Susan Ward Harris

An AMA Designation is Not the Solution: Groundwater Management in the Upper San Pedro Basin

Abstract:

Groundwater provides a finite source of water to Arizona residents, businesses

and agriculture. In 1980, due to high demands placed on groundwater and declining

water tables, Arizona passed the Groundwater Management Act. It identified discrete

geographic areas as Active Management Areas (“AMA”) that would be subject to

significant state regulation of groundwater use. Currently, Arizona has five AMAs. The

gene ra l ques t ion considered is whether the Upper San Pedro River Basin (“Basin”)

should be added as the sixth AMA and thereby impose a very detailed state regulatory

framework on an area which includes Cochise County, Sierra Vista, Benson and

Tombstone.

Three criteria must be satisfied before the Upper San Pedro River Basin may be

designated as an AMA: 1) active management practices are necessary to preserve the

existing supply of groundwater for future needs; 2) land subsidence or fissuring is

endangering property or potential groundwater storage capacity; and 3) use of

groundwater is resulting in actual or threatened water quality degradation. Thus, the

paper examines whether the current condition in the Basin satisfy any of the

designation criteria. More specifically, the paper addresses whether the AMA regime

is the best approach to the management of the unique groundwater issues present in

the Basin.

An AMA Designation is Not the Solution: Groundwater Management in the Upper San Pedro Basin

Susan Ward Harris Department of Hydrology

and Water Resources

University of Arizona June 1, 2015

2

I. Introduction: The 1980 Groundwater Act Passes

In exchange for billions of federal dollars to finance a massive system to lift more than

a million acre-feet of water thousands of feet from the Colorado River and pump it over

hundreds of miles of desert, the Arizona legislature passed the 1980 Groundwater Management

Act (GMA) (Pearce, 2007). The enactment of state groundwater law reform was the price

Arizona paid for the Central Arizona Project (CAP), a federal rescue project that provided a

new supply of water to Central Arizona to enable economic development and make additional

growth possible (Leshy, 2008).

The need for the GMA also stemmed from the recognition that Arizona’s major

aquifers required protection from their current users who pumped substantially more

groundwater each year than could be recharged by rain, snow or stream flow. By 1976,

groundwater withdrawals exceeded natural recharge by 2.2 million acre feet (Glennon and

Maddock, 1994). Depleting groundwater storage in this fashion is also known as “groundwater

mining”, to reflect a nonrenewable, unsustainable use of groundwater (Anderson, Pool and

Leake, 2008). The final impetus to pass the GMA came from the need to override the Arizona

Supreme Court decisions in Jarvis v. State Land Department I, II, III (1969, 1970, and 1976)

and Farmers Investment Company v. Bettwy (1976) that threatened to disrupt both

economically important mining operations in the State and municipal deliveries of water to

many thousands of residential and commercial water users (Staudenmaier, 2007; Pearce 2006).

The convergence of an opportunity for a new water supply, the foreseeable exhaustion of an

old water supply and unacceptable groundwater transport common law caused the Arizona

Legislature to conclude that the State needed a “framework for the comprehensive

management and regulation of the withdrawal, transportation, use, conservation and

conveyance of rights to use groundwater” to protect and stabilize the general economy and the

welfare of the State and its citizens. A.R.S. §45-401(B). In 1980, the Legislature passed the

GMA which survived a constitutional challenge the following year. Town of Chino Valley v.

City of Prescott (1981). A key component of the GMA’s framework involved the creation of the Active

Management Area (AMA). The GMA initially identified four over-drafted aquifers in major

urban and agricultural areas: Phoenix, Tucson, Pinal County and Prescott. Those basins

3

became the initial AMAs (the Tucson AMA was later divided into the Tucson and Santa Cruz

AMAs) and were subject to a host of laws designed to control existing and limit new

groundwater pumping. The GMA provided for the addition of new AMAs by mandating that

the director of Arizona Department of Water Resources (ADWR) shall periodically review all

groundwater basins that were not within an AMA to determine whether such basins meet any

of the three separate criteria. A.R.S. §45-412(C).

To date, the Upper San Pedro Basin, located in the southeastern portion of the State,

has not been designated as an AMA. Given that the water levels in this basin’s aquifer have

fallen while groundwater pumping has increased to meet the demands of a growing population

in and around City of Sierra Vista, the question exists whether to establish and apply the laws

of an AMA to the Upper San Pedro Basin. The conditions in the Upper San Pedro Basin seem

to present the same concerns that led to the passage of the GMA more than 35 years ago,

namely the continued groundwater pumping poses a threat to the economic viability of the area

and potentially jeopardize the continued existence of Fort Huachuca, one of the State’s major

economic engines.

