ARIZONA WATER BANKING AUTHORITY
ANNUAL REPORT
2004

Submitted

July 1, 2005

Arizona Water Banking Authority
Annual Report
2004

Honorable Janet Napolitano
Governor of Arizona

Members
Herbert R. Guenther
Chairman
George R. Renner
Vice­chairman
Charles L. Cahoy
Secretary
Maureen R. George
Member
John Mawhinney
Member
Ex officio
Senator Linda Binder
Representative Jake Flake

Table of Contents
Arizona Water Banking Authority Annual Report Requirement .....................................................1
Update..................................................................................................................................................2
Activities and Projects ­ 2004 ............................................................................................................5
Interstate Issues ..............................................................................................................................5
Agreement to Firm Future Supplies ..............................................................................................7
February 2004 Work Study Session ..............................................................................................7
Legislative Issues............................................................................................................................8
Impacts to the Water Banking Fund Accounts and Revenues ....................................................9
2005 Annual Plan of Operation ......................................................................................................9
Media Coverage.............................................................................................................................10
Agreement and Facility Permit Activity .......................................................................................10
Web Page .......................................................................................................................................10
Monies Expended from the Banking Fund .....................................................................................11
Long­term Storage Credits...............................................................................................................13
Long­term Storage Credits Distributed or Extinguished by the Authority ..................................17
Ten Year Plan for Calendar Year 2004.............................................................................................18
Appendices......................................................................................................................................244

List of Tables
Table 1. Monies Collected and Expended in 2004 by Source of Funds ......................................12
Table 2. Monies Collected and Expended through December 2004 and Monies Remaining
Available to the Authority .........................................................................................................12
Table 3. Number and Location of Long­term Storage Credits Accrued in 2004 .........................13
Table 4. Cumulative Total and Location of Long­term Storage Credits Accrued through
December 2004 ..........................................................................................................................14
Table 5. Identified Uses of Long­term Storage Credits Accrued through December 2004 and
Percentage of AWBA Goals Achieved .....................................................................................15
Table 6. Average Annual Cost for the AWBA to Obtain a Long­term Storage Credit ................16
Table 7. Ten Year Plan ......................................................................................................................19
Table 8. AWBA Percentage of Goals Achieved through 2015......................................................20

Arizona Water Banking Authority Annual Report Requirement

Arizona Revised Statutes § 45­2426 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 long­term storage credits distributed or extinguished by the AWBA.
5. The purposes for which long­term 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 Central Arizona Project (CAP) for all of the following purposes:
a. Protecting this state’s municipal and industrial (M&I) 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.

Update
Calendar year 2004 can best be described as a year of limits as the AWBA faced significant
constraints with respect to availability of funds and water. The limits were somewhat lessened with
respect to water as additional water became available for storage throughout the course of the year
and the AWBA was able to fully utilize it. There was not, however, any increase in the amount of
funds available to the AWBA. In fact, Senate Bill 1402 that was signed by the governor on May 28,
2004 transferred an additional $2 million from the AWBA Fund for fiscal year (FY) 2004­2005.
Additionally, the Central Arizona Water Conservation District (CAWCD) Board resolved for the
second year in a row to retain the 4¢ ad valorem tax revenues for FY 2004­2005. Consequently, it
remained a year of limits with respect to available funds and it appears that these fund limitations will
continue for many years.
With respect to membership, there were no changes to the AWBA Commission in 2004 as shown in
Figure 1.

Herbert R. Guenther
Chairman
George R. Renner
Vice­Chairman
Maureen R. George

Charles L. Cahoy
Secretary
John Mawhinney
Ex officio Members

Senator Linda Binder

DWR Support

Representative Jake Flake

Timothy J. Henley
Manager
Sandra Fabritz­Whitney
Gerry Wildeman
Tech. Administrator
Tech. Administrator

CAWCD Support

Nannette Flores
Administrative Assistant
Patrick Schiffer
Legal Counsel

Figure 1. Arizona Water Banking Authority Organizational Chart for 2004

2

In 2004, the AWBA continued its quarterly meeting schedule with special meetings, workshops and
study sessions scheduled as needed. A meeting of the Indian Firming Technical Committee was held
on February 23, 2004. This meeting was the final meeting of the Indian Firming Technical Committee
as the process was put on hold until such time as the status of the federal legislation became more
clear and the state’s obligations more defined. The Arizona Water Settlements Act, sponsored by
Arizona Senator John Kyl, was ultimately signed into law on December 10, 2004. Further AWBA
activity related to Indian firming pursuant to the Arizona Water Settlements Act will be discussed in
next year’s annual report. On February 24, 2004, the AWBA held a work study session to discuss the
AWBA’s accounting, income and budget process in addition to the Active Management Areas (AMA)
water management objectives and priorities. Additional discussion regarding the AMA’s objectives
and priorities can be found in the Activities and Projects section of this report.
Recovery, including development of intentionally created unused apportionment (ICUA), continued to
be an issue of import in 2004 even though no actual recovery was completed. In recognition of this,
Senator Guenther sent a letter dated July 29, 2004 to Sid Wilson, General Manager of the CAP
requesting that the CAP initiate a process for development of a general recovery plan. By letter dated
August 17, 2004, Mr. Wilson informed Senator Guenther that he had designated Larry Dozier, Deputy
General Manager of CAP, to work with Tim Henley, Manager of the AWBA, to organize a team to
develop the recovery plan. Due to higher priority issues throughout the year, there was not extensive
action taken on the recovery plan. However, the AWBA and CAP will continue to pursue
development of the recovery plan in 2005.
The amendment to the Agreement for Interstate Water Banking among the AWBA, the Southern
Nevada Water Authority (SNWA) and the Colorado River Commission of Nevada (CRCN) was a
significant event in 2004. Due to the importance of this agreement to the state of Arizona, a special
meeting of the AWBA was called on November 15, 2004 to discuss the potential impacts of the
proposed amendments. More detailed information regarding this topic can be found in the Activities
and Projects section of this report. The value of maintaining a positive relationship between Arizona
and Nevada should not be underestimated. As a result of the current situation between the two
states, the CRCN and the SNWA sent a joint letter to the general manager of the CAP reiterating
their support of Arizona’s position regarding the CAP’s subordinate position in the Lower Basin. The
letter stated that Nevada would support either more equitable shortage sharing or amendment of the
portion of the Colorado River Basin Project Act that establishes the CAP’s junior priority.
The AWBA annually coordinates with current and potential recharge entities in the process of
development of the Annual Plan of Operation (Plan) for the following year. As previously discussed,
the 2004 Plan was limited by the availability of water and there was uncertainty late in the planning
process exactly how much water would be available. The original 2004 Plan was developed using
essentially every acre­foot of CAP water that was available. The Plan was later amended by the
AWBA on September 15, 2004 as a result of two events. First, the lack of precipitation led to
inadequate water supplies for one of the agricultural districts that partners with the AWBA at the same
time that two underground storage facilities were experiencing significant decreases in capacity
available to the AWBA. Second, the SNWA requested that the AWBA store 10,000 acre­feet of their
unused Colorado River entitlement within Arizona. Consequently, the Plan was amended to transfer
9,000 acre­feet of water proposed for storage at the Hieroglyphics Mountain Recharge Project
(HMRP) and the Agua Fria Recharge Project (AFRP) to the New Magma Irrigation and Drainage
District (NMIDD) and the Granite Reef Underground Storage Project (GRUSP) and 10,000 acre­feet
of additional storage was included on behalf of the SNWA at the Central Arizona Irrigation and
Drainage District (CAIDD) and the Maricopa­Stanfield Irrigation and Drainage District (MSIDD).
3

