Arizona Water Protection Fund Hijacked By Agricultural Interests

The Arizona Water Protection Fund (AWPF) was created in 1994 by the Arizona Legislature to protect and enhance the state’s streams and associated riparian habitat. But during the last several years it’s been hijacked for the benefit of ranchers and irrigated agriculture.

The environmental purpose of the AWPF was always tenuous, because it wasn’t created as a result of some newfound concern in the Legislature about protecting important natural ecosystems. It was created as a political strategy to make Arizona’s 1993 proposal to repay the multibillion-dollar debt it owed the federal government for the construction of the Central Arizona Project (CAP) canal system more attractive to the U.S. Bureau of Reclamation (USBR).

The state’s payment proposal had received criticism from Clinton appointees in the USBR, and also from Rep. George Miller, D-CA, chairman of the Natural Resources Committee of the U.S. House of Representatives. Furthermore, Arizona environmentalists were encouraging the USBR to reject it because it proposed to increase subsidies for agricultural water users, and also ignored one of the purposes of the CAP, which was “improving conditions for fish and wildlife,” per the Colorado River Basin Project Act of 1968. Environmentalists had also suggested that the CAP financing agreement should include the creation of a trust fund to help pay for projects to restore Arizona’s streams and riparian habitat, and their idea had gained favor in Washington, D.C.

Subsequently, the Legislature’s passage of HB 2590 in 1994 to create the AWPF was designed to preempt the USBR from mandating an environmental trust fund prescribed by the federal government. It was sponsored by state House Speaker Rep. Mark Killian, R-Mesa, a farmer, and the current Director of the Arizona Department of Agriculture.

The bill also created an Arizona Water Protection Fund Commission (AWPFC) to oversee the disbursement of project grants from the AWPF, with administrative support from the Arizona Department of Water Resources.  The Commission consisted of 15 voting members and four non-voting ex-officio members. The makeup of the voting members was heavily tilted towards agricultural interests, and included only two riparian habitat specialists. Almost all of the voting Commission members were appointed by the Governor or the Legislature.

The bill, however, did require that the AWPF grants approved by the Commission had to be used for projects that provided “for the continued maintenance of the portion of the river and stream and associated riparian habitat enhanced by the project.” And that the projects “directly benefit perennial or intermittent rivers or streams.”

The cost of funding the AWPF was minimized for CAP agricultural water users. The Legislature funded it from the state’s general fund with a $4 million annual appropriation for state fiscal year 1995, $6 million for FY 1996, and a promise of $5 million per year after that. The $5 million annual appropriation could be reduced by an amount equal to the excise taxes collected annually on CAP water sold or leased to purchasers outside of Arizona.

The Legislature kept its promise to allocate $5 million a year to the fund in FY 1997. But they reduced it to only $1.6 million in FY 1998. And by FY 2000, at the end of the Clinton administration, they had reduced it to zero. The total appropriations the AWPF received from the general fund from FY1995 through FY 1999 were about $21 million.

The fund’s other major source of money, the CAP excise tax revenues, initially proved to be meager, with the AWPF receiving only about $483,00 for FY1998. It didn’t receive any more of this money until FY2004, when $1.307 million was received. The CAP money peaked at $5.413 million in FY2008, but began a significant and continued decline in FY2012. Still, the Commission was able to brag in its FY2013 Annual Report that during the previous 16 years they had been able to award AWPF grants totaling nearly $43 million for 209 projects that had restored, protected, and enhanced riparian habitat in Arizona.

Many of the AWPF grants awarded from 1995 through 2013 went to public land ranchers. A lot of the projects directly benefited riparian areas by helping to keep cattle out of perennial streams. A total of $368,118 in AWPF money, for example, was awarded in grants #96-0012, #00-102, #06-135, and #11-177, to fund fences on grazing allotments in the Apache-Sitgreaves National Forests along upper Eagle Creek, which provides habitat for several endangered species. In 2018, however, the Center for Biological Diversity conducted on-the-ground assessments of upper Eagle Creek and found cattle had access to the stream, and were damaging it, on three of the four allotments where AWPF grants had been awarded to fence them out. Subsequently  on January 13, 2020, the Center filed a lawsuit against the Forest and the U.S. Fish & Wildlife service for violating the Endangered Species Act.

