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Real estate industry's clout produced 'pro-development' 1993 groundwater law

Real estate industry's clout produced 'pro-development' 1993 groundwater law

Many 1993 water law supporters now say they couldn’t have predicted the increase in suburban planned communities.

A 1993 water law that cleared the way for large-scale development to sprawl far from existing cities was born out of the real estate industry’s political clout.

With that state law, builders and developers in Arizona’s three most populous counties can pump groundwater for their subdivisions when they lack access to renewable water supplies like Colorado River water delivered through the Central Arizona Project.

To compensate for the pumping, developers and homeowners in suburban Pima, Pinal and Maricopa counties pay into a replenishment district, which buys renewable water supplies and sinks them into the ground elsewhere.

The law, conceived and drafted by developers and their lobbyists, was endorsed or unopposed by most Arizona water interests.

Backers framed it as a compromise. But after the legislation passed, Arizona Department of Water Resources official Steve Olson told a Phoenix newspaper that it was “pro-development.”

The trade-off: Without this law, the water department would never have received the support from builders and developers needed to approve a related set of rules. Those rules carried out an earlier law requiring new urban developments to have a 100-year assured water supply — considered the most important section of the pioneering 1980 Arizona Groundwater Management Act, aimed at limiting over-pumping.

The replenishment program most likely was the brainchild of the late Jim Johnson, a longtime Phoenix real estate and mining attorney, said Maggie Gallogly, who worked for Johnson. He also was heavily involved in drafting the 1980 groundwater law.

Also involved in the 1993 law were Karl Polen, a top official for developer Robson Communities, and the late Michael Brophy, a lawyer for the Del Webb development firm.

The developers and their successors — Del Webb was bought by Pulte Homes — later were able to build major projects in suburban areas of Tucson and Phoenix because of the 1993 law.

Polen, at various times Robson’s senior vice president and chief financial officer, is today the Arizona State Retirement System’s chief investment officer.

“It was fair to say I was heavily involved,” Polen recently told the Star. “I worked at the time for Robson. We sponsored the legislation.” He declined to elaborate.

Gallogly, a Phoenix lawyer-lobbyist who helped draft the bill, detailed in a recent interview how it was put together, and defended the involvement of real estate lobbyists. She noted that even though it allows groundwater pumping for new growth, it still meets the 1980 groundwater law.

Many environmentalists and other critics say the 1993 bill allows for unsustainable development on groundwater.

But Gallogly defends it as “a solution to a problem” caused by what she saw as conflicting provisions of the 1980 law.

“In general and regardless of the industry involved, it is my opinion that those whose economic interests are at stake should be able to participate in drafting legislation that impacts their industry,” said Gallogly, who is now retired.

Longtime Sierra Club lobbyist Sandy Bahr wasn’t active in the Legislature in 1993. But she says the bill’s passage showed developers had influence out of proportion to their numbers.

“It was established by and for developers and to create and continue this perception that we can continue to build massive sprawling subdivisions without worrying about how dry it is or what the cost is from an ecological perspective,” said Bahr, director of the Sierra Club’s Grand Canyon chapter.

Individual aquifers can be depleted

The law’s roots date to 1988, when the Arizona Department of Water Resources proposed rules sharply limiting new growth in areas lacking access to renewable CAP water. Back then, under interim guidelines set to carry out the state's assured supply program, builders could legally drill 1,200 feet deep to prove an assured water supply. Many critics found that to be excessive and ADWR agreed the program needed to be made more stringent.

When the new rules hit the table, developers, builders and cities lacking access to CAP supplies objected. Their residents and customers had to pay property taxes — like everyone else in the three counties — to support operation of a project that they couldn’t use, they complained. Developers, builders and bankers also said the new rules would devastate the state's economy. So the state pulled the rules.

The bill that ultimately became law five years later set up the Central Arizona Groundwater Replenishment District to buy and recharge renewable supplies. The district became part of the agency that manages the CAP.

Attorney Johnson thought that letting new development pump groundwater while recharging renewable supplies elsewhere was consistent with the 1980 law’s “safe yield” requirement that pumping be balanced with recharge, Gallogly said.

The 1980 law requires achieving overall “safe yield” by 2025 in five urban state water active management areas. The management areas regulate groundwater pumping in the Tucson, Phoenix and Prescott areas, and in Pinal and Santa Cruz counties.

Johnson thought that recharging other aquifers would keep a new subdivision’s groundwater use “neutral” within these management areas, as long as pumping and recharge took place within the same areas, Gallogly said.

But the law allowed individual aquifers to be depleted, if total pumping equaled total recharge across an entire management area. In other words, if the entire Tucson area is in balance, it’s legally OK if pumping causes water levels to drop underneath Green Valley subdivisions.

