In October, the Central Arizona Water Conservation District (“CAWCD”) Board of Directors approved an agreement to purchase land and water rights in the Mohave Valley Irrigation and Drainage District (“MVIDD”) from Water Asset Management, LLC and Water Property Investor, LP. The purchase consists of seven farms totaling 2,203 acres and approximately 13,929 AF of Colorado River diversion rights—of which 11,429 AF are 4th Priority rights under subcontracts with MVIDD, and 2,500 AF are present perfected rights.
CAWCD intends to work with MVIDD to create a rotational fallowing program similar to the pilot fallowing and forbearance project it is running with Yuma Mesa Irrigation and Drainage District (“YMIDD”). CAWCD will continue leasing the land in coordination with the fallowing program. The water generated by the leasing program will be used by the Central Arizona Groundwater Replenishment District (“CAGRD”) for replenishment purposes. The land lease payments will help offset the acquisition costs. (For background on the YMIDD pilot fallowing and forbearance project, see “CAWCD and YMIDD Conserve Water for the Colorado River System through Pilot Fallowing Project,” JOW March 2015).
CAWCD will pay $34 million from the CAGRD Water Rights and Infrastructure Account reserves. Because of the offset provided by the land leases, CAWCD staff attribute the entire price to the water giving it a value of $2,440/AF.
The transaction is currently in due diligence. During the due diligence period, CAWCD staff will:
- Research the validity and transferability of the water rights
- Discuss with MVIDD the development of a rotational fallowing program
- Extend existing farm leases
- Hold discussion with local taxing jurisdictions to minimize the impact of CAWCD land ownership
- Conduct environmental review of the property
- Review the title report and land survey.
The due diligence period ends January 12, 2018, and the CAWCD Board of Directors will likely consider the final contract in January 2018.
Closing is scheduled for February 15, 2018 and is contingent upon MVIDD approving the assignment or issuing new water contracts for the 4th Priority water rights, seller assigning to CAWCD interest in any shared well agreements, and obtaining confirmation of seller’s ownership share of any partially-owned present perfected rights. CAWCD also must file an application for consultation with the Arizona Department of Water Resources, obtain approval from the U.S. Bureau of Reclamation to add Central Arizona replenishment as a second place of use for the water rights, and obtain any authorizations and agreements needed to transport non-project water under the CAP System Use Agreement. (For background on the System Use Agreement, see “CAP System Use Agreement Brings Needed Flexibility to Arizona Water Management Efforts,” Journal of Water Spring 2017 and “Central Arizona Project Holds Workshop on Firming, Wheeling and Exchanges,” JOW February 2016).
Mohave County opposes the transfer. Three days before the CAWCD board meeting, the Mohave County Board of Supervisors passed a resolution in which they characterize this transfer, along with the long-term lease from the Town of Quartzsite, as “a raid on rural Arizona’s water supply.” They argue that the 4th Priority rights were allocated to water users on the mainstem of the river and should not be transferred away from there, the water rights belong to MVIDD and not the sellers, and the transfer will remove acres from the Mohave County tax rolls. The county supervisors also express concern that Mohave County has no representation on the CAWCD board.
Written by Marta L. Weismann