Arizona’s Certificate of Assured Water Supply (CAWS) is a crucial component of the state’s water management strategy. Designed to ensure sustainable water use, the CAWS guarantees that new developments in Active Management Areas (AMAs) have a 100-year assured water supply. Here, we explore what it takes to obtain this certificate, the timeline involved, and the associated costs.
What is a Certificate of Assured Water Supply?
The Certificate of Assured Water Supply is a designation issued by the Arizona Department of Water Resources (ADWR). The Certificate serves as a verification that a subdivision within an AMA has a legally, physically, and continuously available water supply for the next century. This certificate is essential for developers before they can sell or lease subdivided lands.
When is a CAWS Required?
A Certificate of Assured Water Supply (CAWS) must be obtained when land is subdivided within an active management area and is not served by a designated water provider.
Requirements for Obtaining a CAWS
1. Legal Availability of Water– Applicant must demonstrate they have the legal right to the water they plan to use. This can involve water rights, contracts, or other legal mechanisms. An applicant must demonstrate right to all water supplies included in the application. See R12-15-718.
2. Physical Availability of Water– The water supply must be physically accessible and sustainable. This requires hydrological studies and models to prove that the water source will remain reliable over the 100-year period. Sources of water have specific requirements for demonstration of physical availability. A list of those specific requirements can be found in the Arizona Administrative Code. (See: A.A.C. R12-15-716).
3. Continuous Availability– The water supply must be available without interruption. This often involves proving infrastructure capacity, such as wells and storage facilities. Water providers or developers must demonstrate that the water supply is uninterruptible for the 100-year period, or that sufficient backup supplies exist for any anticipated shortages. (See: A.A.C. R12-15-717).
4. Water Quality– The water must meet quality standards set by the Arizona Department of Environmental Quality (ADEQ). Proposed sources of water must satisfy existing state water quality standards and any other quality standards applicable to the proposed use after treatment. (See: A.A.C. R12-15-719).
5. Financial Capability– The applicant must demonstrate the financial capability to construct and maintain the necessary water infrastructure. Water providers or developers must demonstrate financial capability to construct the water delivery system and any storage or treatment facilities. Financial capability for developers is typically considered through the local government’s subdivision review process. A demonstration is also required that adequate delivery, storage and treatment works will be available to the applicant or the applicant’s customers for 100 years. (See: A.A.C. R12-15-720).
6. Consistency with the Management Goal-The proposed water use must align with the AMA’s goal, which typically focuses on sustainable water use and conservation. Each AMA’s Management Plan prescribes water conservation requirements for municipal water providers. Water demand associated with proposed subdivisions is evaluated in accordance with these conservation requirements. (See: A.A.C. R12-15-721).
Type A Certificates and Type B Certificates
There are Type A Certificates of Assured Water Supply and Type B Certificates of Assured Water Supply. Type A Certificates are ______________.
Type B Certificates are “The Director shall classify all certificates that do not meet the requirements of subsection (H)(1) of this Section as Type B certificates.” Ariz. Admin. Code § 12-15-704.
It is possible to submit an application to the Arizona Department of Water Resources to reclassify an existing Type Certificate.
Reclassification of Certification. Type B classification can be amended by submitting a Reclassification of Type B to Type A Application.
Exemptions. A developer can apply for an exemption under R12-15-704(K), which states: R12-15-704(K)– “A new owner of all or a portion of a subdivision for which a plat has been recorded is not required to obtain a certificate if all of the following apply:
1. The Director previously issued a Type A certificate for the subdivision pursuant to subsection (H)(1) of this Section or R12-15-707;
2. Water service is currently available to each lot; and
3. There are no material changes to the plat for which the certificate was issued, according to the criteria in R12-15-708.
Assignment Pursuant to A.A.C. R12-15-706. It is possible to assign a Certificate of Assured Water Supply pursuant to A.A.C. R12-15-706.
Timeline for Obtaining a CAWS
The process of obtaining a Certificate of Assured Water Supply can be lengthy and so do not delay in beginning the application. Here’s a general timeline:
1. Pre-Application Consultation with the ADWR– Engaging with ADWR early can help clarify requirements and streamline the process.
2. Application Submission– Only once the application is 100% complete, including all necessary studies and documentation, should it be submitted to the ADWR.
3. ADWR Reviews the Application– The review process can take several months to a year, depending on the complexity of the application and the thoroughness of the initial submission.
