Tens of thousands of families from Tucson through Pinal County to Phoenix have been living on borrowed water for years.
Payback time is coming.
The Arizona Legislature is considering a bill that would authorize a little-known agency to sell up to $500 million worth of bonds to buy new water supplies to serve these suburban residents.
The bonds, ultimately, would have to be repaid by residents.
In Pima and southern Pinal counties, they live in suburban areas that include parts of or all of Oro Valley, Green Valley, Sahuarita, SaddleBrooke, SaddleBrooke Ranch, Red Rock and Tucson's southeast side.
One reason the bill is being seriously considered is that most of these homes have no assured, long-term water supply.
They are being served by a short-term supply that could disappear in a few years to a decade from now because legally, it belongs to somebody else.
The debate on the bill has unearthed some long-simmering issues swirling around the three-county Central Arizona Groundwater Replenishment District.
The district has signed up more current and future housing developments in Pima, Pinal and Maricopa counties than it has long-term water supplies for.
By 2025, it will be legally bound to provide more renewable water supplies to its customers than the city of Tucson would be serving.
The legislation has stirred fears that customers in the district will ultimately be subject to "rate shock" once the water supplies are on line and the bills come due.
Today, no one knows for sure when the district would acquire water, where it would come from, what it would cost or what the repayment terms would be.
Among possible sources are farmers along the Colorado River, treated sewage effluent, desalination of seawater or salty, brackish groundwater, or rural areas that have groundwater supplies.
The only thing that's clear is that the cost would be higher than the district's current water supplies from the Central Arizona Project, which uses Colorado River water brought by canal.
But backers of the bill say the measure is aimed at preventing what one critic calls an economic "time bomb" from going off, by spreading the costs of new water over a long repayment period.
law set limit
The need for more water springs from a long-standing problem in enforcing a key measure of the state's pioneering 1980 Groundwater Management Act.
As a way to keep development from sucking away the state's dwindling groundwater reserves, the law required that new growth within state water management areas in Tucson, Phoenix and Pinal County, among other places, prove an assured 100-year water supply. At the time the law passed, it was hailed as the toughest of its kind in the country.
But on closer examination, the assured supply law didn't have that many teeth. It allowed new growth if a developer could show that the 100-year supply didn't cause the water table to drop more than 1,000 feet. Since subsidence - sinking of the ground that can lead to cracks and fissures - can occur before that point, critics immediately took aim at the rules. The Arizona Department of Water Resources announced in the late 1980s that it would toughen them by requiring that new developments provide a renewable supply, such as CAP water.
But developers fought back, arguing that the new rules would shut down growth in the very places where the market was pushing it. Those are suburban areas located too far from the CAP canal to make it economical to tap into it.
Higher bills likely
In 1993, developers helped push through legislation creating the Central Arizona Groundwater Replenishment District. That law said a new development could meet the assured-water-supply rules by pumping groundwater, if it joined the district and the district bought and recharged renewable supplies. That was OK even if the recharge - putting water on the ground to seep into the aquifer - occurred miles from where the groundwater was pumped for the houses.
Without the district, "The rules would have stopped virtually all development outside of the boundaries of designated water providers" such as Tucson Water, says Mike Pierce, a water lawyer who has represented developers, cities and private water companies.
"I don't think there was the political will to do that in the state," Pierce recalls, adding, "The rules are good and what they are trying to accomplish is the highest standard in the United States. It is a lofty goal, but it takes effort and money to achieve."
But the replenishment district is a time bomb, likely to erupt in the form of sharply higher water bills once the district buys new supplies, says Priscilla Robinson, a retired environmental activist and consultant for Tucson Water.
"It benefited people who were building houses and wanted to sell the houses. They weren't going to be around when the bills came due," she says.
Creating the district let developers satisfy, in theory, the assured-water-supply requirements, while transferring to a public agency the obligation to come up with the water, adds Robert Glennon, a University of Arizona law professor and a longtime critic of the replenishment district.
Today, the district's water recharge activity is relatively modest - about 40,000 acre-feet annually to serve 96,000 homes statewide, including 26,464 homes in the Tucson area. An acre foot is enough to serve about three households for a year.
But the district expects that obligation to grow rapidly over the coming decades - to 227,000 acre feet annually by 2035.
More than 260,000 homes, the vast majority still unbuilt, lie within the district's boundaries. The district expects to have as many as 340,000 homes by the 2030s.
Most of the district's water supply is called "excess CAP," which is legally owned but not currently used by other governments, mining companies, farms and others. Someday, the water's owners will claim it, and the district won't be able to use it anymore.
This problem surfaced at a recent legislative hearing on the bonding measure.
Rep. Daniel Patterson, a Tucson Democrat who ultimately voted for the bill in committee, criticized an attorney testifying in support of the bill for not discussing the need to make better use of existing water supplies.
"We don't have water supplies; that's the problem," answered Suzanne Ticknor, an attorney for the Central Arizona Project, the replenishment district's parent agency. The replenishment district "is operating now on borrowed supplies," she said.
Some of the excess CAP water now available to the district could be cut off sooner than expected, if a CAP shortage is declared, which the project's staff says could occur as soon as 2012.
"If there is a shortage, we don't fill all the pools, and the board will make a decision on which pool to fill," says Tom McCann, an assistant general manager for the project.
Whether the bonding bill is the best solution is a question dividing even environmentalists, who have long disliked the replenishment district.
The bill would double the bonding capacity for the CAP and the replenishment district from $250 million to $500 million.
The soonest bonds could be sold would be in two or three years. District director Cliff Neal says the district is not about to go out and spend $500 million right away. First, it would have to decide which supplies to target, and it would buy the water in phases as needed.
But because the district needs the new water supplies in any case, the bigger question surrounding the bill is whether the financing will be done upfront or over time, which costs customers less now, Neal says.
Charging the tab to the homeowners amounts to a subsidy for developers of subdivisions within the district, says Nancy Freeman, a Green Valley water activist, because the developers never had to pay up-front. She says the bill should not be passed until it's clear how much homeowners will have to pay.
To law professor Glennon, the timing of buying the water - years or decades after the developments were approved - is troublesome.
"People who bought the land will get a bill somewhere down the road for expenses that they never much thought about, and there's no way they could even calculate it," he says.
There's no way to protect current homeowners from the effects of decisions made nearly 20 years ago to form the replenishment district, environmentalist Robinson says.
"We can't protect people from reality," she says. "Reality is going to bite."
WHERE THE PROPOSAL STANDS
The state Senate passed the bonding bill for the Central Arizona Groundwater Replenishment District by a 24-6 vote Feb. 15. The House Water and Energy Committee approved it 7-0 Feb. 25. It's awaiting action on the House floor.
Contact reporter Tony Davis at 806-7746 or email@example.com