ARIZONA WATER BANKING AUTHORITY ANNUAL PLAN OF OPERATION 2013 Sandra A. Fabritz-Whitney, Chairman December 2012 The Arizona Water Banking Authority Summary The Arizona Water Banking Authority (AWBA; Water Bank) was created in 1996 to store the unused portion of Arizona’s annual allocation of the Colorado River. By storing this unused water, the AWBA secures a dependable water supply necessary to ensure the state’s long-term prosperity. The Water Bank stores unused Arizona Colorado River water to meet future needs for:      Firming (to secure) adequate water supply to municipal and industrial users in the Central Arizona Project service area and along the Colorado River in times of shortages; Meeting the management plan objectives of the Arizona Groundwater Code; Meeting the State’s obligation pursuant to Indian Water Rights Settlements; Assisting the Colorado River fourth priority municipal and industrial (M&) users in developing credits that could be used to increase their future supplies; and Assisting Nevada and California through interstate water banking. Each year, the AWBA pays the delivery and storage costs to bring Colorado River water into Central and Southern Arizona through the Central Arizona Project (CAP) canal. The water is stored underground in existing aquifers (direct recharge) or is used by irrigation districts in lieu of pumping groundwater (indirect or in lieu recharge). For each acre-foot stored, the AWBA accrues credit that can be redeemed in the future when Arizona’s communities, Indian Tribes or neighboring states need this backup water supply. The money that funds the AWBA and, specifically, water storage for the benefit of Arizona (intrastate storage) comes from three sources. Restrictions on the ways these monies can be used depend on the source of the monies, which currently include:    Fees for groundwater pumping currently collected within the Phoenix, Pinal and Tucson Active Management Areas (AMA). These monies can only be used to benefit the AMA in which the fees are collected. Included as a benefit to the AMA are both municipal and industrial firming and Indian firming. A four cent ad valorem property tax collected in the three county CAP service area. If these monies are deposited in the Water Banking Fund they can only be used to benefit the county in which the tax is levied. A general fund appropriation received at the discretion of the Legislature. Another source of funding is used for water storage to aid Nevada (interstate storage) and is received from Nevada pursuant to an Agreement for Interstate Water Banking. In 2013, the Water Bank will store approximately 52,500 acre-feet of CAP water at a cost of approximately $7 million. The amount of water available to the AWBA has decreased substantially because of increased demand from M&I priority subcontract and Indian contract orders. In addition, unlike previous years, the Central Arizona Groundwater Replenishment District (CAGRD) ordered its full pool amount of 35,000 acre-feet for replenishment obligations. Because of the increased demand from higher 1 priority users, the 175,000 acre-feet AWBA/CAGRD Replenishment Reserve pool was reduced to 61,371 acre-feet. This trend is anticipated to continue into the future. There is no interstate storage planned for 2013. In addition to delivering water for storage, the AWBA will deliver an additional 1,000 acre-feet of water directly to the Gila River Indian Community for the Southside Replenishment Bank at a cost of $144,000. To date, the AWBA has delivered for storage just over 4 million acre-feet (MAF) of water at a cost of approximately $305 million; 3.5 MAF for intrastate storage at a cost of $196 million and 594,000 acre-feet for interstate storage at a cost of $109 million. A total of 4,000 acre-feet has been delivered for Southside Replenishment Bank purposes at a cost of $470,000. INTRODUCTION The AWBA was created to store Arizona’s unused Colorado River water entitlement in western, central and southern Arizona to develop long-term storage credits to: (1) firm existing water supplies for M&I along the Colorado River and CAP M&I users during Colorado River shortages or CAP service