THE NEW CSE REPORT ON THE UPPER SAN PEDRO BASIN


Another report has just come in about the water situation in the Upper San Pedro Basin.  In July, New Mexico's "Center for Sustainable Economy" (the "CSE") issued "Fort Huachuca and the San Pedro River:  Improving Water Deficit Liability Calculations Through Economic Modeling," whose full text is online at sustainable-economy.org.


1.    Report page 2:  "Currently, groundwater is being pumped well in excess of aquifer recharge rates, leading to a water deficit in the upper basin of between 5,144 and 7,000 acre feet (af) per year, although more recent estimates place that deficit as high as 10,800 ...."

-- However, the size of the deficit only has meaning if compared to the size of the supply; drawing 1 gallon of water from a 5 gallon can is noticeable, but taking 1 gallon from a 5000 gallon pool is imperceptible.  At the present rate of deficit, the Upper San Pedro Basin has a 2000-year supply of water.  If we must reduce the problem to one number, the number shouldn't be "10,800 acre feet," it should be "1/20 of 1%".

-- It has been commented that the problem is not that the San Pedro Basin will run out of water, but that enough water will be used so that the San Pedro River stops flowing, and creates a disaster for the ecology along the river.  I'd say that the people who think the San Pedro is in crisis must decide which they value more:  a water supply, or the ecology along the river.  Preserving the ecology requires wasting water.  When flowing, the San Pedro is a shallow sheet of water in a very hot place -- maximizing water loss by evaporation.


2.    Report pages 2-4:  With respect to groundwater, Fort Huachuca considers groundwater uses "attributable" to the Fort to be uses "associated with water used on-post in base operations, water used by 'people who live in the Sierra Vista sub-watershed due to the presence of Fort Huachuca,' and water use associated with 'off-post induced economic development' that would not occur but for the presence of the Fort."  In other words:  people "attributable" to the Fort include people assigned to the post, people living off them, and people living off the people living off the people assigned to the post.

-- CSE is increasing water use "attributable to" the Fort, by increasing the number of people "attributable" to the Fort.  This results in a higher percentage of water use "attributable" to the Fort.  However, the same procedure could be applied to water use "not attributable" to the fort, and that percentage would go up too.  But of course, percentages can't add up to over 100%, so, in a process called "renormalization," all percentages must be reduced until they add up only to 100 -- and you end up where you started.  CSE, an advocacy group, is so fixed on its goals that it has forgotten basic mathematics.


3.    Report page 5:  the procedure used to calculate the Fort's water usage in 2002.

In 2002, the "attributable" population was calculated at 34,993, which in turn was the sum of two smaller groups.

-- The first group was 26,531 military personnel, contractors, retirees, survivors, and family members (all of whom may live on or off the Fort).  This number was not an actual count, but was reduced "for double counting and for those non [sic] living in the Sierra Vista subwatershed (3%)."  Note that reducing by 3% is the same as multiplying by .970; such a "multiplier" pops up again, two paragraphs down.

-- The second group was 7093 people in "an interrelated and interdependent population of induced employees and family members."  This number came from a calculation, not a count.

-- -- The number of enlisted personnel assigned to the Fort was 4199.  That was multiplied by .332288, "the assumed employment multiplier for enlisted military personnel".

-- -- -- It has been commented that using enlisted personnel amounts to excluding officers and warrant officers.  However, "enlisted military personnel" is the term used in CSE's report.  Clearly there is an error here; whose, is not clear.

-- -- --- Using an "assumed" multiplier is bad enough, but using a 6-digit multiplier is ridiculous; a 6-digit multiplier is accurate to one part in a million, but Cochise County only has roughly 100,000 people, using a 6-digit multiplier in Cochise County implies accuracy down to 1/10 of a person -- common sense is left behind.  In any event, the result of this calculation was multiplied by .968, "a discount factor to account for those not living in the Sierra Vista subwatershed."  Again, this number gives the appearance of more precision than really exists, and there is no possible good reason for using .968 here, versus .970 for the same factor two paragraphs up.

-- -- The number of contractors and government civilians supported by the Fort was 5879.  That was multiplied by .383932, "the assumed multiplier for contractors and civilians," again giving a false appearance of precision.  The result was multiplied by the ".968" multiplier -- as if .970 weren't already more precise than this guesswork justified.