Additional interstate water storage was done in December of 2004 to insure full utilization of CAP
supplies. This storage was completed at underground storage facilities in the Tucson AMA.
The theme of limitations carried over into development of the 2005 Plan as there continued to be
increased demand for excess CAP water and little water available for the AWBA. The original 2005
Plan approved in December of 2004 projected less than 129,000 acre­feet of AWBA storage.
However, record precipitation levels early in 2005 led to significant changes in the water demands of
many CAP customers resulting in a number of requests for remarketing of scheduled water. As a
result of the remarket requests, CAP informed the AWBA that more than 300,000 acre­feet of
additional water was available for delivery. In recognition of the financial constraints associated with
intrastate storage in the Tucson and Pinal AMA, the 2005 Plan was amended to include interstate
water banking in an effort to assist CAP fulfill the remarket requests. As an added incentive to
encourage groundwater savings facilities (GSF) to increase their use of CAP water, the AWBA
reduced the cost share portion of interstate water taken in 2005 to $26 an acre­foot. This was done
in recognition of the extreme importance of full utilization of Arizona’s Colorado River entitlement. For
the 2005 Plan, the entities scheduled for delivery are SRP’s GRUSP and GSF facilities, the
CAWCD’s HMRP, AFRP, Avra Valley Recharge Project, Pima Mine Road, Lower Santa Cruz
Recharge Project and Tonopah Desert Recharge Project, Chandler Heights Citrus Irrigation District,
NMIDD, Queen Creek Irrigation District, CAIDD, Hohokam Irrigation and Drainage District, MSIDD,
Tucson’s Central Avra Valley Storage and Recovery Project and Herb Kai’s Red Rock Facility.
In 2004, the AWBA delivered for recharge a total of 285,542 acre­feet of water; 270,284 acre­feet for
intrastate purposes and 15,258 acre­feet of water on behalf of the SNWA. This included the first
storage at the Tonopah Irrigation District (TID), even though the TID had been included in previous
Plans of Operation. Additionally, it also included the first storage of interstate water in the Tucson
AMA and the first interstate storage in underground storage facilities (USF). The quantity of water
received by each facility is described in Appendix A and totaled 158,885 acre­feet of water in the
Phoenix AMA, 73,169 acre­feet in the Tucson AMA and 53,488 acre­feet of water in the Pinal AMA.
For the second year since inception, the AWBA stored more water at USFs than GSFs.
Total consumptive use of Colorado River water by Arizona for 2004 was approximately 2.80 million
acre­feet. Distribution of that quantity was approximately 1.13 million acre­feet for direct uses along
the Colorado River and CAP diversions of approximately 1.67 million acre­feet. AWBA storage,
excluding 10,000 acre­feet of Nevada’s entitlement that was diverted and stored in Pinal County,
accounted for approximately 16% of the CAP water delivered.
For more information about the Arizona Water Banking Authority, consult the AWBA web page at
www.awba.state.az.us or contact Tim Henley (tjhenley@azwater.gov), Sandy Fabritz­Whitney
(safabritz@azwater.gov) or Gerry Wildeman (glwildeman@azwater.gov) or by phone at 602­417­
2418.

4

Activities and Projects ­ 2004
Interstate Issues
Amended Agreement for Interstate Water Banking
On July 3, 2001, the Agreement for Interstate Water Banking (2001 Agreement) among the AWBA,
the SNWA and the CRCN was executed1. In the 2001 Agreement, the AWBA agreed to use its “best
efforts” to store water in Arizona in an amount sufficient to develop an aggregate total of 1.2 million
acre­feet of long­term storage credits. Those credits would then be recovered to develop ICUA for
Nevada as a temporary supply of water to allow Nevada time to develop other longer term water
supplies. The 2001 Agreement contained specific provisions to insure that any water stored for
Nevada was water that could not be utilized by water users in Arizona. Nevada would pay the full
cost of water delivery and storage in addition to all costs associated with recovery of the long­term
storage credits. The 2001 Agreement was negotiated recognizing the surplus provisions of the
Interim Surplus Guidelines (ISG).
The ISG published on January 25, 2001 by the United States Department of the Interior, control the
operation of the Lower Colorado River system through 2016. The ISG provide more liberal surpluses
to allow a transition period for California to reduce its reliance on Colorado River water and to
implement measures to limit its total uses of Colorado River water in the state to 4.4 million acre­feet.
Consequently, at the time the 2001 Agreement was negotiated, Nevada anticipated that its water
needs would be met through 2016 by surplus water made available through the ISG. After 2016,
Nevada intended to utilize credits stored on its behalf in the Arizona water bank. However, in 2004,
surpluses under the ISG were not available because the projected storage content of Lake Mead was
below the critical threshold content established in the ISG. Consequently, Nevada began exploring
alternative ways to meet their water supply needs and approached Arizona with a proposal to amend
the existing agreement in such a manner that Nevada’s water supply could be made more secure in
the shorter term. Nevada began negotiations regarding the amendments with AWBA and CAP staff.
A spreadsheet illustrating the potential amendments being negotiated was presented at the AWBA
meeting on September 15, 2004. In summary, the amendments were as follows: (1) guaranteed
Nevada a total of 1.25 million acre­feet of credits; (2) recognized that water other than Colorado River
water may be the source of credits; (3) Nevada would pay the full cost of delivery, storage and
recovery in addition to an additional sum of money to mitigate the risk of the guarantee; (4) identified
a set schedule for recovery of long­term storage credits; (5) a sufficient supply would be recovered to
allow Nevada to use 340,000 acre­feet during a declared shortage on the Colorado River.
These proposed components were discussed at the November meeting of the CAWCD board and a
special meeting of the AWBA held on November 15, 2004. There was extensive discussion at the
November 15th meeting and the general consensus was that additional information was needed by
the public. To that end, a discussion paper was prepared by AWBA staff and distributed on
November 29, 2004. The discussion portion included pertinent background information, a review of
the current agreement and the proposed changes, a description of the benefits to Arizona, and a
timeline for negotiation of the amendments. Additionally, within the discussion paper, AWBA staff
answered the most frequently asked questions regarding the amendments. To insure that the public
1

For purposes of this discussion, the SNWA and the CRCN will be collectively referred to as “Nevada”.

5

was adequately informed, the discussion paper was widely disseminated and AWBA staff attended
various meetings throughout the Phoenix and Tucson metropolitan areas to discuss the amendments
and answer questions. The amended Agreement for Interstate Water Banking (Amended
Agreement) was approved by the AWBA Commission on December 9, 2004 and executed on
February 3, 2005. Copies of the Amended Agreement can be obtained from the AWBA web page.
The two most significant provisions of the Amended Agreement are that Arizona has now guaranteed
Nevada that a sum total of 1.25 million acre of credits will be developed on their behalf. In exchange
for this guarantee, Nevada will pay Arizona $100 million above the actual cost of water delivery and
storage. The disposition of the $100 million was a concern in 2004 and has continued to be an issue
of import in 2005.
Requests for Creation of Intentionally Created Unused Apportionment
No ICUA was developed in 2004 even though requests had been made by both California and
Nevada in 2003. Those requests resulted in CAWCD applying for and obtaining two recovery well
permits to facilitate development of ICUA. In the end, the success of conservation programs in
Nevada and decreased diversions in California negated the need for ICUA in 2004. The two state’s
Colorado River use in 2004 was 283,400 acre­feet and 4.3 million acre­feet, respectively. Therefore,
even with the storage of 10,000 acre­feet of Nevada’s entitlement in Arizona, neither state fully
utilized their Colorado River entitlements.
Notwithstanding the events in 2004, California anticipated a need for development of ICUA in 2005.
By letter dated September 2, 2004, the Metropolitan Water District (MWD) of Southern California
requested development of 40,000 acre­feet of ICUA based on credits stored pursuant to the 1992
agreement between MWD and CAWCD. Because the AWBA is the only entity that can cause ICUA
to be developed and the AWBA and MWD have not yet executed the agreements needed for either
interstate water banking or development of ICUA, the two entities began negotiating an agreement to
authorize development of ICUA. The agreement was not finalized as MWD again realized that the
ICUA would not be needed to meet water demands. Late in the year, MWD and CAP staff began
discussing alternatives with respect to the 89,000 acre­feet of long­term storage credits held by
CAWCD on behalf of MWD. One proposal was that CAWCD would repay MWD the money invested
in developing the credits, plus interest. In the event that this proposal was accepted, the 89,000 acre­
feet of credits could potentially be available for purchase by the AWBA. Discussions regarding this
proposal continue in 2005.
Interstate Water Banking
The AWBA sub­account for Nevada had a balance of 111,098 acre­feet of long­term storage credits
at the beginning of 2004. That balance was comprised of 50,000 acre­feet of credits transferred from
CAWCD for storage done in the early 1990’s under the demonstration project. Additionally, Nevada
earned 61,098 acre­feet of credits for storage completed in 2002.
The original 2004 Annual Plan of Operation did not include an interstate water banking component as
water supplies available to the AWBA were limited. However, by letter dated September 7, 2004,
Nevada requested that the AWBA store within Arizona 10,000 acre­feet of Nevada’s unused
Colorado River entitlement. Due to the response to drought restrictions imposed within Nevada, the
state anticipated that it would not fully utilize its basic Colorado River apportionment. The AWBA
approved an amended Plan of Operation to include the 10,000 acre­feet of storage on September 15,
2004. On October 8, 2004, the Bureau of Reclamation released the 10,000 acre­feet for use within
6