interruptions; (2) help meet the water management objectives of the Groundwater Code; and (3) meet the State’s obligations in the settlement of Indian water rights claims. Changes in the AWBA’s enabling legislation in 1999 authorized the AWBA to participate in other water banking activities, however, no new water banking activities are included in this annual Plan of Operation. The AWBA’s storage of water is accomplished through the Underground Water Storage, Savings and Replenishment Act enacted by the Arizona legislature in 1994 and administered by the Arizona Department of Water Resources (ADWR). Through this program, the AWBA stores renewable water that would not be used in either underground storage (USF) or groundwater savings (GSF) facilities. A USF is a facility that allows water to physically be added to an aquifer. A GSF is a facility where the water is used in place of groundwater, creating a groundwater savings. The program mandates the accounting of the water stored and the development of long-term storage (LTS) credits. The LTS credits developed will then be utilized by the AWBA when future conditions warrant. The use of LTS credits for the three objectives listed is dependent on the source of funds utilized to develop them. The AWBA is required by statute to approve an annual Plan of Operation (Plan) by January 1 of each year. Prior to approval of the final Plan, the AWBA is required to solicit public comment. A draft of the Plan was presented at meetings of the Groundwater Users Advisory Councils (GUAC) for the Phoenix, Pinal and Tucson AMAs. Presentation of the draft Plan must be made at publicly-noticed open meetings at which members of the public are permitted to provide comment. The AWBA also makes the Plan available on its web page and accepts public comment in writing up to the time the final draft Plan is presented for approval. The Plan is intended to govern the operations of the AWBA over the course of the entire calendar year. The AWBA recognizes that day-to-day adjustments in the normal operations of the CAP or the individual storage facilities may affect the actual monthly deliveries made on behalf of the AWBA. If the adjustments do not impact the overall annual delivery projections contained in the Plan, they will be addressed by staff and reported to the AWBA members on an as-needed basis. 2 2012 PLAN OF OPERATION In 2012, the AWBA recharged and directly delivered approximately 136,800 acre-feet of Colorado River water. Arizona is forecast to use its full entitlement of 2.8 MAF (see Figure 1). Figure 1. Recent Comparison of Colorado River Water Uses by Arizona Forecasted direct use of Colorado River water in the Lower Basin is 7.49 MAF in 2012 as of November 30, 2012 (see Figure 2). Figure 2. Recent Comparison of Lower Basin Uses of Colorado River Water 3 The AWBA recharged water at both USFs and GSFs in 2012. Table 1a lists the AWBA's recharge partners for 2012, the amount of water that can be stored under each AWBA water storage permit, and the amount of water delivered to the facility for the benefit of the AWBA in 2012. The amount of water delivered to a facility is always greater than the amount of long-term storage credits earned by the AWBA because credits are computed by subtracting approximately 3% for losses and 5% for a "cut to the aquifer" from the total annual deliveries. Final figures for credits earned generally become available in the middle of the following year after review of the annual reports filed with the ADWR and are reported in the AWBA’s Annual Report. Table 1a. Recharge Partners and Water Deliveries for 2012 PHOENIX AMA AMA Facility Type Permit Capacity Delivered* (acre-feet) (acre-feet) Intrastate Interstate Tonopah Desert Superstition Mtns. USF USF 150,000 25,000 46,815 2,386 0 New Magma ID GSF 54,000 26,400 0 Queen Creek ID GSF 28,000 5,230 0 80,831 0 Intrastate/Interstate AMA Subtotal TUCSON AMA PINAL AMA Phoenix AMA Subtotal Central Arizona IDD Hohokam IDD Maricopa-Stanfield IDD 80,831 GSF GSF GSF 110,000 55,000 120,000 Intrastate/Interstate AMA Subtotal Pinal AMA Subtotal Avra Valley Lower Santa Cruz SAVSARP Pima Mine Road BKW Farms Cortaro-Marana ID Kai Farms-Red Rock 