a d m i n i s t r a t i v e costs. Precedents for t h i s
cost- sharing can be found i n other sections of Arizona water law and i n
that of other western s t a t e s . A t least one western s t a t e , Idaho, has
also extended t h i s p o l i c y t o general adjudications of water r i g h t s .
Precedents for " user" fees - Assessing water users and regulated
e n t i t i e s for a greater p o r t i o n of the costs of administering Arizona
( 1 DWR plans to hold fee revenues and apply i n t e r e s t earnings, and p r i n c i p a l i f
necessary, to pay f o r master costs. The department estimates t h a t master costs may
t o t a l $ 150,000 annually. However, costs may be greater and i n t e r e s t earnings alone
may not be s u f f i c i e n t t o cover these costs.
water laws has precedent under current law. As noted i n Finding IV ( page
3 3 ) , A . R . S . 545- 611.1 requires groundwater users to pay an annual fee to
support DWR costs t o enforce the p r o v i s i o n s of the Groundwater Management
Act. A. R. S. 345- 612 requires groundwater user fees s u f f i c i e n t to cover
one- half of DWR's costs of a d m i n i s t r a t i n g and enforcing the a c t .
One s t a t e has plans to e s t a b l i s h a " water master" a d m i n i s t r a t i v e agency
which i s f u l l y s e l f - s u p p o r t i n g through user fees. Texas i s e s t a b l i s h i n g
t h i s operation to monitor and enforce water r i g h t s . The a n t i c i p a t e d
$ 200,000 annual cost of the operation w i l l be recovered through fees
charged to each water r i g h t holder.
Another s t a t e has extended t h i s concept to general water r i g h t s
adjudications. ldaho has established what i s intended t o be a f u l l y
self- supporting process f o r the Snake R i v e r b a s i n a d j u d i c a t i o n . This
a d j u d i c a t i o n w i l l involve 87 percent of the s t a t e ' s land mass, and i s
expected to cost about $ 28 m i l l i o n over a ten- year period. Each claimant
i s required to pay a f e e , e s t a b l ished by law, based on type of use and
water q u a n t i t y o r power g e n e r a t i n g c a p a c i t y , Fees range from a minimum
of $ 25 for small domestic uses to an estimated $ 5.5 m i l l ion which w i l l be
paid by a major u t i l i t y company.
According to the c h i e f of Idaho's a d j u d i c a t i o n s bureau, fees were
established a f t e r r e c e i v i n g input from a c i t i z e n s ' committee set up to
f i n d a way t o e q u i t a b l y finance the a d j u d i c a t i o n . This o f f i c i a l
i n d i c a t e d t h a t t h e r e had been l i m i t e d success i n g e t t i n g general fund
revenues to support the a d j u d i c a t i o n , y e t , everyone recognized the
b e n e f i t of ~ l i m i n a t i n g the u n c e r t a i n t y over what water was a v a i l a b l e .
The u t i l i t y company, for example, was so committed t o having the
a d j u d i c a t i o n take place t h a t i t was w i l l i n g to pay m i l l i o n s t o support i t .
Arizona a d j u d i c a t i o n fees are low - By c o n t r a s t , claimants i n Arizona
have contributed f a r less to support a d j u d i c a t i o n s . One- time fees
generated as of March 1989 represent an average of about $ 24 per claim
f i l e d . This i s s l i g h t l y less than the minimum fee which w i l l be paid i n
ldaho by small domestic and stock water users.
Government agencies have paid the most to support the a d j u d i c a t i o n s i n
Arizona. The U. S. Forest Service has paid $ 239,140 f o r water r i g h t s
claims i n A r i z o n a ' s n a t i o n a l f o r e s t s . The Arizona State Land Department,
the second highest payer, remitted $ 154,817 to the Department o f Water
Resources for claims on State lands. Among Arizona c i t i e s and counties,
the c i t y of Phoenix has paid the most ($ 65,514) i n f i l i n g fees. Power
companies, i r r i g a t i o n d i s t r i c t s , and other water users have paid
considerably less. The Salt R i v e r P r o j e c t has paid $ 57,101, and Arizona
Public Service has paid $ 5,510. The highest paying i r r i g a t i o n d i s t r i c t
i s the Maricopa- Stanfield d i s t r i c t which remitted $ 7,566 to DWR!"
One DWR o f f i c i a l argues that a d d i t i o n a l fees should not be assessed. He
fears objections by claimants who may drop out of the process and r i s k
i t s v i a b i l i t y . This i s not l i k e l y to happen, however, for two reasons.