Arizona. From October through December, the 10,000 acre­feet of Nevada’s unused apportionment
was stored at three groundwater savings facilities in Pinal County.
In late November, the CAP informed AWBA staff that additional water would be available for storage
in December of 2004 as the project increased diversions in an attempt to fully utilize Arizona’s 2.8
million acre­foot allocation. Due to funding and storage facility capacity issues, the determination was
made to store the additional water on behalf of Nevada in storage facilities located in Pima County.
Consequently, an additional 5,258 acre­feet of water were stored at underground storage facilities in
Pima County for interstate purposes. The 15,258 acre­feet of storage yielded 14,162 acre­feet of
long­term storage credits bringing the total 2004 ending balance of the Nevada sub­accounts to
125,260 acre­feet.
Agreement to Firm Future Supplies
Pursuant to statute, the AWBA is required to reserve a reasonable number of long­term storage
credits developed with general fund appropriations for the benefit of on­river M&I water users during
times of shortage. On January 1, 1998, the AWBA adopted a motion that identified 420,000 acre­feet
as the reasonable number of long­term storage credits for on­river M&I firming. On March 20, 2002,
the AWBA adopted a resolution that provided priorities of use for the general fund credits and
identified on­river M&I firming as the first priority.
The manner in which the general fund credits would be reserved, and then recovered and distributed
during a shortage, has long been an issue of concern to the on­river users. The issue once again
came to the forefront in light of the significant commitment made to Nevada by the AWBA under the
Amended Agreement for Interstate Water Banking. In recognition of the concerns, the AWBA and the
Mohave County Water Authority (MCWA) entered into the Agreement to Firm Future Supplies
(Agreement to Firm). The Agreement to Firm recognizes that the MCWA can enter into subcontracts
with on­river M&I water users having the same priority as the CAP. These are the water users for
whom the AWBA must firm M&I supplies. Upon execution of the subcontracts and payment of the
appropriate fees, the AWBA would reserve the appropriate quantity of long­term storage credits as
described in the Agreement to Firm.
A draft of the Agreement to Firm was presented for discussion and comment at the September 15,
2004 meeting of the AWBA. The Agreement to Firm was approved by the AWBA on December 9,
2004 and ultimately executed by the parties on February 4, 2005. The deadline for MCWA to include
on­river M&I water users under the coverage of the Agreement to Firm is July 15, 2005.

February 2004 Work Study Session
AMA Priorities
Due to the nature of the AWBA’s operations and policies, the AWBA often serves as a mechanism for
the CAP to maximize their flexibility. One example of this occurred in 2004 when the CAP notified the
AWBA in November that additional water would be available within Arizona’s 2.8 million acre­foot
entitlement. That water was ultimately stored in December in Pima County on behalf of Nevada. At
other times, the AWBA water deliveries are decreased as the CAP meets the water demands of other
higher priority users.

7

When these types of increased and decreased water quantity events occur, AWBA staff must make
decisions regarding location and volume of water. Due to the nature of the events, oftentimes the
decisions must be made in a very short time frame and the significance of the decisions is
increasingly important as funds and water supplies are constrained. In recognition of this, the AWBA
Commission directed staff to consult with the Phoenix, Pinal and Tucson AMA directors to identify
priorities for storage. The respective AMA’s provided information regarding priorities and the AWBA
incorporated the recommendations into the 2005 Annual Plan of Operation.
Authorized Use of Groundwater Withdrawal Fees
Concurrent with the discussion regarding priorities, AWBA and ADWR legal staff and the Phoenix,
Pinal and Tucson AMA directors addressed the issue of authorized uses of groundwater withdrawal
fee revenues. This became an issue of import as the ten­year plan for the time period 2005­2014
illustrated that both Pima and Pinal Counties would not meet their M&I firming goal through
expenditure of only 4¢ ad valorem tax revenues. In order to meet the M&I firming goal, Pinal and
Pima Counties might be required to expend revenues in excess of the 4¢ ad valorem revenues
projected to be collected through 2016.
Specifically, the issue is a result of the statutory limitations regarding uses for which specific funds
can be expended. Therefore, the question posed was whether or not M&I firming could be
considered a groundwater management objective. The legal opinion received from ADWR stated that
M&I firming of CAP water within an AMA qualifies as an important water management objective.
Consequently, the AWBA could utilize long­term storage credits developed with groundwater
withdrawal fees for M&I firming in the future if the need arises. To date, no credits have been
identified for specific purposes other than the general purposes described in statute.
Accounting, Income and Budget Discussion
Staff provided the AWBA with information regarding the development of the AWBA budgets and other
aspects relating to income flow and accounting associated with the AWBA Fund. This discussion
was identified as necessary at the December 2003 meeting of the AWBA wherein the water delivery
budget was discussed. The accounting associated with the water delivery budget has become
significantly more complicated in light of the CAWCD decision to retain the 4¢ ad valorem tax
revenues. In essence, revenues for water delivery and storage now have the potential to be
expended by two parties, the AWBA and the CAWCD. Additionally, it has always been difficult to
prepare a water delivery budget based on the fiscal year for water deliveries that actually are
completed on a calendar year basis. To that end, AWBA staff requested a legal opinion regarding
approval of an administrative budget on a fiscal year basis and approval of a water delivery budget on
a calendar year basis in conjunction with the following year’s Annual Plan of Operation. Legal review
determined that this could be done. Therefore, the AWBA adopted the administrative budget for FY
2005 (July 1, 2004­ June 30, 2005) on June 17, 2004. The water delivery budget for calendar year
2005 was approved at the December 9, 2004 meeting of the AWBA.

Legislative Issues
On June 1, 2004, Governor Napolitano signed House Bill 2590 that amended the statute regarding
recovery of long­term storage credits. Under the revised statute, when the water stored is Colorado
River water and the recovering entity is not the entity that stored the water, there is no requirement to
8

obtain consent nor is there a requirement for the director of ADWR to determine that the recovery is
consistent with the AMA management plan and goals if the recovery is within the area of hydrologic
impact of storage. This provides additional insurance to the AWBA and its constituents that long­term
storage credits will be available for recovery when needed in the future.

