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KEEP IT Valley Partnership works to find balanced solutions to water availability issues in Arizona
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FLOWING By STEVE BURKS
It’s complicated and multi-faceted and one of the most important issues that our state and our region faces: Water.
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There is a large array of longstanding pacts and agreements on who gets how much water, but to understand all of the nuance involved in this topic, you need someone who has been dialed into the issue for years. For Valley Partnership, that person is its President and CEO Cheryl Lombard. The group hired Lombard in 2015 after she spent 10 years as the government relations director for the Nature Conservancy. Her background and knowledge on the issue is what made her a perfect hire at the time. “I was working on the water issue there and it is an important part of growth in our state and really in the entire west,” Lombard said. “So when I transitioned over to Valley Partnership, even during my interview process, this was something we talked about because of my expertise on this
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Brad Chelton
Ben Graff
Cheryl Lombard
Brookfield Residential
Quarles & Brady
Valley Partnership
VALLEY PARTNERSHIP issue and wanting to move into this space because, obviously, it was a potential impediment to the success of the development industry.” The issue of water availability and accessibility is something that has come to the forefront in the past decade, as Arizona and all of the states in the Colorado River Basin are in the midst of a 19-year drought. Agreements on how to deal with a
COLORADO RIVER: Nearly the full length of Lake Powell on the Colorado River in Southern Utah and Northern Arizona is visible in this photograph shot by an astronaut aboard the International Space Station, on Sept. 6, 2016. The view is toward the southwest. Water flow is from the lower right toward the top. (Source: NASA Earth Observatory)
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drop in water levels in the reservoirs of the Colorado River (Lake Powell and Lake Mead) have been in the works since 2007. In late April, Arizona delegates Rep. Raul Grijalva and Sen. Martha McSally led the way in the passage of H.R. 2030, the Colorado River Drought Contingency Plan (DCP), which President Donald Trump signed into law. Valley Partnership, with its mission to advocate for responsible development in Arizona, urged the approval of the DCP at every step to ensure that the development community was not unfairly affected by any potential cutbacks in water allotments. “Valley Partnership always has a very tough balance,” said Valley Partnership board of directors member Ben Graff, a land use and zoning attorney for Quarles & Brady. “We have such a
wide variety of membership — from homebuilders, architects, engineers, developers, land owners — sometimes an issue as complicated as the DCP, it can be difficult to get a consensus, and Cheryl did just an unbelievable job.” Graff, who was elected to the Central Arizona Project board in 2016, is just one of many Valley Partnership members who are actively involved in setting water policies for the state. “I ended up joining the board (of CAP) at a very tumultuous, but also a very key time in Arizona water policy,” Graff said. “I certainly can’t say the work started with me in 2016 because there were plenty of things in the works, certainly from Day 1 that has been one of the largest focuses of the CAP board and also the governor’s office and Arizona Department of Water Resources.” Valley Partnership has worked very
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hard to keep its membership informed on the DCP and what it would mean to the development community. In January, the Valley Partnership Friday Morning Breakfast featured some of the most influential leaders in Arizona on this topic, including Tom Buschatzke, director of the Arizona Department of Water Resources. “All of our folks are tied up in securing a 100-year water supply, so they’re very familiar with the issue,” Lombard said. “I think what was new was the discussion tied around the Colorado River. That’s new to all of us. We, meaning Valley Partnership, have been talking about this for a while, meaning it’s in our strategic plan, so they were ready, but it’s a complicated issue with a lot of nomenclature, so there was a lot of education from that aspect.” Buschatzke was pivotal in getting the DCP approved by all of the states in the Colorado River Basin (Arizona, Nevada, California, New Mexico, Colorado, Utah and Wyoming). Without the approval of all of the states, the DCP would not have been sent to Congress and the federal government would have potentially stepped in. Getting California to agree to the DCP was the biggest trick, because there were no laws that required California to reduce its water allotment, as that state has first water rights. “The secretary of the interior within the federal government has the ability, under the premise of the health of the Colorado River, to state that the lowering health of the river has gotten to such a point that he is going to step in and reallocate that water as he sees fit,” Graff said. “California knows that under that scenario they couldn’t possibly get as good of a deal as was passed through Congress now.” Both Lombard and Graff have hands98 | May-June 2019
