MEMORANDUM To: AWBA Commission Members From: Virginia O’Connell Subject: Amended 2011 Plan of Operation Date: August 30, 2011 AUTHORITY MEMBERS Sandra Fabritz-Whitney, Chairman Maureen R. George, Vice-Chairman John Mawhinney Lisa Atkins Marshall P. Brown EX OFFICIO MEMBERS Senator Steve Pierce Representative Andy Tobin As approved by the Authority at the August 25, 2011 meeting, the 2011 Annual Plan of Operation (Plan) has been amended to reflect changes made to the original Plan due to a change in the cost share paid by the Pinal AMA groundwater savings facility (GSF) operators for additional water supplies and to identify changes made to the delivery schedule. Attached to this memorandum are three replacement paragraphs that describe the changes and an Amended Table 2, 4, 5 and 7. These changes constitute the Amended 2011 Plan of Operation. Amended 8-25-11 Amended Table 21 AWBA-Recharge Sites PHOENIX AMA : West Maricopa Combine HIEROGLYPHIC AGUA FRIA TONOPAH DESERT Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 0 0 0 171 0 0 0 6,262 0 0 0 12,622 0 0 0 3,753 0 0 0 1,706 0 0 0 14,354 0 0 0 12,465 0 0 0 3,617 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NEW MAGMA2 QUEEN CREEK 105,000 54,000 28,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,945 0 0 0 0 0 0 0 2,500 683 0 2,500 1,142 0 0 1,143 0 0 1,142 TONOPAH ID 15,000 0 0 0 0 0 0 0 0 0 0 0 0 USF 25,000 35,000 100,000 150,000 RWCD GSF Permitted Capacity (AF) Water Delivery Schedule (Acre-Feet) Calendar Year 2011 0 0 0 54,950 54,950 0 5,000 7,055 0 12,055 AMA TOTAL INTRASTATE 171 6,262 12,622 3,753 1,706 17,299 12,465 3,617 3,183 3,642 1,143 1,142 67,005 0 0 380 0 0 720 0 0 1,550 0 0 1,650 0 0 1,450 0 0 930 0 0 318 7,500 500 200 10,000 750 200 5,000 750 0 0 750 0 0 250 102 22,500 3,000 7,500 33,000 380 720 1,550 1,650 1,450 930 318 8,200 10,950 5,750 750 352 33,000 1,636 0 11,801 0 21,000 34,437 1,000 1,000 2,000 GSF PINAL AMA : CAIDD3 HOHOKAM MSIDD 110,000 55,000 120,000 AMA TOTAL INTRASTATE TUCSON AMA: 11,000 30,000 50,000 100,000 60,000 0 0 1,146 0 0 0 0 2,526 0 0 0 0 2,893 0 0 0 0 2,811 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3,000 0 0 2,000 0 4,000 236 0 425 0 5,000 0 0 0 0 3,000 700 0 700 0 0 2,000 0 4,000 CORTARO-MARANA ID KAI FARMS (Red Rock) 20,000 11,231 0 0 0 0 0 0 0 0 500 0 500 0 0 500 0 500 0 0 0 0 0 0 0 AMA TOTAL INTRASTATE 1,146 2,526 2,893 2,811 500 500 3,000 6,500 6,161 3,000 2,700 4,700 36,437 TOTAL INTRASTATE TOTAL INTERSTATE 1,697 0 9,508 0 17,065 0 8,214 0 3,656 0 18,729 0 15,783 0 18,317 0 20,294 0 12,392 0 4,593 0 6,194 0 136,441 0 TOTAL RECHARGE 1,697 9,508 17,065 8,214 3,656 18,729 15,783 18,317 20,294 12,392 4,593 6,194 136,441 GSF USF AVRA VALLEY PIMA MINE RD LOWER SANTA CRUZ CAVSARP SAVSARP DIRECT DELIVERY (Non-Storage): Southside Replenishment Bank Southside Replenishment Obligation TOTAL DIRECT TOTAL DELIVERIES 1 Water deliveries have been updated to reflect actual deliveries through July. Up to 5,000 acre-feet of deliveries redirected from TDRP. 3 Up to 15,000 acre-feet of deliveries redirected from SAVSARP. 2 0 0 0 0 0 0 0 0 1,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,000 0 0 0 0 0 1,000 0 0 0 0 0 0 0 1,000 1,697 9,508 17,065 8,214 4,656 18,729 15,783 18,317 20,294 12,392 4,593 6,194 137,441 Amended 8-25-11 PRICING Page 12, insert as paragraph 4 In August, certain GSF operators in the Phoenix and Pinal AMAs requested additional water supplies because of an increase in demand for irrigation water that was greater than anticipated. Because the AWBA does not have funds available in the Pinal AMA, the AWBA will charge its GSF partners the full cost of $137 per