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State Supreme Court says local governments can’t block water transfers

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Local governments have no inherent right to try to block the transfer of water and water rights out of their area, the Arizona Supreme Court ruled Thursday.

In a decision with statewide implications, the justices brushed aside arguments by Mohave County that it will lose tax proceeds and already has what it claims is a “strained” water supply. The court said those are legally irrelevant.

Chief Justice Scott Bales, writing for the unanimous court, said Arizona law clearly spells out that the state Department of Water Resources needs to consider only the arguments of “interested” parties.

But he said the law defines — and limits — who qualifies as having an interest in a water transfer. And Bales said the issues raised by the county and its lawyers do not fit that definition.

What makes the ruling significant far beyond this dispute is the justices specifically said the state water agency need not consider claims by a local government that a transfer is contrary to the “public interest.”

They said only the interests of those who have a claim to the water rights can file a protest. And there is no contention by the county that it has a legal interest in the water rights here.

That finding provoked an angry reaction from Mohave County Supervisor Steven Moss.

“They stated that, under the statute, whether it’s in the ‘public interest’ or not, or whether it hurts the public or not, doesn’t matter,” he said. “I really don’t think that is a decision that should make any resident of Arizona happy.”

With the Supreme Court ruling drying up any legal recourse, it’s too late to stop this transfer.

But Moss said he will ask state lawmakers to amend the law to ensure this does not happen again to some other community. He said immediate action is needed what with the state deep in drought.

“That means people are going to be looking to mine water,” Moss said

“They’re going to be looking for transfer from one point to the other,” he continued. “And that means there are going to be winners and losers.”

The case stems from a 2010 request by Freeport Minerals Corp. to transfer the water rights from the land within the Planet Ranch in Mohave County, east of Parker, along the Bill Williams River.

Those rights would be transferred to a well field near Wikieup, also in Mohave County, which, in turn, would be used at the Bagdad Mining Complex in Yavapai County for mining and municipal uses. The plan also involved moving rights to other areas within Planet Ranch for a conservation program.

No actual water would be moved. Instead, the transfers concern the “right” to use water for certain purposes.

As required by law, when Freeport applied for the transfer ADWR published a notice that said “any interested person” could file written objections. Mohave County used that to raise its concerns.

Maricopa County Superior Court Judge Crane McClennen ruled the Department of Water Resources had to consider the county’s objections.

“The action of ADWR was contrary to law, was arbitrary and capricious, and was an abuse of discretion,” he wrote.

Thursday’s Supreme Court ruling overturns that decision

Bales acknowledged the phrase “any interested person” is “ambiguous because it is not statutorily defined and is subject to more than one reasonable meaning.” But he rejected the county’s contention that it is broad enough to include anyone having an interest or concern about something.

“This argument effectively renders the word ‘interested’ meaningless, as it would result in reading the statutes as saying any person may file objections if so inclined,” Bales wrote. Instead, he said, the court is interpreting the phrase to mean objections can be filed only by those who have an actual legal interest in the water.

“The county acknowledges that it has no such rights,” the justice said.

Moss, who is an attorney, contends the court’s narrow interpretation is wrong.

He alleged the public interest was not served because Freeport is “selling something (to the government) they don’t have.”

Moss said Arizona law requires people who claim the right to surface water to essentially use it or lose it. And he said Freeport was not using it, meaning the rights belong to the public.

“And that’s not in the public interest,” Moss said.

Doug Dunham, a special assistant to the ADWR director, acknowledged there is a general requirement to use water or lose rights. But Dunham said his agency determined that Freeport had not forfeited its rights.

Dunham also disputed the county’s contention that giving Freeport the right to pump water from the Wikieup field — all without transferring actual water to replenish it — means that other property owners in the area could end up having to cut back on their own water pumping.

Dunham said Freeport has committed not to pump more water in the future than it is using now. What the agreement provides, Dunham said, is a more legally secure claim to the water.

Bales acknowledged that Thursday’s ruling was deliberately rushed.

The reason is that approval of the transfer is a requirement of settlement agreements among Freeport, the Department of Interior, the state Game and Fish Department and the Hualapai Tribe.

Congress approved the deal last year. But the authorization is set to expire at the end of the year if certain conditions are not met by Dec. 15, including a final non-appealable decision to grant Freeport’s applications.

The 8,400-acre Planet Ranch and its water rights originally were acquired in 1984 by Scottsdale for $11.7 million in an effort by that city to ensure it had enough supply to meet future needs. It even continued a money-losing alfalfa ranch on the property to preserve those rights while it sought a way of moving the water, potentially through the Central Arizona Project canal.

That plan never panned out. So in 2011 it sold the ranch to Freeport for about $10.1 million along with some right to additional water through Salt River Project.

One comment

  1. So, reading this article, ADWR:

    1. Investigated and determined that Freeport owned the water subject to this case; and,
    2. Investigated and determined that residents of Mohave County would not have water rights secondary to Freeport if this transaction went through.

    Some questions-

    Who provided the evidence that allowed ADWR to make these determinations? When did the evaluation occur between 2010-14? Who was invited to put on opposing evidence? Was any part of that review during that period Sandra Febritz-Whitney was director of ADWR (2011-14)? If so, does it not trouble anyone that she’s now a Freeport employee? Why did her successor declaring conflicts between himself and Freeport? And when he declared the conflict, why did he assign it to his assistant (the current director) for resolution, as opposed to the Governor’s office like the law required?

    This is but one of many aspects of this case which motivated Mohave County’s BOS to act. This whole process stinks to high heaven, but apparently that’s normal for Phoenix.

    Steve Moss
    Mohave County BOS, District 5

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