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on approaches to staying on top of this issue. In addition to being appointed to the Arizona DCP Steering Committee, Lombard has been on the Governor’s Augmentation Council since she joined Valley Partnership. That group works on long-term water solutions. She also takes part in committees and discussion groups and is in constant contact with the Arizona Department of Water Resources, CAP, Salt River Project, the tribal leaders in Arizona and municipal leaders. “I don’t believe in 2015 Valley Partnership would have necessarily been invited to the table on DCP,” Graff said. “But fast forward to 2017 through 2019, I can guarantee you that they were one of the first calls to take part in the discussion among stakeholder groups. “There has been a shift in the advocacy and clout of the organization and involvement. I’ve been very, very happy to see that, especially as a new 100 | May-June 2019
member of the board.” Another issue related to water that has gotten a lot of attention from Valley Partnership members is the problems in San Tan Valley with Johnson Utilities. The small company provides water and sewer services to residents of a 160-square mile area of Pinal County. After severe issues with maintenance and upkeep of the water and sewer infrastructure, state regulators stripped control of the company from Johnson Utilities and put EPCOR USA in charge of operations. New construction in the Johnson Utilities service area was stopped, as EPCOR could not guarantee water and sewer service to new homes due to the condition of the system in place. “Brookfield Residential owns a community and is developing a community inside Johnson Utilities' service area, so we were impacted by the challenges that started to become public,” said Brad Chelton, vice
president for Brookfield Residential Properties and a member of the Valley Partnership Board of Directors. “Myself and Cheryl and a few others who are on the board got together and engaged with Johnson Utilities and engaged with the Arizona Corporation Commission and also EPCOR, to really try to find the most common sense solution that was available.” So far, no long-term solution has been reached, as EPCOR continues to work on bringing the Johnson Utilities infrastructure up to date. One potential solution that Valley Partnership and EPCOR agreed to was linking up to Queen Creek’s municipal water and sewer system. “This isn’t about water, per se. There’s plenty of water available in the area,” Chelton said. “The problem is about the infrastructure. The infrastructure hasn’t been maintained or it hasn’t been constructed to keep up with the pace of development.”
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LAKE MEAD: Water level in May 1984.
LAKE MEAD: Water level in May 2016.
(Source: NASA Earth Observatory)
(Source: NASA Earth Observatory)
Lake Mead formed in 1930s following construction on the Hoover Dam along the Colorado River. At maximum capacity, the reservoir would hold 36 trillion liters (9.3 trillion gallons); water in the vicinity of the dam would have an elevation of about 372 meters (1,220 feet) above sea level. In July 2000, the lake level was relatively high at 366 meters (1,200 feet). By July 2015, however, the level had dropped to 329 meters (1,078 feet). Most of the water comes from snowmelt, which travels from the mountains into Lake Powell, through the Grand Canyon and into Lake Mead. Arizona, Nevada, California, and northern Mexico all rely on water from the reservoir. The Las Vegas Valley alone counts on the reservoir for about 90 percent of its water supply. Comparing the top two images, the lake’s northern branch, Overton Arm, is narrower in 2015. It also appears truncated and stops short of the confluence of the Muddy River (west) and Virgin River (east). The Virgin River Basin, the circular feature once connected to Overton Arm via “The Narrows,” appears dry.
Lake Mead: Current Elevation
Lake Mead: Projected Elevation
USBR 2018 Forecast
(Source: Southern Nevada Water Authority-Colorado River Update)
102 | May-June 2019
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Drought Contingency Plan overview The United States Congress passed and President Donald Trump signed into law H.R. 2030, the Colorado River Basin Drought Contingency Plan. States in the Colorado River Basin have been crafting this agreement for more than a decade in the event of a catastrophic drought. Colorado River water is dispersed to more than 6,300 square miles of farmland and cities in the United States and Mexico and supports more than 40 million people. The largest reservoirs are Lake Mead and Lake Powell, which after a prolonged, 19-year drought, are at dangerously low levels. There are two major parts of the DCP. Most of the water comes from the Upper Basin, which is composed of Colorado, New Mexico, Utah and Wyoming. The Lower Basin (Arizona, California and Nevada) is where most of the water is used. If Lake Mead falls below a set level (1,075 feet above sea level), mandatory cutbacks would kick in. The lake is currently at 1,089 feet, if it drops below 104 | May-June 2019
the 1,075 mark, Arizona would reduce usage by up to 9 percent, California by up to 8 percent and Nevada by a fixed 3 percent. To maintain Lake Mead levels, Lower Basin states agreed to cut back on the amount of water they use. The draft plan calls for implementing Lower Basin programs to create or conserve 100,000 acre-feet each year in Lake Mead and other Colorado River reservoirs in the Lower Basin. An acre-foot of water is 325,851 gallons. A typical household uses just over 100,000 gallons of water a year The Lower Basin DCP will trigger additional contributions from Mexico through the Binational Water Scarcity Contingency Plan. Upper Basin states agreed to keep the surface of Lake Powell above 3,525 feet above sea level, keeping the reservoir 35 feet higher than the minimum required to run the hydroelectric plant and allowing excess water to be stored in reservoirs for later use, without fear it will be drained into the Lower Basin and used there.
