Tribal leases don’t impact water costs much, but smaller deals might


CHANDLER — Arizona tribes don’t often part ways with water, excess water or water rights.
Looking ahead, it’s unclear when that might happen again.

At least five Arizona tribes with a presence in the Valley have made long- or short-term contracts with municipalities or water agencies, though none have done so recently.

Municipalities, at one point in the late 1990s and early 2000s, were eager to lock in rates that came with long-term agreements with tribes that had excess water.

While populations of most indigenous communities haven’t skyrocketed at nearly the same rate as the rest of the Valley and Arizona in general, the water needs of those communities is still rising.

Coupled with the Colorado River Basin situation, in which large reservoirs to the north show signs that river’s use needs to be cut severely, it seems less likely tribes will be marketing large surpluses of stored water, storage credits or water rights again any time soon.

Cost of buying water

There are two main ways Arizonans talk about the cost of water: The cost of delivery, or what it costs to treat and move water, as passed along to the end user, is one half of it.

The other half is the cost to purchase water in bulk or to purchase rights or stored water in large quantities. This is usually a contract price between governments or water agencies and typically involves a large, long-term agreement with millions of dollars and many acre-feet of annual water delivery.

Since historically low Colorado River levels have started making news in the past few years, those who have experience in the kind of agreements between tribal and municipal governments say concerns with water among all parties involved is scarcity, rather than finances.

Cynthia Campbell, the city of Phoenix’s water resources management adviser, said scarcity tends to have an impact on both types of costs.

“Infrastructure costs a lot of money; pipes cost more than water,” Campbell said. “And with efforts to conserve more and more, along with new technology, that cost is ever-rising. On the other side, we (the city of Phoenix) will probably buy some storage credits here and there, and those will cost money, too.”

Long-term compacts are good, but for whom?

Jason Travis Hauter is a Gila River Indian Community native and attorney with a Washington, D.C., firm that represents tribes and tribally owned enterprises. He’s a former in-house attorney with GRIC.

He said indigenous leaders often are reluctant to start discussing proposals that would tie up water or water rights for a long term, such as 20, 30 or 100 years.

“They like the flexibility of deciding to go another directions in two years, five years, 10 years, especially with many situations changing so rapidly now,” Hauter said.

One of the last major Indian/Non-native agreements signed in the Valley was between the city of Chandler and Gila River in July 2016. The water exchange agreement was worth at least $43 million to GRIC.

The deal, approved by GRIC Community Council at a regular meeting, helped the community address the rising cost of non-drinkable Central Arizona Project Colorado River water used for critical community agriculture and irrigation projects.

Apache Junction’s agreement with CAP and GRIC was completed in October 2011.

“Anytime you talk about acquisitions, those are worth whatever people are willing to pay for them,” Hauter said. “But I think if you are going to see any acquisitions, it’s going to involve prices that are much different in the Upper Division (Wyoming, Utah, Colorado and New Mexico) compared to down here.”

Hauter said he’s not sure what will happen with agriculture and farming in general as water becomes more scarce. However, he doesn’t think tribes are going to be looking to part with their shares of what seems to be a diminishing overall river water supply.

At a time when conserving water and managing one’s share carefully takes so much energy and planning, Hauter said he believes Valley tribal governments are going to hold that in precedence over deals that could involve a lot of money.

“Traditionally, tribal leaders are skeptical on long-term agreements anyway,” Hauter said. “And now, the level of (Colorado River water) scarcity is a whole animal in these discussions. There are a lot of questions that can’t be answered right now. It will take a while.”

With the Colorado River Indian Tribes Water Resiliency Act stalled in Congress, swapping and dealing water storage credits might be the only real commodity changing hands in the years ahead in Arizona.

In total, approximately 46% of the CAP water supply is, or will be, permanently allocated to Arizona Indian Tribes. This makes CAP the largest single supplier of Colorado River water to tribal water users in the Colorado River system.

The impact of long-term agreements

Campbell said the Phoenix is actively talking with Gila River about a possible deal with the community, in addition to the city’s 99-year lease with the tribe. She said that deal would use money already budgeted for water, so it wouldn’t incur a cost that would be passed along to ratepayers.

She said maintaining diverse sources of surface water, along with pursuing state and federal actions that might change how groundwater can be used and transferred, are keys for a large municipality like Phoenix. 

Campbell cited Salt and Verde river water, possible heightening of existing dams and better and wider applications for reclaimed water as examples.

Phoenix and GRIC also gave up some of allotted water earlier this year to help stabilize Lake Mead’s level, she said.

While cities would like to lock up more long-term leases, Campbell said she knows tribes avoid long-term commitments, but short-term storage credits are on the table as well.

Campbell, who says she grew up within view of the Mississippi River, said the city always has its eyes on long-term research into desalinization or moving water great distances from wet to dry regions. These fixes won’t happen cheaply or quickly.

“Never say never, and know that you get what you pay for,” she said.

While costs might rise and some local wells might run dry, Campbell said she believes the idea of running out of water completely in Arizona still seems avoidable.

She points out the Arizona legislature’s 1980 Groundwater Management Act requires active management areas to diminish reliance on groundwater to the point that recharge and extraction are in rough balance by 2025.

“We must continue to reduce demand, and can’t cut and run on commitments we made to keep a balance,” she said. “As long as we all stick to what we agreed to do back in 1980, we should be OK.”

Over the next five to 10 years, however, Campbell said the cost of purchasing water credits or signing lease agreements is likely to go up in the future, regardless of what tribes agree to or what Congress allows tribes to do with their groundwater.

“The story of how the West was won, so to speak, is permeated by federal subsidies to keep the cost of water itself low,” she said. “Many water managers agree that although subsidized cost of water helped build the West over the past 100 years, that policy has reached the end of its efficacy, and is on its way out.”

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