In addition, in this aquifer, unlike in the original AMAs, the extensive groundwater

pumping also endangers a unique federally protected, riparian habitat. In 1988, Congress

created the San Pedro Riparian National Conservation Area (SPRNCA), the first riparian

national conservation area of its kind in the country. Arizona-Idaho Conservation Act of 1988,

Pub. L No 100-696, 102 Stat. 4571. Congress established SPRNCA to protect the riparian area

and the aquatic, wildlife, archeological, paleontological, scientific, cultural, educational and

recreational resources of the public lands surrounding the San Pedro River. It runs along 40

miles of the San Pedro River and encompasses more than 56,000 acres in Cochise County,

Arizona. Extending from the Mexican border to a few miles south of St. David, SPRNCA

represents the most extensive, healthy riparian ecosystem remaining the desert southwest. It

supports approximately 390 species of birds, 83 different types of mammals and at least three

endangered species, the south western will flycatcher, the Juachuca water-umbel and the jaguar

(Glennon, 2002). This riparian habitat also provides economic as well as ecological benefits,

yet its continued survival is at risk in the face of increased groundwater extraction and

consumption (Leshy, 2013).

4

Clearly, the Upper San Pedro Basin requires appropriate groundwater management to

protect local, state and federal interests. It is not so clear, however, that the legal regime of the

AMA provides sufficient and appropriate regulatory tools to protect the aquifer. It is this topic

that will be explored in this paper.

II. Background: A Brief History of Increased Population and Water Demand and Evolving Groundwater Law Historically, irrigation has constituted and continues to account for the single largest use

of water in Arizona. As of 2000, the agricultural sector used 80% of all surface water and

groundwater. (Anderson, Pool and Leake, 2007). Reflecting changes in land use, agricultural

use has decreased as land has gone out of production and farmers have adopted more efficient

water practices (Id.). By 2005, agricultural use accounted for 75% of all water use (Arizona

Department of Water Resources, 2010).

Municipal demand

accounts for the greatest rate

of increase in water use

(Anderson, Pool and Leake,

2007). The share of

Arizona’s water used for

municipal purposes increased

from 16% in 2000 to 20% of

Arizona’s water use in 2005

(Id.; Arizona Department of

Water Resources, 2010).

Population growth drove this

statewide increase in

municipal domestic demand.

In 1950 the total population had not yet reached a 1,000,000 people, but it tripled to almost

3,000,000 by 1980 when the GMA was enacted and doubled again by 2005 when the

population exceeded 6,000,000 as shown in Figure 1. Groundwater sufficed to meet much of

Figure 1 Source of Data: U.S. Census Bureau

5

the growing demand for water as the State’s population grew. Satisfying the demand required

groundwater mining throughout portions of Arizona that created serious overdrafts in the

aquifers underlying the State’s major urban areas and the agricultural areas (Maguire, 2007).

The Arizona legislature succinctly captured the situation in its assessment of the water situation

in 1980:

[T]he people of Arizona are dependent in whole or in part upon groundwater basins for their water supply and that in many basins and sub-basins withdrawal of groundwater is greatly in excess of the safe annual yield and that this is threatening to destroy the economy of certain areas of this State and is threatening to do substantial injury to the general economy and welfare of this State and its citizens.

A.R.S. §45-401(A).

Through the establishment of the AMAs, the legislature sought to craft tools to help

ADWR to more proactively govern the use of groundwater in high use or populated areas.

A.R.S. §45-411(A). The legislature mandated that each AMA must meet specific

management goals and adopt a series of management plan. A.R.S. §§45-562, 45-563. These

mandated management plans in turn required the implementation of municipal and industrial

conservation measures and increased irrigation efficiency on farms. A.R.S. §§45-464 through

45-569. Notably, however, State law does not require farmers, municipalities and industries

outside of AMA to adopt similar management plans or conservation measures.

The legislature also placed restrictions and limitations within the AMAs on future

groundwater consumption while it preserved or “grandfathered” certain existing groundwater

use. The GMA created three types of rights to groundwater that apply to initial AMAs and

generally to any other subsequently created AMAs.

First, the GMA recognized that the use of water for agricultural purposes contributes

more to the depletion of existing groundwater resources than any other regulated use. Thus,

the GMA generally prohibited the irrigation of any land that had not already been irrigated

during the preceding five years. This provision had the effect of banning the use of

groundwater to irrigate any new land. A.R.S. §45-452(A). Second, for land that had been

irrigated with groundwater after January 1, 1965, but ceased to be irrigated before the

designation of the AMA, the landowner received the right to withdraw three acre-feet per year

for each acre of cultivated land, so long as a development plan existed when the irrigation right

6

was retired. This provision had the effect of not penalizing certain farms that had left

unproductive lands fallow, while at the same time providing a limited groundwater right to the

farmer. Third, when the land had been held for a non-irrigation purpose, which is defined as

any purpose other than one which requires irrigation (A.R.S. §45-402(28)), as of the date of the

designation of the AMA, the GMA permitted the landowner to yearly withdrawals of

groundwater up to the maximum water withdrawn in the proceeding five years.

As already noted, these limitations on groundwater use do not apply in rural Arizona

outside of an AMA. Instead, the doctrine of reasonable use derived from the common law

prevails outside the AMAs. A.R.S. §45-453. This doctrine permits a landowner to pump

unlimited amounts of groundwater even if the pumping damages adjoining landowners so long

as the pumped water is used for the benefit of the overlying land. Brady v. Abbott Laboratories

(2005).1 The common law imposes no other limitation on the amount that may be pumped.