F i r s t , p a r t i e s claiming smaller amounts of water would not be
s i g n i f i c a n t l y impacted by a d d i t i o n a l assessments i f an approach s i m i l a r
to Idaho's were adopted. Estimates provided by the Idaho Department of
Water Resources i n d i c a t e t h a t almost 89 percent of t o t a l revenues to be
raised through fees w i l l come from the largest water users who represent
only about one- third of a l l claimants. Second, larger users of water,
who would be impacted by a d d i t i o n a l assessments, are not l i k e l y to drop
out of the process because they have the most to lose and would
jeopardize t h e i r water r i g h t s . Since these claimants have paid such a
small proportion to support DWR costs thus f a r , i t i s not unreasonable to
expect a greater cost- sharing commitment from them.
( 1 These amounts are based p r i m a r i l y on computer generated data provided by the
Department o f Water Resources and were confirmed w i t h the organization named. I n
two cases, small discrepancies (+ about 1 percent) w i t h claimant records were
i d e n t i f i e d . DWR has n o t audited claims t o determine i f amounts paid comply w i t h
s t a t u t o r y requirements. Therefore, amounts quoted could represent under or over
payments.
The Legislature could amend current s t a t u t e s t o permit a d d i t i o n a l
assessments of claimants on an equitable b a s i s . "' In considering
s t a t u t o r y revisions, the Legislature could requi r e t h a t e i t h e r a p o r t i o n
or a l l of DWR's a d m i n i s t r a t i v e costs be recovered. In a d d i t i o n ,
exemptions for small domestic or stock water users could be considered i f
a d d i t i o n a l fees were deemed to be u n f a i r or a f i n a n c i a l burden.
RECOWENDAT I ONS
1. The Legislature should consider enacting s t a t u t o r y provisions to
permit additional assessments of claimants for a l l or a p o r t i o n of
DWR's administrative costs for adjudications.
2. DWR should undertake a d d i t i o n a l analysis of f u t u r e a n t i c i p a t e d costs,
including the p o t e n t i a l cost of masters, to a i d i n the development of
equitable fee l e v e l s .
( 1 It i s i n t e r e s t i n g t o note t h a t recent l e g i s l a t i o n supported by DWR went i n a
contrary d i r e c t i o n by l i m i t i n g future assessments o f claimants. P r i o r t o enactment
of Senate B i l l 1245 i n 1988, fee revenues c o l l e c t e d could be applied f i r s t t o DWR's
service and process costs. A l l remaining funds would be a v a i l a b l e t o pay f o r the
cost of hearing o f f i c e r s under the provisions of A. R. S. 545- 255.8. I f funds were
i n s u f f i c i e n t , the court could impose an a d d i t i o n a l assessment a t i t s d i s c r e t i o n t o
cover the cost o f the hearing o f f i c e r s . I n supporting SB 1245, DWR, i n e f f e c t ,
delayed and l i m i t e d recovery of i t s own a d m i n i s t r a t i v e costs since, as noted
e a r l i e r , funds w i l l f i r s t go t o pay f o r the c o u r t ' s masters.
August 24, 1989
Mr. Douglas R. Norton
Auditor General
2700 North Central Avenue, Suite 700
Phoenix, AZ 85004
Dear Mr. Norton:
The Department of Water Resources has completed its
review of the draft report of performance audit which your agency
has completed as part of the Sunset Review required by statute.
This letter, along with the responses on particular findings in
the report ( Attachment One), constitutes the Department's com-ments
to the report.
The Department generally agrees with the draft report of
performance audit. The report finds that the Department has
effectively performed its responsibilities in implementing the
Groundwater Code and performing its other water management and
public health and safety functions. In the two areas where the
Department's effectiveness could be improved, the draft report
concludes that additional funding is required. The Department
will seek additional funding for the two areas, ( 1) stronger
enforcement of the Groundwater Code's conservation and allocation
requirements and ( 2) additional effort on capping hazardous open
wells.
In assessing the Groundwater Code, the draft report
concludes that the Code is needed and has provided better water
management in Arizona. Terminating the Department, and by impli-cation
the Groundwater Code, could cause significant harm to the
public's health, safety, and welfare.
As the draft report states, the Department has consis-tently
sought legislation to address deficiencies in the enabling
statutes under which it operates. The Department utilizes both
an annual omnibus groundwater bill supported by the water com-munity
and individually sponsored bills which may not have uni-versal
support.