Other AWPF grants that were awarded to public land ranchers provided less, if any, direct benefits to riparian areas. Grants that helped fund new livestock waters in the uplands, for instance, primarily gave cattle access to new areas, and sometimes led to increased cattle numbers. And the primary objective of grants which funded the destruction of woody vegetation was to try and grow more grass for cattle to eat.

But these agricultural subsidies apparently weren’t enough, because in 2013 state Sen. Gail Griffin, R-Hereford, a member of the Arizona Cattle Growers’ Association, Arizona Farm Bureau, and an advisor to the Hereford Natural Resource Conservation District (NRCD), began to introduce legislation to change the purpose of the AWPF. First, she introduced SB 1288, which reduced the number of voting members on the AWPF Commission from 15 to nine – and none of them were required to be riparian habitat experts. Also, the minimum number of members representing NRCDs was raised from one to five, ensuring that NRCD representatives would have control of the Commission. This changed the focus of AWPF projects because NRCDs, which are regional subdivisions of the Arizona State Land Department, are comprised of local landowners, mostly ranchers, that work to obtain funding for agricultural “conservation” projects. It also created a situation wherein NRCD members were in charge of awarding AWPF grants to NRCDs.

Griffin’s bill also prohibited federal land management agencies, such as the Forest Service or Bureau of Land Management (BLM), from applying for AWPF grants. This was despite that fact that most of Arizona’s remaining riparian areas are located on public lands, and these agencies had previously used AWPF grants to implement numerous successful riparian restoration projects. The obvious intention was to award more AWPF grants to projects located on state and private land. Republican Gov. Jan Brewer signed the bill in June 2013.

AWPF grants, however, were still required to be used primarily for the benefit of riparian habitat. Griffin couldn’t change that, so instead, in 2014 she introduced SB 1478 to add other types of projects that could be funded with AWPF grants. The biggest addition was the creation of the watershed improvement program, which allowed AWPF grants to fund projects to destroy woody vegetation and brush in order to promote the growth of grass for cattle forage. The bill also prohibited AWPF grants for projects that included the planting of nonnative tamarisk trees and native mesquite trees, and allowed funding for projects to remove them – ostensibly because these trees were detrimental to water conservation efforts. While that may be true for exotic tamarisk trees, this provision ignored the fact that mesquite bosques (forests) are an important and endangered riparian habitat in desert bottomlands. The bill also allowed AWPF funds to be used to purchase long-term water storage credits for surface water stored in underground aquifers. Gov. Brewer signed this one too.

Griffin concluded her makeover of the AWPF in 2016 when she introduced SB 1191. It added “measures to increase water availability” to the purposes of the AWPF. It also changed the requirement that AWPF grants directly benefit riparian areas to include the phrase “or that otherwise increase the supply of water.” And it removed a restriction that prohibited more than 5% of the AWPF monies awarded annually from being used for water conservation or research projects. Republican Gov. Doug Ducey signed this one.

The redesigned AWPF Commission held its first meeting in February 2014. No member of the 2013 Commission was present, and Stefanie Smallhouse was the Commission’s new administrative Executive Director. Ms. Smallhouse was a former Executive Director of the Arizona Association of Conservation Districts. (She left the AWPF in November 2017 to become the President of the Arizona Farm Bureau.) Sen. Griffin was a non-voting advisory member of the new Commission.

Not coincidentally, the Legislature resumed making annual appropriations to the AWPF in 2016. They made a general appropriation of $250,000 for state FY 2017, and the same amount for subsequent budget years until FY 2020, when they increased it to $750,000. Additionally, Sen. Griffin succeeded in passing  a supplemental appropriation of $400,000 for FY 2019.

