Talk of the Town
By HARVEY SKOOG
Special to the Coruier
Prescott Valley's plan to auction 2,724 acre-feet of reclaimed water in early November has begun to capture the attention of folks throughout Arizona and even nationwide. Many are intrigued by the concept and have been complimentary about its creativity. A few have criticized the concept either because they misunderstand it or they have other agendas. Because the auction is an important part of the town's long-term water management plan, we'd like to get more information out so it is better understood.
Prescott Valley embraces the goal of reaching safe-yield by 2025. Safe-yield essentially means a long-term balance between the amount of water pumped from the ground and the amount that recharges back into it from various sources. Federal law requires community wastewater collection systems to treat wastewater before it is returned to the environment to become part of that recharge. However, all of the current sources of recharge put together (including the reclaimed water Prescott Valley will produce in the near term) are inadequate to reach safe-yield. In fact, the Arizona Department of Water Resources (ADWR) concluded some time ago that safe-yield can't be reached in central Yavapai County without importing water from other areas. Legislation was adopted that allowed the City of Prescott to transport water from the Big Chino Sub-basin into central Yavapai County. Based on that legislation, Prescott and Prescott Valley reached agreement to jointly finance a project to do just that. The project will be expensive; perhaps the most expensive public works project undertaken by either community. But it mutually ensures our long-term future and is our best chance to meet safe-yield.
To pay its share of the project, Prescott Valley has several options. In choosing among those options, its over-riding policy goal has been for new growth to pay the costs. Bonds could be issued and new impact fees could be applied, but that would tie up bonding capacity for many years and delay projects that benefit existing residents. Selling project water up-front would provide funds without bond costs and would allow market forces to help set the price. Unfortunately, the uncertainties of project timing require an interim resource that has the necessary value today. Since state law allows municipalities to accumulate credits for reclaimed water, that resource meets the need. With the help of ADWR, Prescott Valley has been able to estimate the amount of reclaimed water it will produce from currently approved houses and business areas. That amount can now be sold to raise the funds needed for the Big Chino financing. In essence, 2,700 acre-feet of reclaimed water can be used to obtain 4,000 acre-feet of Big Chino water and better reach the goal of safe-yield.
An auction format helps ensure that the town will receive high value for this resource. Even in the thirsty West, water has historically been considered a free commodity with users paying just the cost to pump and deliver it but not for the water itself. To our knowledge, an auction concept is unique and may establish a whole new approach to water allocation and use. It will certainly help move water from being just a regulatory tool to actually being a commodity within the free enterprise system. Particularly attractive is the ability to separate sale of water from the traditional process of allocating water through development entitlements. That way a water market is created that ensures long-term water availability for development but leaves determinations about particular projects (residential or commercial) to a later day. Certainly, more homes will be built over time using this water. However, the Town won't require its use for homes. Purchasers will be free to use it to support industrial, commercial, recreational and wildlife uses or even hold it for resale. Purchasing the water in November won't guarantee permits for any particular project. The primary limitation is that it be used within the town limits.
We believe this concept is part of a rational policy of water management. Other policies suggested by some would actually encourage more parcel splits and a proliferation of exempt wells (increasing the already high number of users who have no responsibility to help reach safe-yield). We believe most people who look closely at the proposed auction will also come to admire its creativity. More information is readily available at the Prescott Valley Web site at www.pvaz.net.
Harvey Skoog is the mayor of Prescott Valley.
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