The Department disagrees with the draft report only as
to Findings One and Five. Finding One is that a Groundwater Code
study commission should be convened by the Legislature to address
perceived problems with the Code. As stated in the attached
response to Finding One, the Department believes that the goal of
safe yield, the assured water supply provisions, and the per
capita measure of municipal conservation measures require little
M r . Douglas R. Norton
August 24, 1989
Page Two
or no change a t t h i s time. To t h e e x t e n t t h a t some amendment of
t h e per c a p i t a measurement is d e s i r a b l e , and i n regard t o t h e
o t h e r s t a t u t o r y changes i d e n t i f i e d as d e s i r a b l e i n t h e p r e l i m i -
nary r e p o r t , t h e e x i s t i n g mechanisms now u t i l i z e d by t h e Depart-ment
are adequate. A study commission along t h e l i n e s o f t h e
1977 Groundwater Study Commission is unnecessary a t t h i s time and
could g e n e r a t e d i v i s i v e a t t e m p t s to a l t e r t h e b a s i c s t r u c t u r e of
t h e Code which, t h e d r a f t r e p o r t f i n d s , h a s served Arizona so
w e l l .
Finding Five is t h a t i n c r e a s e d f e e s should be a s s e s s e d
t o c l a i m a n t s i n t h e g e n e r a l a d j u d i c a t i o n of water r i g h t s . A s set
f o r t h i n t h e a t t a c h e d response to F i n d i n g F i v e , t h e Department
b e l i e v e s t h a t t h e a d j u d i c a t i o n s provide a b e n e f i t t o a l l resi-d
e n t s of Arizona and c l a i m a n t f e e s should n o t be i n c r e a s e d .
In c o n c l u s i o n , I want to e x p r e s s my a p p r e c i a t i o n f o r t h e
f i n e p r o f e s s i o n a l work done by your s t a f f o f a u d i t o r s . Their
t h o u g h t f u l and i n t e n s i v e study of t h e Department of Water
Resources and its s t a t u t o r y mandates w i l l f u r t h e r t h e g o a l of
e f f e c t i v e and e f f i c i e n t s t a t e government.
N. W. Plummer
Director of Water Resources
NWP : ea
Enclosure -
Attachment One
ATTACHMENT ONE
ARIZONA DEPARTMENT OF WATER RESOURCES
Responses to Auditor General's Findings
Sunset Review
Draft Report of Performance Audit
Finding I: To Help Ensure More Effective Water Manage-ment,
The Legislature Should Address Several Problems
That Have Surfaced Since The Groundwater Code's Incep-tion
in 1980.
A. Groundwater Code Is Needed and Has Provided
Better Water Management
The Department agrees with this finding. In this desert
state, only focused water management and a dedicated commitment
to water conservation will assure the continued availability of
the water needed for current uses and future development. The
Department is committed to fair and effective implementation of
its statutory responsibilities.
B. Several Code Provisions May Not Provide for
Effective Water Management: Safe Yield.
It would be a fundamental mistake to eliminate all ref-erences
to a management goal from the Groundwater Code. The
current levels of groundwater overdraft in the Active Management
Areas ( AMAs) will ultimately lead to a disastrous long term re-sult.
It is imperative to create a strong regulatory incentive
which makes the purchase and use of Central Arizona Project water
as a replacement for mined groundwater a necessity. This can
only be accomplished by establishing a goal which limits the
future access to groundwater as a basic supply source. This is
especially true for municipal water use, where the demands for
water are likely to more than double over the next 40 years. The
goal as it affects the ability to demonstrate an assured water
supply is a critical water management tool and therefore must be
retained.
The existence of large quantities of groundwater in
storage does not mean that a safe yield goal is unnecessary.
Although the Phoenix AMA now has 160 million acre feet in stor-age,
it had 240 million acre feet in storage before modern deve-lopment
began. That 33% reduction in the amount stored within
just a few decades emphasizes the need for a safe yield goal.
Projections that the amount remaining in storage will last for
several hundred years are valid only if CAP water is fully uti-lized
and the Groundwater Code, with its safe yield goal, is
fully implemented.
In spite of the overriding goal, most of the Code's
provisions are not based on resource based considerations. The
amount of water allocated to a farm through the water duty calcu-lation
or to municipalities and industries is based entirely upon
the volume needed to achieve beneficial use, assuming water con-servation
measures. These volumes are in fact a license to over-draft
groundwater. If the safe yield goal were really the deter-mining
factor in the water management scheme, then water alloca-tions
would have been based on a decreasing pro rata reduction in
groundwater until the safe yield level is reached. However,
abandoning the goal of safe yield by 2025 because we may not
succeed in reaching it would be like abandoning a fire prevention
goal because not all fires could be avoided.