UPPER BASIN AND LOWER BASIN DCP’S The Upper Basin DCP (consisting of a Drought Response Operations Agreement and a Demand Management Storage Agreement) is designed to a) protect critical elevations at Lake Powell and help assure continued compliance with the 1922 Colorado River Compact, and b) authorize storage of conserved water in the Upper Basin that could help establish the foundation for a Demand Management Program that may be developed in the future. The Lower Basin DCP (consisting of a Lower Basin Drought Contingency Plan Agreement and the attached Lower Basin Drought Contingency Operations) is designed to a) require Arizona, California, and Nevada to contribute additional water to Lake Mead storage at predetermined elevations, and b) create additional flexibility to incentivize additional voluntary conservation of water to be stored in Lake Mead. The parties have also developed a “Companion Agreement,” in which the parties endorse both the Upper Basin and Lower Basin DCPs, agree to implement both DCPs in good faith, agree to consult during operations to avoid future litigation and reserve legal rights in the future.
SECURING ARIZONA’S SECURING ARIZONA’S WATER FUTURE SECURING ARIZONA’S
WATER FUTURE WATER FUTURE
The Drought Contingency Plan is a historic agreement between seven Southwestern states and Mexico that will help secure ourContingency water future.Plan is a historic agreement The Drought The Drought Contingency Plan isstates a historic agreement seven between seven Southwestern and Mexico thatbetween will Southwestern states help secure our and waterMexico future.that will help secure our water future. A P R I L
16 16
A P R I L
19 19 YEARS
President Donald Trump signs into law the Drought Contingency Plan.Trump President Donald signs into law the Drought Contingency Plan.
YEARS
A 19-year drought threatens water levels in Lake Mead. A 19-year drought threatens water levels in Lake Mead.
17% 17%
Without action, Arizona could lose up to 17% of our water allocation – enoughaction, for 1 million Without Arizonahouseholds. could lose up to 17% of our water allocation – enough for 1 million households.
DROUGHT CONTINGENCY PLAN BY THE NUMBERS PLAN DROUGHT CONTINGENCY BY THE NUMBERS 40 stakeholders from across Arizona came together to develop 40 stakeholders froma plan save water . acrosstoArizona came together to develop a plan to save water.
The Drought Contingency Plan balances our water reductions to help secure The Drought Contingency Arizona’s waterour future. Plan balances water reductions to help secure Arizona’s water future.
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Hegardt makes a lasting impact By STEVE BURKS
T
hroughout her successful professional career, Jill Hegardt has been passionate about helping people accomplish their goals and giving back to the community. This makes DMB Associates a perfect company for her, and why she has been there for 14 years. After starting out in the public sector as a planner, including a stint working for Maricopa County, Hegardt has worked at DMB Associates and on all the DMB legacy communities like Verrado in the West Valley and Eastmark in the East Valley. As the vice president of entitlements at DMB, Hegardt has played a role in bringing these communities to life. “My motivations are accomplishments and successes that make an impact, not necessarily financial. That led me to my profession as a planner and why I majored in this career," Hegardt said. "I’ve been fortunate to work on DMB projects, and having a part in creating these wonderful communities, has been very gratifying.” Hegardt has continued to give back with her time on a variety of professional and civic organization boards, including becoming the latest Chair of the Valley Partnership Executive Committee. Other boards Hegardt has been on included the Greater Phoenix Chamber, the Mesa Chamber, the East Valley Partnership and the Child Crisis Center. More recently, she was inspired by her daughter, who is studying dance at the University of Arizona, to join the board
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for Ballet Arizona. AZRE sat down with Hegardt to get her thoughts on how Valley Partnership helps the overall development community, as well as how it impacts its individual members.