The redesigned Commission has approved grants for the following projects which have had little, if anything, to do with the remaining legal requirement that AWPF projects “directly benefit” riparian areas:

WPF 14-185: Horseshoe Draw Flood Control Study and Design Project; Recipient – Hereford NRCD $198,625
This grant helped pay for a study of a proposal by the Hereford NRCD to address severe erosion that was causing head cutting in Horseshoe Draw in Cochise County on private property on the San Jose Ranch, owned by John W. Ladd, a longtime member and current chairman of the Hereford NRCD. The proposed solution was to build a large earthen berm across the wash, with a spillway, to catch stormwater in order to reduce flood damage to a road crossing downstream. Since Horseshoe Draw is an ephemeral tributary to the San Pedro River, the project was also supposed to improve riparian habitat by reducing deposition into the river of sediment contaminated with E. coli – livestock having been identified as a major source of this dangerous bacteria. Furthermore, water that pooled behind the berm was supposed to help recharge the aquifer downstream that fed the river’s perennial surface flow. The project proposal, however, didn’t address the causes of the accelerated erosion. It mentioned that 9,000 acres of rangeland contributed to the runoff, but there was no discussion about the existing livestock management situation on the watershed. The Commission approved the project during their April 2014 meeting, despite voicing questions about the appropriateness of allocating AWPF money for it, because it was just a preliminary study.

(After the study was completed, the Hereford NRCD was awarded a $993,880 Watershed Quality Improvement Grant #18-001 from the Arizona Department of Environmental Quality to build the project. The grant agreement included a requirement that Ladd manage the livestock on his ranch to ensure that conservative forage utilization levels were maintained and that pastures were periodically rested from grazing. It didn’t say if his cattle would be allowed to access the water that pooled behind the berm.)

WPF 17-188: Apache-Navajo County Watershed Improvement Project; Recipient – Arizona Association of Conservation Districts, $303,975
This grant helped fund a project on the Brown Ranch, owned by the descendants of the late influential state legislator Jack A. Brown. The ranch is a mixture of private, state, and BLM land. The project called for mechanically killing “invasive” juniper trees on 2,000 acres to encourage an increase in the amount of herbaceous forage for cattle and wildlife. The conversion to herbaceous forage was also supposed to reduce soil erosion and thus improve the condition of downstream riparian areas. Vegetative manipulation projects on rangeland are often justified with these claims, even though there’s a significant amount of research that challenges them. Studies about juniper removal, for example, have shown that there’s not a big difference in erosion and sediment loads between land covered in woody vegetation and land covered in herbaceous vegetation. The biggest cause of erosion in the Southwest, studies have shown, is intense rainstorms, and a heavy rain soon after woody vegetation has been removed can wash away a lot of soil. Also, if there’s a drought, it might take years for new grass to grow, and the Southwest has experienced a nearly continuous drought for the last 20 years. Also, more grass and open areas only favor those wildlife species that prefer that type of habitat. Mule deer, for instance, prefer areas with juniper trees. The only major difference that usually results from these projects is that they provide more forage for cattle. And they are expensive to implement, considering the value of the additional forage gained.

WPF 17-189: Grassland Restoration Upper Verde River Watershed; Recipient – Upper Verde River Watershed Protection Coalition, $138,183
This grant helped fund a project to hand-thin pinyon pine and juniper trees from 240 acres in Yavapai County in the Williamson Valley to promote the growth of grass. The killed trees were used to create obstructions in drainages to help slow erosion. The land is on the Barney York Ranch, which includes private and state land, and is owned by the Kenson family, although the grant application was submitted by the Upper Verde Watershed Protection Coalition. The project manager was John Munderloh, a former AWPF Commissioner, and the water resources manager of the Town of Prescott Valley. The trees that were cut down probably did some good as check dams to help stop head cut erosion in the gullies. But, as with all of these types of vegetative manipulation projects, the conversion from “woody species that harmed the land” to grass likely didn’t make a big difference in soil erosion or the condition of downstream riparian areas, and mostly provided more forage for cattle. The project was also supposed to increase the recharge of the local aquifer. But research has shown that aquifer levels in the Southwest are primarily a product of the amount of precipitation and groundwater pumping. Compared to these two factors, the type of vegetation on the land has a relatively minor effect.

WPF 19-194: Davis Cattle Co. Grassland Restoration; Recipient – Arizona Association of Conservation Districts $341,626
This grant helped fund a project to use aerial spraying to apply dangerous herbicides over 5,345 acres in order to kill mesquite trees and promote grass growth on the Davis Ranch, which includes private and state land in Cochise County. Herbicide drift from this spraying resulted in serious complaints from neighboring property owners, including Hofmann Vineyards, to the Arizona Department of Agriculture. The grant application was submitted by the Arizona Association of Conservation Districts. The ranch’s owner, Fred Davis, is a member of the Whitewater Draw NRCD. The stated purpose of the project was to “maximize the capture of precipitation.” Replacing mesquite with grass was supposed to decrease erosion and slow down runoff, which would increase soil moisture, help recharge the local groundwater, and reduce downstream flooding. It was also supposed to improve the local wildlife habitat. All of these claims were questionable. One of the reasons ranchers argue that grass is better at preventing erosion than mesquite is that there’s supposedly less bare ground with grass. But in ungrazed areas, there’s plenty of herbaceous vegetation that grows around and beneath mesquite trees.

