ADEQ Water Quality Grants Are Subsidizing Arizona Ranchers

Arizona’s Water Quality Improvement Grant (WQIG) program is a part of the bewildering array of government assistance program’s available to the state’s public land ranchers.

The Arizona Department of Environmental Quality (ADEQ) administers it, but the program’s grant money comes from the U.S. Environmental Protect Agency (EPA). The program was created when Congress, by a wide margin, overrode a veto by Pres. Ronald Reagan and passed the Water Quality Act of 1987, which made improvements to the 1972 Clean Water Act, including the creation of the Section 319 Nonpoint Source Management Program. Section 319 was the first federal attempt to directly address the widespread problem of nonpoint source (NPS) pollution, which accounted for as much as 50% of pollution in U.S. waterways. As the name suggests, NPS pollution doesn’t originate from a specific point, but from many diffuse sources. In rural areas, it’s usually caused by runoff from poorly managed agricultural operations. In the Southwest, it’s often caused by ranching in the form of increased sediment in streams due to erosion caused by livestock grazing. This runoff sometimes carries the dangerous pathogen E. coli from livestock feces.

The creation of the federal Section 319 program required each state to conduct NPS pollution assessment reports, identify best management practices (BMPs) to reduce the problems identified, and submit state NPS management programs to the EPA for approval. But these mandates were relatively toothless. The only serious leverage the EPA had was to make states ineligible to receive federal money for the new NPS pollution prevention cost-sharing grants if they failed to comply.

SB 1103

The Arizona Legislature significantly revised the state’s NPS pollution prevention program in 1997 with passage of SB 1103. The bill originated in the Senate as a reauthorization of existing agricultural BMP advisory committees. But when it got to the House, Rep. Bill McGibbon, R-Green Valley, a rancher, introduced a floor amendment that created a new surface water quality grazing permit which granted all Arizona ranchers automatic compliance with NPS pollution prevention requirements. The new statewide permit was predicated on the presumption that ranchers would comply with some state grazing BMPs that would be drafted by a new Grazing BMP Advisory Committee. The eight-member Committee included representatives from the state departments of Environmental Quality, Agriculture, and Water Resources, in addition to a representative from the University of Arizona’s College of Agriculture. The other four members were ranchers appointed by the governor. SB 1103 specified that the BMPs recommended by the Committee could not cause a “significant reduction of grazing activity,” and that compliance would be explicitly voluntary, as per ARS § 49-202.01.

Obviously, one of the Legislature’s objectives was to try and have as few strings as possible attached to the federal Section 319 grants. The EPA helped ADEQ move towards that goal when it published new regulations in 1999 designed to improve its relationships with the states by entering into partnership agreements to give the states “increased flexibility” by providing them with annual environmental block grants, including Section 319 money for the state’s to administer on their own.

ADEQ quickly finalized its NPS partnership agreement with the EPA and in 2000 began accepting applications for Section 319 grants, which were renamed Water Quality Improvement Grants (WQIG). Also, the Grazing BMP Advisory Committee got busy and met several times in 2000, which resulted in new BMP rules being published in section R18-9-501 of the Arizona Administrative Code (AAC) early 2001. They were more like guidelines than actual rules.

Since ADEQ began administering the program in 2000, the agency has awarded many Water Quality Improvement Grants to ranchers permitted to graze their livestock on public land managed by the managed by the Forest Service the Bureau of Land Management (BLM). Some of these cost-sharing grants have helped to fund projects that definitely benefited riparian areas and improved stream water quality – but they were still subsidies. There are questions, however, about the appropriateness of some of the grants, including the examples listed below.