Impacts to the Water Banking Fund Accounts and Revenues
There are three primary revenue sources available to the AWBA and each was impacted to some
extent in 2004, largely as a result of the continuing state budget crisis. In some cases, the impacts
were to current revenues and in some cases the impacts were to existing monies in the Water
Banking Fund (Fund). The three revenue sources are a general fund appropriation, groundwater
withdrawal fees and an ad valorem property tax. It should be borne in mind that there is overlap
between the fiscal year (FY), upon which the state budget operates, and the calendar year (CY),
upon which the AWBA operates and this report is prepared. Consequently, CY 2004 included activity
that occurred in the last half of FY 2004 and the first half of FY 2005.
Existing Fund Account Balance Impacts
On June 17, 2003, Governor Napolitano signed HB 2531, the General Appropriations Act for FY 2004
that included a fund transfer from the AWBA to the general fund in the amount of $9 million. Due to
the nature of the AWBA Fund accounts, it was the AWBA’s belief that the transfer could only come
from the groundwater withdrawal fee accounts. Consequently, the transfer was completed on June
25, 2004 with the full $9 million coming from the Phoenix AMA account. With 2004 expenditures and
the legislative transfer, essentially all funds in the AWBA withdrawal fee accounts were utilized. On
May 28, 2004, the governor signed SB 1402 that transferred an additional $2 million from the AWBA
Fund for FY 2005. This transfer specifically identified that the $2 million could not come from 4¢ ad
valorem tax revenues, therefore, the withdrawal fee accounts will again be impacted in 2005.
Revenue Impacts
Historically, the AWBA has received an annual $2 million general fund appropriation from the state
legislature but budget problems have impacted the appropriation over the last few years. In CY 2004,
the AWBA did not receive any general fund appropriation money.
The CAWCD is statutorily authorized through 2016 to levy an ad valorem property tax in the three­
county 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 AWBA Fund. For the
second time since the AWBA’s inception, the CAWCD Board resolved that all taxes to be levied
would be retained by CAWCD. CAWCD has determined that it will use these funds to support their
OM&R activities thus reducing the cost of water to the AWBA.

2005 Annual Plan of Operation
Pursuant to the amended 2005 Plan, the AWBA projects recharge in excess of 280,000 acre­feet. Of
this quantity, more than 120,000 acre­feet are projected to be recharged at underground storage
facilities (USF) and more than 160,000 acre­feet are projected to be recharged at groundwater
9

savings facilities (GSF). The amended 2005 Annual Plan of Operation is available on the AWBA web
page.
Media Coverage
The AWBA received very limited press coverage during 2004 with the majority of articles being
published in association with the amended Agreement for Interstate Water Banking.
“AZ, Nevada are Partners in Major Water Banking Deal”, Arizona Water Resource 13(3), November­
December 2004
“AZ OKs Nevada deal to bank water”, Arizona Daily Star, December 10, 2004
“Nevada to get some Arizona water”, Arizona Republic, December 10, 2004
“Water deal OK’d in Arizona”, Las Vegas Review Journal, December 10, 2004

Agreement and Facility Permit Activity
There was no new agreement or facility permit activity in 2004.

Web Page
The AWBA has maintained a web page at www.awba.state.az.us since 1997 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, AWBA announcements and scheduled meetings and meeting minutes. It
also contains publications and documents that may be downloaded and provides links to other water
related web sites. The AWBA staff continue to review and update the web page to insure that it
contains accurate information that can be accessed in an efficient manner.

10

Monies Expended from the Banking Fund
Arizona Revised Statutes § 45­2425 mandates the various sources of monies for the Water Banking
Fund (Fund) that is administered by the AWBA per the statute. In 2004, the AWBA obtained its
funding from the following sources:
1. Fees for groundwater pumping are collected within the Phoenix, Pinal and Tucson AMAs. Fees
for water banking purposes are charged at $2.50 per acre­foot. The fees for groundwater
pumping are statutorily available to the AWBA through 2016. Long­term 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 three­
county 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 August of
2003, the CAWCD board resolved that all taxes to be levied for the following tax year would be
retained by the CAWCD. Consequently, there were no ad valorem tax revenues deposited into
the Fund in 2004. Money from this source must be used to benefit the county in which it was
collected.
Table 1 shows the money the AWBA received and expended in 2004 by source of funds. Table 2
shows the total money received, expended and remaining in the Fund through December 2004 by
source of funds. The money listed as “Available” is money that is remaining in the Fund. 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 2004 by Source of Funds
Source of Funds

Money Collected

Money Expended

General Fund

$0

$0

Interstate Water Banking ­ Nevada

$2,899,647

$2,899,647

4¢ Ad valorem Tax
Maricopa County
Pinal County
Pima County
Subtotal for Ad valorem

$11,185,771
$452,797
$2,211,073
$13,849,641

$9,243,901
$452,8002
$4,706,618
$14,403,319

Groundwater Withdrawal Fee
Phoenix AMA
Pinal AMA
Tucson AMA
Subtotal for Withdrawal Fees

$2,334,577
$1,216,584
$557,633
$4,108,794

$1,321,349
$1,373,696
$757,633
$3,452,678

$20,858,082

$20,755,644

TOTAL

1

1

This amount is the total reconciled amount for interstate deliveries and storage
Expenditure from CAP accounts

2

Table 2. Monies Collected and Expended through December 2004 and Monies
Remaining Available to the Authority
Source of Funds

Money Collected

Money Expended

Money Available

General Fund

$10,695,000

$10,695,000

$0

Interstate Water Banking ­ Nevada

$11,646,592

$11,646,592

$0

$65,043,808
$2,503,878
$13,399,261
$80,946,947

$39,675,291
$2,503,878
$12,969,492
$55,148,661

$25,368,517
$0
$429,769
$25,798,286

$8,573,6521
$7,735,632
$4,723,361
$21,032,645

$7,573,652
$7,781,525
$4,723,361
$20,078,538

$1,000,000
$­45,893
$0
$954,107

$124,321,184

$97,568,791

$26,752,393

4¢ Ad valorem Tax
Maricopa County
Pinal County
Pima County
Subtotal for Ad valorem
Groundwater Withdrawal Fee
Phoenix AMA
Pinal AMA
Tucson AMA
Subtotal for Withdrawal Fees
TOTAL
1

Total money collected was decreased to reflect the $9 million legislative transfer. Carryover retained for $2 million
legislative transfer for FY 2005.

12

Long­term Storage Credits
The AWBA has established Long­term Storage Accounts with ADWR. The Phoenix AMA account
number is 70­441150, the Tucson AMA account number is 70­411150 and the Pinal AMA account
number is 70­431135. 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 long­
term 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 most storage of water for long­term credit. 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 long­term storage credits for
2004 are listed in Table 3. The cumulative totals of long­term storage credits accrued by the AWBA
through December 2004 are listed in Table 4.

Table 3. Number and Location of Long­term Storage Credits Accrued in 2004
Location and Funding Source

Long­term Storage
Credits Accrued (AF)

Phoenix AMA
4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
AMA Total

128,674
18,393
0
147,067

4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
Interstate ­ Nevada
AMA Total

9,984
30,289
0
9,191
49,464

4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
Interstate ­ Nevada
AMA Total

55,220
8,896
0
4,971
69,087

4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
Interstate ­ Nevada

193,878
57,578
0
14,162

Pinal AMA

Tucson AMA

Totals by Funding Source

TOTAL

265,618

13

Table 4. Cumulative Total and Location of Long­term Storage Credits Accrued
through December 2004
Location and Funding Source

Long­term Storage
Credits Accrued (AF)

Phoenix AMA
4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
AMA Total

871,408
131,574
59,937
1,062,919

Pinal AMA
4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
Interstate Water Banking ­ Nevada
AMA Total

90,645
248,956
296,814
120,289
756,704

4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
Interstate Water Banking ­ Nevada
AMA Total

185,271
66,238
39,748
4,971
296,228

Tucson AMA

Totals by Source of Funds
4¢ Ad valorem Tax
Groundwater Withdrawal Fee
General Fund
Interstate Water Banking ­ Nevada
TOTAL

1,147,324
446,768
396,499
125,260
2,115,851

Since inception, the AWBA has focused it’s efforts on developing long­term storage credits for firming
purposes and the AWBA has identified 2,700,000 acre­feet as reasonable to firm the CAP M&I
subcontracts over the next 100 years. This would be divided 58% to Maricopa County, 32% to Pima
County and 9% to Pinal County based on a pro­rata distribution to the three counties on the basis of
CAP M&I subcontracts. The AWBA has also identified 420,000 acre­feet as reasonable to firm the
on­river communities over the next 100 years. In 2002, the AWBA adopted a resolution that identified
on­river firming as the highest priority of use for the general fund credits and established priorities for
other uses (Indian settlements, etc.). Consequently, all or part of the general fund credits could be
utilized to firm on­river M&I users. It should be noted that the AWBA collects reimbursement for the
replacement cost of credits used for on­river firming. As those credits are used and replaced, they
can be utilized by the AWBA for other authorized purposes. Table 5 illustrates the progress made by
the AWBA towards meeting it’s established goals.

