Judge won't delay his decision on Arizona water rules

In a new order, Maricopa County Superior Court Judge Scott Blaney rejected claims by the Arizona Department of Water Resources that his ruling was likely to be overturned on appeal and therefore he should not enter a final order against the agency.

The judge was no more sympathetic to arguments by AWDR attorney Bo Dul that homebuyers will suffer "irreparable damage'' if the agency cannot enforce the rule he invalidated. That is based on the agency's claim that it could result in ADWR allowing some homes to be built and sold that really don't have a 100-year assured water supply required by state law.

"That is the exact harm the Groundwater Management Act was designed to prevent,'' Dul wrote.

Blaney was not impressed.

"The defendants' concerns are not consistent with the facts,'' the judge wrote in his new order.

He said all his ruling does is require ADWR to use the rules that were in place back in 2023 to determine where homes can and cannot be built — back before the agency adopted the new policies that Blaney ruled in April were not done properly.

The new order most immediately affects efforts by developers to build homes in some communities on the edge of the Phoenix area. Homebuilding there was halted when the agency decided, using its new — and now invalidated — policy, that there is not a 100-year supply of water in the hydrological basin.

Broader significance

But there are broader implications going forward.

The order reaffirms Blaney's conclusion that ADWR is not free to make what he considered to be a significant change in the rules about where residential development can occur without going through the legal process that requires public hearings and other input. That effectively puts the agency on notice that it should not make any future efforts to bypass the rulemaking process when it decides where homes can be built in all areas of the state under its purview.

More immediately, unless overturned, it limits the future ability of ADWR to decide to curb home construction in other areas of the state based on its now-invalidated rules on how it wants to determine if there is sufficient groundwater.

And that is likely to take on more significance as the state loses much of its Colorado River supply and some communities are forced to tap into groundwater.

100-year supplies required

At the center of the issue is the requirement that developers seeking to build in "active management areas'' of the state — there are eight — must show there is sufficient water, generally defined as enough to serve the project for at least 100 years. That is a touchstone of the state's historic 1980 Groundwater Code.

The requirement is generally met by building within a city or a water company service area that already has its own certificate of assured water supply.

But outside those areas, developers had to show they had their own access.

In 2023, however, ADWR decided that it would deny the necessary permission for those developers if the agency's modeling indicated there is not a 100-year water supply — not just at the property but anywhere in the active management area. It concluded the water in the entire 5,600-square-mile Phoenix AMA could be guaranteed for only 96 years.

The agency also found that there were places in the basin where it would require drilling to more than 1,000 feet to access water.

Based on that new policy, the agency stopped issuing certificates in areas of Queen Creek and Buckeye where permits had not yet been issued.

Builders sued and won 

It was that change in policy that led the Home Builders Association of Central Arizona to sue — and to Blaney's ruling earlier this year finding the change was illegally enacted because it was unilateral and did not go through public hearings.

In her latest filings, Dul told Blaney he should delay his decision and leave the policy in place — and the limits on construction — while ADWR seeks review at the Court of Appeals.

She said the agency did nothing wrong, and that its decision did not amount to a change in the rules.

Dul said ADWR has always been required to consider the effect on "all existing users'' of groundwater throughout the basin and not just at the specific site.

Also, she said, the 2023 change came after "improved modeling'' showed that groundwater supplies in the basin already were overallocated. Further studies showed there were areas where the 1,000-foot rule to access water could not be met, she said.

"An agency does not 'change' its rule by considering updated technology and data,'' Dul told Blaney.

Attorney Sean Hood, representing the homebuilders, said that is misstating the issue. He said Blaney's earlier ruling does not require ADWR to disregard updated data.

What it does do, Hood said, is tell the agency it can't simply decide that a development in one area can't be built because ADWR decided without making formal rules that it was now going to consider the availability of water anywhere in the basin.

He also rejected the agency's contention it will be forced to issue certificates for development where there is no assured water supply.

That reflected what the judge already decided. "A government agency cannot be allowed to rationalize a new rule by camouflaging it as just a new implementation of an old rule,'' Blaney wrote in his earlier ruling. 

At this point, it is only the Phoenix AMA where the agency has done basin-wide studies and attempted to halt development. But future studies of other AMAs, including in Pima, Pinal and Santa Cruz counties and Prescott, could lead ADWR to reach similar conclusions about water availability.