-- -- The sum of the above two paragraphs was multiplied by .7325, "the assumed proportion of family members [not] holding induced jobs."

-- -- The result of the above multiplication was multiplied by 2.74, "the ratio of jobs to population in the Sierra Vista subwatershed."  This multiplication gave the final result of 7093.

That's how the total figure of 34,993 was calculated for 2002.


4.    Report pages 5-6:  the heart of CSE's position

In December 2006, Robert Carreira, at Cochise College, came up with not 34,993 people, but only 18,543.  Most of the reduction came from simply counting heads, and eliminating any use of "economic multipliers."  CSE disagrees strongly with Carreira, and would not only restore economic multipliers, but make them more important.

As noted above, CSE applies its "multiplier" approach only to Fort-related water use, not to "non-Fort" use.  The result is an artificial inflation of the Fort's effect on water use.  If the "multiplier" approach is applied to both sets of users, the net result is:  no change in their respective shares of water use.  CSE would impose great complications that achieve nothing.


5.    Report pages 6-10:  CSE's criticisms of mere "head counting"

CSE groups multiplier effects into three main categories

-- "the money Fort Huachuca spends on salaries ....  In 2005, the Fort estimated this amount to be $491 million, supporting 13,379 jobs....  Off duty, such personnel ... induce water use in the local economy by spending money on goods and services from local businesses that use water ....  when off base military personnel play golf, buy food, landscape their homes, wash their cars, or eat out they induce water use at golf courses, supermarkets, nurseries, carwashes, and restaurants. These businesses, in turn, purchase at least some of their goods and services locally, inducing further use of water by suppliers."

-- -- It has been noted that the "$491 million, 13,379 jobs" may be double-counting some money and jobs.

-- "direct procurement of goods and services by Fort Huachuca, estimated [in 2005 at] 339.4 million in Sierra Vista alone....  businesses that provide ... laundry, hospitality, or maintenance services or food, medicines, equipment, technology, or other goods all use water themselves ... and also induce further water use by purchasing at least some of their goods and services locally.  Another pathway is water use by households that benefit from all this economic activity."

-- "the economic activity generated by the Fort just because of its presence....  visits by out of area family members, by those on business with the Fort, or by those touring the Fort's museums or historical sites....  Another example is the retiree population located in Sierra Vista due to the presence of Fort Huachuca."

-- -- It has been noted that CSE includes tourists to the Fort, but omits all other tourists.  This, of course, is another example of CSE's unfair overreaching to increase the share of water use attributable to the Fort.

-- -- A reader has noted an interesting point:  
"when they figure jobs/businesses attributable to the Fort, do they take into account that Sierra Vista is the only large shopping center for everybody else in Cochise County?  For instance, if WalMart sells $xmillion  per year in Sierra Vista, they aren't only selling to Army personnel.  Even without the Fort, the rest of the county would need a main shopping and entertainment center closer than Tucson."  People will want to chew over the implications of this for themselves.

And so on.  In short:  money is spent not just once but over and over, and its effect is multiplied every time it is spent.


6.    Report pages 10-13:  CSE's criticism of "arbitrary assumptions"

None of these criticisms relates to CSE's main point about using economic multipliers, not "head counts," so these criticisms are discussed as briefly as possible.

"Assumption 1: Population growth necessary to account for groundwater deficit"

-- CSE asserts that it has caught Carreira in an arithmetic error:  Carreira either tripled a population increase, or tripled the actual per capita water usage.

-- The error does not exist.  Carreira stated that a certain figure was "per year" over several years, but CSE incorrectly read that as a total figure for the entire year.

-- Even if the arithmetic error existed, it could not validate the "paradigm shift" that CSE wishes to impose.

"Assumption 2: Water use intensity is constant across all population groups"

-- CSE notes, correctly, that both earlier models "contain an implicit assumption that the water use profile of the population attributable to Fort Huachuca is no different than that of the general population in the Sierra Vista subwatershed."  However, because CSE does not state any way in which Fort personnel might use water differently than others, the safest course is use the assumption in the earlier models.

