It’s even worse than that. They knew the Colorado river was at a historic high when they allocated it in the west, and they intentionally overbooked it by 20%. The reasons for that last part are, I think, unclear now.
I think motivated reasoning is a lot of it. People lobbying those making the decisions, cronyism, vested interests, conflicts of interest, etc. Crucial resource and environmental decisions like that should be made by rational technocrats, not whatever high school football coach got elected county supervisor that year. But here we are.