14

Table 5. Identified Uses of Long­term Storage Credits Accrued through
December 2004 and Percentage of AWBA Goals Achieved
Location and Objective

Goal
(AF of Credits)

LTS Credits
Accrued (AF)

Percent of Goal
Achieved

1,566,000

871,408
131,574

56%
N/A

Pinal M&I Firming1
Pinal Groundwater Mgmt2

243,000

90,645
248,956

37%
N/A

Tucson M&I Firming1
Tucson Groundwater Mgmt2

864,000

185,271
66,238

21%

420,000

396,499

94%5

1,250,0006

125,260

10%

Phoenix M&I Firming1
Phoenix Groundwater Mgmt2

General Fund3
On­River M&I Firming4
Interstate Water Banking ­ NV
1

All three Active Management Areas have stated that withdrawal fees could be utilized in addition to 4¢ ad valorem tax
revenues for M&I firming if needed to reach firming goals.
2
Specific water management objectives have not yet been identified or quantified. However, by letter dated October 26,
2004, the Tucson AMA GUAC recommended that the AWBA utilize credits developed using withdrawal fees for M&I
firming.
3
Specific uses of general fund credits have not been determined by the AWBA.
4
By resolution passed in 2002 the AWBA established on­river firming as the highest priority of use for credits accrued
through expenditure of general fund appropriations.
5
This percentage reflects full utilization of general fund credits accrued to date and would change as other objectives are
identified by the AWBA.
6
Pursuant to the Amended Agreement for Interstate Water Banking the AWBA has committed to have this number of
long­term storage credits within the Nevada sub­account.

The average annual cost for the AWBA to obtain one acre­foot of long­term storage credit is
presented in Table 6. Table 6 illustrates that the unit cost per long­term storage credit has increased
each year the AWBA has been in operation with the exception of 2001. Increases are typically a
function of three primary factors: annual increases in the cost per acre­foot of water delivered, annual
increases in the cost of storage facilities and increased percentage of total water stored in USFs. In
2004, the AWBA stored more water in USFs than in GSFs. Although earlier plans projected more
storage in USFs than GSFs, this was the first time since inception that the storage actually took
place. It is anticipated that the increasing trend in cost of developing credits will continue in the future
as more USFs become operational and water delivery and facility costs increase. However, the CAP
policy regarding recharge rate facilities that became effective in 2004 should help stabilize costs to
some extent.

15

Table 6. Average Annual Cost for the AWBA to Obtain a Long­term Storage
Credit1

Year

Credits

Funds Expended

Average Cost

% Stored in GSF:%
Stored in USF

1996

None

None

$0

0% : 0%

1997

296,987

$6,387,000

$21.51

85% : 15%

1998

202,542

$7,143,000

$35.27

68% : 32%

1999

232,142

$8,733,000

$37.61

68% : 32%

2000

272,122

$11,163,000

$41.02

60% : 40%

2001

269,687

$10,893,590

$40.39

62% : 38%

2002

255,000

$13,700,300

$53.732

64% : 36%

2003

200,327

$11,077,666

$55.30

47% : 53%

2004

251,456

$17,855,997

$71.012

41% : 59%

1

The information in this table was obtained from previous Annual Reports. Any differences between the
number of credits displayed here and the total cumulative number in Table 4 are due to the on­going
nature of the accounting process.
2
Average cost is for intrastate credits only.

16

Long­term Storage Credits Distributed or Extinguished by the Authority
The long­term storage credits developed by the AWBA to date have been identified as reserved for
four purposes: firming the post­1968 Colorado River municipal and industrial (M&I) entitlements;
firming the post­1968 M&I entitlements for entities outside the CAP service area; fulfilling the water
management objectives set forth in Chapter 2 of Title 45 (Arizona Revised Statutes); and for
interstate water banking purposes pursuant to agreements with Nevada. 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 unplanned CAP
operational problems, therefore, no credits were distributed or extinguished for these purposes in
2004. 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 2004.
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 2004, no credits were
developed or distributed under such agreements. Additionally, there was no recovery of long­term
storage credits for interstate purposes in 2004 2.

2

The SNWA and MWD did request development of ICUA for 2004, however, changing circumstances led to withdrawal of
the requests. For more information see discussion under “Interstate Issues” in the Activities and Projects section.

17

Ten Year Plan for Calendar Year 2004
Introduction
Preparation of the ten year plan is statutorily mandated. 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 is presented in Table 7. The ten year plan must
also provide an analysis of the AWBA’s ability to complete those activities. This analysis is provided
in Table 8. 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 for the year 2004 analyzes activity for the period 2006­2015 (Table 7) and was
derived using the information found in Appendices B through G. AWBA accounting for previous years
can be found in the 2004 Annual Report. 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 2006­2015.
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.

Ten Year Plan Components
The following factors are recognized to be important elements in developing the model used to
generate the ten year plan. Inclusion or exclusion of a specific factor or component of a factor was
based on whether the extent of the effect of the factor could be predicted over the planning period,
and whether the factor was anticipated to be at issue over the planning period.
1.

Storage Partners and Storage Capacity
The AWBA has 13 water storage permits for GSFs with a total storage capacity of 743,359
acre­feet per annum. Appendix C describes the storage partners, storage permits and
capacity available for use by the AWBA. It also identifies the partners that the AWBA included
in development of this ten year plan.
All of the facility permits associated with GSFs expire within this ten year plan. In most
instances, the AWBA’s water 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 have
been some changes in the process for obtaining a GSF facility permit. First, due to the rapid
rate of urbanization in the AMA’s, ADWR recently began issuing GSF permits with a 5 year
18

Table 7. Ten Year Plan
ARIZONA WATER BANKING AUTHORITY – 10 YEAR PLAN
2006 – 2015
(Acre­feet)

YEAR

(a)
CAP
Water
Avail
for
AWBA

(b)

(c)

(d)

(e)

(f)

(g)

CAP M&I Firming
(4¢ tax)

Water
Management
(Withdrawal Fees)

General Fund

Indian
Settlement

Loaned Credits

Storage
for
Others

Delivered
Pre­
Plan(j)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
TOTAL

n/a
633,159
621,749
634,365
613,364
544,735
513,688
509,982
471,855
443,673
422,292

Credits

Delivered

1,220,200
227,134
278,173
269,648
258,340
282,539
169,605
325,886
225,718
251,611
200,792

209,906
254,050
245,235
235,380
257,145
155,447
296,048
205,845
229,099
183,314
3,491,669

Credits

Delivered

509,429
92,575
78,355
93,146
102,821
100,135
95,342
91,195
87,514
83,125
77,460

84,432
71,589
85,127
93,998
91,476
87,088
83,286
79,921
75,475
71,222
1,333,043

Credits

Delivered

Credits

Delivered

Credits

(h)

(i)

Interstate Banking

Water
Avail.

AWBA
Capacity
Avail.

