Interstate water storage deals violated state law, former Arizona water chiefs say

Two former Arizona water directors told the State Auditor General’s Office last year that the agency that runs the Central Arizona Project exceeded its authority under state law.

The former directors, Rita Maguire and Herb Guenther, said recently that they told state auditors the Central Arizona Water Conservation District (CAWCD) legally overstepped its bounds.

The district did so, they said, by negotiating two rounds of water-storage deals with Southern California’s Metropolitan Water District (MWD) and a Nevada water agency in the 1990s and a third deal with the Southern California district in 2015.

The Arizona Department of Water Resources (ADWR) wasn’t informed of these deals until they had either been approved or until negotiations were far along, Maguire told the Star, adding that she’s concerned about this deal setting a precedent for future Colorado River users to ink similar deals on their own.

“It’s the state of Arizona’s entitlement to Colorado River Water. The CAWCD is a delivery agent, delivering the water on behalf of their customers,” Maguire said. “Their customers are only in three counties. If they can do that, what is to prevent other users from doing the same?”

Along the Colorado River in Arizona, plenty of parties have the same or even more senior rights to river water as the CAP does, said Maguire. They include the cities of Kingman and Yuma and the Yuma irrigation districts, among others.

“If they acted like CAWCD cutting deals with the Metropolitan Water District, that has ramifications that could affect the state,” she said. “That’s why it’s important that the state has oversight authority, to make sure everybody’s interests are attended to.”

Current ADWR Director Tom Buschatzke also raised concerns to auditors about what he termed a questionable action: that the Central Arizona Water Conservation District’s general manager disclosed confidential information from a district board executive session. Under state open meetings law, all information discussed in executive sessions must remain confidential, with limited exceptions.

The auditors didn’t agree with any of the concerns. The audit concluded in December that the Central Arizona Water Conservation District is generally following the law and other established procedures for how it spends money and manages the $4 billion CAP water project.

A CAWCD spokeswoman, Crystal Thompson, said the district properly coordinated its efforts on the 1990s deal with the state water department. The 2015 deal was never consummated, but the district fiercely defended its legality last year when it became publicly known.

This dispute is now being addressed in new legislation.

A bill introduced recently by state Sen. Gail Griffin, a Sierra Vista Republican, would require legislative approval of any transfer of Arizona water out of state.

It would also require ADWR and the three-county CAP water district to notify each other if they’re involved in any Colorado River water negotiations, including interstate agreements or agreements with the U.S. government.

Two weeks ago, the Star reported that the U.S. Bureau of Reclamation had told state auditors the CAP water district has illegally diverted Colorado River water that should have gone to Indian tribes to a related agency that recharges water into the aquifer for new development.

Jeremy Weber of the Auditor General’s Office said it can’t comment on such allegations beyond what’s in the audit.

Specifics of the latest allegations:

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• The 1990s deals involved the Central Arizona water district, Southern California’s Metropolitan Water District and the Southern Nevada Water Authority. The agencies set up an interstate water-banking program, in which the Nevada and California agencies could store 80,000 acre-feet of their river water underground in Arizona and recover it later.

Maguire objected, she said. She was the Arizona Department of Water Resources’ director from 1993 to 2001 under Govs. Fife Symington and Jane Hull. Today, she consults with the department on Colorado River issues.

In the 2015 deal, the CAP district was planning to store 60,000 acre-feet of Arizona’s Colorado River water in Metropolitan Water Department facilities, get $17 million from the MWD and get it back if and when a river water shortage is declared.

In the 1990s, the Central Arizona district “was informed from the beginning” that it lacked authority to engage in interstate transactions involving the state’s Colorado River entitlement, Maguire wrote the Auditor General’s Office last August. “Yet, over the years, they have continued to violate legislative direction on this issue.”

But the arrangements approved in the 1990s not only were legal, they helped replenish farmers’ declining aquifers in Central Arizona, CAP district spokeswoman Thompson countered.

The Nevada and Southern California agencies paid the Central Arizona district to store and recover that water later. The program was carried out in accord with the 1963 Arizona vs. California U.S. Supreme Court ruling and with federal rules for interstate banking, Thompson said. The water was used on several Pinal County irrigation districts’ farmland, Thompson said.

“As a result, those agricultural districts received Colorado River water they would not have received otherwise, reducing their reliance on groundwater,” said Thompson.

To Maguire, that argument is like saying “the end justifies the means.”

• Guenther said he felt the Central Arizona water district inappropriately bypassed the state water agency when it negotiated the 2015 deal with the MWD, known as the “Met.” That deal fell through after ADWR objected.

“You don’t go cutting a deal with your competition without going through the governor’s legal representative on all water issues,” said the now-retired Guenther, water director under Gov. Janet Napolitano in the 2000s.

Buschatzke has said federal interstate water-banking rules only allow agencies to conduct such deals if state law also authorizes them. He and CAWCD officials have strongly disagreed over whether Arizona law allows the Central Arizona water district to do this.

The December audit quoted an unnamed CAWCD attorney as saying that if the 2015 deal had gone through, the district “would have continued to work with the ADWR to develop it and follow the process outlined in federal regulations.”

Bringing up these past discussions now “is divisive and distracts from moving forward together to improve Arizona water management — especially given the continued risks in the Colorado River system,” said CAWCD spokeswoman Thompson.

• Buschatzke told the Star that he raised concerns to the auditor’s office about a 2016 email that CAWCD General Manager Ted Cooke sent to officials of the Metropolitan and Southern Nevada water districts about executive session discussions CAP’s board had about the water storage deal that later fell through.

The audit, however, only discussed an unspecified executive session issue regarding water district board meeting minutes. It said the auditors’ “finding and associated recommendations were communicated directly to the district board,” but didn’t elaborate. The CAWCD didn’t respond to a question from the Star about this matter.