AZRE: Describe your involvement in Valley Partnership and how it led to you being elected Chair for 2019? JH: DMB has been involved in many organizations over the years, but Valley Partnership holds a special place, because of Valley Partnerships’ mission to advocate for and support responsible development. That mission really mirrors up with DMBs’ approach on development of our communities. DMB has been involved with Valley Partnership for many years and we take our role in these organizations
seriously. We’re not just there to fill a seat, we’re there to be an active, contributing member, including taking on the additional responsibilities of taking a leadership role. In keeping with history, I think I’m the third DMB employee who has been elected to serve as Chair of Valley Partnership.
AZRE: In your position with DMB Associates, how has your involvement in Valley Partnership helped? JH: Being involved in Valley Partnership provides a vehicle to interact with others in the industry and to stay up to-date on policy matters, legislation and trends that impact development, including impacts to DMB projects. Members can benefit because we can work together in a collaborative manner to address issues that are
important to the larger development community. Valley Partnership also has many committees and events that also provide opportunities to get the pulse on what’s happening around the Valley.
AZRE: As a member of Valley Partnership, what are some of the more noteworthy experiences you’ve had? JH: I would say participation in the community service projects has been a particularly fulfilling. A significant effort by a group of very dedicated volunteers occurs prior to the community service event and then, on event day, we typically have 200 to 300 volunteers working to create community gardens, outside play and recreation areas, etc. for the selected non-profit. Our members have the skillsets, expertise and connections that are invaluable to planning and executing the Community Service Project which ultimately results in something positive for the community. It’s really a great opportunity to contribute positively to our community and non-profits.
“My motivations are accomplishments and successes that make an impact, not necessarily financial. That led me to my profession as a planner and why I majored in this career.” AZRE: How vital is the role that the development community plays in shaping a successful future for the state of Arizona? JH: The development community plays a vital and important role in shaping the success of the future of our communities. Cities are complex organisms and to be successful, they need to be economically strong with robust businesses and industry, livable neighborhoods and housing, education systems, infrastructure, entertainment
and cultural amenities and service industries. Valley Partnership supports responsible development from the industry that builds our infrastructure, our neighborhoods and communities and spaces for businesses. Also, the real estate and construction industry on its own has historically been an important growth industry for our economy, but as we’ve matured, our economy has gotten much more diverse which is a good thing.
AZRE: The next group of leaders is probably just starting out in the industry; what advice would you give them? JH: There’s a lot of good advice that I could give, but I’m going to say it’s important to be a problem solver. It’s also helpful to make sure you are looking at the problem from different perspective, which I think is important to come up with solutions that meet your needs as well as others. In my career, I’ve observed that the problem solvers tend to be the most sought after individuals.
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Solutions before problems
By STEVE BURKS
A
developer hates surprises when working on a project. Surprises usually cost time and money, two things that aren’t infinite in the competitive world of real estate development in Arizona. For the development community in Arizona, there is a group working hard to make sure there are as few surprises as possible. Valley Partnership has a wide network of connections that are monitoring events or government actions that affect development. Those issues can be city ordinances, state laws or federal regulations. If they will have an impact on what developers do, Valley Partnership is keeping tabs on it. “When I look at a development opportunity in the Valley, I turn to Valley Partnership for insight on potential issues that might arise,” said Molly Ryan Carson, senior vice president and Southwest Region market leader for Ryan Companies US, a major developer in the Phoenix market. “Valley Partnership’s commitment to responsible development is admirable
108 | May-June 2019
and invaluable. The organization works alongside municipalities and developers with the focus on lasting success and growth for our greater community.” The organization has a very small staff, so to keep an eye on all of the potential laws and regulations that could affect development, Valley Partnership leans heavily on other organizations throughout the state. “We work very closely with the Greater Phoenix Leadership, Arizona Chamber of Commerce and Industry, Greater Phoenix Chamber, just to name a few,” said Cheryl Lombard, president and CEO of Valley Partnership. “We actually coordinate quite a bit. There’s a lot of stuff coming at you, between all the cities, states, corporation commissions, so we spend a lot of time talking to each other and all of our organizations work via committees, so we do have a lot of crossover membership. That’s why it’s very helpful for us to coordinate.” “Cheryl is very plugged in with everybody, whether it is state legislation or federal government
regulations or any utilities or corporation commission-type stuff, they are constantly monitoring what is going on from a regulatory standpoint and keeping us aware,” said T.J. Wead, an investment officer for Merit Partners. “Having an advocate that’s constantly bird-dogging the intricacies of the state house, as well as pending federal litigation is invaluable to us.” A former chair of the Valley Partnership Board of Directors, Karrin Taylor Robson, who now serves as founder and president of Arizona Strategies, recalls a proposal by the federal banking committee that would have changed the rules to expand the amount of areas that would have to pay into the Federal Flood Insurance Program. That change would have drastically affected Arizona home builders. Taylor Robson and Valley Partnership made their voices heard in Congress. “Some of our delegation, it wasn’t even on their radar,” Taylor Robson said. “We were able raise our hands and tell the members how this would affect development here in Arizona. It was a very good, free flow of information so we can prevent things from happening.” What is noteworthy about all of Valley Partnership’s efforts is they expertly balance the needs of the development community, even though the groups may have conflicting interests. Their goal is to advocate for the industry as a whole and make sure all parts have equal opportunities for success. “I have seen them over the years be very active in everything from updates to subdivision codes to zoning codes to lighting ordinances; very specific issues at the local level,” Taylor Robson said. “I’ve seen them be very effective when it comes to changes to municipal finance laws at the Legislature — balancing the competing interests of members within Valley Partnership.” “Each of the individual industry asset classes have their own advocates, and they are all very focused on their part of the the real estate market. Valley Partnership naturally balances the interests of all of those groups.”
