ARIZONA WATER BANKING AUTHORITY ANNUAL REPORT 2000 Submitted July 1, 2001 Arizona Water Banking Authority Annual Report 2000 Honorable Jane Dee Hull Governor of Arizona Members Rita Pearson Maguire Chairman Thomas E. Griffin Vice-chairman William L. Chase Secretary George R. Renner Member Richard S. Walden Member Ex officio Senator Ken Bennett Representative Mike Gleason Table of Contents Arizona Water Banking Authority Annual Report Requirement......................................................1 Members of the Arizona Water Banking Authority...........................................................................2 Organizational Chart ...........................................................................................................................2 Interstate Water Banking Negotiating Team .....................................................................................3 Update ..................................................................................................................................................5 Activities and Projects - 2000.............................................................................................................7 Interstate Water Banking ................................................................................................................7 2001 Plan of Operation....................................................................................................................9 Media Coverage ...............................................................................................................................9 Facility Permit Activity ....................................................................................................................9 AWBA Newsletter ............................................................................................................................9 Web Page .......................................................................................................................................10 Monies Expended from the Banking Fund......................................................................................11 Long-term Storage Credits...............................................................................................................13 Long-term Storage Credits Distributed or Extinguished by the Authority...................................16 Ten Year Plan ....................................................................................................................................17 Appendices........................................................................................................................................20 List of Tables Table 1. Monies Collected and Expended in 2000 by Source of Funds.......................................12 Table 2. Monies Collected and Expended through December 2000 and Monies Remaining Available to the Authority..........................................................................................................12 Table 3. Number and Location of Long-term Storage Credits Accrued in 2000 .........................13 Table 4. Cumulative Total and Location of Long-term Storage Credits Accrued through December 2000...........................................................................................................................14 Table 5. Average Annual Cost for the AWBA to Obtain a Long-term Storage Credit.................14 Table 6. Ten Year Plan ..........................................................................Error! Bookmark not defined. Arizona Water Banking Authority Annual Report Requirement Arizona Revised Statutes § 45-2426 mandates that the Arizona Water Banking Authority (AWBA) file an annual report with the Governor, President of the Senate and Speaker of the House of Representatives on or before July 1 of each year for the previous calendar year. The report is required to be a full and complete account of the AWBA’s transactions and proceedings and must include the following: 1. An accounting of all monies expended from the banking fund. 2. An accounting of all monies in the banking fund remaining available to the AWBA. 3. The amount of water stored by the AWBA. 4. The number of long-term storage credits distributed or extinguished by the AWBA. 5. The purposes for which long-term storage credits were distributed or extinguished by the AWBA. 6. A description of the water banking services and interstate water banking to be undertaken by the AWBA during the following ten year period and a projection of the capacity of the AWBA during that period to undertake those activities in addition to storing Colorado River water brought into the state through the CAP for all of the following purposes: a. Protecting this state’s municipal and industrial water users against future water shortages on the Colorado River and disruptions of operation of the CAP. b. Fulfilling the water management objectives of the state. c. Making water available to implement the settlement of water rights claims by Indian communities within Arizona. 7. Any other matter determined by the authority to be relevant to the policy and purposes of the AWBA. 1 Members of the Arizona Water Banking Authority Pictured above from left to right: Richard S. Walden, Thomas E. Griffin, Rita Pearson Maguire, George R. Renner and William L. Chase Organizational Chart Rita Pearson Maguire Chairman Thomas E. Griffin Vice-Chairman William L. Chase Secretary George R. Renner Richard S. Walden Ex officio Members Representative Mike Gleason Senator Ken Bennett Timothy J. Henley Manager DWR Support Gerry Wildeman Tech. Administrator Nannette Flores Admin. Assistant Michael J. Pearce Legal Counsel 2 CAWCD Support Interstate Water Banking Negotiating Team Pictured clockwise from center, Tim Henley, Michael Pearce, David Donnelly, Kay Brothers, Gary Weatherford and Larry Dozier Kay Brothers is an environmental engineer who has served as Director of the Resources Department of the SNWA since 1995. Ms. Brothers has an extensive background in Nevada water management issues. Jim Davenport is the Chief of the Water Division of the Colorado River Commission. The Colorado River Commission is the state agency responsible for protection of Nevada’s trust interest in its share of Colorado River water. Mr. Davenport is an attorney who represents Nevada in numerous proceedings associated with the Colorado River. David Donnelly is a civil engineer who serves as the Deputy General Manager of Engineering/Operations and chief engineer for both the Las Vegas Valley Water District and the Southern Nevada Water Authority (SNWA). The SNWA is the agency responsible for allocation and distribution of Colorado River water to the Las Vegas Valley. Mr. Donnelly has held these positions