West Fork Pinto Creek Canyon, Tonto National Forest
Herbaceous vegetation surrounds manzanita and mesquite in ungrazed West Fork Pinto Creek Canyon, Tonto National Forest, 2012 (Jeff Burgess)

Grass is also supposed to increase soil moisture because it uses less water. It’s true that woody vegetation uses more water than grass, but if grass uses less water, how is it better at reducing runoff? And if mesquite trees grab more water, and produce more shade, how is soil moisture higher with grass? Mesquites are one of the trees that ranchers like to call “invasive,” but that’s a pejorative word that denigrates its role as a keystone plant in Southwest ecosystems. Research has shown that many wildlife species are more numerous in areas with mesquite trees. Furthermore, the primary reason for the expansion of woody plants across the Southwest was that overgrazing by cattle removed the fine fuels needed to carry the periodic, relatively mild, natural wildfires that killed young trees and maintained grasslands. There’s also a suspicion that the widespread historical use of trees for firewood had an effect. It’s probably impossible to reverse the situation now, because climate change is creating hotter and drier weather that’s more favorable for mesquite trees, which makes killing them an expensive temporary measure.

WPF 19-195: Gila Valley Irrigation District Rapid Appraisal & Modernization; Recipient – Gila Valley Irrigation District (GVID), $32,982
This grant helped fund a review of the infrastructure of the 11 agricultural irrigation canal companies in the GVID along 35 miles of the upper Gila River in Graham County to identify improvements to increase their efficiency.

WPF 2000: Gila Valley Irrigation District (GVID) Optimization Phase 1; Recipient – Gila Valley Irrigation District, $275,775
This grant helped to fund the optimization of GVID canals that divert water from the upper Gila River in Graham County, by installing modern canal gates to reduce water loss and improve the measurement of the amount of water used by the local water rights holders. It was likely a response to efforts by the Gila River Indian Community, located downstream, to regain some of the water rights they had lost in the late 1800s, when settlers were allowed to divert the river upstream, thereby destroying the Tribe’s thriving agricultural economy. The Tribe had filed lawsuits asking courts to declare that some farmers in the upper Gila Valley no longer owned water rights because they had failed to use them for five years, as specified in the “use-it-or-lose-it” provision of Arizona’s water laws. Arizona House Speaker Rusty Bowers, R-Mesa, responded in February 2019 by introducing HB 2476 to delete this longstanding legal requirement. But the bill was quickly held up in the Legislature after the Tribe threatened to withdraw from the proposed multi-state drought contingency plan for Colorado River water if it was passed. The state appropriations bill that increased the annual appropriation to the AWPF to $750,000 for FY2020 passed the Legislature in May 2019. The Commission approved the grant for this project during its November 2019 meeting, despite the fact that its proponent had trouble explaining to the Commission’s Chairman how it would benefit riparian areas.

WPF 2010: Quantifying Benefits for Brush Management on Arizona Rangelands; Recipient – Arizona Association of Conservation Districts, $50,000
This grant helped to fund an initiative to encourage local ranchers, rather than government agencies, to gather data on the effectiveness of brush removal projects.

Updates

In March 2020 the Arizona Legislature responded to the COVID-19 pandemic by adjourning after it passed a basic state FY 2021 budget. The budget bill included an appropriation to the AWPF from the general fund of $250,000.  Griffin, now serving in the state House of Representatives, had introduced HB 2101 in January to provide a $1 million supplemental appropriation to the AWPF, but the bill didn’t pass before the adjournment.

On May 26, 2020, I filed an official complaint with Arizona Attorney General Mark Brnovich regarding the Arizona State Land Department’s failure to ensure that the state’s Natural Resource Conservation Districts comply with the state’s open meeting law.

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