Grants To HRM Ranchers

The EPA was in charge of awarding Section 319 grants in Arizona prior to when ADEQ took over the program in 2000, although ADEQ solicited the grant applications during those early years of the program. During that time ADEQ succeeded in convincing the EPA to fund at least two demonstration projects on ranches that used holistic resource management (HRM) grazing systems. HRM livestock management schemes have been promoted in response to the controversy about livestock grazing on public land, especially riparian areas. Proponents of HRM claim its use can resolve the political conflict with win-win solutions wherein ranchers can put more cattle on the land while, at the same time, wildlife habitat can be improved. The problem is that HRM isn’t science-based, and a growing body of research has long shown that its proponents claims weren’t true. The EPA, however, still awarded the following two Section 319 grants to help fund HRM projects in Arizona in the 1990s:

Section 319 Grant #90-004: Chino Winds HRM Demonstration Project; Recipient – Chino Winds Natural Resource Conservation District, $175,600
This project was implemented on the Yavapai Ranch, which includes the Prescott National Forest’s Yavapai Grazing Allotment. The Arizona State Land Department’s Chino Winds Natural Resource Conservation District (NRCD) took the lead in drafting a coordinated resource management plan (CRMP) to justify the project. This was despite the fact the federal USDA’s Natural Resources Conservation Service (NRCS) had drafted a conventional, science-based, rest-rotation grazing plan for the ranch in 1986. The implementation of the intensive HRM grazing system required the construction of 54 miles of fence, 30 miles of water pipelines, 21 water storage tanks, and 33 cattle watering troughs. It was supposed to improve upland range conditions, and thereby increase downstream water quality. The project monitoring showed the HRM system didn’t produce the expected results.

Section 319 Grant #95-002: Ungulate Action HRM Demonstration Project; Recipient – Fredonia Natural Resource Conservation District, $70,800
This project was implemented on the BLM’s Pratt Tank Grazing Allotment, located in the Arizona Strip. It was supposed to show that feeding a herd of 400 cattle, confined to a relatively small pasture of sagebrush, would kill the sagebrush and increase the ground cover, especially grass, thereby reducing erosion and nonpoint source water pollution downstream. But, like the previous Chino Winds HRM project, it didn’t produce the expected results. Lisa Nelson, the EPA’s regional NPS pollution prevention manager at the time, approved the grant for the Ungulate Action project. She admitted it “sounded weird” when she heard the proposal for the first time. “We have no hammers, no nonpoint source regulatory authority,” she explained afterwards. “All we have is the Section 319 grants. We are trying to foster a community awareness about this type of pollution.”

ADEQ should have learned from these failed HRM ranch projects, but instead, they continue to fund more of them after they began administering the WQIG program in 2000.

WQIG #4-012: Upper Verde Collaborative Watershed Restoration Project; Recipient – EcoResults, Inc., $55,700
In 1998 the owners of the Rio Verde and Y Bar D ranches located in the Prescott National Forest along the upper Verde River had signed a memo of understanding (MOU) in 1998 with the U.S. Forest Service to become part of the Upper Verde River Adaptive Management Partnership (UVRAMP). These ranches held the grazing permits for the Forest’s Del Rio/West Bear and Horseshoe grazing allotments, and both of them used HRM grazing theories to manage their cattle. In 2002 ADEQ awarded WQIG #4-012 to a EcoResults, Inc, a contractor that used HRM, in order to implement some livestock management measures on the two ranches. The grant was used to help fund a project that was supposed to include “state-of-the-art” techniques, but most of them were common measures, such as building fences, and cutting down juniper trees to grow more grass for cattle. The project’s uniquely HRM measure of having cattle stomp hay and seeds into the ground to promote the growth of vegetation was a complete failure.