8,670 3,670 8,670 0 0 0 21,010 0 21,010 USF USF USF USF GSF GSF GSF 11,000 50,000 60,000 30,000 14,316 20,000 11,231 Intrastate/Interstate AMA Subtotal Tucson AMA Subtotal 1,000 11,010 15,000 600 200 4,339 1,851 0 0 0 0 0 0 0 34,000 0 34,000 TOTAL INTRASTATE & INTERSTATE DELIVERIES TOTAL RECHARGE DELIVERIES 0 135,841 * December deliveries estimated 4 In addition to recharge deliveries, the AWBA also delivered water to meet the requirements of the Gila River Indian Community Water Settlement Program (Settlement Program). In 2009, the AWBA entered into an intergovernmental agreement (IGA) with the Gila River Indian Community that identifies the procedure for delivering water for meeting a replenishment obligation and/or for establishing the Southside Replenishment Bank identified in the Settlement Program. While these deliveries do not accrue long-term storage credits that may be recovered in the future, the Replenishment Bank receives a credit for each acre-foot of water delivered. The replenishment bank can then be used as an option for offsetting any replenishment obligations created as a result of pumping limitations included in the Arizona Water Settlements Act (Settlements Act). Table 1b identifies the amount of water the AWBA delivered to the Replenishment Bank. There was no replenishment obligation in 2012. Table 1b. Replenishment Deliveries Southside Replenishment Activities 2012 Deliveries (acre-feet) Cumulative Deliveries (acre-feet) 0 1,000 0 4,000 1,000 4,000 Replenishment Obligations Replenishment Bank TOTAL DIRECT DELIVERIES The AWBA again participated in the AWBA/CAGRD Replenishment Reserve Excess CAP water pool created by CAWCD. The 2012 Plan identified the delivery of 119,002 acre-feet of water for recharge purposes. Additional water became available to the AWBA during the year from CAP customers that had turned back water. As a result, the AWBA recharged an estimated 135,841 acre-feet of water in 2012: Figure 3 identifies the storage breakdown between GSFs and USFs for 2012 and provides a comparison between 2012 and previous years. RECHARGE BY TYPE 0.30 Deliveries (MAF) 0.21 0.20 0.14 0.17 0.14 0.08 0.09 0.10 0.06 0.04 0.04 0.00 2010 2011 Groundwater Savings Facility 2012 Underground Storage Facility Figure 3. Recent Comparison of Annual Deliveries to GSFs and USFs 5 2013 PLAN OF OPERATION The AWBA will store 51,546 acre-feet of intrastate water in 2013. Water storage will be occurring in facilities in all three counties. The AWBA is not planning any interstate storage. The AWBA will also deliver 1,000 acre-feet of water for the Southside Replenishment Bank. When developing a Plan of Operation, the AWBA evaluates four critical factors: (1) the amount of water available to the AWBA for delivery; (2) the CAP canal capacity available to the AWBA for the delivery of water; (3) the funds available and the costs required to deliver the water; and (4) the capacity available for use by the AWBA at the various recharge facilities. In addition to these critical factors, the AWBA takes into consideration recommendations made by the Groundwater Users Advisory Councils (GUAC) of the three AMAs regarding water management objectives and priorities for storage. For 2013, the amount of water available to the AWBA is the limiting factor for this Plan. I. Water Availability The factor of water availability consists of two parts: (1) the amount of water available on the Colorado River for diversion by the CAP within Arizona’s allocation; and (2) the amount of CAP water available to the AWBA for delivery under the existing pool structure. The proposed Annual Operating Plan (AOP) for water year 2013 distributed by the Bureau of Reclamation (Bureau) stated that the Intentionally Created Surplus (ICS) Surplus Condition is the criterion that will govern the release of water for the states in the Lower Basin during calendar year 2013. Because Arizona has not created ICS, the State will operate under normal conditions, which allows 2.8 MAF of water available for use within Arizona. Arizona’s on-river use is forecast to be 1.2 MAF, leaving approximately 1.6 MAF available for diversion by CAP. For 2013, the AWBA will purchase water from the