since 1990. Larry Dozier has served as Deputy General Manager for the Central Arizona Project (CAP) since September 1995. Mr. Dozier is responsible for operations, engineering and maintenance at the CAP. Tim Henley is a Civil Engineer appointed as Manager of the Arizona Water Banking Authority (AWBA) in 1996. Mr. Henley has a long history of serving as Arizona’s representative in interstate water matters. Michael Pearce serves as the Chief Counsel of the Arizona Department of Water Resources (ADWR). Mr. Pearce has been involved in the AWBA since its creation and specializes in issues concerning the law of the Colorado River. Gary Weatherford is a partner in the San Francisco natural resources law firm of Weatherford and Taaffe, LLP. Mr. Weatherford has been of special counsel for SNWA since its inception. He shares 3 this and other legal responsibilities concerning Colorado River matters with David Lindgren of the Sacramento law firm of Downey, Brand, Seymour and Rohwer, LLP. 4 Update During the previous calendar year, the AWBA continued to work to accomplish its mission of utilizing the unused portion of Arizona’s Colorado River allotment for recharge and development of long-term storage credits for Arizona’s future use. The recharge that is done by the AWBA utilizes Colorado River water that would otherwise not be used within Arizona. One new member joined the AWBA in 2000. Representative Mike Gleason was appointed ex officio member by Representative James Weirs, Speaker of the Arizona House of Representatives on December 15, 2000. Representative Gleason represents District 15 and replaces former ex officio member Representative Gail Griffin. A biography of Representative Gleason can be found on the AWBA web page. In 2000, the AWBA held quarterly meetings at the ADWR to insure that the public stay apprised of their activities. In addition to the regularly scheduled meetings, special meetings of the AWBA or AWBA subcommittees can be called when there are issues that require additional input and discussion. In 2000, special meetings of the AWBA were called on January 13, January 26 and June 28 to address issues related to interstate water banking. A special meeting was also called on May 3 to approve the storage agreement for the Lower Santa Cruz Recharge facility. Meetings of the Recovery Subcommittee were called on March 2 and May 17. The newly formed Interstate Water Banking Subcommittee (IWBS) held meetings on August 21, October 24, November 14 and December 12. The first Recovery Subcommittee meeting focused on identification and development of recovery strategies utilizing the information provided in the compact disk (CD) prepared by the consultants. The CD, titled “AWBA – GIS Database for Phoenix and Tucson Active Management Areas, Version 1.0 (March 2000)” was distributed to recovery participants in April 2000. The second meeting was held to solicit input from the parties regarding their ability to participate in the recovery strategies discussed at the previous meeting. At the second meeting, a small group of entities were identified as possessing the operational flexibility and capability to participate in recovery. Consequently, a Recovery Core Group was formed within the Recovery Subcommittee. The Recovery Core Group held meetings on June 6 and August 31 to evaluate the potential for interested parties to participate in the recovery process. It is perceived that there will be significantly more activity of the Recovery Core Group in 2001 as the parties complete investigations of their system capabilities with respect to recovery. The IWBS was formed at the June AWBA meeting as it was recognized that interstate issues would require a substantial investment of meeting time. All action items of the IWBS would be addressed at the quarterly AWBA meetings. Meetings of the IWBS focused on status updates, re-evaluation of the intrastate firming requirements, the availability of water and storage capacity for interstate water banking, providing staff with direction and review of draft agreements. A work group was formed to address the technical aspects of the impact of interstate water banking. More detailed information regarding interstate water banking can be found in the Activities and Projects section of this report. The Central Arizona Water Conservation District (CAWCD) has experienced extended delays in the initiation of the Agua Fria Recharge Project due to an inability to acquire the necessary land interests. In response, the CAWCD proposed legislation in the 2000 session to obtain limited condemnation 5 authority to acquire land associated with development of a facility under the State Demonstration Recharge Project. At the January 26, 2000 meeting, the AWBA voted unanimously to support the proposed legislation because the lack of adequate recharge facility space currently limits AWBA storage. A letter stating AWBA support was signed by Chairman Rita Pearson Maguire and mailed on January 31, 2000. Following several amendments, Senate Bill 1364 was signed into law on April 4 and became effective in July 2000. The AWBA members and staff coordinate annually with current and potential recharge entities in the process of development of the Annual Plan of Operation for the following year. Interested entities provide information regarding their desired level of participation with the AWBA. The recharge capacities of the facilities are then matched with the delivery capacities of the CAP aqueduct. Through coordination between AWBA and CAWCD staff, adjustments are made between facility capacities and CAP availability and a final proposed delivery schedule is determined. For the 2001 Plan of Operation, the entities scheduled for delivery were Salt River Project’s Granite Reef Storage Project (GRUSP) and Groundwater Savings facility, CAWCD’s Agua Fria, Avra Valley, Pima Mine Road and Lower Santa Cruz facilities, New Magma Irrigation District, Queen Creek Irrigation District, Tonopah Irrigation District, Central Arizona Irrigation and Drainage District, Hohokam Irrigation District, Maricopa Stanfield Irrigation District, Chandler Heights Irrigation District and Herb Kai. In November, AWBA staff met with staff from Salt River Project and CAP to discuss inclusion of a water exchange in the 2001 Annual Plan of Operation. The CAWCD has planned an outage of the Salt River siphon from November 1 to December 15, 2001 for inspection and repair that would preclude storage at GRUSP for that time period. The AWBA obtained a general use water exchange permit in 1999 to be used in these situations. Consequently, the 2001 Plan was developed with 6,000 acre feet of storage planned at GRUSP in November and December under the water exchange agreement and permit. The AWBA recharged almost 294,000 acre feet of CAP water in 2000 (see Appendix A). Of this, 156,000 acre feet were stored in the Phoenix AMA, 99,000 acre feet were stored in the Pinal AMA and 39,000 acre feet were stored in the Tucson AMA. Total consumptive use of Colorado River water by Arizona for 2000 was approximately 2.65 million acre feet. Distribution of that quantity was: approximately 1.23 million acre feet for direct uses along the Colorado River; CAP subcontractor uses of approximately 1.13 million acre feet; and AWBA water uses of approximately 294,000 acre feet. For more information about the Arizona Water Banking Authority, consult the AWBA web page at http://www.awba.state.az.us or contact Tim Henley (tjhenley@adwr.state.az.us) or Gerry Wildeman (glwildeman@adwr.state.az.us) at 602-417-2418. 