The GMA also potentially curtails future residential development in an AMA by

limiting a developer’s ability to pump groundwater to serve the future development. It

prohibits new development unless the developer can show that: (1) sufficient groundwater,

surface water, or effluent of adequate quality will be continuously available to satisfy the water

needs for at least 100 years; (2) the projected use is consistent with the applicable management

plan; and (3) the developer has the financial capability to construct the water facilities

necessary for the water supply. A.R.S. §45-476 (J). State law does not impose a similar

prohibition on residential development outside of an AMA. Nor does State law impose any

liability on the developer whose projections of water availability prove to be in error.

Finally, the location of new wells and replacement wells in an AMA must be carefully

chosen so that they do not unreasonably increase damage to surrounding land or other water

users. A.R.S. §45-598. In addition a permitting process applies to the drilling of the wells and

withdrawal of groundwater. Although landowners outside of AMAs must file a notice of

drilling, they do not face similar restrictions on the placement and pumping from their wells.

1 Interestingly, the Brady decision makes it clear that the reasonable use doctrine still has some applicability in an AMA because Abbott Laboratories’ pumping occurred within an AMA. Thus, at a minimum, the reasonable use doctrine operates as least as a shield in an AMA against the imposition of an obligation to pay damages for harm caused by groundwater pumping.

7

With respect to domestic wells or “exempt” wells, the GMA provides two general criteria: (1)

water cannot be used for irrigation; and (2) the pump cannot have the capacity to pump more

than 35 gallons per minute. Significantly, the volume of water that can be pumped from an

exempt well is not de minimus and thus not inconsequential; pumping at a rate of 35 gallons

per minutes translates into 56 acre-feet per year or 18,247,680 gallons each year. In AMAs,

the maximum amount that can be pumped from such a well depends upon the age of the well

and the location of the well. Wells either drilled before or in the process of being drilled on

June 12, 1980, can pump the full 56 acre- feet. If the well was drilled after April 28, 1983, in

an AMA, then no more than 10 acre-feet per year may be used for purposes other than

domestic use and stock watering.

Thus, the laws applicable to AMAs prevent new irrigation use, may constrain

residential growth, require the adoption of a management goal, the implementation of a series

of management plan that imposes conservation measures and regulate the installation and use

of new and replacement wells. Each of these laws furthers the stated goal of the GMA to limit

the pumping of groundwater and preserve the remaining groundwater in depleted aquifers for

future use. Given that purpose, the GMA would appear to be the appropriate mechanism to

invoke to protect over-drafted aquifers such as the Upper San Pedro Basin.

As they continue to pump, the City of Sierra Vista, Fort Huachuca, industry, owners of

exempt wells, private water companies and farmers deplete the groundwater in the Upper San

Pedro Basin. During the period 1990 - 2001, water levels declined in some areas around

Sierra Vista by almost 15 feet (ADWR, 2005). Groundwater mining continues to occur as

evidenced by the groundwater budgets prepared for the basin between 2003 and 2011 that

report annual storage deficits ranging from 8,000 to 20,000 acre-feet per year based on an

estimated 15,000 acre-feet per year of recharge from precipitation (Richter, 2014). The current

extent of groundwater mining may be greater than reported because recharge rates may be

significantly less than those assumed in the annual budgets. In a study published in 2007,

based on an analysis of chemical isotopes, the authors determined the amount of mountain

front recharge in the basin amounted to 1,621 to 7,296 acre-feet per year (Wahi, 2007).

Assuming that 85% of the precipitation recharge to the Upper San Pedro Basin comes from

mountain front recharge (Pool and Dickinson, 2007), the annual recharge may be overstated

and therefore the storage deficit may be correspondingly understated by more than 11,000

8

acre-feet.

Consistently with a

finding of reduced

recharge and storage, the

basin also reflects

declining rates of

discharge as shown by the

declining streamflow in

the San Pedro River. See

Figure 2. The average

streamflow of the river

has declined over the past

80 years (Randal and

Meixner, 2013).

The current projected

decline in the groundwater threatens the remaining baseflow in the San Pedro River (Serrat-

Capdevila 2009). A decline in streamflow assumes federal environmental importance because

it threatens the continued viability of SPRNCA. In more dramatic terms, the situation can be

described: “The City, the Army, farmers, and others all pump groundwater. The pumping aims

a loaded gun at the stream-flow and the riparian corridor. The resulting overdraft will, unless

checked, inexorably extinguish the stream and its rich riparian habitat.” (Leshy 2008)

The decline in streamflow also has the potential of serious economic disruption in the

area. The U.S. Army installation at Fort Huachuca, also located in the Upper San Pedro Basin,

represents a major driver for southern Arizona’s economy as the largest employer in the region

and contributes approximately $2 billion annually to Arizona’s economy (Richter, 2014). Fort

Huachuca also pumps groundwater from the aquifer and, its mining of the aquifer thus also

affects the viability of the SPRNCA. Due to the Environmental Protection Act, the future

viability of SPRNCA may affect the future viability of Fort Huachuca (Serrat-Capdevila 2009).