Excess CAP water pool that is available for use by the AWBA and CAGRD for replenishment reserve purposes. Under this pool the AWBA shares an equal priority for municipal and industrial (M&I) firming with the CAGRD for replenishment reserve purposes. The Federal government may also order water from this pool for meeting its Indian firming obligations. The CAWCD Board of Directors (Board) originally identified a volume of 175,000 acre-feet for this pool. However for 2013, due to higher than expected priority M&I subcontractor and Indian orders the CAWCD Board adjusted the quantity available in this pool to 61,371 acre-feet. Subtracting the projected uses for the CAGRD replenishment reserve (3,565 acre-feet) and the Bureau (5,260 acre-feet), leaves a remaining balance of 52,546 acre-feet for the AWBA. Given the reductions to the pool, water availability is the primary limiting factor in developing the 2013 Plan. 6 II. CAP System Capacity Under normal operating conditions, CAP can divert approximately 1.6 MAF of water. Reclamation estimates that the full amount will be available for delivery by CAP in 2013. This quantity includes the volume of water available to the AWBA. Because there is still capacity available in the CAP to deliver additional supplies, capacity within the CAP for the delivery of AWBA water is not a limiting factor in this Plan. III. Available Funds The AWBA will have withdrawal fees collected in 2013 available for use in this Plan. Total withdrawal fees are estimated at $3.1 million, which includes $1.5 for the Phoenix AMA, $1.2 million for the Pinal AMA and $400,000 for the Tucson AMA. As in previous years, the CAWCD Board resolved to continue to retain the county ad valorem property taxes collected and not transfer those revenues to the AWBA Fund. Property tax revenues retained by CAWCD can be used to offset the cost of AWBA water deliveries in the tri-county CAWCD service area. Estimated funds available from CAWCD for the 2013 Plan are: Maricopa County ($14 million), Pinal County ($1.15 million), and Pima County ($3.2 million). While funding was not a limiting factor in developing the Plan for the Phoenix and Tucson AMAs, funding did limit the amount of water available for storage in the Pinal AMA. The amount of funds collected in both the Pinal and Tucson AMAs is expected to be a limiting factor in these areas in the future. IV. Available Storage Facility Capacity AWBA staff conferred with facility operators to discuss their delivery schedules and their continued interest in participating with the AWBA. These discussions confirmed that there was significant interest from facility operators in all three AMAs in partnering with the AWBA. If additional supplies become available, the AWBA still has sufficient capacity to meet its anticipated needs. Storage capacity is therefore not a limiting factor for this Plan. The Water Delivery Schedule (Table 2) identifies the AWBA’s partners for 2013 and the amount of water scheduled to be recharged. The second column in this section identifies the AWBA’s water storage permit capacities for each facility based on the facility permits. The capacity available as shown does not always equate to the storage permit capacity because the storage facility operators may have agreements with other storage partners. In addition to recharge deliveries, Table 2 also identifies the amount of water scheduled for meeting the AWBA’s Southside Replenishment obligations. SHORTAGE REPARATION FUNDS Southern Nevada Water Authority (SNWA) agreed to provide $8 million to the AWBA to assist Arizona in offsetting impacts from shortages pursuant to the Arizona-Nevada Shortage-Sharing Agreement. Approximately $3 million of these funds have been 7 expended since 2008. The AWBA will expend an additional $1.5 million to store water in the Tucson AMA in 2013. NEW FACILITIES There are no new recharge facilities identified in the 2013 Plan. 8 Table 2 Water Delivery Schedule (Acre-Feet) Calendar Year 2013 AWBA-Recharge Sites PHOENIX AMA : HIEROGLYPHIC MTN AGUA FRIA TONOPAH DESERT Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 35,000 100,000 150,000 0 0 2,000 0 0 2,000 0 0 2,030 