396,499
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
396,499

270,156
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

FOOTNOTES:
(a) See Appendix B
(b) See Appendix D
(c) See Appendix E
(d) See Appendix F
(e) No Indian settlement requirements included in this ten year plan
(f) Currently no requests for loaned credits
(g) Currently the AWBA is not providing banking services for others
(h) Available CAP Supplies minus AWBA intrastate delivery requirements
(i) See Appendix G
(j) Cumulative totals for 1997­2005; 2004 actual credits and 2005 credits estimated based on projected deliveries

19

Credits

0
0
0
0
0
0
0
0
0
0

313,450
265,220
271,571
252,202
162,061
248,740
92,901
158,623
108,937
144,040

213,139
214,699
214,834
215,844
202,423
326,855
178,065
267,374
249,529
304,421

200,000
200,000
200,000
200,000
152,337
27,507
0
0
0
0
1,250,000

Table 8. AWBA Percentage of Goals Achieved through 2015

Location and Objective

Goal
(AF of Credits)

LTS Credits Accrued
(AF)1

Percent of Goal
Achieved

1,566,000

2,638,6602
591,160

168%
N/A

Pinal M&I Firming
3
Pinal Groundwater Mgmt

243,000

196,832
600,838

81%
N/A

Tucson M&I Firming
3
Tucson Groundwater Mgmt

864,000

656,270
141,049

76%
N/A

420,000

396,499

94%6

1,250,0007

1,250,0008

100%

Phoenix M&I Firming
Phoenix Groundwater Mgmt3

General Fund4
On­River M&I Firming5
Interstate Water Banking ­ NV
1

Cumulative totals for 1997­2005; actual credits through 2004 and 2005 credits estimated based on projected deliveries.
The M&I firming goal will be met in 2009.
3
Specific water management objectives have not yet been identified or quantified, however, all three AMAs have stated
that withdrawal fees could be utilized in addition to 4¢ ad valorem tax revenues for M&I firming if needed to reach firming
goals. If withdrawal fees are utilized for M&I firming, the Pinal firming goal will be met. With full utilization of withdrawal
fees in the Tucson AMA, the percent of goal achieved through 2015 is 93%.
4
Specific uses of general fund credits have not been determined by the AWBA.
5
By resolution passed in 2002 the AWBA established on­river firming as the highest priority of use for credits accrued
through expenditure of general fund appropriations.
6
This percentage reflects full utilization of general fund credits and could change as other objectives are identified by the
AWBA.
7
Pursuant to the Amended Agreement for Interstate Water Banking the AWBA has committed to store this quantity of
water on behalf of the Southern Nevada Water Authority.
8
The goal will be met in 2011.
2

term instead of the usual ten year term unless the applicant can prove that development is not
an issue. Additionally, because of development, the acreage available for irrigation has been
reduced which can reduce the volume of water included in the GSF. There are also other
operational issues currently associated with renewal of a GSF facility permit that can make the
process more difficult. Furthermore, all of the agreements for water storage expire within this
ten year planning period. Impacts of this nature cannot be predicted and, consequently,
although they are recognized they were not included in development of this ten year plan.
The AWBA currently has nine water storage permits for USFs with a total storage capacity of
611,000 acre­feet per annum. Additionally, the AWBA recently submitted an application for
water storage permit at the new CAWCD facility, the Tonopah Desert Recharge Project
(TDRP). The TDRP is a constructed facility located in the Hassayampa sub­basin within the
Phoenix AMA, northwest of Tonopah, Arizona. Upon receipt of this water storage permit, the
USF capacity permitted to the AWBA will be 761,000 acre­feet for the time period 2005­2008
and 698,500 acre­feet for the remainder of the planning period. The USF permit issued for
the Pima Mine Road facility limits total storage for the term of the permit to 500,000 acre­feet
with the ability to request an amendment to 600,000 acre­feet. Based on historic volumes of
20

storage at the PMR facility, it is not anticipated that this storage quantity limitation will be a
factor within this ten year plan. The GRUSP permit is the only facility permit that expires
within this planning period.
As previously described in the GSF discussion, any difficulty in obtaining new permits could
impact 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. However, impacts of this nature cannot be predicted and are not included in the
analysis of this ten year plan.
2.

Recovery
This ten year plan includes a recovery component for interstate purposes pursuant to the
Amended Agreement for Interstate Water Banking (Amended Agreement). The Amended
Agreement authorized Nevada to request development of intentionally created unused
apportionment (ICUA), if needed, as follows: in 2007 and 2008, an amount not exceeding
20,000 acre­feet; in 2009 and 2010, an amount not exceeding 30,000 acre­feet; and in
subsequent years, an amount not exceeding 40,000 acre­feet. This ten year plan does not
include development of ICUA for California. Recovery of credits stored by the Metropolitan
Water District (MWD) of Southern California is not included in light of current discussions
between MWD and CAP staff. It is anticipated that the two parties will reach an agreement
wherein the long­term storage credits accrued by MWD under the Demonstration Project in the
early 1990’s will be returned to the CAWCD for monetary reimbursement.
This ten year plan does not include a recovery component for M&I firming or Indian
settlements because shortages on the Colorado River are not anticipated within the scope of
this ten year plan. As a result of the on­going drought and public concern regarding reservoir
levels, the CAP ran dry year scenario models of the Colorado River system. Those model
runs identified a potential for shortage in 2011. However, in light of the precipitation received
since last winter, that date has likely moved to 2012 or 2013. Nonetheless, based on projected
CAP M&I demand levels, there will be no shortages to CAP M&I users within the scope of this
ten year plan, even with the dry year hydrology used by CAP in modeling. Recovery for Indian
firming purposes is also not anticipated in the scope of this ten year plan due to demand
levels. It should be noted, however, that if a shortage is declared during the ten year period it
may impact on­river M&I users. They may be required to recover long­term storage credits to
insure firm supplies. Those credits would be credits that had previously been developed by
the AWBA through general fund expenditures and which would be transferred to the on­river
M&I users pursuant to statute. Although recovery is not anticipated within the scope of this ten
year plan, the AWBA will participate with CAP and ADWR in development of a general
recovery plan as discussed in the Update section of the 2004 Annual Report.

3.

Water management objectives
The early activities of the AWBA were focused on achieving the goal of full utilization of
Arizona’s Colorado River allocation and Arizona met this goal from 2002 until 2004. Another
primary objective of the AWBA was meeting the M&I firming goals and the AWBA has stored
almost 1 MAF of credits for that purpose. As discussed in the Activities and Projects section of
the 2004 Annual Report, the issues of water management priorities, expenditure of withdrawal
fees and other water management activities have recently been addressed by the AWBA. It is
anticipated that the evaluation of water management activities will become even more
21

significant and complex as the available excess CAP water and storage facility capacity
becomes limited, new storage facilities are sited and AWBA’s funding sources are impacted by
economic factors.
Central Arizona Groundwater Replenishment District (CAGRD) Replenishment Reserve
Pursuant to statute, the CAGRD must develop a 20% replenishment reserve. The CAGRD
replenishment reserve shares co­equal priority for excess water with AWBA M&I firming.
However, the reserve has a higher priority for excess CAP water than the AWBA’s deliveries
for other non­firming purposes (i.e. water management). Therefore, a component for the
proposed replenishment reserve as well as the advance replenishment was included in the
model for this ten year plan.
The CAP Water Forecast Group
The group is composed of CAP, CAGRD, ADWR and AWBA staff and was formed to facilitate
consistency and understanding between the entities with regard to assumptions used for short­
and long­term Colorado River water supply and demand forecasts. Portions of this ten year
plan were developed using projections obtained from the forecast group.
AWBA General Fund Appropriation
Since inception, the AWBA has received an annual general fund appropriation of $2 million.
To date, the AWBA has primarily utilized the money to augment the revenues generated in
Pinal County to develop credits to be used to firm on­river uses. It is recognized that the
economic factors resulting in the loss of the AWBA’s general fund appropriation will exist for
some time. Therefore, the ten year plan was developed with no general fund appropriation.
4.

Modifications within CAP with regard to pricing and pool allocation
In May 2000, the CAWCD Board adopted a policy for marketing the non­Indian agriculture
(NIA) pool of excess water. This policy established a NIA pool of 400,000 acre­feet from 2004­
2016. The pool will decline to 300,000 acre­feet from 2017­2023 and to 225,000 acre­feet
from 2024­2030. This use will be the highest priority use for excess water. It is recognized
that this is a factor that could impact the AWBA’s ability to participate in recharge at
groundwater savings facilities, however, it is difficult to predict an effect. Therefore, only the
400,000 acre­foot pool concept was utilized in this ten year plan.
The CAWCD Board has also discussed the marketing of excess water for other users including
the CAGRD replenishment and replenishment reserve, incentive recharge programs, other
M&I uses and the AWBA. These discussions have centered on the recognition that policies
were developed to insure full utilization of CAP and Arizona’s Colorado River allocation and
included subsidized water rates to encourage CAP use. However, in light of Arizona’s full use
of its 2.8 million acre­foot entitlement from 2002­2004, such subsidies may no longer be
necessary. In April 2005, CAP presented potential alternatives with respect to the incentive
recharge pool. One alternative was discontinuation of the pool except for the AWBA, one
alternative was elimination of the pool at a later date, and one was maintaining the current pool
policy. The CAP has not yet established policy with respect to the various excess water pools,
however, in light of the current discussions this ten year plan included a component for
decreased availability of the incentive recharge pool.
22

5.