On the face of it, the Upper San Pedro River Basin appears to be an ideal candidate for

the AMA regime given the adverse consequences that will occur if the basin is seriously

Figure 2: Mean daily flow of water in the San Pedro River 4 measured at the USGS Charleston gauging station. The trend line highlights the declining average streamflow in the river.

9

compromised. Whether, however, it should be classified as an AMA requires two questions to

be answered:

1) Do conditions exist in the Upper San Pedro River Basin that authorize the

director of ADWR to designate the Upper San Pedro River Basin as an

AMA?

2) Are the AMA laws the best method to protect the Upper San Pedro River

Basin, the City of Sierra Vista and the population in the unincorporated

portion of Cochise County surrounding Sierra Vista?

III. A Prior Study Considering Whether the Upper San Pedro Basin Should be an AMA

A basin may be designated as an AMA if the director of the Department of Water

Resources determines that: 1) active management practices are necessary to preserve the

existing supply of groundwater for future needs; 2) land subsidence or fissuring is endangering

property or potential groundwater storage capacity; or 3) use of groundwater is resulting in

actual or threatened water quality degradation. A.R.S. §45-412(A). The director does not have

the authority to impose an

AMA designation if none of the

three conditions exist. In 2005,

ADWR conducted a study of

the Upper San Pedro Basin and

found no indication of land

subsidence or threatened water

quality degradation (ADWR,

2005). Thus, an AMA could

only be implemented based

upon a finding that active

management practices were

necessary to preserve the

existing supply of groundwater

Figure 3: Sierra Vista population from 1980 to 2013.

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1/1/

80

1/1/

82

1/1/

84

1/1/

86

1/1/

88

1/1/

90

1/1/

92

1/1/

94

1/1/

96

1/1/

98

1/1/

00

1/1/

02

1/1/

04

1/1/

06

1/1/

08

1/1/

10

1/1/

12

1/1/

14

Population of Sierra Vista 1980 - 2014

Source of Data: Arizona Department of Administration, Office of Employment and Population Statistics

10

to satisfy future needs.

According to the study, the basin held approximately 20 to 26 million acre-feet in

storage (Id. at p. 7-2). As of 2005, ADWR found that the current primary water demand

sectors were agricultural and municipal with relatively little demand from the industrial sector.

Between 1985 and 2002, agricultural demand had declined by 45% due to economic conditions

and because agricultural land had been purchased, retired and subjected to conservation

easements (Id. at p. 6-9). Similarly, Fort Huachuca reduced its water use by almost 45%

between 1993 and 2002 due to a combination of irrigation efficiency, installation of low water

use plumbing fixtures, replacement of high water use landscaping and education (Id.). In

contrast, municipal demand in and around Sierra Vista increased by over 5,000 acre-feet due to

an increase in population from less than 25,000 in 1980 to over 40,000 by 2000. See Figure 3.

Although Sierra Vista had implemented water conservation programs and ordinances,

the rate of gallons used per capita per day had not changed appreciably (Id.). The study

pointed out, however, that under the AMA laws, municipal groundwater use could increase

because service area rights are not subject to volumetric groundwater withdrawal limits and

new service area rights can be established (Id. at p. 6-5). As a result, municipal water volume

use may increase as the population increases, but the management plan adopted pursuant to the

AMA laws then in place would impose a gallon per capita per day cap that would gradually

decline. The study concluded that if an AMA were implemented, the per capita water

conservation measures would apply to approximately 47% of the municipal water user in the

Basin (Id. at p. 7-4).

After examining the application of the assured water supply program, ADWR noted

that the AMA laws would only apply to new subdivisions and did not estimate any potential

impact (Id.). Finally, as to wells, ADWR noted that the well impact and well spacing laws

could help protect well owners from the adverse impact of the installation of a new or

replacement large wells (Id. at p. 6-8). The study concluded with the determination that there

are sufficient groundwater supplies exist in the basin to meet the needs of municipal, industrial

and agricultural water users (Id at p 7-4) and, therefore, none of the statutory criteria to

designate the Upper San Pedro Basin as an AMA had been demonstrated (Id. at p. 7-5).

11

IV. Research Results: An AMA is Not the Best Water Management Policy Choice To date, ADWR has not changed its position that the Upper San Pedro Basin does not

meet the statutory criteria to be designated as an AMA. Since 2005, the demand for water for

agricultural use in this basin has continued to decline and agricultural demand is not likely to

become a dominating factor in the future. In conjunction with the efforts of the Nature

Conservancy, the federal government has reduced the agriculture demand for water by taking

land out of production. (Leshy 2008). The federal government, due to an interest in

maintaining the integrity of Fort Huachuca, has committed to “protect land adjacent to the

installation from incompatible development” (U.S. Army Environmental Command, 2007) as

amply evidenced by the amount of federal funds spent in conjunction with its “partner”, The

Nature Conservancy:

(Id.)