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6,030 SUPERSTITION MTNS 35,000 0 500 500 702 0 0 0 0 0 0 0 0 NEW MAGMA QUEEN CREEK TONOPAH ID 54,000 28,000 15,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 175 0 0 1,343 0 0 2,285 0 0 1,142 0 0 1,143 0 0 1,142 0 1,702 7,732 0 7,230 0 7,230 2,000 2,500 2,530 702 0 0 175 1,343 2,285 1,142 1,143 1,142 14,962 0 0 408 0 0 536 0 0 989 0 0 935 0 0 935 0 0 536 0 0 247 6,600 1,650 218 0 1,650 472 0 1,650 400 0 1,650 670 0 0 254 6,600 6,600 6,600 19,800 408 536 989 935 935 536 247 8,468 2,122 2,050 2,320 254 19,800 883 0 4,000 0 11,901 16,784 0 0 0 0 USF GSF Permitted Capacity (AF) AMA TOTAL INTRASTATE GSF PINAL AMA : CAIDD HOHOKAM MSIDD 110,000 55,000 120,000 AMA TOTAL INTRASTATE USF AVRA VALLEY LOWER SANTA CRUZ PIMA MINE ROAD CAVSARP SAVSARP 11,000 50,000 30,000 100,000 60,000 0 0 0 0 2,000 0 0 0 0 2,000 0 0 0 0 2,000 0 0 0 0 2,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 700 0 0 0 0 800 0 0 183 0 1,700 0 2,000 700 0 800 0 1,901 GSF TUCSON AMA: CORTARO-MARANA ID KAI FARMS (Red Rock) BKW Farms 20,000 11,231 14,316 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 AMA TOTAL INTRASTATE 2,000 2,000 2,000 2,000 0 0 0 0 700 800 3,883 3,401 16,784 TOTAL INTRASTATE TOTAL INTERSTATE 4,408 0 5,036 0 5,519 0 3,637 0 935 0 536 0 422 0 9,811 0 5,107 0 3,992 0 7,346 0 4,797 0 51,546 0 TOTAL RECHARGE 4,408 5,036 5,519 3,637 935 536 422 9,811 5,107 3,992 7,346 4,797 51,546 DIRECT DELIVERY (Non-Storage): Southside Replenishment Bank Southside Replenishment Obligation TOTAL DIRECT TOTAL DELIVERIES 0 0 1,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,000 0 0 1,000 0 0 0 0 0 0 0 0 0 0 1,000 4,408 6,036 5,519 3,637 935 536 422 9,811 5,107 3,992 7,346 4,797 52,546 9 INDIAN SETTLEMENTS The Plan does not specifically identify storage to meet the State’s firming obligations under the Settlements Act; however it does incorporate replenishment deliveries required under the Gila River Indian Community (GRIC) Settlement Program. Indian Firming CAP supplies will not be shorted in 2013. There are also no long term system outages anticipated that would reduce deliveries to CAP customers. Therefore, there is no obligation for the AWBA to firm Indian supplies under this Plan. The Settlements Act recognizes three categories where the State has firming responsibilities. The first two obligations pertain to firming of water for the GRIC and other Arizona tribes in times of shortage for a 100-year period; the third obligation pertains to providing assistance to the Secretary of the Interior (Secretary) in carrying out obligations of the Southern Arizona Water Rights Settlement Act. 1. GRIC - The AWBA must ensure that up to 15,000 acre-feet per year of CAP NIA priority water be made available to the GRIC. The AWBA did not receive a general fund appropriation for 2013 to assist in meeting this obligation. Withdrawal fees may be utilized for Indian firming purposes after appropriated funds are expended. The 2013 Plan does not identify expenditures specifically for this purpose. However, credits accrued through the use of withdrawal fees could be used to meet this obligation if necessary. 2. Other Tribes - The AWBA is also required to firm up to 8,724 acre-feet per year of CAP NIA priority water for other Indian Settlements. The White Mountain Apache Tribe has entered into a settlement which requires the AWBA to firm 3,750 acre feet per year of the 8,724 acre-feet CAP NIA priority water. As with the GRIC obligation, no general fund appropriations were made available for this purpose. However, credits developed in this plan using withdrawal fees could be used for this purpose if needed. Settlements for other Indian Tribes have not been enacted at this time. 3. Federal Assistance - The AWBA has completed the State obligation to contribute $3 million in cash or in-kind services to assist the Secretary in meeting the Federal obligation to the Tohono O’odham Nation. Southside Replenishment Bank In addition to the firming requirements of the Settlements Act, the AWBA, acting as agent for the State, is required to deliver 15,000 acre-feet of water to the GRIC for the purpose of establishing the Southside Replenishment