WQIG#5-012: West Clear Creek Proposal, WQIG #6-019: West Clear Tributary Watersheds, WQIG #20-006, Buckhorn Allotment Livestock Waters & Juniper Removal; Recipient – M Diamond Ranch Co. LLC, $414,641 total
The M Diamond Ranch holds the grazing permit for the the Coconino National Forest’s Buckhorn Grazing Allotment, which is located along the north side of the West Clear Creek Canyon. The current permittee acquired the ranch in 2000 and began to implement a new allotment management plan facilitated by projects that were funded with the help of government assistance. They included new fences to minimize the sizes of the areas excluded from grazing, while other fences were built to create new upland pastures. The projects also rehabilitated old livestock waters, built new ones, and destroyed pinyon and juniper trees to grow more grass for cattle. These were typical range “improvements,” but Buckhorn allotment’s 2010 environmental assessment (EA) and the ranch’s 2020 annual operating instructions (AOI) indicate that the ranch’s grazing system is based upon HRM theories. The biggest difference between HRM and conventional science-based grazing systems is that HRM systems have higher forage utilization levels and pasture moves are based on timing, while science-based grazing systems employ conservative forage utilization rates and pasture moves are made to ensure them. There’s plenty of research that shows conservative forage utilization is especially important in the hot and arid Southwest. The 2010 EA states that the allotment’s permittee is required to comply with the Forest’s conservative annual forage utilization guideline of a maximum of 30 to 40 percent. But that’s contradicted when it then says a “grazing intensity” of up to 50% is allowed “during the grazing period.” And the 2020 AOI shows the ranch is increasing grazing intensity by using the HRM strategy of forcing the entire herd to graze together in one of the ranch’s 22 relatively small pastures at the same time, with pasture moves based primarily on timing. The total amount of government assistance that benefited the M Diamond Ranch is shown in the table below.

Government Assistance Program Key
AWPF - Arizona Water Protection Fund, AWPF Commission (state)
EQIP - Environmental Quality Incentives Program, USDA’s Natural Resources Conservation Service (federal)
The EQIP program absorbed the Wildlife Habitat Incentives Program (WHIP) after 2014.
HPC - Habitat Partnership Committee, Arizona Game & Fish Commission (state)
Arizona Heritage Fund, Arizona Game & Fish Commission (state)
LCCGP - Livestock & Crop Conservation Program, Arizona Department of Agriculture (state)
Note: Open Space Reserve Grants became LCCGP Grants after 2002.
LFP - Livestock Forage Disaster Program, USDA’s Farm Service Agency (federal)
LRP - Landowner Relations Program, Arizona Game & Fish Department (state)
PFWP - Partners for Fish & Wildlife Program, U.S. Fish & Wildlife Service (federal)
WQIG - Water Quality Improvement Grant, Arizona Department of Environmental Quality (federal/state)
Note: These grants were previously called Section 319 nonpoint source (NPS) water pollution prevention grants.
M Diamond Ranch (M Diamond Management Co. LLC) - Buckhorn Allotment
2003Heritage Fund$31,300West Clear Creek Riparian Fence
2004WQIG #5-012$119,100West Clear Creek Proposal
2004HPC #03-2-040$29,850Indian Flat Habitat Improvement (Cut Down Pinyon Pine & Juniper Trees.)
2004HPC #03-2-041$29,850Boulder Habitat Restoration (Cut Down Pinyon Pine & Juniper Trees.)
2005WQIG #6-019$224,177 West Clear Creek Tributary Watersheds
2005LCCGP #05-63$75,000Grassland Restoration & Erosion Control
2007LCCGP #07-58$26,100Fencing
2018HPC #17-204$20,000Buckhorn Allotment Livestock Water Enhancement
2018WQIG #20-006$71,364Buckhorn Allotment Livestock Waters & Juniper Tree Removal
$852,601TOTAL 2003-2018
Grant With A Potential Conflict Of Interest