Much of the former agricultural land in the Upper San Pedro Basin is now owned by the

Bureau of Land Management (BLM), the Nature Conservancy and Cochise County. (Richter,

2014). Thus, the many statutory provisions of the AMA designed to curtail the use of

irrigation would not be necessary where the landowners of former agricultural lands are

strongly opposed to pumping groundwater for their lands.

Industrial demand continues to be minimal. While, the City of Sierra Vista desires

economic growth and works to attract new businesses, it also appears to carefully consider the

water needs and requirements of potential businesses along with those of existing residents of

the city. For example, a Dutch company approached the city about starting a hothouse

operation to raise tomatoes. Due to the water demand to operate a hothouse business, the city

12

declined. Likewise, a business desiring to start a water-intensive t-shirt manufacturing plant

met the same negative response.

Municipal water use in the Sierra Vista sub-basin persists as the major source of

concern in terms of continued or increased use of groundwater. Since 2005 the population in

Sierra Vista has increased by an additional ten percent (10%) with population projected to

continue to increase. The per gallon per day per capita rate has, however, declined by 14%

since 2005 from 155 gallons per capita per day (gpcd) to 133 gpcd. (City of Sierra Vista,

Department of Public Works, Environmental Services Division Area Water Use). Given the

conservation results achieved to date, it is not clear that the adoption and implementation of an

AMA management plan would be more successful in reducing municipal use by current

residents than the steps taken without the existence of an AMA in the Upper San Pedro Basin.

The potentially most important development in terms of municipal use since 2005 arose

from a lawsuit arising out of the proposed construction of 6,959 homes as part of the Tribute

Master Planned Community (Tribute) on the remaining private land in Sierra Vista. The

arguments raised in that lawsuit and the trial court decision highlight a distinguishing feature

between the Upper San Pedro Basin and the existing AMAs and truly underscore the real

policy issue that must be addressed in the basin.

Under Cochise County regulations, which apply to the City of Sierra Vista, the

subdivision plat for Tribute cannot be approved unless a developer proves the existence of an

adequate water supply for the homes in Tribute. Cochise County, Az. Subdivision Regulations

§ 408.03; see A.R.S. §11-823(A). For county purposes, an “adequate water supply” consists

of either a determination by the director of ADWR that there is an adequate water supply or a

written commitment of water service from a city, town, or private water company designated

by ADWR as having an adequate water supply. The necessary determination articulated in the

State laws, which Cochise County has adopted, requires the director to find:

(1) Sufficient groundwater, surface water or effluent of adequate quality will be

continuously, legally and physically available to satisfy the water needs for

the proposed use for at least one hundred years.

(2) The financial capability has been demonstrated to construct the water

facilities necessary to make the supply of water available for the proposed

13

use, including a delivery system and any storage facilities or treatment

works.

A.R.S. §45-108(I)

In 2011, Pueblo del Sol Water Company (PDS), a company wholly owned by the

developer, filed an Application with ADWR for the requisite designation of adequate water

supply through the year 2032 with a total annual demand of 4,879 acre-feet of water

(1,593,413,478 gallons). With the Application, PDS submitted a groundwater model

demonstrating that the depth to static groundwater would not exceed 650 feet after 100 years of

pumping from its wells (Administrative Law Judge Decision, 2013). The BLM and the Center

for Biodiversity opposed the approval of the Application arguing that the proposed groundwater

pumping and the subsequent decline in the water table would adversely affect the SPRNCA and

therefore the federal water rights that Congress reserved when it formed SPRNCA. See Winters

v. United States, (1908); see also Arizona v. California, (1963) (expressing "no doubt about the

power of the United States under these clauses to reserve water rights for its reservations and

property").

A groundwater model developed to quantify the potential impact that additional

pumping by PDS would have on the streamflow in the San Pedro River shows that under

current pumping conditions, the flow in the San Pedro River will continuously decline over the

next 100 years (Randall and Meixner, 2013). The addition of the proposed pumping for Tribute

accelerates that decline. Id. The model indicates that when groundwater extraction from the

PDS wells is increased to a total of 4870.39 acre-feet per year, the baseflow at every gaining

reach of the San Pedro River is less than the baseflow in the “base case” scenario by the

percentages shown in the table below:

Baseflow Depletion

End of “Winter” Season End of “Summer” Season

Upstream of Lewis Springs -12.4% -38.4%

Downstream of Lewis Springs -7.2% -13.6%

Charleston -7.3% -13.5%

Table 1. Percentage baseflow is decreased between “base case” and “projection” scenario. Source of Table: Randall and Meixner, 2013.

14

Rejecting that argument and focusing on the fact that PDS had a Certificate of

Convenience and Necessity issued by the Arizona Corporation Commission, the director of

ADWR decided that the Pueblo del Sol had an adequate water supply for the proposed

development. The director did not consider the impact of the proposed pumping on SPRNCA

because, according to the decision, the director did not have the authority to consider the

impact of the proposed groundwater pumping on the federal reserved surface water rights. In

June 2014, the Arizona Superior Court determined that ADWR erred in determining that

Pueblo del Sol had a legally available adequate water supply based on the Certificate of

Convenience and Necessity. The court found that ADWR must consider both the existing and

potential legal claims that BLM had to the groundwater based on its surface water claim as part

of its determination that PDS had met its burden to show that it had a legally available

adequate water supply. Currently, the case in on appeal to the Arizona Court of Appeals,

Division One.