6 Activities and Projects - 2000 Interstate Water Banking AWBA Activities – 2000 1 Although the rule that made interstate water banking permissible from a federal perspective was promulgated in 1999, the state process did not officially begin until January 13, 2000. On that day, the chief counsel for ADWR held a public meeting to solicit input to be used in completing his recommendation to the Director regarding the adequacy of the federal rule titled “Offstream Storage of Colorado River Water and Development and Release of Intentionally Created Unused Apportionment”. On January 26, 2000, the Director presented her determination that the federal rule met the statutory criteria and that initial discussions regarding development of the agreements necessary to permit interstate banking could commence. At that same meeting, the AWBA authorized a negotiating team to initiate exploratory discussions using a set of issues of negotiation that had been identified. Brief biographies of the Arizona and Nevada members of the negotiating team are presented earlier in this report. The negotiating team met several times with both California and Nevada entities in February and March of 2000. Staff developed a first draft of the agreement titled “Storage and Interstate Release Agreement” (SIRA) that was distributed and discussed by the AWBA at the March 14, 2000 meeting. The SIRA is an agreement between the AWBA, the United States Bureau of Reclamation and the authorized entity in the consuming state and is required by federal rule. The SIRA describes the manner in which the Secretary of the Interior will monitor and account for the storage and recovery of water pursuant to an interstate water banking agreement. Also at that meeting, representatives from Nevada and California made presentations to the AWBA that described their water needs and the perceived role the AWBA could play in meeting them through interstate water banking. Interstate water banking was a primary agenda item at the June 21, 2000 AWBA meeting. At that meeting, staff updated the AWBA on the status of the exploratory discussions, discussed a chart that modeled the opportunities for interstate banking, and presented a preliminary draft of a second agreement titled “Agreement for the Development of Intentionally Created Unused Apportionment” (ADICUA). The ADICUA is an agreement between the AWBA and the CAWCD, or other recovering entity, that mandates how water will be recovered and how unused apportionment will be created on the Colorado River. A second draft of the SIRA was also discussed and the AWBA Interstate Water Banking Subcommittee (IWBS) was established. It was determined that future interstate water banking issues would be discussed in the subcommittee which would meet more frequently than the quarterly AWBA meetings. However, approvals of agreements and other important action items would be referred to and acted upon by the AWBA at their quarterly meetings or at special meetings scheduled as necessary. 1 This Annual Report documents AWBA activities that occurred in calandar year 2000. However, since the end of the reporting period significant progress has been made on both the Agreement for Interstate Water Banking (AIWB) and the Storage and Interstate Release Agreement (SIRA). Both the AWBA and Nevada have approved the AIWB and the initial drafting of the SIRA has been completed. 7 A major milestone in the interstate water banking process occurred on June 28, 2000 when the negotiating team was formally authorized by the AWBA to begin negotiating the concepts and language of the various agreements. July 17, 2000 marked the first negotiation meeting between Arizona and Nevada. It was decided at that meeting that the initial point of focus would be preparation of the agreement between Nevada and the AWBA. That agreement, ultimately titled “Agreement for Interstate Water Banking” (AIWB) describes the financial, operational and legal requirements of the authorized entities. The SIRA and the ICUA will be developed on the basis of concepts agreed upon in the AIWB. Consequently, the SIRA and ICUA did not proceed past the initial drafts in 2000 as the negotiating team and the AWBA focused on the AIWB. In July and early August there were three meetings of the negotiating team at which general concepts regarding cost, scheduling, environmental requirements, and term were discussed. The first meeting of the IWBS was held on August 21, 2000 and the members were updated on the status of the negotiation process. At this point, general concepts to be included in the AIWB had been discussed, however, actual language had not been negotiated. An outline draft of the AIWB that detailed the concepts identified thus far was presented to the members. Also discussed at this meeting was the continuing concern of the members that there is insufficient water and storage capacity available to allow interstate banking. The second meeting of the IWBS was held on October 24, 2000. The primary focus of the meeting was discussion of a number of areas of concern identified by the AWBA. The issues were (1) pricing of interstate water banking, (2) ordering, scheduling and payment of interstate deliveries, and (3) water and storage capacity availability. Staff prepared issue papers and completed computer modeling runs to address the member’s concerns. In this meeting, it was determined that the AWBA required additional information regarding the current status of the intrastate firming requirements and a technical work group was appointed to develop that information. In subsequent meetings of the IWBS, additional concerns were raised and addressed through issue papers and discussion. These areas of concern include (1) Arizona’s requirements during declared shortages on the Colorado River, (2) quality of recovered water, and (3) enforcement of contracts between the AWBA and other entities. The final meeting of the IWBS for 2000 was held on December 12. At that meeting, it was decided that the majority of the concerns of the AWBA had been identified and addressed and