WQIG #10-008: Gila Box Riparian National Conservation Area (RNCA) Riparian Fence; Recipient – Noland Ranch LLC, $126,900
The Noland Ranch was located in Greenlee County and included the BLM’s Turtle Mountain, Morenci & Metcalf allotments, along with the Granville allotment on the adjacent Apache Sitgreaves National Forests, and also a couple of subleased Arizona state land grazing leases. WQIG #10-008 helped fund the reconstruction of 7.4 miles of fence on the Turtle Mountain allotment to keep cattle out of Bonita Creek in the the BLM’s Gila Box RNCA. It helped protect the creek’s important riparian habitat, but a closer look at the grant’s financial details raised some troubling questions. The budget page from the grant agreement showed the cost of building the fence included $10,00 per mile for labor, plus $5,000 per mile for foremen, and $9,400 for a project administration fee. I was curious about why the labor costs to build the fence were so much higher than average. The 2008 quarterly project report submitted to ADEQ by the ranch’s owners that showed the fence construction was completed by a contractor named “Jr’s Fencing of Morenci, AZ.” An online search revealed that Jr’s Fencing shared the same phone number as Noland Tough, a fencing company incorporated in 2009 by the Noland Ranch’s owners. I used the Contact Us form on the Noland Tough website to ask if Jr’s Fencing was the previous name of their fencing company, and on May 26, 2020, I received an email response which confirmed that it was. I subsequently contacted ADEQ and asked if this apparent conflict of interest was an accepted practice, and was told that all WQIG recipients were required to sign a Terms and Conditions agreement to comply with federal law which includes a Section 9.1, that states:

Conflict of Interest. The Grantee shall comply with standards of conduct pursuant to 40 CFR § 31.36 to avoid conflict of interest. Recipients of federal funds may not participate in the selection, award, or administration of a contract if real or apparent conflict of interest would result.

Moreover, the labor cost of $15,000 per mile to build the project’s fence was about twice the usual rate in the area. In 2006, for example, the Arizona Water Protection Fund (AWPF) grant #06-135 helped fund the construction of 7.5 miles of new fence on the nearby Double Circle Ranch for the going rate of only $7,000 per mile for labor. Furthermore, the Gila Box RNCA fence wasn’t the only project in the area that was partially funded by a government grant where a Noland company was the fence contractor and the labor costs were higher than average. A receipt attached to the project record for WQIG #9-003 indicates the Noland’s were the fence contractor for that project too. That $95,100 grant in 2007 helped fund the construction of 5.5 miles of fence on the Double Circle Ranch, and the project’s budget shows the contracted labor to build the fence totaled $97,977, which works out to about $17,814 per mile. The Nolands were also the fence contractor for AWPF grant #11-177 in 2011 for $136,714, which helped fund the reconstruction of 5 miles of fence on the nearby Four Drag Ranch. That works out to about $27,342 per mile, although that includes the cost of materials too. And these weren’t the only local projects that raised questions about fence costs. The projects partially funded by WQIG #8-007 and WQIG #10-003 appeared to have high fence costs too. I sent the Nolands an email asking if they were the contractors for those projects, but I didn’t receive an answer. So, I subsequently sent another email asking for an explanation of why the fence costs were above average on the projects for which I already knew they were the contractor, but got no response to that either. The table below lists all of the government assistance that benefited the Noland Ranch before it was sold to a new owner in 2019.

Noland Ranch (Noland Ranch LLC) - Turtle Mountain, Morenci, Metcalf (BLM) & Granville (FS) Allotments, State Subleases #05-001089, #05-002190
2007LCCGP #07-70$125,000Livestock Water, Fencing
2008WQIG #10-008$126,900Gila Box RNCA Riparian Fence
2008LRP$22,200Gila Box RNCA Riparian Fence
2011LCCGP #11-52$83,910Chesser Creek Rehab
2013HPC #12-502$29,623Turtle Mountain Wildlife Enhancement
2014HPC #13-503$33,000Turtle Mountain Wildlife Enhancement
2016LCCGP #16-19$47,863Livestock Fence Reconstruction
$1,004,525TOTAL 2007-2018
Grants For Projects With Failures

