Arizona Water Protection Fund Grants Hijacked

The Arizona Water Protection Fund (AWPF) has been hijacked by ranchers and other agricultural interests, despite the fact it was created in 1994 by the Arizona Legislature to protect and enhance the state’s streams and associated riparian habitat.

The environmental focus 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 rancher and 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 cost-share 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 FY 1998. It didn’t receive any more of this money until FY 2004, when $1.307 million was received. The CAP money peaked at $5.413 million in FY 2008, but began a significant and continued decline in FY 2012. 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.

Early AWPF Grants

When the Commission began awarding AWPF grants in 1995, many of them directly benefited riparian areas on public lands that were being damaged by livestock grazing. For example, grants were awarded to protect the Bureau of Land Management’s Gila Box and San Pedro riparian national conservation areas from cattle. And one of the very first grants helped build a riparian exclosure to protect Sycamore Creek, located on the Tonto National Forest’s Sunflower grazing allotment.

Most often, these grants were in the form of helping public land ranchers to pay for new livestock fences and waters. These projects typically purported to protect riparian areas by drawing cattle away from them by building new livestock waters in the surrounding uplands. But this strategy could bring negative impacts to rarely-grazed upland areas, and sometimes facilitated increased cattle numbers. Also, if cattle were only seasonally excluded from the riparian areas, the protection was only partial.

Furthermore, it appears that some of these fences weren’t maintained. They were several AWPF grants to help public land ranchers build fences to protect upper Eagle Creek, located In the Apache Sitgreaves National Forest. This stretch of the Eagle Creek is located in the Clifton Ranger District, and provides habitat for several endangered species. In 2018, however, the Center for Biological Diversity conducted an on-the-ground assessment of the creek and found that cattle had access to the riparian areas, and were damaging them. 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.

Purpose of AWPF Grants Changed

Despite these issues, the early AWPF grants often brought some measure of direct improvement improvement to riparian areas. But 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.

Even worse, 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 riparian restoration projects. Republican Gov. Jan Brewer signed the SB 1288 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 she introduced SB 1478 in 2014 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 in order to promote the growth of grass for cattle forage. The bill also prohibited AWPF grants for projects that included the planting of native mesquite trees – ostensibly because these trees were detrimental to water conservation efforts. This provision ignored the fact that mesquite bosques (forests) are an important and endangered riparian habitat in Southwestern 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 rancher Stefanie Smallhouse was the Commission’s new administrative Executive Director. Ms. Smallhouse was a former Executive Director of the Arizona Association of Conservation Districts, private nonprofit organization that promotes the state’s NRCDs. (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 AWPF Commission has proceeded to approve grants that have little, if anything, to do with the remaining legal requirement that AWPF projects “directly benefit” riparian areas.

Grants to Kill Trees

Recent AWPF grants were approved for projects which were justified as being watershed improvement projects that would reduce erosion and improve water quality downstream. They involved manipulating native vegetation by killing “invasive” woody vegetation in order to try and grow more grass. These types of projects claimed that grass is inherently superior to woody vegetation for watershed health. The typical targets of the projects were mesquite trees in the lower elevations, and juniper trees in the higher places. Sometimes the trees were killed mechanically, but they were also killed by the aerial spraying of dangerous herbicides. But research (Belsky 1996, Collings 1966, Perkins 2005, Wilcox 2002) has shown that there’s no significant difference in streamflows, water yields, and sediment loads between healthy woody and herbaceous vegetation communities in the arid Southwest.

Furthermore, these projects were just treating symptoms, not the causes. One of the primary causes of the recent proliferation of woody vegetation is that cattle prefer to eat herbaceous vegetation, like forbs and grasses, which provide the fine fuels necessary for the periodic, milder fires that naturally control woody vegetation. If cattle grazing isn’t concurrently reduced when the woody vegetation is killed, the process can repeat itself. And increases in woody vegetation might recurr anyway because of ongoing climate change.

The real primary objective of these projects was to grow more herbaceous forage for cattle. For example, AWPF Grant #17-188 for $303,975 helped fund a juniper removal project on the Brown Ranch, owned by the descendants of the late influential state legislator Jack A. Brown. The large ranch is a mixture of private, state, BLM, and Forest Service land in Apache County. 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 big game. The project’s grant application was submitted by the Arizona Association of Conservation Districts.