that the subcommittee could likely be dissolved after a final meeting in January 2001. The negotiating team then began drafting the contractual language of the AIWB using the components that had been identified and discussed over the previous five months. CAWCD Activities – 2000 2 At the March meeting of the CAWCD, Board President George Renner informed the board that the AWBA had authorized a negotiating team to initiate exploratory discussions regarding interstate banking. Recognizing that the CAWCD would play a role in interstate banking, President Renner appointed four board members to serve on a committee to draft principles for board review. The Interstate Water Banking Committee met several times between March and June and developed a policy for CAWCD’s participation in interstate water banking. In developing the policy, the CAWCD’s 2 At the March 8, 2001 CAWCD Board meeting, the Board was briefed on the progress of the AIWB and was given assurances that the agreement met the requirements of their previously established policy regarding participation in interstate water banking. 8 goal was to support the policies of the AWBA and the ADWR and protect the CAP contractors and subcontractors. The policy, adopted at the June 22, 2000 board meeting, provides that the CAWCD will assist the AWBA in implementation of an interstate water banking program if certain provisions are met. The provisions describe payment components, the type of water to be banked, recovery aspects, and the requirement for a formal water resource plan that shows an end to the reliance on interstate water. 2001 Plan of Operation The AWBA plans to recharge approximately 320,000 acre feet of water in calendar year 2001. Of this quantity, approximately 130,000 will be recharged at underground storage facilities and approximately 190,000 will be recharged at groundwater savings facilities. The AWBA’s Plan of Operation anticipates recharge of almost 12,000 acre feet at the Agua Fria facility. Delays in this facility becoming operational could negatively impact the quantity of water stored under the 2001 Plan of Operation. For more detailed information, the plan is available on the AWBA web page. Media Coverage The AWBA received limited press coverage during 2000 with the majority of articles being published immediately following the special Authority meeting that authorized staff to initiate interstate water banking negotiations. “Nevada-Arizona water agreement near”, Las Vegas Sun, June 29, 2000 “Arizona considers plan to store Nevada water”, The Arizona Republic, June 29, 2000 “Arizona aquifer may get Nevada CAP”, Southern Arizona Online, June 29, 2000 “Arizona deal could quench Las Vegas thirst for 23 years”, Las Vegas Review-Journal, June 29, 2000 Facility Permit Activity The AWBA submitted three water storage permit applications in 2000: full-scale Pima Mine Road (PMR) recharge facility on March 1, 2000; full-scale Central Avra Valley Storage and Recovery Project on June 8, 2000; and Vidler Water Co. on August 28, 2000. The AWBA received permits for five water storage permit applications in 2000: Agua Fria (managed) and Agua Fria (constructed) were permitted on January 6, 2000; Lower Santa Cruz was permitted on January 18, 2000; Kai Farms-Picacho was permitted on August 9, 2000; and full-scale PMR was permitted on September 7, 2000. AWBA Newsletter The AWBA staff developed a newsletter to provide the public with periodic updates on water deliveries and other AWBA related water management issues. The first issue was published in 9 February 2000 with additional issues published in May, August and November. The newsletter can be accessed on the AWBA web page. Web Page The AWBA has maintained a web page (http://www.awba.state.az.us) since 1997 as a means to provide timely and accurate information regarding the AWBA’s activities to the water community. The web page contains information about the AWBA, AWBA members and staff, the AWBA’s recharge partners, monthly water deliveries, the AWBA newsletter, AWBA announcements and scheduled meetings and meeting minutes. It also contains numerous publications and documents that may be downloaded and provides links to other water related web sites. The web page was originally developed and maintained by the Water Resources Center at the University of Arizona, however, maintenance was transferred to the ADWR Information Technology Division in late 1999. In the summer of 2000, a consultant was retained and completed reconstruction on several sections of the web page. Design changes continue to be made on the site, however, the web page is currently fully functional. 10 Monies Expended from the Banking Fund Arizona Revised Statutes § 45-2425 mandates the various sources of monies for the Water Banking Fund (Fund) that is administered by the AWBA per the statute. In 2000, the AWBA obtained its funding from the following sources: 1. Fees for groundwater pumping are collected within the Phoenix, Pinal and Tucson AMAs. Fees are calculated two different ways because there exists a gradual increase in fees for entities not associated with irrigation districts within the Pinal AMA. In the Phoenix AMA, Tucson AMA and most areas of the Pinal AMA, fees for water banking purposes are charged at $2.50 per acre foot. Fees for entities in Pinal County who are not associated with an irrigation district were charged at $0.75 per acre foot in 1997 with planned increases of $0.25 per acre foot annually until the $2.50 per acre foot amount is reached. Therefore, the fee charged for these entities was $1.50 per acre foot in 2000. The fees for groundwater pumping are statutorily available to the AWBA through 2016. Long-term storage credits accrued with these monies must be used to benefit the AMA in which they were collected. 2. The CAWCD is statutorily authorized through 2016 to levy an ad valorem property tax in the threecounty CAP service area that cannot exceed four cents per $100 of assessed valuation and is used either for repayment or OM&R costs of the CAP. If the taxes levied are not needed for those purposes, an annual resolution of the CAWCD board can direct them to the Fund. In 2000, the CAWCD board resolved that all taxes to be levied would be deposited in the Fund. The Fund receives this money in two payments that are roughly concurrent with the due dates for property taxes; funds are typically received in December and May. Money from this source must be used to benefit the county in which it was collected. 