Residents say this Arizona water transfer bill threatens La Paz County's future

State lawmakers are considering a proposal that would allow a New York-based investment company to sell water from rural La Paz County to more urban parts of the state. The McMullen Valley Basin is what’s known as a “transfer basin,” which allows the water in it to be moved elsewhere.

There are two others, including the Harquahala Basin. Last year, lawmakers approved a bill allowing water to be moved out of that basin.

Phoenix used to own the land in question but sold it in 2012. A few years ago, a firm called Water Asset Management bought it. The company is supporting the bill in the state Legislature.

Stan Barnes is the lobbyist for WAM. He told a Senate committee last week that the company plans to scale back farming water-intensive alfalfa in McMullen, in favor of less thirsty crops. And, he said, if the measure goes through, there’ll be less water being used from McMullen than there has been historically.

"My client is dialing that back and plans to get rid of all alfalfa. Because in spite of it being the money crop for farming, in the end, the water is more valuable some day to move, as needed by the population centers of Phoenix, and Tucson and Pinal County," Barnes said.

The bill sets limits on how deep the wells could be and how much water WAM could sell to Valley cities. Barnes told lawmakers it’d benefit the roughly 3,000 residents of the area, which includes the communities of Wenden and Salome.

"Local citizens will have a water security they do not have today, because my client has the revenue to spend to make sure they do. And has the political incentive because we know that we cannot get through this process and get a governor's signature if we don't do something about the couple of thousand of people who live in the Wenden-Salome area," Barnes said. "So, for the first time, my client is going to spend millions of dollars and is seeking an agreement with the three main water companies that serve customers there to help prop up their systems, provide financial relief where they need and provide wet water if that's what they want. We're going to do more for locals than has ever been done."

But some of those residents aren’t interested in that, and are urging lawmakers to reject the plan.

Gary Saiter lives in Wenden and serves as chairman of the board for the Domestic Water Improvement District in Wenden. He’s also the board chairman of the Water Alliance for La Paz County. And he’s not a fan of the proposal.

Full conversation

GARY SAITER: Well, in my thinking about this bill, it represents an extreme example of poor planning for the urban areas of this state. Back in the early '80s, when some of this water legislation was passed, then again in the '90s when the transport aquifers were created, that was the state essentially taking the rights of rural water residents away, of rural Arizona.

And that meant we no longer had the right to use the water the way that we chose to. And my question has always been, that's great. When you do that, we sacrifice and we may lose communities and you may survive. But what are you going to do 30 years from now when that water runs out?

BRODIE: So do you see this as sort of kicking the can down the road on the state's part?

SAITER: Absolutely. And we weren't too concerned in McMullen Valley because the original bill was written for the city of Phoenix. City of Phoenix, back in the early '80s, bought 13,000 acres here in the, in McMullen Valley. In 2012, apparently they decided that they no longer wanted to own that for whatever reason that was.

And they sold these 13,000 acres to international Farming out of North Carolina, I believe, and they almost immediately started growing a lot of alfalfa. Some people have said, oh, we've grown alfalfa forever. That's not true.

About two years ago, a company called Water Asset Management, a hedge fund out of New York City, decided to take advantage of the water shortage in Arizona and the laws protecting rural groundwater and purchase those 13,000 acres for $100 million fully with the intent of changing the statute, which hence is House Bill 2758, so that they would be allowed to transfer water. We weren't really concerned about it before because it was written for Phoenix. Now with this change, now we're in, we're being threatened.

BRODIE: What do those threats look like? You alluded to maybe communities going away. Like, is that a realistic possibility?

SAITER: Absolutely. The average well depth in McMullen Valley is 572 feet, according to ADWR. And we use more water than we should. This, this aquifer is in a deficit, but WAM continues to tell us that, you know, it's going to be OK and they're going to slow down the water usage. But if you look at the math, there's no way for them to do that unless they eliminate agricultural activities completely, which is a whole other problem.

They have the right to take up to 33,000 acre-feet per year from the aquifer, in addition to the 59,000 acre-feet that ... we already use in the valley for agriculture. And a tiny, tiny portion for people. And they have the right to take the aquifer down to 1,200 feet. At 1,200 feet, it's incredibly expensive to drill wells low enough to be able to access that water. And it's incredibly expensive from an electric, from the cost of electric to actually withdraw that water from the aquifer at that depth.

So that puts the 800 people in the valley that rely on private wells, their wells would be dry in eight to 10 years, and the aquifer itself will be at 1,200 feet in about 35, 36 years. And then heavy, hard decisions have to be made by people as to whether they're going to stay, figure out some way to get water, which would be incredibly difficult, or just go.

BRODIE: Well, you live in that area. What would you do?

SAITER: I'd probably move.

BRODIE: So one of the arguments that Water Asset Management is making, and you kind of alluded to this, in the sense that you know your area is using more groundwater than maybe it should. One of their arguments is that this would lead to less groundwater depletion, that the aquifer would be in better condition if they were taking the amount of water they plan to take out of it than what's currently being taken out of it. What do you make of that argument?

SAITER: I've been asking them for two years for information to back that up. And the simple math is that unless they eliminate all agricultural use, there's no mathematical way to achieve that.

BRODIE: I'm curious also what you make of some of the, I guess what supporters of this bill are calling protections for residents of the McMullin Valley in terms of how much water they can take and the limits on how deep they can go and that sort of thing. Based on your chuckling, it sounds like you don't really think much of them.

SAITER: Well, I don't think much of them at all because, hey, we're going to, we're going to take your water, but we're going to protect you and we're going to give you more water. Gail Griffin specifically has several bills that she says will take care of us in the Valley. They don't.

My concern is that when House Bill 2758 passes, if it does, then we have no leverage any longer to negotiate anything in terms of them taking care of our long term needs.

BRODIE: Is there something about the fact that the company that is involved in this is a hedge fund, it's based in New York City? You referenced how the city of Phoenix used to own this land. Would it be different in some way if it wasn't a New York-based hedge fund that was doing this, if it was some other entity, or maybe even an Arizona-based entity?

SAITER: Not in my mind. Years ago, five years, six years ago, whatever it was, everybody's hair was on fire about the Saudis stealing all of our water, growing alfalfa and turning into hay and shipping it to the Middle East. Well, the Saudis did nothing illegal. They were taking advantage of the laxity of groundwater regulations in rural Arizona.

So they weren't the bad guy. The bad guy was the Legislature. I put WAM in that same position. They're simply taking advantage of the laws that we have managing groundwater in rural Arizona to make money. I can't really blame them for that. I can't say they're the enemy. It could be anyone coming in and buying the land and being able to do the same thing.

The problem is inaction by the Legislature and not moving to protect the groundwater. You know, you have to ask the question, why is a family of four who wants to buy a new home in Buckeye or wherever it happens to be, why are their rights more important than mine? And I have to sacrifice my water and potentially lose my community just so you can live there?