The agency that operates the CAP wants to spend $34 million on farmland and water rights from a rural slice of northwestern Arizona along the Colorado River to slake the thirst of the growing Tucson and Phoenix suburban areas.

The Central Arizona Project’s governing board voted overwhelmingly Thursday to take the first key step toward importing the river water into the state’s midsection. But the agency is meeting fierce resistance from officials where the water would come from — rural Mohave County, although it's supported by home builders who want the water moved to central and southern Arizona for future growth.

Meeting at the Omni Tucson National Resort Thursday, the board OK’d a purchase agreement to buy seven farms in the Bullhead City area totaling 2,203 acres. The CAP district, which serves Maricopa, Pinal and Pima counties, will also get nearly 13,900 acre-feet of water rights from the farms, which are owned by a pair of New York City-based hedge fund firms. The measure was approved by voice vote, with Sharon Megdal of Tucson and Terry Goddard of Phoenix the only audible dissenters among the 15-member board. Another board member, Rod Lewis, recused himself, citing a conflict of interest which he didn't explain.

The board will vote on final approval of the deal in January, and the transaction would close in February if approved. The land and water rights are now owned by Water Assets Management LLC and Water Property Investor LP.

Opponents say the water transfer could bleed the economy of small towns along the Colorado River.

Gary Watson, chair of the Mohave County Board of Supervisors, told the CAP board, “The water you seek to buy and transfer is the economic lifeblood of our rural county in Mohave Valley. It is our very future and you seek to wheel it to three far wealthier counties for your own benefit. Our citizens demand that we protect their interests and oppose this action by all means.”

Critics also say it could set a precedent for future transactions, stripping even more water from on-river users for the benefit of Tucson and Phoenix.

Feeding PHOENIX’s ‘Voracious appetite’

“All of the state’s rural areas are at risk of Phoenix’s voracious appetite eating up all of their water,” said Maureen George, a Tucson attorney who represents the Mohave County Water Authority, which exists mainly to protect that area’s Colorado River water supplies.

“This is an issue of whether water speculators should drive the market or whether statewide public policy should set the market,” George said.

But an official for a sister agency of CAP that is shepherding the water transfer says the agency will take steps to insure it won’t harm the rural economy, and that it has already pulled off a similar water rights transfer in the Yuma area with no apparent ill effects.

The plan is for that agency, the Central Arizona Groundwater Replenishment District, to use barely one-third of the water it has the right to, and leave the rest for on-river use. The water district would lease the farmland it purchases to area farmers now using it, and offer money to those and other farmers to fallow some of their land to save water for the district’s needs.

“This deal will offer the farmers in Mohave County more flexibility if they can build a reliable revenue stream into their business plan,” said Perri Benemelis, water supply manager for the replenishment district, which tries to acquire renewable water supplies for future development. “Agriculture will go away if you can’t make a profit in it.”

CAP board members who supported the deal said they will work closely with Mohave County officials over the coming months to try to meet their concerns, and will start to develop a policy on how to handle future land and water transfers.

‘nothing secret’ about PRESSING water needs

“This is an issue that puts the board in a difficult position,” board member Jim Holway said. “Everyone’s always known there has to be more water supplies. There’s nothing secret about the fact that this is the board’s charge, and we are carrying it out.

“Personally, I wish this conversation had been started four years ago, but unfortunately, it’s now. It’s before us with a willing buyer and willing seller.”

This isn’t the first time the water district has gone after on-river water supplies to supplement the Colorado River water that’s already coming into Tucson and Phoenix via the 336-mile-long CAP canal.

In June, the district signed a lease agreement with the La Paz County town of Quartzsite for 1,070 acre-feet of water, or enough to cover more than 1,000 football fields a foot deep.

The water district expects to bring a third proposed deal of this kind to the CAP board in December, said Benemelis.

She declined to be more specific because the deal is in negotiations now, although she said it wouldn’t be from Mohave County.

Groundwater pumped for suburban areas

The groundwater district is under pressure to satisfy its legal obligation to round up enough water to satisfy expected future growth. The district’s purpose is to buy and recharge renewable supplies — such as Colorado River water — to compensate for groundwater that is pumped for people living in suburban developments that don’t get CAP water. These include the unincorporated suburban Tucson developments of SaddleBrooke and Quail Creek.

Today, the groundwater district is recharging more than enough renewable water to satisfy legal obligations to existing development. But by 2034, it is expected to need a little more than 86,000 acre-feet of renewable supplies, far more than the 38,600 it has available today.

That 38,600 is not totally secure because much of it is river water that would get cut off in a shortage.

“They are in a tough place,” said Leslie Meyers, Phoenix-area manager of the U.S. Bureau of Reclamation, who attended the meeting.

Goddard, a former Arizona attorney general, called this proposal "deja vu" all over again, reminding board members that back in the 1980s there was lots of talk about buying and moving groundwater from rural western Arizona to the Phoenix area, and one such purchase, the Planet Ranch in Mohave County, by the city of Scottsdale. That purchase sparked a statewide ban on more such groundwater transfers.

"All the very positive statements were being made then, similar to today, that it's part of our obligation, that it can be mitigated. I think we were wrong," said Goddard, who was Phoenix's mayor back then and was later the state attorney general. "It was an effort to move substantial amounts of future water of one area to guarantee the future of another. I don’t believe that’s good state policy."

But attorneys for homebuilding groups including the Southern Arizona Home Builders Association and for Pulte Homes strongly endorsed the Mohave County deal, saying the groundwater replenishment district's success in finding water supplies is critical to their industry and the economic development of Pima, Maricopa and Pinal counties that the district serves.

"It's just the kind of proposal that's needed for cities and subdivisions that rely on the (replenishment district) so they will have meaningful access to a reliable water supply," said Michelle Van Quathem, Pulte's attorney. "It's important that the CAGRD buy land to have meaningful control of the cost of water."

The groundwater district’s Benemelis sought to offer an olive branch to the Mohave County farmers. By using a fallowing program, the district hopes to maintain a “financially viable” agriculture economy there, she said. The fallowing program would be open to farmers who have historically farmed the area, and would employ dust and weed control and well maintenance to keep the farmlands and their infrastructure in working order.

But Mohave County’s Watson said this arrangement would forever lock those lands into agricultural use, blocking future residential, industrial or commercial uses that would be worth more money.

Attorney George noted that in 1990, the Arizona Department of Water Resources took what it called its “unequivocal position” that a large amount of river water, including most of what’s at issue in this current proposal, “be reserved for future municipal and industrial use along the river.”

If the CAP board seals this deal, there will be more hurdles ahead. The Department of Water Resources must make a recommendation on the proposal after taking public comment. Then, the Bureau of Reclamation will take more public comment and make the final decision, because it has the final say over the contracting of all Colorado River supplies.

It’s likely to be about 2020 before any water from this deal could come to the urban areas, Benemelis said.

Contact reporter Tony Davis at tdavis@tucson.com or 806-7746.