acre-foot for providing in lieu water in excess of the amounts scheduled in the original Plan. GSF partners in the Phoenix AMA will continue to pay a cost share of $33 per acre-foot since the AWBA has sufficient funds available in that AMA. Table 4. Amended 2011 Water and Facility Rates CAWCD delivery rate to AWBA for water storage $137 per acre-foot Interstate rate $167 per acre-foot Groundwater Savings Facility operator cost share rate 1 Intrastate Phoenix and Pinal AMAs $33 per acre-foot Tucson AMA $15 per acre-foot 2 Deliveries Redirected to Pinal AMA $137 per acre-foot Interstate $26 per acre-foot Underground Storage Facility rate paid by AWBA Agua Fria Recharge Project 3 $8 per acre-foot Hieroglyphic Mtn. Recharge Project Tonopah Desert Recharge Project 3 3 $8 per acre-foot West Maricopa Combine Avra Valley Recharge Project $8 per acre-foot $25 per acre-foot 4 $15 per acre-foot Lower Santa Cruz Recharge Project Pima Mine Road Recharge Project 4 4 Clearwater Facility (CAVSARP/SAVSARP) CAWCD rate to AWBA for Southside Replenishment Bank deliveries $15 per acre-foot $15 per acre-foot $14.73 per acre-foot $122 per acre-foot 1 This rate is paid directly to CAP by the GSF operators and is not available as revenue to the AWBA. The AWBA’s rate for delivery of in lieu water is thus reduced to $104/af for intrastate deliveries to the Phoenix and Pinal AMAs, $122/af to the Tucson AMA, and $141/af for interstate deliveries. 2 Rate paid by Pinal AMA GSF operators for 15,000 acre-feet of water redirected from the Tucson AMA. 3 Additional capital charge of $15 per acre-foot for interstate storage. 4 Additional capital charge of $9 per acre-foot for interstate storage. Amended 8-25-11 ACCOUNTING Page 13, amended paragraph 2 Under the AWBA’s Amended 2011 Plan of Operation, the total estimated cost of the Plan decreased from approximately $19.3 million to $16.8 million. Table 5 provides estimates of the funds available to be utilized by the AWBA, an estimate of funds to be collected during the year, the funds to be utilized, the entity that holds the funds, and the credits that will accrue to those accounts based on the Amended 2011 Plan. Page 14, amended paragraph 1 The Amended 2011 Plan continues to expend all available withdrawal fees in the three AMAs. AWBA water costs offset by CAWCD utilizing four-cent tax collected in Maricopa County, decreased by $205,000 due to a shift in storage of 5,000 acre-feet from a USF to a GSF. Likewise, water costs offset by CAWCD utilizing the four-cent tax collected in Pima County has been reduced by approximately $2.3 million, which reflects a reduction in storage of 15,000 acre-feet at the Southern Avra Valley Storage and Recovery Project. The total number of long-term storage credits accrued from funds available to the AWBA decreased by 13,800 acre-feet to account for the decrease in 15,000 acre-feet of deliveries to the Tucson AMA. Credits accrued from the 15,000 acre-feet of water that was redirected to the Pinal AMA from the Tucson AMA are not identified in Table 5 since the AWBA paid no costs for that water. Amended 8-25-11 Table 5. Funding for 2011 Annual Plan of Operation Funds Available ($) AWBA CAWCD Funds Utilized ($) AWBA CAWCD Credits (AF) Withdrawal Fees Phoenix AMA 1 Pinal AMA 2 Tucson AMA $1,600,000 $1,200,000 $435,000 Phoenix AMA Pinal AMA 3 Tucson AMA $0 $0 $0 General Phoenix AMA Pinal AMA Tucson AMA $0 - $1,600,000 $1,200,000 $435,000 - 10,460 9,540 1,800 51,180 7,020 31,720 Four Cent Tax $120,870,000 $795,000 $7,440,000 $0 $0 $0 $7,621,000 $794,000 $5,164,000 - $0 $0 $0 - - $0 $0 $0 Other Gifts, Grants, Donations Shortage Reparations (NV): Phoenix AMA Pinal AMA Tucson AMA Interstate Banking- Nevada 4 Operating 1 2 3 4 $0 $33,315,000 $0 Total Funds Available $165,655,000 Total Funds Expended $16,814,000 0 0 0 0 0 0 0 Credits 111,720 Includes expenditure for 1,000 acre-feet of direct deliveries for establishing the Southside Replenishment Bank under the Gila River Indian Water Settlement Program. Includes expenditure of $141,360 for the assignment of an estimated 930 acre-feet of credits to the AWBA from the Tohono O’odham Nation pursuant to §45-841.01. Includes CAWCD’s capital charge recovery for costs of construction of state demonstration projects when facilities are used for interstate purposes and by entities that do not pay the 4¢ ad valorem tax. Revenue through 2009 is estimated to be $2,026,952. The amount of funding that will be available from the Southern Nevada Water Authority (SNWA) if water becomes available for interstate storage. Pursuant a letter agreement between SNWA and AWBA dated June 15, 2010, annual payments of $23 million for calendar years 2011 and 2012 have been deferred. Amended 8-25-11 Table 7. Projected Percent of Goals and Obligations Achieved through 2011 Location and Objective Funding Source Goal Obligation Non-Credit Goal/Oblig. Achieved Credits Accrued (AF) Percent Goal/Oblig. Achieved Phoenix AMA M&I Firming 1 Groundwater Mgmt Ad valorem tax Withdrawal Fees 1,566,000 AF 1,268,596 279,343 81% 99% Pinal AMA M&I Firming 1 Groundwater Mgmt Ad valorem tax Withdrawal Fees 243,000 AF 179,869 383,416 74% 232% Tucson AMA M&I Firming 1,2 Groundwater Mgmt Ad valorem tax Withdrawal Fees 864,000 AF 360,206 90,766 42% 54% General Fund 420,000 AF 403,830 96% On-River M&I Firming 3 4 Indian Settlements: GRIC Firming Withdrawal Fees 350,000 AF 5 up to 15,000 AF/YR 0 0% Future Settlements Withdrawal Fees 200,000 AF 5 up to 8,724 AF/YR 0 N/A Federal Assistance Tucson AMA Southside Repl. Bank Interstate Water Banking – NV $3,000,000 Appropriation Withdrawal Fees 6 Cost of Services $3,000,000 $2,338,171 $630,490 $31,339 Withdrawal Fees 15,000 AF Direct Delivery Contract with Nevada 1,250,000 AF 7 39,723 34,102 5,621 n/a 100% 3,000 20% 600,252 48% 82,283 37% Other: Shortage ReparationsNevada Gifts, Grants, Donations Pinal Redirect Credits n/a 1 2 $8,000,000 $2,999,748 13,800 8 Withdrawal fees could be utilized in addition to 4¢ ad valorem tax revenues for M&I firming if needed to reach firming goals. Includes credits acquired from the Tohono O'odham Nation pursuant to §45-841. 3 By resolution passed in 2002, the AWBA established on-river firming as the highest priority of use for credits accrued through expenditure of general fund appropriations. Pursuant to the AWBA Agreement to Firm with the Mohave County Water Authority (MCWA) dated February 4, 2005, a total of 230,280 acre-feet of credits were transferred to the AWBA longterm-storage sub-account for the MCWA in 2005. 4 This percentage reflects full utilization of general fund credits accrued to date and would change as other objectives are identified by the AWBA. 5 Based on estimates from the Indian Firming Study Commission Report dated January 6, 2006. 6 Include $14,883 and $16,456 deducted for payment of cost of services for FY08 and FY09, respectively. 7 Pursuant to the Amended Agreement for Interstate Water Banking, the AWBA has committed to have this number of longterm storage credits within the Nevada sub-account. 8 Credits accrued from 15,000 AF of water that was scheduled for the Tucson AMA and redirected to the Pinal AMA for storage at GSFs. These credits will be used for M&I firming in the Tucson AMA and would meet 1% of the firming goal.