The AWPF grant, however, wasn’t the only government assistance program that has benefited the Brown Ranch. The known list is provided in the table below.

Another example is AWPF Grant #19-194 for  $341,626 helped fund a mesquite removal project on the Davis Ranch, which includes private and state land in Cochise County. Aerial spraying was used to apply three different herbicides over 5,345 acres in order to kill mesquite trees and promote grass growth for cattle. Some herbicide, however, drifted from this spraying and resulted in serious complaints from neighboring property owners that were investigated by the Arizona Department of Agriculture, and resulted in a large financial settlement. This project’s grant application was also submitted by the Arizona Association of Conservation Districts. The ranch’s owner, Fred Davis, is the current chairman of the Whitewater Draw NRCD.

The stated purpose of the project was to “maximize the capture of precipitation.” But the use of herbicides can leave the land practically denuded for several years, with little vegetation to hold the rain or soil during rainstorms. This situation lasts longer when there’s a drought.

Also, ranchers like to call mesquite trees “invasive,” but that’s a pejorative word that denigrates its role as a keystone plant in Southwest ecosystems. Research has shown that desert plant species (Tiedemann 2004) and wildlife species (Germano 1983), including mule deer, are more numerous in areas with mesquite trees. (Mule deer habitat improvement was the Arizona Game & Fish Department’s justification for this project’s matching HPC grant.)

Like many other Arizona ranches, the Davis Ranch has benefited from other government programs too. A list of the known assistance is provided in the table below.

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 only $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. Subsequently, no AWPF grants were awarded for FY 2021.

The FY 2022 state budget bill passed by the Arizona Legislature appropriated $1.25 million to the Arizona Water Protection Fund.

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.

On August 6, 2021, the Arizona Attorney General’s office finally responded to my complaint when it issued letters which notified the Apache, Chino Winds, and Whitewater Draw NRCDs, which I had named in my complaint, that they were out of compliance with the state’s open meeting law. The NRCDs were given 30 days to verify their compliance. According to the Coconino NRCD's August 26, 2021, meeting minutes, Republican state Rep. Gail Griffin “agreed to intervene” in the matter.

As of September 20, 2021, the Apache, Chino Winds, and Whitewater Draw NRCDs had posted agendas and minutes to the Arizona Association of Conservation Districts website. Many of the state's other local NRCDs, however, still hadn't posted anything there, although a few NRCDs have their own websites. Another Open Meeting Law complaint was filed with the Arizona Attorney General's office September 21, 2021, regarding the noncompliant NRCDs.

The FY 2023 state budget bill passed by the Arizona Legislature appropriated $1.25 million to the Arizona Water Protection Fund.

On November 29, 2022, the Arizona Water Protection Fund Commission met and approved three grants for state FY 2023. They included AWPF Grant #2301 for $261,000 to remove juniper trees from the Timberline Ranch. The grant’s application was submitted by the Arizona Association of Conservation Districts.The table below shows all of the government assistance that has benefited the ranch.

The FY 2024 state budget bill passed by the Arizona Legislature appropriated $1.25 million to the Arizona Water Protection Fund.

In late 2023 Arizona Water Protection Fund Commission met and approved five AWPF grants for state FY 2024, including AWPF grant #2401 for $229,698 to replace old livestock water tanks in the Big Sandy Natural Resource Conservation District (NRCD), which includes many BLM grazing allotments administered by their Kingman Field Office.

The FY 2025 state budget bill passed by the Arizona Legislature appropriated $1.25 million to the Arizona Water Protection Fund.

On June 21, 2024, Gov. Katie Hobbs signed HB 2865, creating a new state agency called the Natural Resource Conservation District Board, comprised primarily of local NRCD supervisors. It's tasked with providing administrative assistance to the state's regional Natural Resource Conservation Districts, which was formerly the responsibility of the Arizona State Land Department. The initial operating funds for the Board will come from the Legislature's regular annual appropriation of $650,000 to the state's NRCDs. The NRCD Board is also responsible for dispensing "conservation" and "education" grants from a new NRCD Fund to the local NRCDs and Soil and Water Conservation Districts. The monies in the fund can include state appropriations, grants and contributions - although the Legislature didn't make an initial appropriation to the fund. Most of the grants dispensed by the Board will likely benefit ranchers, as most NRCD supervisors are ranchers.

In late 2024 the Arizona Water Protection Fun Commission approved three AWPF grants for state FY 2025.