Participation in Indian settlements
One objective of the AWBA is assisting with the settlement of water rights claims by Indian
communities within Arizona. The state of Arizona has a 100 year firming obligation under the
Arizona Water Settlements Act that was executed on December 10, 2004. In order to meet the
obligation, it is anticipated that the state may rely on the AWBA in some manner. Additionally,
pursuant to House Bill 2728 executed on April 18, 2005, the AWBA has statutorily mandated
responsibilities for the Southside Replenishment obligation. The Arizona legislature created
the Arizona water firming program study commission to evaluate the potential alternatives for
meeting these obligations. The commission held its first meeting in May of 2005 and must
present their final recommendations to the legislature by January 6, 2006. While it is
recognized that the AWBA will play a significant role in Indian settlement obligations, due to
the on­going nature of the commission process, there was no Indian settlement component
included in this ten year plan.

6.

New recharge facilities and/or expanded capacities at existing facilities
The AWBA is currently in the process of completing a revised inventory of existing storage
facilities in the state as required by A.R.S. § 45­2452. The revised inventory will be utilized in
developing future ten year plans.
The CAP has been active in the evaluation of locations for additional storage facilities. In
January 2002, the CAP initiated a regional feasibility study for sites in the East Salt River
Valley. Construction has initiated on the Tonopah Desert USF and it is anticipated to be
operational by late 2005. The AWBA has recognized additional capacity available in Maricopa
County in this ten year period for storage at the Tonopah Desert USF.
The SRP has applied to ADWR for a recharge facility permit for a project located in the west
valley near the confluence of the Agua Fria River and New River. The project has a planned
initial capacity of 30,000 acre­feet increasing to a maximum of 100,000 acre­feet. Storage at
this facility was not included in this ten year plan because of uncertainty regarding
development of an agreement between AWBA and SRP, cost of storage and availability of
capacity to the AWBA.

7.

Interstate banking
The ten year plan includes an interstate water banking component for Nevada but does not
include California.
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.

23

Appendices

24

Appendix A.
Colorado River Water Deliveries for Water Banking Purposes for Calendar Year 2004 by
Partner and Active Management Area
Phoenix Active Management Area
Partner

Quantity of Water (AF)

Agua Fria Recharge Project
Chandler Heights Citrus Irrigation District
Granite Reef Underground Storage Project
Hieroglyphic Mountains Recharge Project
New Magma Irrigation and Drainage District
Queen Creek Irrigation District
Salt River Project GSF
Tonopah Irrigation District

16,300
576
56,500
21,398
46,117
7,499
8,000
2,495

Pinal Active Management Area
Partner

Quantity of Water (AF)
13,8211
16,7001
22,9671

Central Arizona Irrigation and Drainage District
Hohokam Irrigation and Drainage District
Maricopa­Stanfield Irrigation and Drainage District

Tucson Active Management Area
Partner
Avra Valley Recharge Project
Central Avra Valley Storage and Recovery Project
Kai­Red Rock
Lower Santa Cruz Recharge Project
Pima Mine Road Recharge Project
1

Includes both intrastate and interstate deliveries

Quantity of Water (AF)
6,0841
6,000
1,100
41,7201
18,2651

APPENDIX B
CAP DELIVERY SCHEDULE
(Acre­feet)

CAP Demands
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

(1)
(2)
(3)
(4)
(5)
(6)

Average
Year
Supply 5

Available
for
AWBA 6

M&I 1

Indian 2

Ag 3

Total4

374,541

102,300

400,000

891,841

1,525,000

633,159

385,951

102,300

400,000

903,251

1,525,000

621,749

368,835

106,800

400,000

890,635

1,525,000

634,365

374,836

121,800

400,000

911,636

1,525,000

613,364

422,937

142,328

400,000

980,265

1,525,000

544,735

434,384

161,928

400,000

1,011,312

1,525,000

513,688

420,625

179,393

400,000

1,015,018

1,525,000

509,982

433,652

204,493

400,000

1,053,145

1,525,000

471,855

461,834

204,493

400,000

1,081,327

1,525,000

443,673

483,215

204,493

400,000

1,102,708

1,525,000

422,292

Includes M&I, CAGRD, CAGRD replenishment reserve, Indian M&I lease and
M&I incentive water
From settlement discussions
Based on current agricultural pool policy, includes 32,537 for Harquahala
Includes secondary excess uses of 15,000 AF per annum 2006 through 2014.
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

APPENDIX C
STORAGE FACILITIES AVAILABLE TO THE AWBA1
(as used in the 10 year plan)

AMA and
Facility Type

Facility
Permit
Expiration

Capacity
Available
to AWBA2

Facility
Permitted
Capacity

(AF)

(AF)

Year
Water
Last
Stored

Volume of
Water Last
Stored
(AF)

3

New Magma IDD
Queen Creek ID
Salt River Project
GRUSP
Agua Fria Recharge Project
Hieroglyphic Mtns.
Tonopah Desert RP

PHOENIX – GSF
12/2007
54,000
12/2004
28,000
12/2005
200,000
PHOENIX – USF
12/2010
200,000
05/2019
100,000
12/2021
35,000

45,000
3,000
20,000

2004
2004
2004

46,117
7,499
8,000

50,000
40,000
26,000

2004
2004
2004

56,500
16,300
21,398

4

PINAL – GSF
12/2007
110,000
15,000
2004
12/2007
55,000
50,000
2004
12/2004
120,000
50,000
2004
TUCSON – GSF3
Kai – Red Rock
12/2006
11,231
3,000
2004
TUCSON – USF
Avra Valley
03/2018
11,000
7,000
2004
CAVSARP
07/2021
60,000
40,000 5
2004
Lower Santa Cruz
09/2019
50,000
40,000
2004
Pima Mine Road
09/2020
30,000
28,000
2004
Other Facilities Currently or Anticipated to be Available to the AWBA
4
Vidler – USF
09/2020
100,000
80,000
4
West Maricopa Combine ­ USF
05/31/2021
25,000
6
Superstition Mountain
80,000
40,000
SRP New River – USF 6
Central Arizona IDD
Hohokam IDD
Maricopa­Stanfield IDD

13,821
16,700
22,967
1,100
6,084
6,000
41,720
18,265
0
0
n/a
n/a

Footnotes:
(1) As additional facilities are developed, they will be included in future plans. However, it should
be recognized that availability of water and funding will likely be the limiting factors in future
plans.
(2) This does not reflect the actual “permitted” volume for these facilities, instead for the purposes
of this plan, staff relied on average historical storage volumes and potential for future storage.
(3) The AWBA holds water storage permits at Chandler Heights Citrus ID (3KAF), Maricopa Water
District (18KAF), Roosevelt Water Conservation District, BKW Farms (16KAF), Kai­Avra
(12KAD) and the Tonopah (15KAF) GSFs. These were not considered significant uses in this
10 year outlook.
(4) No deliveries to date.
(5) 20,000 acre­feet of additional capacity included beginning in 2003.
(6) Not yet permitted.