3. A general fund appropriation is made to the Fund in an annual amount determined to be appropriate by the Arizona Legislature and the Governor. In 2000, the general fund appropriation was $2 million. General fund money is made available to the Fund in equal payments on a quarterly basis. Water stored with these funds may be used to assist communities along the Colorado River, to assist in meeting state water management objectives or as a component of Indian water rights settlements. Table 1 shows the money the AWBA received and expended in 2000 by source of funds. Table 2 shows the total money received, expended and remaining in the Fund through December 2000 by source of funds. The money listed as Available is money that is either remaining in the Fund or money that has been prepaid to CAWCD. Any money that remains in the Fund is available to be expended in subsequent years; any interest that accrues on this money is credited to the Fund and is available for use. 11 Table 1. Monies Collected and Expended in 2000 by Source of Funds 1 Source of Funds Money Collected Money Expended General Fund $2,000,000 $2,149,000 4¢ Ad valorem Tax Maricopa County Pinal County Pima County Subtotal for Ad Valorem $8,102,000 $274,000 $1,590,000 $9,966,000 $6,459,000 $270,000 $367,000 $7,096,000 Groundwater Withdrawal Fee Phoenix AMA Pinal AMA Tucson AMA Subtotal for Withdrawal Fees $2,701,000 $927,000 $656,000 $4,284,000 $0 1 $1,628,000 $0 $1,628,000 Interest $ Collected on Fund Dedicated to Administration $1,439,000 $290,000 TOTAL $17,689,000 $11,163,000 1 Includes carryover from previous years Table 2. Monies Collected and Expended through December 2000 and Monies Remaining Available to the Authority Source of Funds General Fund Money Collected Money Expended Money Available $8,695,000 $8,629,000 $66,000 4¢ Ad Valorem Tax Maricopa County Pinal County Pima County Subtotal for Ad Valorem $30,310,000 $1,113,000 $6,793,000 $38,216,000 $18,736,000 $1,101,000 $2,350,000 $22,187,000 $11,574,000 $12,000 $4,443,000 $16,029,000 Groundwater Withdrawal Fee Phoenix AMA Pinal AMA Tucson AMA Subtotal for Withdrawal Fees $7,345,000 $3,079,000 $2,023,000 $12,447,000 $0 $1,628,000 $0 $1,628,000 $7,345,000 $1,451,000 $2,023,000 $10,819,000 $3,259,000 $1,038,000 $2,221,000 $62,617,000 $33,482,000 $29,135,000 Administration TOTAL 12 Long-term Storage Credits The AWBA has established Long-term Storage Accounts with ADWR. The Phoenix AMA account number is 70-441150, the Tucson AMA account number is 70-411150 and the Pinal AMA account number is 70-431135. After receiving the AWBA’s annual reports for it’s water storage and water transfer permits and the annual reports for the recharge facilities, ADWR calculates and issues longterm storage credits to the appropriate accounts. The AWBA receives credit for 95% of the recoverable quantity of stored water. The 5% that is not credited is termed the “cut to the aquifer” and provides additional groundwater replenishment benefits. This cut to the aquifer is mandated by statute and applies to almost all storage of water for long-term credit, with some exceptions. The recoverable amount of stored water is determined by subtracting facility losses from the quantity of water delivered to the facility. After credits are issued to the account, AWBA staff allocate the credits to the appropriate sub-accounts based on source of funding. The number and distribution of long-term storage credits for 2000 are listed in Table 3. Cumulative totals of long-term storage credits through December 2000 are listed in Table 4. The average annual cost for the AWBA to obtain an acre foot of long-term storage credit is presented in Table 5. Table 3. Number and Location of Long-term Storage Credits Accrued in 2000 Location and Funding Source Long-term Storage Credits Accrued (AF) Phoenix AMA 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund AMA Total 138,673 0 0 138,673 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund AMA Total 10,821 65,231 14,460 90,512 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund AMA Total 6,323 0 30,848 37,171 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund 155,817 65,231 45,308 Pinal AMA Tucson AMA Totals by Funding Source TOTAL 266,356 13 Table 4. Cumulative Total and Location of Long-term Storage Credits Accrued through December 2000 Location and Funding Source Long-term Storage Credits Accrued (AF) Phoenix AMA 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund AMA Total 496,501 0 52,087 548,588 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund AMA Total 51,991 65,231 255,285 372,507 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund AMA Total 40,736 0 30,848 71,584 4¢ Ad valorem Tax Groundwater Withdrawal Fee General Fund 589,228 65,231 338,220 Pinal AMA Tucson AMA Totals by Funding Source TOTAL 992,679 Table 5. Average Annual Cost for the AWBA to Obtain a Long-term Storage Credit1 Year Credits Funds Expended Average Cost % Stored in GSF:% Stored in USF 1996 None None $0 0% : 0% 1997 284,239 $6,387,000 $22.47 85% : 15% 1998 202,457 $7,143,000 $35.28 68% : 32% 1999 233,822 $8,733,000 $37.35 68% : 32% 2000 266,356 $11,163,000 $41.90 60% : 40% 1 The information in this table was obtained from previous Annual Reports. Differences between the number of credits displayed here and the total cumulative number in Table 4 are due to the on-going nature of the accounting process. 14 Table 5 illustrates that the unit cost per long-term storage credit has increased each year the AWBA has been in operation. This increase is the function of three primary factors: annual increases in the cost per acre foot of water delivered, annual increases in the cost of storage facilities, and increased percentage of total water stored in underground storage facilities (USF). AWBA storage at USFs is increasing due to the agricultural economy and the increased availability of USFs. Groundwater savings facility (GSF) opportunities are limited in some instances by the existing AWBA policy that requires GSF operators to pay $21 per acre foot of water delivered to their facility. 15 Long-term Storage Credits Distributed or Extinguished by the Authority The long-term storage credits developed by the AWBA to date have been identified as reserved for three purposes: firming the post-1968 Colorado River municipal and industrial (M&I) entitlements; firming the post-1968 M&I entitlements for entities outside the CAP service area; and fulfilling the water management objectives set forth in Chapter 2 of Title 45 (Arizona Revised Statutes). Credits for firming purposes may be distributed or extinguished when the Colorado River system is deemed to be in a shortage or if there is an operational disruption of the CAP. There were no shortages or CAP operational problems, therefore, no credits were distributed or extinguished for these purposes in 2000. Credits may be distributed or exchanged for water management purposes upon request of the director of ADWR. There were no requests made for distribution or extinguishment of credits for water management purposes in 2000. Under the 1999 amendments to the AWBA legislation, the AWBA is authorized to develop credits with monies collected pursuant to water banking services agreements. In 2000, no credits were developed or distributed under such agreements. 