HB2338 - Regional Water Augmentation Authorities

by Patrick O'Malley, Precinct Committeeman, LD12 (Queen Creek)

HB2338 is a bad bill that has been introduced by Arizona Speaker of the House Andy Tobin (LD1) and Representative Brenda Barton (LD6).  Arizona already has water districts that don’t necessarily deliver water directly to homes. CAP and SRP are big ones, but there are others of various sizes. HB2338 creates a new type called a Regional Water Augmentation Authority. These authorities will be allowed to execute all types of projects related to water.  That includes the ability to buy water rights and real estate, and move water through pipes and canals from one part of the state to another. 

The new Authorities will be easy to start, but difficult to stop.

Any group of legal entities can form one, if they agree on a purpose and as long as there is at least one public agency involved. The others can be most any type of legal entity, including corporations and organizations.  You can’t stop an Authority from forming because you object to its purpose, and once the Authority exists it takes a unanimous vote by its Board of Directors to end it.  The Board members are not chosen by the voters. They are appointed by the agencies and organizations that started the Authority.

Authorities are tax exempt and not regulated by the Arizona Corporation Commission. They may issue tax free bonds to pay for their projects and can use Eminent Domain to build the projects.

There are water projects in Arizona that many people agree should be built. Some of them would bring additional water to Payson, Prescott, and Sierra Vista.  Regional Water Authorities are one way to do these projects. But what other projects could Authorities start? There are no limits or approvals needed to start an Authority, and no restrictions on its project as long as it’s a water project with a “clear public purpose.”

Who ends up paying the Authority’s bills?

Bonds will be used for the construction phase, but the only way to make the bonds attractive to investors is to have customers already lined up to buy water after the construction is done. The customers are most likely to be water districts that sell directly to the public, so the public ends up paying. That’s fair enough; those customers are the people who benefit from the water. But water projects have a horrible history of predicting the final cost of water correctly. So how much will the water really cost?

Regional Water Authorities would give Arizona a piecemeal state water policy. The sum of the different Authorities’ actions would determine which parts of Arizona bring in more water and how it gets used. The existing bill allows no branch of State government the right to oversee or intervene in the formation or activities of Regional Water Authorities. That’s a situation ripe for unintended consequences.

The Arizona Department of Water Resources (ADWR) is the logical agency to oversee these Authorities. ADWR should exercise some control over the formation of Authorities to ensure the benefit to the public is both clear and realistic, and to avoid conflict between competing Authorities. They should also provide oversight for the life of the Authority to see that it’s making real progress on its goal and to promote cooperation between Authorities.

Contact your State Legislators and urge them not to pass HB2338 until it is amended to let our State Government control the formation and operation of Regional Water Augmentation Authorities.

Here is the link to the bill’s status on the Arizona Legislature’s website: