COUNCIL COMMUNICATION
TO: Honorable Mayor and Council
FROM: Kelly Garry, City Attorney
SUBJECT:Title
Discussion and Action: Resolution No. 25-3875 Opposing the Permanent Transfer of 4th Priority Colorado River Water from GSC Farm, LLC, to the Town of Queen Creek (Kelly Garry)
Body
FUNDING SOURCE:
N/A
PURPOSE:
To consider adoption of a resolution opposing the transfer of 4th Priority Colorado River Water from GSC Farm, LLC, to the Town of Queen Creek. The proposed transfer seeks to permanently move 2,033.01 acre-feet per year (“AFY”) of Colorado River water off River to the Town of Queen Creek in Pinal and Maricopa Counties (“Permanent Transfer”).
BACKGROUND:
On September 15, 2025, the U.S. Department of Interior, Bureau of Reclamation (“Reclamation”) published a Notice of Intent To Prepare an Environmental Impact Statement (“EIS”) for the GSC Farms, LLC (“Greenstone”) - Queen Creek Water Transfer Project. The Federal Register Notice of Intent can be found at this website: <https://www.govinfo.gov/content/pkg/FR-2025-09-15/pdf/2025-17743.pdf>. This Notice of Intent continues an application to the Arizona Department of Water Resources (ADWR) filed by Greenstone in 2019. Under the proposed water transfer, Greenstone would sell a water supply to the Town of Queen Creek to be used in the Town’s water service area in Pinal and Maricopa Counties. This would be the first ever transfer of Colorado River from an on-River entitlement holder to metropolitan central Arizona that was not allocated through the Central Arizona Conservation District, known as the Central Arizona Project (“CAP”).
Historically, the 2019 Greenstone application was initially denied by ADWR. However on reconsideration, and despite overwhelming opposition from Colorado River Communities to the Permanent Transfer, the ADWR initially recommended to Reclamation to approve the transfer of 1,078.01 AFY of Greenstone’s 2,083.1 AFY 4th Priority Colorado River entitlement, and that Greenstone retain 1,005 AFY of 4th Priority Colorado River entitlement for future use on the 500 acres of land owned by Greenstone in La Paz County. ADWR ultimately increased the recommendation to 2,033.01 AFY, leaving a small amount of water for use or development of the 500 acres in La Paz County.
During the initial process, Reclamation was urged through public comment to engage in a full EIS. However, Reclamation determined that a less-intensive Environmental Assessment (“EA”) was all that was necessary to evaluate the Permanent Transfer. The EA process moved quickly and Reclamation published the final EA in July 2022. Despite public comments outlining the detrimental impacts of this Permanent Transfer and the precedential decision to allow future Colorado River transfers, Reclamation’s EA determined that the impacts were not significant and published an official Finding of No Significant Impact (FONSI) in August 2022, which would permit the Permanent Transfer to begin in 2023.
In December 2022, Mohave, La Paz and Yuma Counties and the City of Yuma filed a lawsuit against Reclamation seeking a preliminary injunction against the Permanent Transfer and remand of the matter to Reclamation to conduct a full EIS on the Permanent Transfer as mandated by NEPA. (The City joined in amicus supporting the Counties’ litigation.) The preliminary injunction was denied in April 2023, and the Permanent Transfer began to divert at the Wilmer Plant in Lake Havasu and flow through the CAP canal system to Queen Creek in June 2023.
The litigation continued and in February 2024 the Counties prevailed on Summary Judgment with the Federal Court finding that there were questions of significant impact that needed to be addressed through a full EIS. The matter was remanded to Reclamation to address the shortcomings, presumably through a full EIS to satisfy the requirements of NEPA.
Presently, Reclamation published the Notice of Intent in September 2025 to prepare a full EIS for the Permanent Transfer with a target date for completion of the EIS and issuance of a Record of Decision (ROD) in April 2027.
Colorado River water users depend on the Colorado River Water entitlements and carefully plan, conserve, and prioritize use of water. Colorado River water users, including the City, have consistently opposed efforts to transfer Colorado River water away from On-River users for use in other parts of the State. Transfer of water away from Arizona’s Colorado River Communities affect the future economic well-being and growth opportunities of the affected River Communities as well as resulting in less water being available for return flows to the Colorado River.
This proposed Resolution conveys Lake Havasu City’s continued opposition to Greenstone’s Permanent Transfer and urges Reclamation to consider a No Action Alternative or, alternatively, to implement a sound policy and precedent limiting this Permanent Transfer, and any similar proposed transfers of Colorado River water, to times when the Colorado River levels at Lake Powell and Lake Mead rise to a safe level to mitigate the environmental impacts and the hydroelectric concerns.
COMMUNITY IMPACT:
Water is one of our most precious natural resources that is in jeopardy of being depleted if not managed adequately.
FISCAL IMPACT:
None.
ATTACHMENTS:
Resolution No. 25-3875
SUGGESTED MOTION:Recommended ACtion
I move to adopt Resolution No. 25-3875 opposing the transfer of Fourth Priority Colorado River Water from GSC Farm, LLC, to the Town of Queen Creek.