APPENDIX D
Credits Developed for M&I Firming Utilizing the 4¢ Tax 1

PHOENIX AMA2

Year
Pre­plan3
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

PINAL AMA2

Year
Pre­plan3
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

TUCSON AMA2

Year
Pre­plan3
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

(Acre­feet)
Groundwater Savings
Capacity Capacity Credits
Available4
Used
Earned
29,991
30,960
30,960
30,714
30,269
29,754
29,713
29,105
31,174
32,539

29,991
30,960
30,960
30,714
30,269
29,754
29,713
29,105
26,498
23,853

516,308
26,992
27,864
27,864
27,643
27,242
26,779
26,742
26,194
23,848
21,468
778,944

Groundwater Savings
Capacity Capacity Credits
Available4
Used
Earned
85,359
89,646
81,978
76,825
77,175
79,680
81,966
83,493
84,908
86,224

7,268
8,081
10,728
12,641
12,767
12,153
11,589
11,067
10,584
10,136

98,284
6,687
7,435
9,869
11,629
11,746
11,181
10,662
10,182
9,738
9,325
196,738

Groundwater Savings
Capacity Capacity Credits
Available4
Used
Earned
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

4,349
0
0
0
0
0
0
0
0
0
0
4,349

Underground Storage
Capacity
Capacity
Credits
4
Available
Used
Earned
195,666
244,349
243,533
239,578
239,194
231,113
243,121
242,403
237,885
239,037

100,874
180,261
189,018
171,300
196,103
85,045
242,608
144,257
173,904
126,835

410,531
90,787
162,235
170,116
154,170
176,493
76,540
218,347
129,831
156,514
114,152
1,859,716

Underground Storage
Capacity
Capacity
Credits
Available4
Used
Earned
­
­
­
­
­
­
­
­
­
­

­
­
­
­
­
­
­
­
­
­

­
­
­
­
­
­
­
­
­
­

Underground Storage
Capacity
Capacity
Credits
4
Available
Used
Earned
89,256
87,916
88,011
87,068
98,324
107,913
109,151
98,092
107,173
107,413

89,000
58,870
38,943
43,685
43,400
42,652
41,977
41,290
40,625
39,968

190,728
85,440
56,516
37,385
41,938
41,664
40,946
40,297
39,638
39,000
38,369
651,921

Footnotes:
(1) Development of M&I firming credits followed utilization of groundwater withdrawal fees.
(2) M&I firming targets are Phoenix AMA­1.566 MAF, Tucson AMA­864 KAF, and Pinal AMA 243 KAF.
(3) Cumulative totals for 1997­2005; 2005 credits estimated based on projected deliveries.
(4) The capacity available is based on the capacity remaining at the USFs and GSFs after all higher priority
demands have been met.

APPENDIX E
Credits Developed for Meeting AMA Water Management Goals
Utilizing Withdrawal Fees 1
(Acre­feet)
Groundwater Savings
Capacity
Capacity
Credits
Available3
Used
Earned

Year

PHOENIX AMA

2

Pre­plan
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

PINAL AMA

Year
Pre­plan2
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

TUCSON AMA

Year
Pre­plan2
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

69,746
72,000
72,000
71,429
70,393
69,196
69,100
67,686
66,300
64,158

39,755
41,040
41,040
40,714
40,124
39,442
39,387
38,581
35,126
31,620

114,679
35,780
36,936
36,936
36,643
36,112
35,498
35,448
34,723
31,613
28,458
462,826

Groundwater Savings
Capacity
Capacity
Credits
Available3
Used
Earned
115,000
115,000
115,000
115,000
115,000
115,000
115,000
115,000
115,000
115,000

29,641
25,354
33,022
38,175
37,825
35,320
33,034
31,507
30,092
28,776

303,912
27,270
23,325
30,380
35,121
34,799
32,494
30,391
28,987
27,685
26,474
600,838

Groundwater Savings
Capacity
Capacity
Credits
Available3
Used
Earned
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000

5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000

8,296
4,800
4,800
4,800
4,800
4,800
4,800
4,800
4,800
4,800
4,800
56,296

Underground Storage
Capacity
Capacity
Credits
Available3
Used
Earned
210,155
246,933
252,024
251,912
251,415
250,132
252,717
251,024
247,345
248,002

14,489
2,584
8,491
12,335
12,221
11,019
9,596
8,621
9,460
8,964

40,331
13,040
2,326
7,642
11,101
10,999
9,917
8,637
7,759
8,068
8,514
128,334

Underground Storage
Capacity
Capacity
Credits
Available3
Used
Earned
­
­
­
­
­
­
­
­
­
­

­
­
­
­
­
­
­
­
­
­

0
­
­
­
­
­
­
­
­
­
­
0

Underground Storage
Capacity
Capacity
Credits
Available3
Used
Earned
92,946
92,294
93,604
93,665
103,289
112,474
113,329
101,897
110,620
110,513

3,690
4,378
5,593
6,597
4,965
4,561
4,178
3,805
3,447
3,100

42,211
3,542
4,203
5,369
6,333
4,767
4,379
4,011
3,653
3,309
2,976
84,753

(1) Expenditure of withdrawal fees was given the highest priority.
(2) Cumulative totals for 1997­2005; 2005 credits estimated based on projected deliveries, as amended.
(3) The capacity available is based on the capacity remaining at the USFs and GSFs after all higher priority demands
have been met.

APPENDIX F
Credits Developed Utilizing Annual General Fund Appropriations1,2
(Acre­feet)
Groundwater Savings
Capacity
Capacity
Credits
Available
Used
Earned

Year

PHOENIX AMA

3

Pre­plan
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

0
0
0
0
0
0
0
0
0
0

Pre­plan3
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

78,091
81,565
71,251
64,184
64,408
67,527
70,378
72,425
74,324
76,088

0
0
0
0
0
0
0
0
0
0

296,814
0
0
0
0
0
0
0
0
0
0
296,814

Groundwater Savings
Capacity
Capacity
Credits
Available
Used
Earned

Year
3

TUCSON AMA

37,964
0
0
0
0
0
0
0
0
0
0
37,964

Groundwater Savings
Capacity
Capacity
Credits
Available
Used
Earned

Year

PINAL AMA

0
0
0
0
0
0
0
0
4,676
8,685

Pre­plan
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0

2,306
0
0
0
0
0
0
0
0
0
0
2,306

Underground Storage
Capacity Capacity
Credits
Available
Used
Earned
94,792
64,088
54,515
68,277
43,091
154,068
513
98,146
63,981
112,202

0
0
0
0
0
0
0
0
0
0

21,973
0
0
0
0
0
0
0
0
0
0
21,973

Underground Storage
Capacity Capacity
Credits
Available
Used
Earned
­
­
­
­
­
­
­
­
­
­

­
­
­
­
­
­
­
­
­
­

­
­
­
­
­
­
­
­
­
­

Underground Storage
Capacity Capacity
Credits
Available
Used
Earned
256
29,046
49,069
43,383
54,924
65,260
67,174
56,802
66,548
67,445

Footnotes:
(1) The ten year plan does not include a component for General Fund appropriations
(2) The on­river M&I firming target is 420 KAF.
(3) Cumulative totals for 1997­2005; 2005 credits estimated based on projected deliveries.

0
0
0
0
0
0
0
0
0
0

37,442
0
0
0
0
0
0
0
0
0
0
37,442

APPENDIX G
Potential Credits Developed for Interstate Water Banking1
(Acre­feet)
Year

Available CAP
Supplies 2

Available
AWBA
Capacity3

313,450
265,220
271,571
252,202
162,061
248,740
92,901
158,623
108,937
156,169

213,139
214,699
214,834
215,844
202,423
326,855
178,065
267,374
249,529
304,421

Remaining
Supply 4

6

Pre­plan
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Total

50,522
56,736
36,358
0
0
219,477

Interstate
Credits 5
270,156
200,000
200,000
200,000
200,000
152,337
27,507
0
0
0
0
1,250,000

Footnotes:
(1) The AWBA has an obligation to have 1,250,000 acre­feet of credits for the SNWA.
(2) Water available for Interstate Banking is calculated by subtracting the water delivered and stored by
individual subcontractors, contractors, and the AWBA for intrastate water banking from the Total
Available Supply (see Appendix B).
(3) Reflects the unused capacity available to the AWBA at USFs and GSFs in the Phoenix, Pinal, and
Tucson AMAs as well as capacity available from other storage facilities permitted by the AWBA outside
of the AMAs. Additional capacity may be available at individual facilities based on the utilization by
individual water storage permit holders
(4) Remaining supplies after subtracting the water delivered and stored by individual subcontractors,
contractors, and the AWBA for intrastate water banking and water delivered for interstate water
banking.
(5) Based on the Available Supplies or the Available AWBA Capacity, whichever is less, resulting stored
water multiplied by an average 6% cut and loss factor.
(6) Cumulative totals for 1997­2005; 2005 credits estimated based on projected deliveries