4. Public Notice and Comment Period– There is a period for public notice and comments, which adds additional time to the application process. “The Director shall give public notice of an application for a certificate as provided in A.R.S. § 45-578.” Ariz. Admin. Code § 12-15-704.
5. Final Application and Determination– After considering all factors and public input, ADWR makes a final determination. If approved, the Certificate of Assured Water Supply is granted.
Transferability of Assured Water Certificate
An Arizona Certificate of Assured Water Supply (CAWS) is not automatically transferable when a property changes ownership because the Certificate is tied to the property owner listed on the certificate and the plat on which the application was based.
1. Assignment of CAWS: If certain conditions are met, the existing CAWS can be assigned to the new property owner using a Type A or Type B Assignment Application. These applications have specific requirements that need to be fulfilled for the assignment to be successful. 45-579(A) “A holder of a certificate of assured water supply issued pursuant to section 45-576 may assign the certificate, in whole or in part, to another person if the holder applies to the director for approval within ten years after the original certificate was issued and the director approves the application.” If more than 10 years have passed since the certificate was originally issued then, “An application may be filed under this section more than ten years after the original certificate was issued if a minimum of five hundred lots within the subdivision covered by the certificate have been sold to individual home buyers by the holder of the certificate and any previous holders of the certificate.”
2. Re-Issuance of CAWS: If the ownership has changed and the plat remains unchanged, a new CAWS can be issued to the new owner under certain conditions.
3. Material Plat Change Review: If changes have been made to the plat after the CAWS was issued, a Material Plat Change Review may be required to determine if the changes are substantial enough to necessitate a new CAWS application.
The Arizona Department of Water Resources (ADWR) handles the applications for the assignment or re-issuance of CAWS.
Costs to Obtain a Certificate of Assured Water Supply
The costs associated with obtaining a CAWS can vary widely based on several factors, including the size of the development and the complexity of proving water availability. Here are some potential costs:
1. Application Fees. The ADWR charges a fee for processing the CAWS application. As of 2024, the application fee is $1,000.
2. Hydrological Studies. Conducting the necessary hydrological studies can cost thousands of dollars but are essential for proving physical availability and sustainability.
3. Legal and Consulting Fees. Legal and consulting fees for preparing the application, conducting studies, and navigating the regulatory process can add significantly to the cost.
4. Infrastructure Costs. Costs for developing the necessary water infrastructure, such as wells, pipelines, and storage facilities, can be substantial. These are often borne by the developer and can run into millions of dollars for large projects.
5. Ongoing Compliance. Maintaining compliance with the CAWS requirements may incur additional ongoing costs, including monitoring, reporting, and potential upgrades to infrastructure.
Exemptions From the Certificate of Assured Water Supply
A certificate of assured water supply is not required if you project does not contain certain provisions.
Number of Parcels–
Application Process– A developer can apply for a waiving by completing an Application with the Arizona Department of Water Resources.
Conclusion
Since 1995, more than 1,200 new subdivisions dependent on groundwater have been approved and 20 water providers have been designated as having an assured water supply in both the Phoenix and Pinal Active Management Areas. These AMAs are vast groundwater basins located in the Phoenix metropolitan area and in central Pinal County.
Fast forward to 2019, when the Arizona Department of Water Resources (ADWR) published a groundwater model that projects groundwater demands in the Pinal AMA would result in 10% of those demands being unmet during the 100-year period. Similarly, in 2023, ADWR published another groundwater model that projects demands in the Phoenix AMA could also not be met.
This resulted in ADWR declaring that no new assured water supply determinations could be issued in those groundwater basins until a solution is developed.
Subsequently, the Governor’s Water Augmentation Council and stakeholders from water sectors worked with ADWR to prepare a third method for securing an assured water supply called the alternative designation of assured water supply, or ADAWS. This method, a hybrid of the two existing methods, will allow water providers to secure an assured water supply designation through the ADAWS. This means developers and builders will bring a sustainable water supply to meet the demands of the subdivisions, and water providers will bring an additional amount of sustainable water supplies to meet the groundwater demands of existing customers who have been using unreplenished groundwater for decades.
Obtaining a Certificate of Assured Water Supply in Arizona is a complex and costly process, but it is essential for ensuring sustainable water use in new developments. As water becomes an increasingly valuable resource, the CAWS plays a vital role in balancing growth with sustainability.
For more detailed and specific guidance then contact the Dunaway Law Group at 480-702-1608 or message us.
The Dunaway Law Group provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers. The Firm limits its practice to the states of Arizona and New York.