The 1993 law also was aimed at resolving a conflict in the 1980 groundwater law between the safe yield requirement and provisions allowing use of groundwater to meet the assured supply requirement, Gallogly said. Developers said the conflict was that the law required balancing pumping with recharge even while allowing new subdivisions to pump groundwater deep into the aquifer.

Today, developers who join the district still must prove they have a 100-year groundwater supply, Gallogly said. The 1993 law allows them to pump 1,000 feet deep, a slight reduction from the earlier rules.

Today, many environmentalists and hydrologists are concerned that continued pumping of water for such development will eventually trigger subsidence, or settling of the water table, and ground fissures. But Gallogly disparages as “a bit impractical” their view that all recharge should happen near the pumping.

“I’m not a hydrologist, not a geologist. But I know from speaking with those folks, that since the active management areas are so large, there are places where it makes sense to replenish and it doesn’t make a lot of sense to have recharge facilities stretched out all over the place where people are pumping groundwater,” she said.

Former governor and Interior Secretary Bruce Babbitt warned in a recent interview that the district is heading toward a “train wreck” in which renewable water for recharge runs short.

Gallogly acknowledged that could be valid, but said she believes if you find a problem, you can always find a solution.

“The beauty of this system is that you can correct issues like this. You have time,” she said. “If there’s some adjustment that needs to be made, and we need to have recharge in specific locations, you can figure out a way to do that.”

“Sometimes you can’t go back and fix it …”

That view is “magical thinking,” said Kathleen Ferris, a co-author of a 2019 Arizona State University report that criticized the 1993 replenishment district law.

“I don’t think you can go back and fix it,” said Ferris, a former ADWR director who chaired a study commission that drafted the 1980 groundwater law. “There’s a whole lot of water stored in locations where they don’t know whether they can get it out of the ground. Sometimes you can’t go back and fix it after you allow thousands of homes to be built on a finite supply. Where are you going to get the water?”

Ferris also disputed Gallogly’s view that the 1980 groundwater law has a contradiction in allowing the use of groundwater to meet the 100-year supply provision while still requiring “safe yield.”

“The statute says you can use groundwater. It doesn’t say you can use an unlimited amount of groundwater,” Ferris said.

As for the original, 1980 assured water supply requirement, the groundwater study commission had a clear goal for it, Ferris recalled: “It wanted to push growth to where the water is.”

“Houses will keep going where they shouldn’t be going …”

Gallogly noted the water district bill was run past a wide array of interests before heading to the Legislature. Among them were the Arizona Municipal Water Users Association, representing 10 Phoenix-area cities; the Salt River Project utility, the Central Arizona Project, which now runs the water replenishment district; at least one private water company and an association representing private water companies, Gallogly said.

From Tucson, she consulted with officials of a newly formed Santa Cruz Valley water replenishment district: Sharon Megdal, its director, and Steve Weatherspoon, its attorney. The Arizona Department of Water Resources was also consulted, and Weatherspoon is the only one representing any of those entities who can recall opposing it.

“It was a lot of work, a lot of meetings. I can’t remember anybody being opposed,” Gallogly recalled.

The bill passed the House 37-16 and the Senate 27-2. In the House, opponents talked about the same issues that are being discussed today, recalled one, then-Rep. Elaine Richardson, a Tucson Democrat.

“We felt that if we just keep going on allowing building to go up unchecked, houses will keep going where they shouldn’t be going and water could become very scarce in the future,” Richardson said.

Megdal recalled supporting the bill in part because she felt to get the assured supply rules passed, there had to be a way for parties lacking CAP rights to meet the rules’ requirements. Also, the Santa Cruz water district would have been authorized to do the replenishment, although it later dissolved before any such replenishment occurred.

Weatherspoon, however, said that he felt, “You can’t forever store water in one place and recover it in another. I saw the problems coming."

Many supporters, including now-retired ADWR Assistant Director Herb Dishlip, now say they couldn’t have predicted the proliferation of suburban planned communities in the Tucson and Phoenix areas that started in the late 1990s and was only temporarily halted by the 2008 real estate crash.

Also, while everyone knew that a future Colorado River shortage was likely, it seemed a long way off. Officials of CAP, which runs the replenishment district, calculated in the late 1990s that it would have access to enough “excess” CAP water that nobody else wanted to compensate for all expected pumping until 2046.

Officials then were preoccupied with the large amount of CAP water that was going unused because farms and cities couldn’t afford it. There was a question of whether the project was economically viable, Dishlip said.

The groundwater replenishment law created a use for that water — putting it in the aquifers — so California couldn’t take it.

This year, with the Colorado River on the edge of shortages, no “excess” CAP is available for the replenishment district. And environmentalist Bahr said officials should have planned for shortages far earlier.

“They knew in 1993 that the Colorado River was overallocated. We knew about climate change/global warming then, too,” she said. “The state has a history of having a boom and bust real estate market, so they knew there would be another boom.”

Contact reporter Tony Davis at or 806-7746.

On Twitter: @tonydavis987.

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