"Assumption 3: Validity of DES [Arizona Department of Economic Security] population data"

-- CSE notes that Carreira "questions the methodology of the DES [and] suggests the U.S. Census data has greater accuracy and should be used" but nonetheless relies "heavily in [sic] the DES data for period analysis not covered by the Census."  Here, the CSE is merely carping, not actually criticizing.  Even if Census data is more reliable than DES data, DES data may still be acceptable when Census data does not exist -- and Carreira acknowledges the changes in validity between the two types of data.

"Assumption 4: All same-sized Arizona communities are identical"

-- Here as above, CSE is carping, not criticizing.  CSE is complaining about Carreira's argument that because many Arizona cities are growing, Fort Huachuca isn't the only reason that Sierra Vista is growing.  On the face of things, Carreira's argument is correct; there is natural population growth, by an excess of births over deaths, and also, as Cochise County residents know, there is great pressure from realty interests to build large housing tracts in Cochise County, especially as "bedroom suburbs" for Tucson.  However, CSE does not acknowledge natural population growth, nor show any awareness of the pressure from builders to proceed with "bedroom suburbs" -- which, as residents of Cochise County know, is immense.

"Assumption 5: All new jobs are filled locally"

-- CSE notes that Carreira "assumes that an increase in jobs automatically correlates to a reduction in unemployment....  This is an oversimplification" and that Carreira also "assumes that if new jobs are created then family members of active military fill [them].  This assumption ... is unfounded in economic literature."  Actually, Carreira's point is merely that if military family members are counted as "attributable" to the Fort, and they fill jobs that are "attributable" to the Fort, they must not be double counted.  Recognizing that a correction must be made is not the same as stating that the correction must be set at 100%, as CSE implies.

"Assumption 6: Economic multipliers are not appropriate to estimate population growth"

-- CSE argues that Carreira's choice, of using head-counting instead of economic multipliers, has two major problems:

-- -- that using multipliers must be right, because economists have been using multipliers for 50 years, especially since computers came along.

-- -- -- That is, "all the kids do it" so it must be right.

-- -- that Carreira's estimate is "of people who are directly connected to the Fort. This implied assumption is that secondary effects and tertiary effects (indirect and induced) are inconsequential...."

-- -- -- That is, Carreira is wrong because CSE says so, a classic example of arguing "from authority."

-- CSE's arguments are typically used between demanding children and resistant parents; they have no place in a serious discussion between adults.


7.    Report pages 14-19:  CSE's proposed theories of calulation

CSE states that "Given the inherent problems with population-based models for modeling Fort Huachuca's water deficit liability an economic based model may be a far better approach" and to "suggest three alternative approaches to modeling Fort Huachuca's water deficit liability based on its overall economic impact."

-- the "Gross regional product approach," "to assign water deficit liability based on the share of regional economic activity attributable to Fort Huachuca in the Sierra Vista subwatershed."

-- the "Water intensity - labor market approach," "to consider the labor associated with the Fort's impact via the number of employees attributable to the Fort in primary, indirect and induced activities and the average water use per employee."  This result would be measured against "the total water consumed in the sub-watershed."

-- -- this section has some standard figures for water usage per employee per day in different kinds of work:  a government office, 136; a "primary metal industry," 1318; and "for food and kindred products," 1967.  So to use less water, shrink farming, and expand government office work.]

-- the "Econometric approach," "to use econometrics," meaning to find a set of variables that can be manipulated in a mathematical formula. For instance, the county's total water deficit could be the sum of one formula for "economic activity associated with the Fort" plus another formula for "economic activity ... not associated with the Fort."  The goal is to determine "the estimated share of the deficit attributable to the Fort".

CSE does not show any calculations, but merely concludes that "All of these models are likely to find a water deficit liability greater than the 54.3% found by Fort Huachuca's 2002 biological assessment. In fact, preliminary data suggest that a model based on share of economic activity may find the Fort's water deficit liability to be as high as 80%."

-- If 80% is the highest number that CSE's equations, using "preliminary data," have generated, then 80% cannot be a representative result.  A report that gives one extreme result, but does not show the entire range of results, with the data and equations that led to them, is not ready for publication.