16 Ten Year Plan Introduction The ten year plan is a statutorily mandated component of the Annual Report. The ten year plan must include a description of any water banking activities the AWBA intends to undertake in addition to the three primary AWBA functions of firming for M&I supplies, assisting in Indian water rights settlements, and fulfilling state water management objectives. The ten year plan must also provide an analysis of the AWBA’s ability to complete those activities. The ten year plan is not a guarantee of future storage activities and is completed for planning purposes only. In any given year, the AWBA’s activities are governed by the annual Plan of Operation. The ten year plan in the 2000 Annual Report analyzes activity for the period 2002-2011 (Table 6) and was derived using the information found in Appendices B through G. AWBA accounting for previous years can be found earlier in this annual report (see Tables 2 and 4). In 2000, the AWBA developed long-term storage credits through expenditure of groundwater withdrawal fees for the first time. AWBA staff developed the ten year plan based on the following guiding principles: 1. The intent of the plan is to evaluate if the AWBA can engage in water banking activities beyond the scope of the currently established AWBA role and to what extent. 2. The plan covers a ten year time period beginning with the next calendar year. For example, this ten year plan covers the time period 2002-2011. 3. The plan will be updated annually based on current priorities of the AWBA. 4. The plan is an important tool to be utilized in development of the next year’s annual Plan of Operation. Storage Partners The AWBA has 12 water storage permits for GSFs with a total storage capacity of 726,700 acre feet per annum (see Appendix C). The AWBA is not currently utilizing the Roosevelt Water Conservation District or the Maricopa Water District GSFs and does not anticipate doing so within this plan period. The AWBA first stored water at Herb Kai’s Red Rock facility in 2000 and anticipates utilizing his Avra Valley facility beginning in calendar year 2002. All of the permits associated with GSFs expire within this ten year plan, however, six do not expire until late in the planning period. All of the AWBA’s storage permits expire simultaneously with the partners’ facility permits. Consequently, any difficulty on the part of the partners or the AWBA to obtain new permits could affect the ability of the AWBA to maintain adequate storage capacity to fulfill water banking activities. Discussions with ADWR recharge staff have indicated that there is typically no difficulty in obtaining new permits for GSF facilities. Nonetheless, impacts of this nature cannot be predicted and are not included in this ten year plan. D:\Documents\AWBA internet_Water_Banking_Authority\07102001Gerry\10YEARPLAN.doc The AWBA has seven water storage permits for USFs with a total storage capacity of 531,000 acre feet per annum. The AWBA voted in 2000 to not participate in projects that had not yet demonstrated feasibility. Because West Maricopa Combine has a facility permit, it has been included in the ten year 17 plan even though the AWBA does not currently have a water storage permit for the facility. It is anticipated that one will be obtained in 2001. Although a water storage permit is held for the facility, the AWBA does not anticipate storage at the Central Avra Valley Storage and Recovery Project due to Tucson Water’s full utilization of the facility. The USF permit issued for the Pima Mine Road facility limits total storage under the permit to 500,000 acre feet with the ability to request an amendment to 600,000 acre feet. This storage quantity limitation will not be a factor within this ten year plan. One permit, the Granite Reef Underground Storage Project, expires within this planning period. As previously described in the GSF discussion, any difficulty in obtaining new permits could effect the capacity available to the AWBA. As the process of obtaining a new USF permit can be more complex and extensive than obtaining a new GSF permit, the possibility of impact is greater. Again, impacts of this nature cannot be predicted and are not included in the analysis of this ten year plan. Recovery This ten year plan does not include an analysis of the impacts of recovery. Based on current analysis and discussion, recovery for shortage protection or interstate needs is not anticipated within the scope of this ten year plan. Issues of Consideration The decision to participate in specific water bank activities is guided by the goals of the AWBA and influenced by a variety of factors including pricing and availability of CAP water, recharge facility availability and capacity and quantity and source of funding. The following is a description of factors that may influence AWBA actions over the planning period. 1. Water management objectives The early activities of the AWBA were focused on achieving the goal of full utilization of Arizona’s Colorado River allocation. However, as the AWBA matures and evolves, there may be increasing emphasis on other AWBA goals such as water management. 2. Modifications within CAP with regard to pricing and pool allocation The current method of allocation of water within the agricultural pools has a planned termination of 2004. The CAWCD continues to examine new ways to distribute and price agricultural water. While the extent of the effect of changes in allocation on the AWBA is not known, it is recognized that this is a factor that could impact the AWBA’s ability to participate in recharge at groundwater savings facilities. 3. Participation in Indian settlements There are on-going discussions regarding Indian water rights settlements within Arizona. As a result of those discussions, the AWBA may be requested to provide services to insure that the 18 terms of settlements are met. There have been no requests made to date and this factor was not included in the current plan. 4. Possible new recharge facilities In 2000, the CAWCD completed an investigation to identify areas in the western part of the state where large recharge and recovery projects might be feasible. This was done in recognition of the fact that storage facility capacity currently limits recharge in the state and that siting a facility in the west could provide increased CAP operational flexibility. The CAWCD also has significant planning and permitting efforts underway to provide additional recharge facilities in the Phoenix AMA, specifically in the Queen Creek and Northeast Salt River Valley areas and at Hieroglyphic Mountain. These projects will be developed and constructed with State Demonstration fund money. Additional recharge facility capacity was not included in this ten year plan, however, additional recharge capacity could be included in future plans if permits are obtained. 