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'We need to get good partners' to secure water for AZ, agency says

The head of a state agency that’s looking for new water sources for Arizona is unhappy with the governor’s budget proposal.

Two years ago, then-Gov. Doug Ducey and Arizona lawmakers agreed to invest $1 billion in a desalination plant, among other projects to augment Arizona’s water supply. The money was to be allocated over three years. But last year’s budget included roughly half of the $333 million expected for the Water Infrastructure Finance Authority, or WIFA. And Gov. Katie Hobbs has proposed just $33 million for the agency in her plan for the upcoming fiscal year.

All of that has Chuck Podolak concerned. He’s WIFA’s director, and has been speaking out about the need to fully fund his decades-old agency.

He joined The Show to talk more about it and the conversation began with where the authority is in the area of trying to find new sources of water for the state.

CHUCK PODOLAK: Yeah, we are, we are looking and we're looking at all options, and I think that's what has been the really the theme of the last year is moving ahead in a methodic way to make sure that we're looking for answers that can help support customer need in Arizona. And we're doing that in a way that makes the most sense for Arizona.

MARK BRODIE: So desalination was obviously sort of the, the big headline that a lot of people know about. But are there other areas of augmentation that you're also looking at?

PODOLAK: Yeah, absolutely. There was, there was a lot of talk about in 2022 about the possibility of doing a desalination project in Mexico and bringing water into the state. And that's one option that has been looked at in Arizona and frankly, throughout the West, for quite a long time. Back in 2019, the governor, there was a governor's group that published a report that looked at the whole menu of options for augmentation, when augmentation really I think of that is how do you grow the pie? How do you make the pie of water in Arizona? Bigger bringing water in from ocean and California, doing advanced reuse in California and trading some water, bringing water in from Mexico. People have talked about looking to the Missouri, the Mississippi at excess floodwaters and bringing that in. All complicated options, all very difficult to bring to fruition, but all things that, that in our mind are still on the table. 

BRODIE: So as you say, those are all kind of complicated, difficult things to do, but are some easier to do than others?

PODOLAK: Probably everything really has its pros and cons you know. Doing projects across the border across an international border may be more complicated than across a state border. Doing projects across multiple states may be harder than a single state. The water that we would bring into Arizona all has to come from quite a distance. And so how do you do that? Do you physically move in a pipeline? There are some really cool ways to do like exchanges or trades, take some of Colorado, California's Colorado River water in exchange for giving them some water. So yeah, there's, there's, there's pluses and minuses, and I think what, what we're at the stage of doing it right now and with us, rather than using our instinct or gut feel is to say, OK, how do you do the, how do you really analyze these? How do you look at the pros and cons, what's the best? And that, that's what we're in the process of doing right now.

BRODIE: Does anything seem to be sort of, pardon the pun, floating to the top at this point in terms of most feasible and also maybe the most cost efficient.

PODOLAK: Not right now. I think, you know that you do have some people with vested interests, you have some people that have strong feelings about what they think should happen, who would advocate for some things to float to the top, but we really haven't gone in far enough to say, with integrity and with rigor that we think this is the best option. That's where, where we still keep in a very open mind right now.

BRODIE: And it seems as though when you talk about potential complications, you have sort of the political issue in terms of international or interstate kinds things. But also then the technical like, how do you get the water, how do you treat the water if that's something you're doing? Do those both have equal difficulty or are there some options that maybe are hard to do politically, but technically would be easier to do, or vice versa?

PODOLAK: I would say the challenges that keep me awake are more on the how do you get things permitted? How do you get the political and diplomatic will to make these things happen? We know how, we engineering scientists know how to, how to clean water. We know how to take things out of the water and reuse water. We know how to take salt out of the water and use seawater. So it's less of an engineering. And we know how to move water through pipes. The engineering of it is, is less daunting than how do you get the buy-in from a whole bunch of different areas and jurisdictions to make something like that happen

BRODIE: When you talk about buy-in, there's also been a lot of talk about increased conservation in terms of both agriculture and sort of city use and homeowner use. Where are we on that? And how does that sort of fit into the overall water picture here?

