Budget Cuts Take Toll on ADWR's Operations

Agency copes with unfilled positions, personnel layoffs and eliminated or cut-backed programs.

The Arizona Department of Water Resources took a 10 percent hit to its already lean budget during the most recent round of state budget cuts. This recent cut along with other previous budgetary setbacks is eroding the agency's ability to effectively manage the state's water resources.

Due to budget cuts over time, the agency is hurting in various way. Consider staffing: In 1990, ADWR had a staff of 237, and today staffing is down to 166 positions. During this period, as the number of ADWR staff decreased, state population increased by 40 percent.

ADWR Director Joe Smith says, "My target staff number for the agency is around 185 or 190 people. We are at 166.

"If the Legislature were to fund us fully we would be operating with about $21 million, and we are currently operating at about $14 million. We are below what I would call a minimum pool of staff and money to adequately manage."

Years of relatively level funding from the Legislature has taken a toll on the agency, to the point that meeting fixed expenses has been a problem. Smith says, "The Legislature has not funded us at a level to cover our fixed expenses." He says the cost of the private office space that the agency occupies increases with rent and property tax. To pay rent, he shifts money from personnel, at a cost of two FTE per year. "My budget is 90 percent personnel, with very little discretionary funding for anything else."

The financially strapped agency's most recent budgetary challenge was to respond to the governor's directive, issued in August and sent to all state agency directors, to cut FY 2003 budgets by ten percent. This meant that ADWR needed to cut $1.5 million. This was the second year in a row that state budgets had to be cut by 10 percent. In FY 2002, ADWR was able make up its ten percent reduction by relinquishing unfilled positions. Other options had to be found for FY 2003 cuts.

One of the options was to cut the Rural Water Initiative Program. It was the one ADWR program targeted for FY 2003 reductions that involved cutting dollars, not staff. Now in its fourth year of operations, the program provides support to the U.S. Geological Survey to conduct hydrologic studies in rural areas of the state. The information is provided to resource managers and planners at the local level. Since the USGS provides matching funds, a cutback of state funds represents a two-for-one loss.

At this point, work on rural studies is essentially in abeyance, with agreements signed on a quarterly basis, at a substantially reduced funding level. Work in the three major project areas — the San Pedro, Verde and Coconino watersheds — will either be down-scaled or funding will need to be obtained from other sources. Fairly recently, before budget cuts did their damage, rural water concerns were receiving increased due attention, with ADWR gearing up to work with stakeholders in rural, non-Active Management Areas of the state.

Further cuts were made by eliminating the staff processing the notices of intent to drill. Staff members had been responsible for processing the seven or eight thousand requests per year to drill wells. With the staff gone and ADWR still with statutory responsibility of responding to requests, the duties have been reassigned to the agency's Hydrology Division. These will be added tasks, to perform in addition to its regular responsibilities, with the result that obtaining approval to drill wells will take longer — and with less regulatory review.

Greg Wallace, chief hydrologist, says "We are considering an on-line automated process that gives just about any driller permission to drill a well. Minimum well construction standards will have to be met, but they will not be reviewed in advance. The burden will be on the counties and drillers to make sure they are drilling a proper well. We don't have much choice. We do not have the personnel."

In a further comment on his section's operations Wallace says, "We have basically dispensed with any sort of field investigations and travel outside of metro areas. We are going to concentrate on efforts in metro Phoenix this fall because we do not have travel funds. We turned in some trucks, and we turned in all of our cell phones."

Funding for ADWR's support of the state's Water Quality Assurance Revolving Fund (or State Superfund) also took a hit, its $800,000 budget cut in half to $400,000, with six staff members losing their jobs. As a result, ADWR will no longer be providing updates to its WQARF database for the Arizona Department of Environmental Quality. Field inventories will still be done, but not data entry.

Major budget cuts to the general fund appropriations are not the only financial loss to plague the agency. During FY 2002, $1 million of the Phoenix AMA Conservation and Augmentation Fund was reverted. Not general expense monies, these funds were earmarked for specific expenditures that now will not be made.

For the last several years, funds from the AMA's Conservation and Augmentation programs have been redirected to pay for monitoring activities. These funds, which must be used within the AMA where they were collected, had previously been used to support recharge and conservation projects through a grants program.

The Arizona's Water Protection Fund also is in trouble. The Legislature has not appropriated any funding for AWPF for several years. ADWR has sufficient monies in reserve to support AWPF staff for about 24 months to mange ongoing projects, some with multiple year commitments. ADWR maintains reserved funds since the agency has the fiduciary responsibly to manage ongoing programs even if AWPF is eliminated. Future legislative action will determine the fate of AWPF. The program's purpose is to fund projects with a local focus that address riparian issues.

The tales of financial woe are likely to continue beyond the current year, with future cuts in store. The recent state deficit is about $400 million, and the governor anticipates about a billion-dollar deficit next year.

Smith says, "What we are trying to do is sustain programs important to Arizona's development community such as the Assured and Adequate Water Supply program. And we have tried to avoid cuts in the AMAs. But if I have to cut again I am going to have to start looking at consolidating AMA offices."

In the face of hard times, Smith fears losing seasoned and experienced staff. He says, "An organization that appears to be faltering tends to lose its brightest staff. I've got an extremely talented staff, and I am concerned about losing them to other governments or they may take work as private consultants."

With positions left unfilled, personnel laid off and program operations eliminated or greatly cut back, prospects seem grim to many ADWR employees. Wallace says, "Morale is abysmal. I have been here for 17 years, and this is the worst I have ever seen."

See Guest View for a commentary on ADWR budget cutbacks.

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