WQIG #15-001: Sands Ranch Brush Eradication Plan, WQIG #16-002, Sands Ranch HQ Brush Eradication & Livestock Water; Recipient – LS Cattle Co. LLC, $184,272 total
WQIG #18-004, Sheet Erosion & E. coli Mitigation on Sands Ranch; Recipient – Borderlands Restoration Network, $130,500

The 62,685 acre Sands Ranch includes Forest Service, BLM, state, Pima County and private land in Pima and Cochise counties. The ranch’s numerous pastures wrap around the southern end of the Whetstone Mountains, with the westernmost ones in the Cienega Creek watershed, and the eastern pastures in the watershed of the Sand Pedro River. In 2008 Pima County paid $21 million to purchase 5,040 acres of the ranch’s private base property to prevent it from becoming a new housing development, and then leased it back to the seller, Sands Properties LLC, to allow the ranching operation to continue. Before the county purchased the land, it commissioned a biological reconnaissance of the ranch which found that in some places “the native bunch perennial bunch grasses have been much reduced and occasionally eliminated along with most of the other ground vegetation.” It added that these areas, “have also been trampled, pulverizing the topsoil, ” and pointed out that, “these areas are prime areas for subsequent erosion.” After the county acquired the property, the ranch’s managers worked with the local NRCS office to draft a coordinated resource management plan, which resulted in the Sands Ranch CRMP in 2010. One of the CRMP’s primary objectives was to deal with the ranch’s “impediments to profitability.” The CRMP was used to justify two Water Quality Improvement Grants, #15-001 and #16-002, which totaled $184,272, that helped fund the aerial spraying of the herbicide tebuthiuron to kill brush to grow more grass for cattle. The stated objective was to reduce erosion by growing more grass, but research has shown that there’s no significant difference in erosion rates between woody and herbaceous vegetation in the Southwest. Furthermore, the primary danger of using tebuthiuron is that, even though it targets woody vegetation, it’s still toxic to a lot of herbaceous plants – including some grasses. This means the land can be practically denuded, and stay that way if there’s drought after it’s applied. This is especially a problem because it usually takes multiple applications to kill woody plants. This is apparently what happened, because in 2016 ADEQ awarded WQIG #18-004 for $130,500 to the Borderlands Restoration Network, a regional nonprofit that promotes a “restorative economy,” to help fund their Sheet Erosion & E. coli Mitigation on Sands Ranch project. They built small rock erosion control structures on the ranch to catch sediment contaminated with E. coli by cattle, to prevent it from reaching the San Pedro River. The primary area for this mitigation work was described as, “extensive areas east of Hwy 90 previously sprayed with herbicide that have not recovered vegetatively.” The total amount of government assistance that benefited the Sands Ranch is shown in the table below.

Sands Ranch (LS Cattle Co. LLC) - Mescal (FS) and Sands (BLM) Allotments, State Lease #05-001181, Pima County Lease #22-64-S-141624-1208
2011LCCGP #11-29$124,000Grassland Restoration, Livestock Water
2012HPC #11-510**$18,000Southwest Whetstone Mountains Livestock Water - Phase 2
2014WQIG #15-001$86,163Sands Ranch Brush Eradication Plan
2015WQIG #16-002$98,109Sands Ranch HQ Brush Eradication & Livestock Water
2016WQIG #18-004$130,500Sheet Erosion & E. coli Mitigation on Sands Ranch
2017 - 2019LFP$60,552
$653,341TOTAL 2011-2019

Note: Arizona State Land Department records show the Game & Fish Department may have contributed to a $68,123 aerial herbicide treatment in 2011 to kill brush on the ranch. AGFD stated they “were unable to locate any records” for the project.
* Prior to 2012 the ranch was owned and managed solely by Sands Properties LLC.
** HPC #11-510 was shared with a neighboring ranch.