5. Interstate banking As previously discussed in this annual report, the AWBA requirements with regard to interstate banking are being better defined. This ten year plan includes banking for Nevada but does not include banking for California. 6. Replacement water for Yuma Desalting Plant The United States Bureau of Reclamation (USBR) is currently evaluating options and opportunities for meeting Mexican Treaty obligations without operating the Yuma Desalting Plant. One of those options might be to utilize the AWBA to store water in Arizona. The credits could later be used to help offset the federal obligation to replace the water being bypassed to the Santa Clara Slough. This ten year plan does not include any storage for the USBR but future plans may. Conclusion The ten year plan is intended to serve as a guide to assist the AWBA in the development of the Annual Plan of Operation (Plan). The AWBA is required to develop a Plan for activities to be undertaken the following calendar year. As part of the Annual Report, the ten year plan is reviewed and updated annually. Therefore, it is possible that the ten year plan may change significantly depending on the goals set by the AWBA. 19 Appendices 20 Appendix A. Colorado River Water Deliveries for Water Banking Purposes for Calendar Year 2000 by Partner and Active Management Area Phoenix Active Management Area Partner Quantity of Water (acre feet) Granite Reef Underground Storage Project New Magma Irrigation and Drainage District Queen Creek Irrigation District Maricopa Water District Salt River Project Chandler Heights Citrus Irrigation District 81,567 47,200 10,089 1,164 14,838 1,150 Pinal Active Management Area Partner Quantity of Water (acre feet) Central Arizona Irrigation and Drainage District Maricopa-Stanfield Irrigation and Drainage District Hohokam Irrigation and Drainage District 13,192 29,489 55,531 Tucson Active Management Area Partner Avra Valley Central Avra Valley Storage and Recovery Project Pima Mine Road Kai – Red Rock Lower Santa Cruz Quantity of Water (acre feet) 1,976 10,532 7,393 2,784 16,670 APPENDIX B CAP DELIVERY SCHEDULE (Acre feet) CAP Demands Year M&I (1) Indian (2) Ag (3) Total Average Year Supply (4) Available for AWBA (5) 2002 2003 485,000 527,000 80,000 81,000 520,000 470,000 1,085,000 1,078,000 1,540,000 1,540,000 455,000 462,000 2004 520,000 82,000 400,000 1,002,000 1,540,000 538,000 2005 521,000 97,000 400,000 1,018,000 1,540,000 522,000 2006 533,000 113,000 400,000 1,046,000 1,540,000 494,000 2007 549,000 134,000 400,000 1,083,000 1,540,000 457,000 2008 554,000 157,000 400,000 1,111,000 1,540,000 429,000 2009 564,000 177,000 400,000 1,141,000 1,540,000 399,000 2010 572,000 188,000 400,000 1,160,000 1,540,000 380,000 2011 593,000 199,000 400,000 1,192,000 1,540,000 348,000 (1) (2) (3) (4) (5) Includes M&I, CAGRD, Indian M&I lease and M&I incentive water From settlement discussions From agricultural pool discussions Based on average year delivery of 1,600,000 AF per year minus losses Average year supply minus CAP demands; AWBA last priority for intrastate use C:\AWBA Files\Annual Report\Report2000\new APPENDIX C.doc APPENDIX D Credits Developed for M&I Firming Utilizing the 4¢ Tax (1) (Acre feet) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 P i Phoenix AMA Year Year Groundwater Savings Capacity Capacity Credits Available Used Earned 88,000 78,066 72,601 88,000 88,000 81,840 88,000 88,000 81,840 88,000 88,000 81,840 88,000 88,000 81,840 88,000 79,561 73,992 88,000 74,686 69,458 88,000 69,458 64,596 88,000 66,150 61,519 88,000 60,579 56,339 Underground Storage Capacity Capacity Credits Available Used Earned 180,000 169,398 157,540 180,000 52,708 49,019 170,000 43,638 40,584 170,000 59,752 55,569 170,000 75,864 70,553 170,000 94,858 88,218 170,000 105,515 98,129 170,000 116,181 108,049 170,000 119,251 110,904 170,000 121,640 113,125 Groundwater Savings Capacity Capacity Credits Available Used Earned Underground Storage Capacity Capacity Credits Available Used Earned 2002 81,000 7,143 6,643 - - - 2003 81,000 5,910 5,496 - - - 2004 81,000 5,134 4,775 - - - 2005 81,000 6,272 5,833 - - - 2006 81,000 7,554 7,025 - - - 2007 81,000 9,306 8,655 - - - 2008 81,000 10,450 9,719 - - - 2009 81,000 11,506 10,701 - - - 2010 81,000 11,786 10,961 - - - 2011 81,000 11,490 10,686 - - - Groundwater Savings 2002 Capacity Available 8,000 Capacity Used 7,000 Credits Earned 6,510 Capacity Available 58,000 Capacity Used 24,451 Credits Earned 22,739 2003 8,000 7,000 6,510 58,000 38,833 36,115 2004 8,000 8,000 7,440 58,000 40,946 38,080 2005 8,000 8,000 7,440 58,000 19,749 18,367 2006 - - - 58,000 26,620 24,757 2007 - - - 58,000 28,796 26,780 2008 - - - 58,000 26,200 24,366 2009 - - - 58,000 18,585 17,284 2010 - - - 58,000 15,723 14,622 2011 - - - 58,000 11,783 10,958 Tucson AMA Year (1) Underground Storage Developing M&I firming credits has the first priority for water and storage capacity APPENDIX E Credits Developed for Meeting Water Management Goals Utilizing the Withdrawal Fee (1) (Acre feet) Groundwater Savings 2002 Capacity Available 9,934 Capacity Used 8,803 Credits Earned 8,187 Capacity Available 10,602 Capacity Used 10,602 Credits Earned 9,860 2003 - - - 127,292 127,292 118,381 2004 - - - 126,362 62,216 57,861 2005 - - - 110,248 35,467 32,984 2006 - - - 94,136 38,382 35,695 2007 8,439 7,630 7,096 75,142 37,135 34,536 2008 13,314 11,300 10,509 64,485 36,551 33,992 2009 18,542 14,635 13,610 53,819 36,446 33,895 2010 21,850 16,425 15,275 50,749 35,069 32,614 2011 27,421 18,876 17,555 48,360 33,057 30,743 Phoenix AMA Year Pinal AMA Year 2002 2003 Groundwater Savings Capacity Capacity Credits Available Used Earned 73,857 58,806 54,690 75,090 24,213 22,518 75,866 20,619 19,176 - - - 2005 74,728 24,691 22,963 - - - 2006 73,446 29,155 27,114 - - - 2007 71,694 35,211 32,746 - - - 2008 70,550 38,760 36,047 - - - 2009 69,494 41,841 38,912 - - - 2010 69,214 42,017 39,076 - - - 2011 69,510 40,161 37,350 - - - Underground Storage 2002 Capacity Available 1,000 Capacity Used - Credits Earned - Capacity Available 33,549 Capacity Used - Credits Earned - 2003 1,000 - - 19,167 - - 2004 - - - 17,054 4,654 4,328 2005 - - - 38,251 24,851 23,111 2006 - - - 31,380 15,675 14,578 2007 - - - 29,204 5,490 5,105 2008 - - - 31,800 - - 2009 - - - 39,415 - - 2010 - - - 42,277 - - 2011 - - - 46,217 - - Year Tucson AMA Underground Storage Capacity Capacity Credits Available Used Earned - 2004 Groundwater Savings (1) Underground Storage Withdrawal fee used to develop credits for water management goals after the 4¢ tax is fully utilized