The need for water conservation and better water manage-ment
is not synonymous with the need to achieve the particular
goal of safe yield. While the Code establishes a safe yield goal
for the three metropolitan AMAs, most of the water management
provisions in the Code are actually independent of having such a
qoal. The Groundwater Code generally utilizes the approach of an
equitable allocation of groundwater resources. It is important
to note that the basic operating tenets of the Code are identical
in the Pinal AMA, which does not have a safe yield goal, to those
in the safe yield AMAs. Regardless of the goal, grandfathered
rights are established; service area rights are determined; allo-cations
based on conservation requirements are set forth in the
management plans; and all well construction rules and regulations
are accomplished in a consistent fashion. These provisions are
the substance of the Groundwater Code. In fact, the management
goal has very few applications in the day to day administration
of the Code.
The establishment of safe yield as the goal has three
major policy implications. First, it sets the level and degree
to which augmentation may be needed. The need for new projects
or for water importation is dependent upon the goal. Second, the
goal has a major effect on how much groundwater is allowed for
demonstration of assured water supplies for municipal development
purposes. Third, the goal determines the ultimate need for the
purchase and retirement of grandfathered rights after the year
2005.
The real issue which needs to be addressed is whether or
not the strict goal of safe yield by 2025 is appropriate. As the
Auditor General's report states, the AMAs are not yet at safe
yield, and may not succeed in reaching that goal by 2025. There-fore,
this state can expect to see declining groundwater tables
until at least 2025. At that time, if it appears that additional
declines in the groundwater table are economically and political-ly
acceptable, perhaps a different management goal should be
set. That goal might be safe yield by a date later than 2025, or
safe yield at a particular depth to water ( the Department now
allows new developments which are projected to cause the ground-water
table to drop to 1200 feet).
Whichever management goal is selected, however, no one
should lose sight of the overriding conclusion of the Auditor
General that "[ tlhe groundwater code is needed because it has
provided better water management in Arizona."
C. Assured Water Supply Provisions Can Work
Against Safe Yield.
The report indicates that the assured water supply pro-visions
could work against the safe yield goal and therefore
should be re- examined. Because the Department has taken an ap-proach
of phasing in the reduction of groundwater in the assured
supply test in order to minimize economic impacts, the result
described in the report has occurred to date. Minimizing econo-mic
impacts is certainly within the spirit of the Groundwater
Code, which was adopted to protect and stabilize the general
economy and welfare of this state and its citizens. However, the
conclusion that allocation of groundwater for an assured supply
demonstration works against the safe yield goal is correct.
The Department disagrees with this finding of the draft
report, because correction of this impact on safe yield does not
require review of the assured water supply statute. A change in
the policy by the Department in how it implements this provision
is all that is needed. One interpretation of the statutory lan-guage
is that all new assured supplies must be consistent with
achievement of the management goal, and therefore no volume of
mined groundwater component may be included. In other words, the
Department could solve this problem administratively by adopting
much more restrictive policies and rules for use of groundwater
in the demonstration of an assured water supply. The Department
is currently in the process of formulating rules to address this
issue.
D. Problems with the Code's Municipal Conservation
Measure.
While there may be some problems with the use of gallons
per capita per day as a measurement tool for level of conserva-tion,
this system is the most commonly used measure in the water
industry. Clearly, the City of Tucson dramatically reduced its
average gallons per person per day rate when it undertook a major
water conservation effort in the 1970' s. Although a per capita
requirement may not fully reflect efficient water use, to date no
one has yet developed a clearly superior alternative to the pres-ent
system. However, the Department is in the process of deve-loping
an amendment to the per capita provision which may provide
an alternate measure of groundwater conservation for municipal
uses. Therefore, the Department agrees that the per capita con-servation
requirement in the Code should be reviewed.
The Department disagrees with this finding on the ques-tions
of improper application of the existing statute and. whether
the statute works against the safe yield goal. In fact, the
Department has properly interpreted the statutory requirement for
reasonable reductions in groundwater use per capita in adopting
the management plans. Arizona's desert environment is subject to
great fluctuations in available surface water supplies, including
CAP supplies. Groundwater tends to be available on a more con-sistent
basis, even when surface water or other renewable sup-plies
are severely curtailed. In determining what constitutes a
reasonable reduction in groundwater use, the Department has had
to consider that, in practice, the amounts of groundwater used
each year will vary unpredictably over a ten- year management
period, depending on what renewable supplies are available.
