Moving Colorado River water from farms to cities spurs fight
A private company and the town of Queen Creek are proposing a water deal that would leave 485 acres of farmland permanently dry near the Colorado River and send the water used on that land to the fast-growing Phoenix suburb.
The company GSC Farm LLC is seeking to sell its annual entitlement of 2,083 acre-feet of Colorado River water — about 678 million gallons — to Queen Creek for a one-time payment of $21 million. The town and the company asked regulators at the Arizona Department of Water Resources to endorse the water transfer, and the agency is holding a series of four meetings this week to hear comments on the proposal.
At the first meeting in Phoenix on
Tuesday, the proposal was strongly opposed by local officials and state legislators from counties along the river who say they fear the deal would harm their farming economies and open the door for more water to be traded away to Arizona’s thirsty cities.
“They’re purchasing properties to try to get those waters transferred. So they’re making money off of us. They’re making money off of those communities that need that water,” state Rep. Regina Cobb said. “As soon as you start moving that water out of those communities, guess what’s going to happen. They’re going to dry up.”
Cobb, a Republican, represents La Paz County, including the small farming community of Cibola, where the company would stop irrigating its farmland and let the water go to Queen Creek. Cobb disagreed with representatives of the company and the town who said the proposal would bring economic benefits and more tax revenues to the rural area and the state as a whole.
“The arrogance, the greed that they have right now is that they feel they are more important than that community,” Cobb said.
If the deal goes through, she said, it would be a first and set a precedent for other investors and companies to buy farmland along the river to sell off the water. Cobb said she welcomes companies investing in the area, but not if their purpose is “solely to transfer water away from rural Arizona.”
Other officials from Mohave and Yuma counties, whose areas depend on diverted river water, raised similar objections. They argued that Queen Creek has other alternative water sources it could consider and shouldn’t siphon away a resource that the rural community depends on.
‘A very noble use of the water’
Supporters of the proposal argued that transferring the water makes economic sense and is in line with Arizona water policy.
Lawyer Mike Pearce, who represents the company and Queen Creek, urged state officials to sign off on the deal.
“This transfer in my mind represents all that is good about Arizona water management,” Pearce said. “Here we are proposing a transfer from one beneficial use to another, what many would consider to be a very noble use of the water to displace groundwater pumping in central Arizona.”
The company that owns the farmland, GSC Farm LLC, is a subsidiary of Phoenix-based Greenstone, which describes itself on its website as a “water company that works with local governments,
businesses and developers who seek to increase either the quantity and/ or reliability of their water supplies.”
Greenstone’s parent company is the global financial services firm Barings, whose investors include pension funds. Greenstone says it’s a “developer and owner of reliable, sustainable water supplies” and its goal is to “advance water transactions that benefit both the public good and private enterprise by providing solutions” in the western United States.
Grady Gammage Jr., an attorney for GSC Farm, said during the meeting that the water transfer “is in the best interests of all of Arizona.”
The company has a “fourth-priority” entitlement to Colorado River water under a contract with the federal Bureau of Reclamation. The state Department of Water Resources is considering the proposal to transfer that entitlement to Queen Creek.
Gammage said GSC’s right was established by transfers dating to the 1950s.
“It’s a private water right that goes back for a very long time, and that private right is GSC’s to figure out what to do with,” Gammage said.
For now, the company is leasing out the land, and the water is flowing to fields of cotton and alfalfa.
The main road to the Cibola area comes across the river from California, so the workers and their tractors cross over the state line to work the land.
“All of the current economic benefit from the farming on this property flows into California,” Gammage said. “What you are looking at here functionally is really California water. This water is used for the economic benefit of California, not Arizona.”
Town looks to secure water
Officials from Queen Creek pointed out that the town, which was founded in 1989, gets a relatively small allocation of Colorado River water from the Central Arizona Project Canal. They said buying water rights is part of their long-term strategy.
“The transferred water will help the town minimize its reliance on groundwater, preventing nearly 200,000 acrefeet of groundwater from being pumped within the next 100 years, benefiting current and future generations,” said Paul Gardner, the town’s utilities director.
He said bringing in water helps the town move toward a central goal of Arizona’s Groundwater Management Act: using surface water to reduce reliance on groundwater.