Bank. The AWBA must deliver a minimum of 1,000 acre-feet per year to establish this Bank. The Southside Replenishment Bank will fulfill the obligations created under the Settlements Act for protection of the Reservation from off-reservation groundwater pumping. The 2013 Plan includes 1,000 acre-feet of direct deliveries to the GRIC for this purpose, creating a 10 cumulative total of 5,000 acre-feet toward meeting this obligation. Cumulative costs through 2013 total $614,000. Assignment of Long-term Storage Credits by the Tohono O’dham Nation Pursuant to A.R.S. § 45-841.01, the Tohono O’dham Nation (Nation) must offer ten percent of the any credits they accrue at the Mission Mine Complex to the AWBA at a price per acre-foot that is equal to the AWBA’s delivery and storage costs at the time of sale. If the Nation offers the AWBA credits in 2013, the AWBA will evaluate the offer to determine if it is reasonable to purchase those credits. While these credits may be used for M&I firming or for water management purposes, there is a restriction that the credits not be recovered within five miles of the exterior boundary of the reservation. INTERSTATE WATER BANKING The 2013 Plan does not include an interstate storage for Nevada. The AWBA and SNWA executed a letter agreement, December 9, 2010, which suspends certain provisions of Second Amended Agreement for Interstate Water Banking (Second Amended Agreement). Pursuant to the letter agreement, AWBA agreed to forego storing additional water for SNWA through the end of calendar year 2014 and SNWA agreed to forego requiring the development of ICUA during this period. In order to accommodate these operational adjustments, and unless otherwise agreed to by the AWBA and SNWA, payment dates specified in Subarticle 2.4.1.2 of the Second Amended Agreement will be extended by six years. From 2009 to the present, Legislative transfers from the AWBA Nevada Resource subaccount total $19.65 million. RECOVERY No recovery of AWBA long term storage credits is anticipated in this Plan. Staff representatives for ADWR, CAWCD and the AWBA continue to meet to develop a draft Intergovernmental Agreement (IGA) among the ADWR, CAWCD and AWBA. This draft IGA will identify the duties and responsibilities of the parties as they relate to recovery of long term storage credits and delivery of the water created by that recovery. While the actual recovery of AWBA credits for firming is not expected for several years, a better understanding of the how that recovery is expected to occur would be very beneficial. As the staffs continue these efforts they will seek input from all interested parties. PRICING In June 2012, the CAWCD Board approved its water delivery rate schedule for calendar years 2013/2014. The AWBA rate for recharge is equivalent to the rate for excess M&I water at $144 per acre-foot. 11 Groundwater pumping costs in the Phoenix, Pinal and Tucson AMAs vary depending on energy sources used and the location of wells, i.e. depth to water. The AWBA cost share in 2013 for the GSF partners in the Phoenix and Pinal AMAs is $34 per acre-foot, which is comparable to the average groundwater pumping costs in these areas. Based on the range of groundwater pumping costs and cost shares paid by other partners, it was determined the cost share in 2013 for the Tucson AMA will be $16 per acre-foot. Table 4 reflects the water delivery rate CAWCD will charge the AWBA, the cost share GSF operators pay, and the rates the AWBA pays to utilize different USFs. When storing water for other than M&I firming and water management purposes, the AWBA also pays a facility capital charge. There is no administrative cost component in the facility cost because the AWBA pays the CAWCD administrative costs on an annual basis. While no interstate banking is anticipated in this Plan the rate established for interstate banking is $168 per acre-foot, plus facility costs and facility capital costs. Table 3. 