Communities concerned about whether they can provide sufficient water for the future may need to make choices about how to allocate their available resources given the uncertainty of future demand and the need to meet current needs and community goals. The benefits derived from a new water user, such as its economic benefit, may need to be weighed against the user’s long-term impact on the water sustainability of the entire community. For communities with growth potential and limited water supplies, requiring new large water users to find additional water supplies or “bring the water” could be considered. This is more easily done where there is a water rights system with transferable water rights or credits that can be purchased, such as within Arizona’s active management areas (AMA). Elsewhere a voluntary water offset credit program, similar to the Verde River Exchange, could provide a useful mechanism.
The City of Prescott, located in an AMA, was faced with higher demand for building permits, which require alternative water supplies, than it had allocated annually for that purpose, leading to a temporary moratorium on issuing permits. In response, it has adopted a water allocation policy to place alternative water supplies into water contracts. Among the policies is that alternative supplies will not be allocated for uses that will not return 50% or more wastewater to a treatment plant, which would affect new golf courses, commercial agriculture, and residential units without sewer connections.
The City of Chandler, located in an active management area, was concerned that its water resource portfolio might not be sufficient to serve future large commercial and industrial customers, which currently account for 42% of its water use. This led to adoption of regulations to directly link land use planning and water policy by allocating water to high volume, new non-residential users based on a tiered system.
As the Chandler Water Manager remarked, “The last thing we wanted to do is use 100 percent of our water and find out we only have 90 percent of our land built.”
In addition, non-residential development is often not required to demonstrate a 100-year assured water supply, which applies only to subdivided land. The assured water supply demonstration requires use of non-groundwater supplies, like Central Arizona Project Water, to maintain groundwater resources.
Chandler’s regulations have been described as the first of their kind in Arizona, and perhaps in the entire U.S., and illustrate that communities have the ability to influence development through water resource management. The regulations create a 3-tiered system. The first tier provides a “Base Allocation” of water that is considered adequate for most new non-residential users. Tier II, the “Quality of Life Allocation” is based on the City’s current water resource management strategy and considers factors like the development’s contribution to economic development, redevelopment, and neighborhood revitalization. The City decides whether and how much water to allocate under Tier II. If the development exceeds the Tier I allocation and does not qualify for Tier II, the Tier III allocation requires the development to bring a new water supply to the City, either by purchasing water or by reimbursing the City for its purchase of water for the development.
Model Ordinance
Chandler Ordinance 4634: Sustainable Water Allocation Regulations 
Contact
Municipal Utilities Department
Website: http://www.chandleraz.gov/default.aspx?pageid=147
Email
Phone: 480.782.3800