“While the town has the legal right to continue to pump groundwater, this transfer will help the town be good stewards of water and leave as much groundwater as possible,” Gardner said. He said transferring water to the area
southeast of Phoenix would offset the town’s groundwater pumping and “help reduce that pumping by a little over 10 percent.”
The deal would bring enough water to supply approximately 5,500 homes, Gardner said. The costs for the town, on top of the $21 million payment, would include about $350,000 per year to deliver the water through the CAP Canal.
Queen Creek is one of the fastestgrowing communities in Arizona. The 2010 census recorded a population of about 26,000. The town now estimates the population is 51,800. Its water service area is twice the size of the town’s boundaries, supplying an estimated population of 90,000.
The town’s officials project that once Queen Creek is fully built out, it will be home to about 170,000 people – with a water system serving approximately 238,000.
Mayor Gail Barney said the Town Council is taking steps to ensure water for the long term.
“The proposed transfer is an effort to reduce our reliance on groundwater, benefiting current and future generations,” Barney said.
Developers are supporting the water deal. Spencer Kamps of the Home Builders Association of Central Arizona said the transfer would bring big economic benefits for the state. He pointed to an economic study by a consultant that projected new jobs, increased economic output and more tax revenues.
If the water is transferred, alternative uses of the farmland could include an RV park and a solar farm, Gammage said. “So, La Paz County actually will win.”
Leaders from the rural counties strongly disagreed. Mohave County Supervisor Gary Watson urged state officials to recommend rejection of the proposal to the Bureau of Reclamation. He suggested there are other water sources available for Queen Creek rather than taking away supplies from the community on the river.
Watson pointed out it’s not the first attempt to transfer “fourth-priority” Colorado River water from the area to cities in central Arizona. Previously, the agency that manages the Central Arizona Project had looked at buying farmland in Mohave County and leaving land fallow to put the water into the CAP Canal. But the agency’s directors voted to drop that proposal last year after an outpouring of opposition.
State water officials also turned down a proposal last year by the town of Quartzsite to lease Colorado River water for use in central Arizona.
GSC ‘does not own the water’
The debate about the latest proposal centers partly on a legal dispute over whether the company should be permitted to sell the water entitlement.
Watson wrote in a letter that the company “does not own the water it now diverts as a ‘private property right,’ but instead GSC has a contract permitting the water’s use in a limited area of Cibola land in La Paz County.” He said the contract “does not, in any way, authorize transfer of the water to Central Arizona.”
Jamie Kelley, general counsel of the Mohave County Water Authority, agreed that “it is not a private property right; it is the right to use the water.” Additionally, she said, transferring the water would rob river communities of the potential for future growth and would put their economies in peril.
Democratic Sen. Lisa Otondo of Yuma said she strongly opposes the deal, as do communities along the river that see the beginning of water transfers as a major threat.
“This is the camel’s nose under the tent — no, let me correct myself. This is the camel moving in the tent,” Otondo said. “This goes through and the avalanche begins.”
Cobb said rural communities won’t stand for having their water taken for cities by powerful interests.
“I think that if we start doing this … we will be starting a civil war on water, and we’ve already come out fighting strong the first time around,” Cobb said, referring to the proposed deal that the CAP board dropped last year. “We’re going to fight strong on this one, and if it comes up again, we’ll fight strong again.”
Speaking for the company, Gammage argued that the type of water right involved in the deal is a tiny piece of the water that’s diverted to farms and towns along the river. While areas on the river get a total of about 1.3 million acre-feet, he said, there is only about 15,000 acre-feet of privately held fourth-priority water rights.
“There may be more trading, but it’s not like there’s a lot of this sort of transaction that can take place,” Gammage said. “This is a really unique piece of property and a unique transaction.”
Department of Water Resources Director Tom Buschatzke listened during the meeting but did not make comments.
The department held other meetings on the proposal in Bullhead City and Parker on Wednesday, and a fourth meeting is scheduled in Yuma today. The agency is also accepting written comments until Dec. 16.
Reach reporter Ian James at ian.james@arizonarepublic.com or 602-444-8246. Follow him on Twitter: @ByIanJames.
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