2013 Water and Facility Rates Recharge Cost per Acre-foot CAWCD delivery rate to AWBA for water storage $144 Interstate rate $168 Groundwater Savings Facility operator cost share rate 1 Intrastate Phoenix and Pinal AMAs $34 Tucson AMA $16 Interstate $26 Underground Storage Facility rate paid by AWBA CAWCD – Phoenix Facilities 2 $8 3 $15 Avra Valley Recharge Project $15 CAWCD – Tucson Facilities Clearwater Facility (CAVSARP/SAVSARP) $15.63 Direct Deliveries CAWCD rate to AWBA for Southside Replenishment Bank deliveries $144 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 $110/af for intrastate deliveries to the Phoenix and Pinal AMAs, $128/af to the Tucson AMA, and $142/af for interstate deliveries. 2 Additional capital charge of $15 per acre-foot for interstate storage. 3 Additional capital charge of $9 per acre-foot for interstate storage. ACCOUNTING The AWBA’s enabling legislation required the development of an accounting system that allows the tracking of all credits accrued by the AWBA and the 12 funding sources from which they were developed. The ADWR maintains the accounting of the credits. The AWBA accounts for the expenditure of the funds. The estimated total cost of the AWBA’s 2013 Plan is approximately $7 million. Table 4 provides estimates of the funds available to the AWBA, the funds to be utilized, the entity that holds the funds, and the credits estimated to accrue to those accounts based on the 2013 Plan. Table 4. Funding for 2013 Annual Plan of Operation Estimated Funds Available ($) 1 AWBA CAWCD Estimated Funds Utilized ($) AWBA CAWCD Estimated Credits (AF) Withdrawal Fees Phoenix AMA 2 Pinal AMA Tucson AMA $1,500,000 $1,200,000 $400,000 Phoenix AMA Pinal AMA 3 Tucson AMA $0 $0 $0 General Phoenix AMA Pinal AMA Tucson AMA $0 Shortage Reparations (NV): Phoenix AMA $1,500,000 - $1,500,000 $1,200,000 $400,000 - 10,480 8,830 2,310 3,290 9,380 4,480 Four Cent Tax $14,000,000 $1,150,000 $3,200,000 $0 $0 $0 $471,000 $1,122,000 $776,000 - $0 $0 $0 - - $0 0 $0 $1,500,000 0 8,650 Other Pinal AMA Tucson AMA 0 0 0 Interstate Banking- Nevada Operating 1 2 3 4 4 $0 Total Funds Available $22,950,000 $0 Total Funds Expended $6,969,000 0 Credits 47,420 The figures shown are estimates provided by CAWCD staff, and are based on amounts anticipated to be collected during the 2012 tax year and include funds carried over from the previous year if needed to meet the estimated funds utilized during the year. If utilization is greater than estimated, there may be additional funds held by CAWCD that could be made available at the discretion of the CAWCD Board of Directors. Includes expenditure for 1,000 acre-feet of direct deliveries to establish the Southside Replenishment Bank under the Gila River Indian Water Settlement Program. Estimates include revenue from CAWCD’s capital charge for construction of state demonstration projects when facilities are used for interstate purposes and by entities that do not pay the 4¢ ad valorem tax. Pursuant to a letter agreement between AWBA and SNWA executed December 9, 2010, storage of water on behalf of SNWA and annual payments to the Operating account have been suspended through 2014. The 2013 Plan was developed expending all available withdrawal fees in the three AMAs and $1.5 million in Shortage Reparation funds in the Tucson AMA. The Plan also shows CAWCD utilizing a portion of the four-cent tax collected in Maricopa and Pima 13 Counties and all of the four-cent tax collected in Pinal County, including funds carried over from the previous year, to offset water costs for credits accrued to the AWBA. Table 5 provides an estimate of the AWBA funds expended and the location of the credits accrued since inception through 2012. Table 5. Cumulative Long-term Storage Credits 1997-2012 FUNDING FUNDS SOURCE EXPENDED CREDITS AMOUNT (AF) 1 LOCATION Withdrawal Fee Phoenix AMA Pinal AMA 2 Tucson AMA $18,875,551 $15,280,367 $7,886,313 290,382 393,632 98,086 Phoenix AMA Pinal AMA Tucson AMA Four Cent Tax Maricopa County Pinal County Pima County $87,767,572 $9,312,705 $40,144,935 1,333,628 188,867 389,918 Phoenix AMA Pinal AMA Tucson AMA $11,100,865 $1,522,115 $6,394,964 $3,183,786 403,830 42,316 306,968 54,546 Phoenix AMA Pinal AMA Tucson AMA Indian Firming Appropriation $2,338,171 $0 $0 $2,338,171 28,481 0 0 28,481 Phoenix AMA Pinal AMA Tucson AMA Shortage Reparations $2,999,742 $1,099,339 $1,708,580 $191,823 82,376 20,642 60,507 1,227 Phoenix AMA Pinal AMA Tucson AMA Pinal AMA Other General Fund 3 Pinal Redirect Interstate 4 N/A 14,125 Nevada 5 $109,087,822 $11,444,369 $71,508,152 $26,135,300 600,651 51,009 439,851 109,791 $304,794,041 3,823,974 TOTAL 1 2 Phoenix AMA Pinal AMA Tucson AMA Actual expenditures and credits for 1997-2011; 2012 estimated. Includes expenditure of $22,698 for the assignment of 234 acre-feet of credits to the AWBA from the Tohono O’odham Nation pursuant to §45-841.01. 