PODOLAK: Overall, doing good on conservation. We have, there's been a real focus on water in Arizona for the last few years, and I think there's a sense in some people's mind that now we need to start doing conservation. And what gets lost is there's been incredible conservation going on in the agricultural space in the cities for decades in Arizona, which isn't to say that we don't have more room to go. And that's one thing that we've been doing while we've been looking at this augmentation focusing on that part of our mission. We also have a mission to advance conservation in the state. We have $200 million to distribute over the over the course of a year period to fund really cool innovative projects that save water in Arizona. And we're well in the process of putting those that money to work. 

BRODIE: So let me ask you about money because you've been pretty critical of the governor's proposed budget in which she set aside about 30 or so, some odd million dollars, which is far less than what the agency was hoping and maybe even expecting to get this year. Let's say that that is or something close to it is what comes out of the final budget. What does that mean for WIFA?

PODOLAK: It means it may make it harder. And I think that's, that's what we're trying to convey both to the governor and to the legislators is in this very difficult time with the, the state revenues are in a tough spot. And our message is, don't forget about water, don't back off on our long-term commitment to, to go find new supplies. And so what we want to do is to make sure that through all the compromise that will be required down at the Capitol, that people don't question our commitment to this customers of this potential new project. Don't lose faith that it can happen. People that partners that we will work with in the private sector don't lose faith that the state of Arizona is a good partner on this. And that's what we're really trying to get interject in the conversation.

BRODIE: Do you have the sense that that is starting to happen that potential customers or other private entities that the state might be working with are starting to question Arizona's commitment.

PODOLAK: Yes, I think it is. We, in 2022 there was a commitment by the state of Arizona to not only stand WIFA with these new authorities, but to back that up with a billion dollars and that was paid in three installments. The first year it was fully paid, the second year, some of that money was about half of that money was diverted for other water projects. And that started to raise some questions about, well, are you a good partner? How much, how much does WIFA have, how much does the state of Arizona have to bring to a partnership like this? And I think that questioning continues as we work through what whatever happens this year.

BRODIE: If WIFA ultimately gets the billion dollars, is that enough, for example, to, to build a desalination plant and to operate it for some amount of time?

PODOLAK: No, it's not. And that, that really goes to the core of why we need to get good partners. You know, people have kicked around ideas and, and you know, we've seen inflation and, and just the cost of building things go up. But, you know, maybe we're talking a $5, $10, $15 billion kind of project. The state can bring some money to the table, but really, we're looking for private partners to bring money to the table and for them to know that they have a partner, we have to be serious. They have to know that we're in this for the long haul.

BRODIE: How big of a role does the actual money play in that? I mean, I would imagine that anybody who is in the water arena knows that Arizona is in the situation it's in and is looking at augmentation. So given that, how significant is it, maybe if the amount of money that you thought you would be getting, isn't there relative to everything else?

PODOLAK: So, so that's a great point. And I think it, it may be less the final dollar amount and more the security of it. So, if we knew for sure that, you know, you had X amount of money, that's what we bring to the table with a partner when that X amount of money is up in the air. I think it, that's, that's the real difficult part. 

BRODIE: What have you heard from either the governor's office or from other sort of in the water community here in Arizona about the fact that you are speaking up about this and in some cases being a little bit critical of what the governor is proposing here.

PODOLAK: Well, we all have different roles. You know, the governor, the, the legislators have a tough task of balancing a lot of competing interests. I have a different role. My role is, is tasked by, by the statutes, by the Arizona laws that set up WIFA to make this program work. And so what we're trying to do is to say this is what you need to consider if you want this program to work and that's what we're doing.

BRODIE: Sure. All right. That is Chuck Podolak, executive director of the Water Infrastructure Finance Authority, otherwise known as WIFA. Chuck, thanks a lot. I appreciate it.

PODOLAK: Thank you.

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Mark Brodie is a co-host of The Show, KJZZ’s locally produced news magazine. Since starting at KJZZ in 2002, Brodie has been a host, reporter and producer, including several years covering the Arizona Legislature, based at the Capitol.