Here then is a key difference between the Upper San Pedro Basin and the Phoenix,

Tucson and Pinal County AMAs. Not only does the Upper San Pedro Basin not have any CAP

water available to satisfy existing demands and meet new demands, but the surface water

which does flow through the area may not be available to alleviate demands on the

groundwater. Given the importance of SPRNCA to the basin both directly and indirectly, a

management goal identified the U.S. Congress in the Upper San Pedro Basin is the protection

of the surface water. Pub. L. No. 108-136, Sec. 321; 117 Stat. 1392. More specifically,

Congress imposed a requirement that “sustainable yield” be attained, which has been defined

as “managing [groundwater] in a way that can be maintained for an indefinite period of time,

without causing unacceptable environmental, economic, or social consequences” (Richter,

2014). Thus, groundwater must be managed to protect SPRNCA and therefore, the surface

water flowing in the San Pedro River. In contrast, the management goals in the AMAs focus

on the protection of the groundwater. Surface water, including the influx from CAP, is the

means to that end. Interestingly, however, despite the differences in the management goals

and that fact that the AMA laws have no application to new residential development in the

Upper San Pedro Basin, the Cochise County regulations effectively resulted in a clear

examination of the competing water demands on the aquifer and accomplished, at least for the

15

present time, the same goal desired by the AMAs: limit the use of groundwater to support new

residential development.

The pending Tribute lawsuit also underscores an important issue in the Upper San

Pedro Basin that must be addressed: the impact of new large wells on the small, private or

“exempt” wells operated by existing users to obtain water. The groundwater model filed with

the PDS Application acknowledged that PDS’ pumping would cause the groundwater level to

decline by hundreds of feet. Most exempt wells do not draw from such depths, which means

that, in time, owners of such wells will lose their water supply lose access to their water supply

and will be forced to bear the expense of drilling a deeper, more expensive well. An AMA

may provide protection to well owners operating exempt wells, for their domestic use, which

are defined as those wells that pump less than 35 gallons per minute. A.R.S. §45-454. The

owners of exempt wells are not regulated either in or outside of an AMA. They may, however,

be better protected in an AMA. The GMA contains well impact and well spacing regulations

intended to protect well owners from the adverse impact of the installation of a new or

replacement large wells. For instance, A.R.S. §45-598 specifically provides:

The director shall adopt rules governing the location of new wells and replacement wells in new locations in active management areas to prevent unreasonably increasing damage to surrounding land or other water users from the concentration of wells.

A.R.S. §45-598(A).

As of January 2015, there were 6,271 exempt wells in the Upper San Pedro Basin

registered with ADWR. Since 1982, the average reported initial depth of exempt wells,

averaged in five year increments, has increased by 137.4 feet. See Figure 4. The increased

depth imposes a cost on the well owner both in terms of the initial cost to drill the well and the

cost of energy to lift the water the additional distance. The installation of a larger well could

divert water that would have otherwise been pumped by the smaller well thereby causing the

smaller well to either go dry or the water table to fall with its attendant consequences. Under

the doctrine of reasonable use that would govern such a dispute, a well owner whose well went

dry due to the actions of a neighboring well owner would have no recourse if the neighbor

could prove the pumping was a reasonable use for the land. The AMA provisions offer the

possibility that such harmful use could be sanctioned by ADWR or the State under the

provision of the GMA authorizing civil penalties and criminal prosecution. A.R.S. §§45-635

16

and 45-636.

The Brady decision creates some doubt about whether even an AMA designation would

give the well owner a private right to damages (Brady v. Abbot Laboratories, 2005). In Brady,

the court ruled against a landowner damaged by Abbott Laboratories’ pumping and dumping

121 acre-feet of groundwater in an existing AMA in violation of a dewatering permit issued by

ADWR. Abbot Laboratories’ pumping de-watered the perched aquifer that created a water

table 16 feet under the surface. The loss of the aquifer caused the neighboring farmer’s pecan

trees, valued in excess of $600,000, to die. The court ruled that under the common law rule of

-500

-450

-400

-350

-300

-250

-200

-150

-100

-50

0

1982 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010 2011-2015

Feet

Years

Changes in Exempt Well Initial Depth 1982 - 2015

Source of data: ADWR Well Registry

Figure 4. Average initial reported depth of exempt wells calculated over five year increments has increased.