3 256,174 AF of credits reserved pursuant to contract with Mohave County Water Authority. Credits accrued from water scheduled for the Tucson AMA and redirected to the Pinal AMA for storage at GSFs. Facility operators paid 100% of the water delivery rate. 5 Includes 50,000 acre-feet of credits transferred from CAWCD pursuant to Amended Agreement for Interstate Water Banking. 4 14 Table 6 identifies the progress made on the AWBA’s goals and obligations through 2013. Table 6. Projected Percent of Goals and Obligations Achieved through 2013 Location and Objective Funding Source Goal Phoenix AMA M&I Firming 1 Groundwater Mgmt Ad valorem tax Withdrawal Fees Pinal AMA M&I Firming 1 Groundwater Mgmt Tucson AMA M&I Firming 1,2 Groundwater Mgmt On-River M&I Firming 3 Obligation Non-Credit Goal/Oblig. Achieved Credits Accrued (AF) Percent Goal/Oblig. Achieved 1,566,000 AF 1,336,915 300,859 85% Ad valorem tax Withdrawal Fees 243,000 AF 198,251 402,464 82% Ad valorem tax Withdrawal Fees 864,000 AF 394,396 94,773 46% 57% General Fund 420,000 AF 403,830 96% 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 0% Federal Assistance Tucson AMA $3,000,000 $3,000,000 $2,338,171 $630,490 $31,339 Appropriation Withdrawal Fees 6 Cost of Services Southside Repl. Bank Interstate Water Banking - NV Withdrawal Fees 15,000 AF Direct Delivery Contract with Nevada 1,250,000 AF 7 34,102 28,481 5,621 n/a 100% 5,000 33% 600,651 48% 91,450 56% 14,125 N/A Other: Shortage ReparationsNevada Pinal Redirect Credits 1 8 Gifts, Grants, Donations $8,000,000 $4,499,742 N/A Withdrawal fees could be utilized in addition to 4¢ ad valorem tax revenues for M&I firming if needed to reach firming goals. 2 Includes 234 AF credits acquired from the Tohono O'odham Nation pursuant to §45-841. 01. 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. 256,174 AF of credits reserved pursuant to contract with Mohave County Water Authority. 4 This percentage reflects full utilization of general fund credits accrued to date and would change as other objectives are identified by the AWBA. 3 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 long-term 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 are currently identified for M&I firming in the Tucson AMA and would meet 1% of the firming goal. 15 PUBLIC REVIEW AND COMMENT The AWBA staff held meetings with the Groundwater Users Adivsory Councils (GUAC) for the Phoenix, Pinal and Tucson AMAs as required by statute. The Plan was distributed to the public and was posted on the AWBA web page for public review and comment. In general, the GUACs supported the Plan and had no requests for changes to it. In the Phoenix AMA, GUAC members asked for clarification on use of the 4-cent ad valorem tax and questioned whether CAWCD was obligated to offset the AWBA’s costs as part of their O&M costs. AWBA staff noted that while the CAWCD Board’s resolution on use of the 4-cent tax does not specifically identify AWBA storage as part of the O&M costs, CAWCD has made funds available for this purpose. CAWCD staff also commented that the CAWCD Board has recognized the importance of the AWBA and has been committed to offsetting AWBA costs. In the Pinal AMA, there were comments from the public requesting that the AWBA consider storing additional water if additional funding and water become available. In the Tucson AMA there were comments questioning whether the AWBA should continue its historic practice of scheduling deliveries for direct use (GSFs) before deliveries to USFs when water supplies are limited rather than prioritizing storage locations based on meeting certain goals and obligations. This issue was confirmed by a letter from the Southern Arizona Water users Association (attached). 16