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Valley Partnership events are serious fun By STEVE BURKS
I
t’s mission is right there on its logo: Valley Partnership — The Valley of the Sun’s Premier Advocacy Group for Responsible Development. Sounds pretty serious, and Valley Partnership does serious work for the development community in Arizona. But, the group also likes to have fun and, when possible, mix in a little information and community service while having an enjoyable time. “It’s easier to do business with people that you like than with people you just
110 | May-June 2019
don’t know,” said Kelly Patton, senior economic development consultant for APS, a sponsor of the monthly Friday Morning Breakfast event. “Valley Partnership does a great job of providing those venues to get to know each other on more than just a formal business level and those are the types of events that people love to go to.” Valley Partnership’s events include the Friday Morning Breakfast, which provide members with a chance to network and hear from speakers
on a variety of topics, the annual community service project, annual golf tournament and annual spring training game. Each event is eagerly anticipated by members. “The Friday Breakfast is packed every single month, the golf tournament sells out year after year, and so does the Spring Training game,” said Ben Butler, Assistant Vice President and Counsel for Fidelity National Title’s Phoenix National Commercial Services (NCS) operation. “These events bring people
together and provide an opportunity for networking and discussion that the members clearly value.” If members had to rank these events in terms of fun, most would put the spring training game in March and golf tournament in April as a close, 1-2 punch. Both of these events are casual and relaxing, which allows members and their guests to socialize and network in a very comfortable environment. “I hear all the time that these social events provide some of the best networking opportunities in the industry,” said Butler, who served on the Valley Partnership golf tournament committee. “They are also fun events, and who doesn’t like having a little fun while working?” “Everybody loves a warm, sunny day and baseball, it’s America’s pastime, and a cold beer,” said Patton, referencing the Spring Training game. “Everybody can rally behind that.”
Belinda Rosthenhausler, commercial sales executive for Clear Title Agency of Arizona, leads the groups’ planning for the Spring Training game as a part of the Valley Partnership events committee. She said that event started out as a simple mixer at the ballgame and has grown into the group taking over a whole party deck with almost 400 people in attendance at the 2019 game in March. “I think any organization should also incorporate these kinds of networking events so you get to meet people on a more social level,” Rosthenhausler said. “It’s more comaraderie at that point.” Another goal of the events committee is to not overburden the Valley Partnership members, either their time or money. “There are some of these organizations that you want to go to their events, but it’s a couple hundred dollars,” Rosthenhausler said. “I know that we should do more (events), but
it’s hard. Who’s going to take it on? As it is, everyone is involved in other organizations and to me it’s a lot of work, in addition to the full-time job.” While golf and a ballgame are fun, the community project is fun and rewarding. Each year, Valley Partnership selects a non-profit organization that can benefit from the skills, efforts and supplies provided by Valley Partnership partners and members. A couple hundred members and their families gather on one Saturday in November to renovate and enhance facilities for those in need. Past projects have included installing recreation and sports facilities at Sunshine Acres in Mesa and installing irrigation systems, electricity and other useful enhancements to The Society of St. Vincent de Paul urban garden in Phoenix. For more information on Valley Partnership events or to get involved, visit ValleyPartnership.org. 111
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