Therefore, the Department has adopted a per capita measurement
for groundwater reductions by setting a reasonable level of total
water use.
In drought years, when renewable supplies are not avail-able,
the entire amount of water served by a municipal provider
may be groundwater. In wet years, when renewable supplies are
relatively abundant, the Department effectively subtracts the
renewable supplies used from the goal of the total water use
rate. The remainder is the amount of groundwater that may be
used based on reasonable reductions in use.
Only the groundwater portion of the total water used is
subject to the strictures of the management plans. However, the
Department cannot ignore other water used in determining whether
the groundwater use was reasonable.
An example will illustrate how the per capita rate re-quirements
work. A municipal provider may have served 300 gal-lons
per capita of water per day ( GPCD) to its residents in 1980,
with one- third of its supply surface water ( 100 GPCD) and two-thirds
of its supply groundwater ( 200 GPCD). Its goal for total
water use for 1987 might be 280 GPCD, without regard to whether
the groundwater portion of the supply remains at 200 GPCD, in-creases,
or decreases. The municipal provider would be in com-pliance
with its goals in 1987 if it used 280 GPCD or less, in-cluding
all sources of water. Thus, the provider would not have
been penalized if 1987 was a drought year, the surface water
portion of its supply was reduced to 50 GPCD, and groundwater use
was increased to 230 GPCD to make up the difference. On the
other hand, if 1987 happened to be a wet year so that 200 GPCD of
surface water was used, the municipal provider would not be in
compliance if it also served 180 GPCD of groundwater, for a total
water use of 380 GPCD. In that case, even though the groundwater
portion of the GPCD was reduced by 20 GPCD, the reduction would
not be reasonable because it would be without regard to increases
in other water used.
The Department's interpretation of the municipal water
per capita requirements of the Groundwater Code is the only ra-
tional way to deal with a variable water supply. While the De-partment
enforces only against use of groundwater in excess of a
GPCD goal, the Department must consider groundwater use against a
background of other water use.
The Department's policy of taking surface water into
account in determining what groundwater use reductions are rea-sonable
does not work contrary to the Code's safe yield goal. A
city or other municipal provider is never penalized for increas-ing
the percentage of its surface water use. However, a provider
is not rewarded for increasinq its use of surface water if the
provider also wastes groundwater. By requiring that all ground-water
use be based on a conservation standard, the Department is
moving in the direction of the safe yield goal.
E. Other Findings.
The Department generally agrees with the other findings
of the need for more comprehensive water management, regulatory
authority over effluent, incentives for the increased use of non-groundwater,
and the benefits of a metropolitan, regional or
state- wide water district. The Department is working now to
develop legislative initiatives on these matters.
F. Study Commission Recommendation.
A study commission to address changes to the Code is
unnecessary and undesirable. The Department regularly convenes
an ad hoc " rump group" to develop consensus on changes needed to
the Code. To the extent that complete consensus is not possible,
the Department has worked with members of the water community to
develop legislative changes in the public interest. This pro-cess,
generally led by the Department, has resulted in changes
such as the recharge project law and the restrictions on artifi-cial
lakes.
The Code was the result of numerous negotiated compro-mises
and agreements. Opening up the process to review may lead
to requests for basic structural changes to the Code which could
threaten the accomplishments of the Code to date. The Code
should not be exposed to the dangers of opening it up to the
ripple effects of people all wanting their pet problems solved at
the same time. Overall the Code has been effective. It has only
been in effect for nine years. To decide to make major changes
at this point may be premature.
Finding 11: A Stronger Enforcement Proqram May be
Needed.
The Department agrees that a stronger enforcement pro-gram
may be needed. Through review of available reports and
documents, follow- up on reported complaints about possible viola-tions,
and use of satellite photography generated by other enti-ties,
the Department has developed an enforcement program which
fully utilizes the time of its staff. The compliance and en-forcement
program has been successful in resolving hundreds of
suspected cases of violations each year since 1985. Moreover,
this program has been successful in establishing determinations
and resolutions of violations without resort to the court appel-late
process in all but a handful of instances.
Despite this success, there are indications that addi-tional
enforcement activities are desirable. Random field in-spections
and record audits would further insure widespread com-pliance
with the Groundwater Code. However, the Department now
lacks the staff to do these random checks at all, much less in
statistically significant numbers. Therefore, the Department has
requested additional funds for the operations and compliance
( enforcement) effort.