WQIG #3-005: Campomocho-Sacaton Watershed Improvement Phase 1, WQIG #7-002: Campomocho-Sacaton Watershed Improvement Phase 2; Recipient – Coronado Resource Conservation & Development Area, Inc., $479,800 total
These two grants were awarded to the Coronado Resource Conservation & Development Area, Inc., a regional nonprofit organization that helped solicit grants for agricultural interests. But the grants benefited a couple of ranches, the Hook Open A and Redtail ranches, located adjacent to each other in Cochise County north of Willcox. Each ranch held a permit for a grazing allotment in the Coronado National Forest in the southern foothills of the Pinaleño Mountains north of town, and when there was sufficient precipitation, the runoff on the ranches drained south across the state lands leased for grazing in the desert below. In 2001 the owners of the two ranches spearheaded a local planning effort to draft the Campomocho-Sacaton Watershed Improvement Plan which helped to justify the grants. Their stated objective was to reduce erosion and downstream flooding in the area. The grants helped fund the “ripping” of strips of state land about 50 feet apart with a single plow at a perpendicular angle to the direction of the runoff in order to slow down its flow, and to also create places to plant native grass seeds because grass had become scarce due to overgrazing and drought. The money also helped fund the construction of more than a dozen new “flood control structures” which also just happened to function as dirt stock tanks where cattle could water. But according to an investigation update in the State Land Department’s FY 2009 Annual Report, the tanks were seriously damaged by heavy runoff from a rainstorm shortly after they were built, and two of them completely failed. After an investigation, they were repaired, but the report implied that even more public funds were spent to fix them. (In response to a public record request about the investigation, the State Land Department responded they “do not have the information you are requesting on the subject project.”)

Old City Cemetery, Willcox, Arizona
Old City Cemetery, Willcox, Arizona (Jeff Burgess)
No Needs Tests For Grants

WQIG #05-013: Upper Hassayampa Watershed Restoration: Wagoner & Crooks-Maverick Grazing Allotments; Recipient – Maughan Ranches LLC, $39,900
The Water Quality Improvement Grant program, like all of the government assistance programs available to ranchers, doesn’t have a financial needs test – so even millionaires are eligible. WQIG #05-013 is an example, because it was awarded to Maughan Ranches, LLC to help build some new livestock waters on the Wagoner and Crooks-Maverick grazing allotments in the Bradshaw Ranger District of the Prescott National Forest. The company is owned by multi-millionaire Rex Maughan, who founded the Forever Living Products company in 1978, and Forever Resorts in 1981. He owns more than a dozen ranches in Arizona alone.

The Wagoner and Crooks-Maverick allotments are part of Maughan’s Diamond 2 Ranch. He also received a $32,196 Open Space Reserve grant from Arizona State Parks for the ranch in 2002 because of a 1998 decision by the Prescott National Forest to reduce the permitted number of cattle on the Crooks-Maverick allotment. The total amount of government assistance that has benefited the ranch is shown in the table below.

Diamond 2 Ranch (Maughan Ranches LLC) - Crooks-Maverick and Wagoner Allotments, State Lease #05-000346
2002OSR #49*$32,196
2003WQIG #5-013$39,900New Livestock Waters
2018HPC #17-302$1,116Middlewater Well Solar Conversion
2018HPC #17-304$1,116160 Well Solar Conversion
$74,328TOTAL 2002-2018
* Open Space Reserve (OSR) grants became LCCGP grants in 2005.
Maughan has also received at least four other HPC grants, including #13-206 for $8,700 for his Apache Maid Ranch, #14-308 for $5,500 for his Ft. Rock Ranch, along with #16-310 for $7,450 & #17-303 for $1,117 for his North Fork Ranch. They amount to $22,767.

Note: Financial information obtained by federal Freedom of Information Act requests, and state Public Records Requests.


The WQIG Awards approved for state FY2020 included WQIG #19-0010, for up to $109,176, to the Arizona Game & Fish Department. Although described as an NPS pollution prevention project, it’s actually mesquite removal project to grow more grass for cattle and local game species, pronghorn antelope in particular.

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