17

reasonable use, the farmer could not collect damages from Abbott Laboratories because the

pumping of the groundwater was reasonable because the removal of the water benefitted the

land. The court expressly stated that it decided the case only in terms of common law claims

for negligence and nuisance and did not consider whether a private right of action for

negligence per se can be implied under the GMA. To the extent that a question exists as to

whether a landowner in an AMA has a right to recover for harm suffered from illegal pumping,

the well impact and spacing rules should be clarified to confirm the existence of a private cause

of action. The concurring opinion in Brady expressed the problem, the policy and a solution

quite well:

If we were not bound to follow the Arizona Supreme Court, I would urge that Arizona's reasonable use doctrine no longer depend solely upon whether the use of the water benefits the property from which it is extracted. Accounting for the amount of water used, considering the utility of competing water uses, and acknowledging the rights of adjacent water users seems especially important in an arid, rapidly growing state like Arizona.

In authorizing strict water permit restrictions as well as public notice and the opportunity for administrative hearings on proposed water permits, the Arizona legislature has indicated that Arizona water users must consider the rights of adjacent property-holders. Ariz. Rev. Stat. §§ 45-518(A)(4), 45-523 (2005). Unfortunately for the Bradys and other Arizona water plaintiffs, the Arizona legislature has not provided an express private cause of action, nor has the Arizona Supreme Court had occasion to imply one, against those who, for the benefit of their own property, unreasonably and illegally interfere with the water rights of their neighbors.

Id. at 683.

V. Policy Recommendations and Conclusion

The AMA regime offers few benefits to the Upper San Pedro Basin due to a mismatch

between the focus of the AMA laws and the management issues in this basin. The Upper San

Pedro Basin no longer supports significant agricultural production that could warrant the

imposition of the AMA irrigation restrictions. Further, the basin is subject to Cochise County

regulations that address water demand from new development, and the municipalities and

private water companies have taken action to reduce daily per capita use of water. The

exempt well owners, however, would benefit from that portion of the GMA that regulates well

spacing and well impact. Not only should these laws be enforceable by ADWR, they should

18

expressly give a private cause of action to individual well owners to collect damages if large

wells dewater the aquifer to levels that prevent the reasonable and economic use of their

exempt wells.

While the benefit side of the scale balancing the decision to designate the basin as an

AMA is light, the cost side is not. The costs incurred would be both intangible and tangible.

The intangible costs consist mainly of the political costs and increased administrative and

enforcement costs arising from local opposition to the implementation of the AMA

designation. A collaborative, community-based approach to addressing water issues provides

better and more effective management than a “top-down” regulatory model. (Browning-Aiken

et al 2004). The State’s implementation of an AMA would not likely be viewed as a

collaborative approach to management of the aquifer.

A strong sentiment in the area exists in the area against the implementation of state

regulation even if it is to be enforced by local officials. The strength of this sentiment can be

seem from the 2010 defeat of a proposal to create an Upper San Pedro Water District (District)

under State law that would have established a local governing body to manage the basin’s

groundwater. According to a general survey taken shortly before the vote on the District,

opposition generally stemmed from a concern that the District would raise taxes, create

government interference, and was not needed (Upper San Pedro Water District Citizen Survey,

2010). The concerns about cost and government regulation still exist and would likely result in

opposition to a new AMA.

The tangible costs of the AMA, as opposed to the intangible political costs, that may

outweigh its benefits are the costs to the State to implement and operate a new AMA. It costs

money to start and run an AMA. To fund its operations, AMAs impose fees on certain water

users. In its 2005 study, ADWR estimated that 72% of the water pumped in the Upper San

Pedro area would be subject to fees (ADWR, 2005, p. 6-6). To the extent that the fees and

other sources for revenue in the GMA fail to cover the new expenses, the State would have to

bear those operating costs. In addition, ADWR would incur costs to collect and assemble the

data needed to properly establish a new AMA and comply with the GMA. Due to the reduced

budgets passed by the Arizona legislature since 2009, ADWR would face challenges meeting

its existing demands as well as the new demands associated with the creation of an AMA in the

Upper San Pedro. ADWR suffered cuts exceeding 50% to its budget and workforce in 2009 -

19

2010. See Figure 5. Thus, the adoption of a new AMA could require new funding from

Arizona’s general fund which may not be forthcoming and would further strain the already

limited resources available to ADWR.

Accordingly, assuming that Cochise County’s subdivision regulations remain in place,

that the historically agricultural lands remain fallow and no new lands are brought into

production, and that municipal, county, federal and environmental land owners continue to

implement sound water management policies in the basin, an AMA should not be established

in the Upper San Pedro Basin. Adequate governance tools exist to manage the competing

water needs. Action, however, should be taken, such as making an appropriate amendment to

A.R.S. § 45-598, to protect the owners of exempt wells from or at least compensate them for a

loss of a reasonably accessible water supply attributable to new pumping activities of

neighboring wells.