Finding 111: More Effort Is Needed To Protect The Pub-lic
From Hazardous O ~ e nWe lls
The Department agrees that more effort is needed to
ensure that open wells are capped. While the Department has
identified hundreds of open wells and- has adopted an emergency
rule to require owners to cap open wells, the Department lacks
the staff to enforce timely and complete compliance.
The Department would not support funding the additional
effort either from the enforcement fund or from a self- supporting
open well fund. The groundwater enforcement fund now supports a
full- time enforcement attorney. Penalties would have to be
raised to a publicly unacceptable level to finance additional
personnel from that fund, or from a self- supporting open well
fund. The Department has requested additional funds to staff the
effort which is needed. Finally, the Department agrees that it
would be desirable to require reports of open wells when water
rights are conveyed, and will work to implement that recomrnenda-tion.
Finding IV: Groundwater Withdrawal Fees.
The increase in the groundwater withdrawal fee to cover
half of the Department's administrative costs is one way to in-crease
taxes in light of tight budgets. Such an increase would
also provide an incentive for uses of alternative supplies of
water.
Finding V: Water Rights Claimants Should Support a
Greater Share of the Adjudication Costs
The Department disagrees that claimants will benefit
more than the general public from water rights adjudications.
Because the two general adjudications encompass almost all water
uses in Arizona except those supplied by the Colorado River,
nearly all of the general public is represented. Everybody uses
water, and individuals who did not file their own claims are
nevertheless generally represented by the claims made by their
water provider. For example, the City of Phoenix filed claims on
behalf of all those it serves. In fact the largest entities, who
represent the interests of many individual water users, are the
most active in the adjudications and have an acute interest in
bringing certainty to their rights in order to facilitate plan-ning
for increasing future needs.
The draft report implies that the only purpose for the
adjudications is to settle Indian claims. While that may have
been the primary motivation behind the petitions for adjudica-tion,
there are many instances of uncertain water rights and
conflicts among non- Indian water users which have needed resolu-tion
for many years. The fundamental benefit of the adjudica-tions
is certainty of water rights for both Indian and non- Indian
water users. Benefits accrue not only to the individual water
user, but also to the state as a whole because the determinations
made by the adjudications will be necessary in order to proceed
with meaningful water resources planning and management in
Arizona.
It is also stated in the draft report that the Depart-ment's
cost for administering the adjudications has increased
greatly in recent years. The costs have increased greatly since
1983 because that is the year that the U. S. Supreme Court's rul-ing
first made it certain that the adjudications would take
place. The Department has been spending a significant percentage
of its budgetary authority in building the Adjudications Division
to an adequate level since then, and, as the finding correctly
points out, the necessary staff level has not yet been at-tained.
The Department has always been aware of the relative
magnitude of the effort that the adjudications would impose on
the agency. What could not be anticipated were the specific
requirements which the courts have established for the Depart-ment's
technical assistance. These have been reached as a result
of litigation by the claimants.
Under the section " Precedents for ' User' Fees," there is
discussion relative to the Texas programs for collecting fees to
support a water master agency. That program and our current
program of adjudicating rights are not comparable. The current
Arizona statutes provide that the Director of the Department will
administer and enforce the final decree after the adjudication.
This effort, which may involve water masters, is several years in
the future. A fee to be assessed to water right holders for
administration, as determined in the decree, would make sense,
but it is premature to develop that type of program at this time.
The Snake River adjudication is cited as an example of
precedent for user fees. The primary impetus behind that adjudi-cation
is to determine the rights of utilities to use water for
hydroelectric power generation. A large percentage of the total
fees collected were from those utilities. In the Snake River
system, hydroelectric power generation revenues are substantial
and payment of large fees to determine their relative water
x ghts is feasible and justifiable. The Idaho fee schedule was
only slightly higher than Arizona's and was also a one- time
assessment. Idaho has a substantial amount of water and there-fore
collected a large amount of money. The Department is not
aware of any state that continues to collect fees from claimants
in the adjudication to support the litigation.
The United States, on behalf of its various agencies,
has paid approximately $ 318,000.00 in filing fees for both adju-dications.
These fees, however, were paid under protest and it
is the intention of the United States, as noted in each of their
claims, to seek recovery of all fees paid in Arizona at some
point during or after the proceedings. In the Snake River adju-dication
the United States has refused to pay the filing fee
unde