June 21, 2023 — The unincorporated Rio Verde Foothills is an upscale community north of Scottsdale, Arizona that does not have a municipal water supply. It had been relying on water hauled from Scottsdale, but that supply was cut off on January 1.  The matter went to court, and then the state capitol.

Arizona Governor Katie Hobbs signed Senate Bill 1432 into law on June 19. The legislation targets water resource management and accessibility, particularly for communities in Active Management Areas (AMAs).

Understanding the Purpose of Senate Bill 1432.

Senate Bill 1432 is a short-term emergency measure that will require additional research and analysis of water supply certificates for residential building projects. Additionally, the bill aims to regulate water service delivery through a standpipe system, an alternative water delivery method for those lacking sufficient water access.

Background: Arizona Groundwater Management Act of 1980.

The Arizona Groundwater Management Act of 1980 established AMAs to regulate the use of groundwater resources in Arizona. A certificate of assured water supply is a guarantee that enough water will be available to meet a proposed project’s needs for the next 100 years. These certificates are crucial for developers or private water companies looking to construct residential buildings in AMAs.

Provisions of the Bill: A Closer Look.

• Report on Building Permit Applications. The new law mandates the Arizona Department of Water Resources (ADWR) Director to research and submit a report on the process of obtaining a certificate of assured water supply for large-scale residential construction projects (six or more residences) within an AMA. The report is to be presented to the Governor and legislative leaders.
• Standpipe Service and Self Hauling. The legislation also sets out a series of requirements for towns and cities providing water service through an agreement with a standpipe district, which is a special administrative region that oversees water delivery via standpipes.  These requirements ensure that water provision meets the needs of up to 750 households outside the city’s or town’s water service area without impacting the water availability of existing customers. It also includes mechanisms for cost recovery, water conservation, and future planning for water supply. Furthermore, the legislation allows for self-hauling of water.
• Standpipe District and Governance. The law establishes a five-person Board of Directors to govern the standpipe district, with members appointed by various state authorities. It limits the district’s powers to those specifically outlined in the law, allows a reasonable surcharge on water prices to cover administrative costs, and prohibits the district from exercising eminent domain.  One of each of the directors are appointed by (a) Speaker of the House of Representatives; (b) President of the Senate; (c) Governor and who serves at the pleasure of the Governor; (d) Commissioner of the Arizona Real Estate Department and who serves at the pleasure of the commissioner of the Arizona Real Estate Department; and (e) Director of ADWR and who serves at the pleasure of the Director of the ADWR.

Timeframe and Summary.

The legislation has an expiry date: the requirements relating to water service outside a city or town will be repealed on January 1, 2026. The law went into effect immediately upon Governor Hobbs’ signature, due to an enacted emergency clause.

In short, Senate Bill 1432 provides a short-term solution for water accessibility and management issues in AMA regions.  The legislation mandates that Arizona’s municipalities must supply water to residents in unincorporated areas neighboring a population of 750,000, in cases where there isn’t a sufficient water source within a 10-mile radius of the unincorporated area.

Elected Officials Weigh In.

Governor Katie Hobbs: “This bipartisan bill shows that when we put politics aside, we can come together to solve problems for everyday Arizonans. While it isn’t perfect, I’m glad we were able to deliver relief for the residents of Rio Verde Foothills. Moving forward, I will keep working across the aisle to protect water for every Arizonan and ensure we continue our growth and make Arizona the best place to live, work, and raise a family.”

Representative Alexander Kolodin: “The era of kicking the can down the road is over. Arizona’s water issues are serious, but, today, we learned that they are also solvable. I look forward to that challenge.”

Representative Laura Terech: “Some things are bigger than party, and water is one of them. The fact that this bill is on the Governor’s desk today is proof that not only is bipartisanship possible, it’s achievable if we simply have the courage and political will to set our differences aside for meaningful change.”

Senator Justine Wadsack: “Water is life, water is God-given and everyone has the right to access it. Access to water is the future of Arizona. Water has been an issue for years now, and this is just the beginning to real solutions.”

Scottsdale Mayor David D. Ortega: “Sometimes the mirage in the distance causes the nearest oasis to be overlooked. On Feb. 21, the Scottsdale City Council anticipated the terms of an Intergovernmental Agreement (IGA) and unanimously approved a draft IGA for providing a temporary water supply to Rio Verde Foothills. As mayor, I believe that the draft IGA protects Scottsdale Water facilities, conforms to our Drought Management Plan, is fiscally responsible, and could move forward to the proposed standpipe district.”

Statement Issued by Scottsdale City Manager’s Office:

As part of its continuing leadership role in addressing the lack of a sustainable water supply for Maricopa County residents in the Rio Verde Foothills area, the City of Scottsdale stands ready to do its part as Arizona Senate Bill 1432 is signed into law.

Scottsdale worked diligently with legislators and the Governor’s office and is confident that this legislation protects Scottsdale residents and addresses the city’s primary short-term concerns while placing the city back into a role as temporary provider of water for Rio Verde Foothills.

Key provisions from the City of Scottsdale’s perspective include:

• Scottsdale would work with a newly created standpipe district that would be responsible for obtaining the water that Scottsdale would treat, and the city would be reimbursed for the full reasonable costs of service.
• The standpipe district would be responsible for contracts and billing its customers, and for reimbursing Scottsdale for full and reasonable costs incurred; the city would not be liable for any actions after the water is provided at the standpipe.
• Scottsdale’s own water would not be used and Scottsdale’s state mandated Drought Management Plan would not be affected.
• The number of homes eligible to receive water would be limited to 750.

Once the standpipe district is established, the City of Scottsdale will work with the district on an intergovernmental agreement which would be brought forward for City Council consideration.