Maricopa County Superior Court Judge Scott Blaney has ruled the Arizona Department of Water Resources overstepped when it altered the process used to identify if the area groundwater supplies were sufficient to support development of new homes without undertaking a formal rulemaking process.
ADWR changed its policy in 2023. Previously, the Department used hydrology reports submitted by developers to certify a planned development had sufficient water supplies to last 100 years, as required under the 1980 Arizona Groundwater Management Act.
The Department changed its policy after a model-based study estimated the entirety of the Phoenix Active Management Area had nearly five million fewer acre-feet of water than it needed. The updated policy resulted in a construction moratorium in some parts of Maricopa County.
It also created two mechanisms for developers to obtain a Certificate of Assured Water Supply under the new policy. They could either buy farmland and use that property’s water credits under a program called “Ag to Urban,” or they could try to secure assured water supplies through alternate means.
The Home Builders Association of Central Arizona, represented by the Goldwater Institute, filed a lawsuit, alleging ADWR violated state law when it unilaterally changed its groundwater evaluation process.
Blaney agreed and said the Department had acted illegally by making the change without going through a formal rulemaking process.
ADWR had argued it did not formally change its rules on how the availability of water was determined. Judge Blaney disagreed and said the Department’s argument that it could change the process and criteria and still claim it was adhering to the existing rules was without merit.
Even though Blaney’s ruling is not a final judgment, ADWR representatives said the Department plans to appeal.
Goldwater Institute attorney Timothy Sandefur said the Department deliberately tried to avoid the formal rulemaking process under the Administrative Procedures Act so it would not be deluged with objections from builders and developers. In doing so, he said, ADWR effectively blocked the people of Arizona from having a say in the issue.
Representatives of HBACA said tens of thousands of developer-owned homesites were impacted by the Department’s 2023 decision, particularly on the west side of metro Phoenix. ADWR has continued to receive applications to build in those areas, but it has not processed them.
Sandefur said he doubts an appeal would have any success and said, “I think the ruling is as clear as it could be, and I have a hard time imagining what sort of legal arguments they would use if they were to try.”
He added that, despite alleged media hype and fears to the contrary, there is enough water in Maricopa County to meet development needs and for officials to allege otherwise is detrimental to homeowners and the state economy. (Source)