2004 2006 2008 2010 2012 2014 2016

0

50

100

150

200

250

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Full

Tim

e Em

ploy

ee P

ositi

ons

Ann

ual

Lum

p Su

m A

ppro

pria

tion

Source of data: Arizona Legislature General Appropriations to the ADWR for 2005-2015 Figure 5

20

Resources

Administrative Law Judge Decision, In the Matter of the Decision of the Director to Grant Pueblo del Sol Water Company’s Application for Designation has Having an Adequate Water Supply No 40-700705.0000, No 12A-AWDS001-DWR, March 12, 2013. Aikins v. Arizona Department of Water Resources, 154 Ariz. 437, 441, 743 P. 2d 946, 950 (App. 1987). Anderson, Mark T., Pool, Donald R., Leake, Stanley, 2007, The Water Supply of Arizona: The Geographic Distribution of Availability and Patterns of Use, Arizona Water Policy: Management Innovations in an Urbanizing, Arid Region, edited by Bonnie G. Colby and Katharine L. Jacobs, Resources for the Future Press. Arizona Department of Water Resources, 2010, Arizona Water Atlas, Vol 1. Arizona Department of Water Resources, 2005 Upper San Pedro Basin Active Management Area Review Report. Arizona v. California, 373 U.S. 546, 597-98 (1963).

Brady v. Abbott Laboratories, 433 F.3d 679 (9th Cir. 2005). Browning-Aiken, Anne , Varady,Robert G. , Goodrich, David , Richter, Holly, Sprouse, Terry, and Shuttleworth, W. James, 2003. Hydrology and Water Law — Bridging the Gap: A Case Study of HELP Basins, IWA Publishing, London, UK. Chino Valley v. City of Prescott, 638 P.2d 1324 (Ariz. 1981). Farmers Investment Company v. Bettwy, 558 P.2d 14 (Ariz. 1976). Glennon, Robert, 2002. Water Follies, Island Press. Jacobs, Katherine and Stitzer, Nancy, 2007. Water Management in Rural Arizona, Arizona Water Policy: Management Innovation in an Urbanizing, Arid Region, edited by Bonnie G. Colby and Katharine L. Jacobs, Resources for the Future Press. Jarvis v State Land Department, City of Tucson I, II, III 456 P.2d 385 (Ariz. 1969); mod. 479 P.2d 169 (Ariz. 1970); injunction mod. 550 P.2d 227 (Ariz 1976). Leshy, John D. 2012, Keeping Dry Streams Green: Can Landowners in Arizona and California Use Property Rights to Maintain Groundwater-Dependent Riparian Habitat Along Non-Perennial Watercourses? 18 Hastings College of the Law West-Northwest Journal of Environmental Law & Policy, 121. Leshy, John D., 2008, The Federal Role in Managing the Nation’s Groundwater, 14 Hastings College of the Law West-Northwest Journal of Environmental Law & Policy, 1323.

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Maguire, Rita Pearson, 2007, Patching the Holes in the Bucket: Safe Yield and the Future of Water Management in Arizona, 49 Ariz. L. Rev. 361. Pearce, Michael, J., 2007. Balancing Competing Interests: The History of State and Federal Water Laws, Arizona Water Policy: Management Innovation in an Urbanizing, Arid Region, edited by Bonnie G. Colby and Katharine L. Jacobs, Resources for the Future Press. Pool, D.R., and Dickinson, J.E., 2007, Ground-water flow model of the Sierra Vista Subwatershed and Sonoran portions of the Upper San Pedro Basin, southeastern Arizona, United States, and northern Sonora, Mexico: U.S. Geological Survey Scientific Investigations Report 2006–5228. Richter, Holly E., Gungle, Bruce, Lacher, Laurel J., Turner, Dale S. and Bushman, Brooke M., 2014. Development of a Shared Vision for Groundwater Management to Protect and Sustain Baseflows of the Upper San Pedro River, Arizona, USA, Water, 6, 2519-2538; doi:10.3390/w6082519. Randal T., and Meixner, Thomas, 2014. Modeling the Impact of Increased Pumping from the Pueblo Del Sol Water Company in the Upper San Pedro Basin, submitted to Robin Silver. Serrat-Capdevila, Aleix, Browning-Aiken, Anne, Lansey, Kevin, Finan, Tim and Valdes, Juan B. 2009. Increasing Social-Ecological Resilience by Placing Science at the Decision Table: the Role of the San Pedro Basin (Arizona) Decision-Support System Model, Ecology and Society 14(1): 37. Smith, Paula, K., 1986. Coercion and Groundwater Management: Three Case Studies and a "Market" Approach, 16 Environmental Law Review, 797, 807. Staudenmaier, William L., 2007. Between a Rock and a Dry Place: The Rural Water Supply Challenge for Arizona, 49 Ariz. L. Rev. 321. U.S. Army Command Environment Command Report for Fort Huachuca, Arizona, ACUB approval date: 23 February 2007, http://www.aec.army.mil/Portals/3/acub/AZ-Huachuca.pdf Upper San Pedro Water District Citizen Tracking Survey, August 2010, FMR Associates, Inc. Town of Chino Valley v. City of Prescott, 131 Ariz. 78, 638 P.2d 1324 (1981). Wahi, Arun K., Hogan, James F., Ekwurzel, Brenda, Baillie, Matthew N., and Eastoe, Christopher J. 2007. Geochemical Quantification of Semiarid Mountain Recharge, Groundwater, Vol. 46, pages 414–425. Winters v. United States, 207 U.S. 564 (1908).