APPENDIX F Credits Developed Utilizing the General Fund (1) (Acre feet) Phoenix AMA Groundwater Savings Underground Storage Year Capacity Available Capacity Used Credits Earned Capacity Available Capacity Used Credits Earned 2002 1,000 - - - - - 2003 1,000 - - - - - 2004 - - - 64,145 - - 2005 - - - 74,781 - - 2006 - - - 55,754 - - 2007 - - - 38,007 - - 2008 - - - 27,934 - - 2009 - - - 17,373 - - 2010 - - - 15,679 - - 2011 - - - 15,303 - - Pinal AMA Groundwater Savings Underground Storage Year Capacity Available Capacity Used Credits Earned Capacity Available Capacity Used Credits Earned 2002 2003 15,051 50,877 4,939 24,213 4,593 22,518 - - - 2004 55,247 20,619 19,175 - - - 2005 50,037 24,691 22,963 - - - 2006 44,291 29,155 27,114 - - - 2007 36,483 27,811 25,864 - - - 2008 31,790 18,686 17,378 - - - 2009 27,653 9,797 9,111 - - - 2010 27,197 6,333 5,890 - - - 2011 29,349 3,421 3,182 - - - Tucson AMA Groundwater Savings (1) Underground Storage Year Capacity Available Capacity Used Credits Earned Capacity Available Capacity Used Credits Earned 2002 1,000 - - 33,549 26,500 24,645 2003 1,000 - - 19,167 12,900 11,997 2004 - - - 12,400 11,900 11,067 2005 - - - 13,400 12,900 11,997 2006 - - - 15,705 13,900 12,927 2007 - - - 23,714 17,700 16,461 2008 - - - 31,800 22,600 21,018 2009 - - - 39,415 26,800 24,924 2010 - - - 42,277 27,500 25,575 2011 46,217 27,800 25,854 General Fund used to supplement 4¢ tax and withdrawal fee in AMAs where funding is a constraint. APPENDIX G Credits Developed for Interstate Storage (1) (Acre feet) Water Capacity Credits Year Available Needed (3) Earned (4) (2) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (1) (2) (3) (4) 52,650 75,435 227,499 211,793 162,671 104,847 74,533 43,050 28,785 8,506 52,650 75,435 227,499 211,793 162,671 104,847 74,533 43,050 28,785 8,506 48,964 70,154 211,574 196,968 151,284 97,508 69,316 40,036 26,770 7,911 Interstate banking is the last priority. Water available for interstate storage is computed by subtracting the water delivered for intrastate storage from the total water available to the AWBA. Additional capacity may be needed to fully accommodate the opportunity for interstate storage. Interstate storage credits accrue for the benefit of Nevada. Table 6. Ten Year Plan ARIZONA WATER BANKING AUTHORITY - 10 YEAR PLAN 2002 - 2011 (Acre Feet ) (a) YEAR CAP Water Available for AWBA (b) (c) (d) Water CAP M&I Firming Management (four cent tax) (Withdrawal Fees) (e) General Fund Indian Settlement Delivered Credits Delivered Credits Delivered Credits Delivered Credits 2002 455,000 292,701 266,033 2003 462,000 197,947 178,980 78,211 2004 538,000 190,493 172,719 87,489 2005 522,000 187,606 169,049 85,009 2006 494,000 205,063 184,175 2007 457,000 2008 429,000 2009 2010 2011 (f) (g) Loaned Credits Storage for Others Credits Delivered Credits (h) (i) (j) Interstate Banking Water Available Capacity Needed Credits 72,737 31,439 29,238 52,650 52,650 48,964 151,505 140,899 37,113 34,515 75,435 75,435 70,154 81,365 32,519 30,242 227,499 227,499 211,574 79,058 37,591 34,960 211,793 211,793 196,968 83,212 77,387 43,055 40,041 162,671 162,671 151,284 221,176 197,645 85,466 79,483 45,511 42,325 104,847 104,847 97,508 226,570 201,672 86,611 80,548 41,286 38,396 74,533 74,533 69,316 399,000 226,432 200,630 92,922 86,417 36,597 34,035 43,050 43,050 40,036 380,000 223,871 198,006 93,511 86,965 33,833 31,465 28,785 28,785 26,770 348,000 216,178 191,108 92,095 85,648 31,221 29,036 8,506 8,506 7,911 Footnotes: (a) See Appendix B (b) See Appendix D (c) See Appendix E (d) See Appendix F (e) Currently no Indian settlement requirements identified for the AWBA (f) Currently no request for loaned credits (g) Currently the AWBA is not providing banking services for others (h) Available CAP supplies minus AWBA intrastate delivery requirements (i) Additional capacity may be needed to fully accommodate the opportunity for interstate storage (j) See Appendix G, Agreement for Interstate Water Banking approved 2001, other agreements pending APPENDIX C STORAGE FACILITIES AVAILABLE FOR INCLUSION IN THE TEN YEAR PLAN Tonopah MWD SRP RWCD QCID CHCID NMIDD 15,000 AF (12/2006) 40,000 AF (12/2003) 200,000 AF (12/2005) 100,000 AF (12/2010) 28,000 AF (12/2004) 3,000 AF (12/2010) 54,000 AF (12/2007) Yes (12/2001) Yes (12/2001) Yes (12/2005) Yes (12/2001) Yes (12/2001) Yes (12/2001) Yes (12/2001) 15,000 AF (12/2006) 18,000 AF (12/2003) 200,000 AF (12/2005) 100,000 AF (12/2010) 28,000 AF (12/2004) 3,000 AF (12/2010) 54,000 AF (12/2007) 3,000 AF 0 20,000 AF 0 20,000 AF 3,000 AF 47,000 AF 1999 (200 AF) 2000 (1,000 AF) 2000 (14,800 AF) 1998 (24,400AF) 2000 (10,000 AF) 2000 (1,150 AF) Water Storage Permit Capacity (Expires) Capacity available to AWBA Last year in which water was delivered Groundwater Saving Facilities SRP (GRUSP) West Maricopa Combine HID CAIDD MSIDD 100,000 AF (5/2019) 200,000 AF (12/2010) 25,000 AF (5/2021) 55,000 AF (12/2007) 110,000 AF (12/2007) 120,000 AF (12/2004) draft agreement Yes (12/2001) In negotiations Yes (12/2001) Yes (12/2001) Yes (12/2001) 100,000 AF (5/2019) 200,000 AF (12/2010) Developing 55,000 AF (12/2007) 110,000 AF (12/2010) 120,000 AF (12/2004) 90,000 AF 90,000 AF To be determined 55,000 AF 15,000 AF 29,000 AF No deliveries to date 2000 (81,500 AF) No deliveries to date 2000 (55,000 AF) 2000 (13,000 AF) 2000 (29,000 AF) (1) Underground Storage Facilities (2) Kai Farms (Red Rock) Kai Farms (Avra) CAWCD (Avra Valley) Permit Capacity (Expires) 11,231 AF (12/2006) 12,513 AF (4/2008) 11,000 (3/2018) 30,000 AF (9/2019) 30,000 AF (9/2020) 60,000 AF (7/2021) Yes (12/2001) In negotiations Yes (12/2001) Yes (5/2005) Yes (3/2004) Yes (9/2003) 11,231 AF (12/2006) 12,513 AF (12/2006) 11,000 AF (3/2018) 30,000 AF (2/2019) 30,000 AF (9/2020) 60,000 AF (7/2021) 3,000 AF 5,000 AF 11,000 AF 22,000 AF 25,000 AF 0 2000 (2,700 AF) No deliveries to date 2000 (2,000 AF) 2000 (16,700 AF) 2000 (7,400 AF) 2000 (10,500 AF) Tucson AMA Permit Holder CAWCD (Lower Santa Cruz) Water Storage Permit Capacity (Expires) Capacity available to AWBA Last year in which water was delivered (1) CAWCD (Agua Fria) Groundwater Saving Facilities Agreement (Expires) 2000 (47,200 AF) (1) Participation at GSFs may be limited by the $21 per AF cost recovery requirement. (2) Participation at USFs may be limited by operator commitments to other partners. CAWCD (Pima Mine Road) Tucson (CAVSRP) Vidler Water Outside the AMAs Agreement (Expires) Phoenix AMA Underground Storage Facilities Permit Holder Permit Capacity (Expires) (2) Pinal AMA Permit Holder Permit Capacity (Expires) Use Agreement (Expires) Water Storage Permit Capacity (Expires) Capacity available to AWBA Last year in which water was delivered Phoenix AMA Groundwater Savings Facilities (1) 100,000 AF (9/2020) Yes (12/2003) 100,000 AF (9/2020) 80,000 AF No deliveries to date