AWBA 2011 Annual Report &

Ten-Year PlanAWBA Quarterly Meeting

June 20, 2012

Annual Report RequirementsAccounting of AWBA transactions and proceedings for

previous yearAll monies expended from Banking Fund

All monies remaining in Banking Fund

Amount of water stored

Number of long-term storage credits distributed or extinguished

Ten-Year Plan

2011 Plan of OperationInitial Plan – 136,441 AF

135,441 AF storage - 1,000 AF Southside Replenishment Bank

No Interstate storage

Amended Plan - August5,000 AF redirected from TDRP to NMIDD (Actual use 2,626)15,000 AF redirected from Tucson AMA to Pinal AMAPinal AMA GSF operator’s pay full cost

Final Deliveries - 136,576 AF, includes 1,000 to SSRB

Agreements and Permits

Groundwater Savings Facility AgreementsEffective through December 2021

Master Water Storage Agreement

Amended Agreement to Firm Future SuppliesExhibit C – reserves additional 25,894 AF credits

(256,174 AF)

Water Storage PermitsSuperstition Mtns., QCID, CAIDD, MSIDD

Indian Firming ProgramWhite Mountain Apache Tribe Water Rights Quantification

- signed December 2010Firming obligation 3,750 AF/yr during shortagesEnforceability anticipated in 2014

Navajo Nation/ Hopi Tribe settlement discussionsBill introduced February 14, 2012

Southside Replenishment BankAWBA required to deliver 15,000 AF3,000 AF delivered since 2009

Water Supply and Demand StudyDetermine potential for use of existing and future AWBA

credits for meeting firming requirements

Colorado River System Simulation – AZ assumptionsPeriod 2008 – 2138 (based on NAIWRS)

Three Scenarios: 1997 Base – Conditions existing when goals establishedAWBA Base – Current River operations, 60th percentile Maximum Firming – Worst case scenario using AWBA Base

Water Supply and Demand StudyStudy Identified:

Number of shortages for each firming obligationFirming and shortage volumesAmount of credits remaining after firming period

Initial AnalysisAWBA Base – probability of shortage before 2022 is 6%Maximum Firming - 15.4 % chance of shortage in 2035Insufficient credits for Pima County after 2057Maximum Firming – deficit of 128KAF of credits for

Indian firming by 2091

Credit DistributionWhat is AWBA’s Role in Recovery Planning Process

4-Cent Tax Credits Distributed to CAWCD “to the extent necessary” to

meet demands of CAP M&I subcontractors during shortages or disruptions in operations of the Project

Withdrawal Fee CreditsUsed at discretion of AWBA Commission

Indian firming M&I firming Other water management objectives

Credit DistributionWorkshop with Interested Parties

Solicit input on distribution of credits during shortages

Issues Raised by ParticipantsWhat is meant by “to the extent necessary”Are recovered CAP credits considered Project waterIs equity a consideration?Perception of other states, particularly Lower BasinFocus discussion first on 4-cent tax creditsIdentify which organization is responsible for various

issues and developing potential policies

Organized Inter-agency Workgroup

Conceptual IGAAWBA Potential Policies/Rules/Statutes

Considering credit preservation when distributing AWBA credits

Limiting the amount of credits to up to 20% of the shortageUse of AWBA credits for the purpose of accruing long-term

storage credits Distribution of the credits within the AMA or County that is

being benefitedWhen to use 4¢ ad valorem tax credits vs. withdrawal fee

credits

Conceptual IGACAWCD Potential Policies/Rules/Statutes

Meeting its CAP M&I subcontractors’ full orders during a shortage event using a combination of Project Water and AWBA credits

Delivery of recovered credits as Project WaterCreation of a credit recovery scheduleRecovery agreements CAWCD may have with entities

that will be recovering credits on behalf of CAWCDManaging the shortage and distribution of supplies

Conceptual IGA

ADWR Potential Policies/Rules/StatutesDevelop credit transfer form and fees Recovery for M&I firmingUse of AWBA long-term storage creditsAnnual recovery reports long-term storage

accounting

Continuing Inter-agency Workgroup Discussions

2012 Plan of OperationProjected Deliveries

119,002 AF deliveries for storage1,000 AF Southside Replenishment BankNo Interstate storage

  Monies Collected Monies Expended

Money Available  Annual Cumulative Annual Cumulative

General Funds $0 $11,101,000 $0 $11,101,000 $0

MCWA Prepayments $26,000 $4,631,000 $26,000 $4,631,000 $0

State Indian Firming $0 $2,338,000 $0 $2,338,000 $0

Interstate - NV $1,000 $109,346,000 $0 $109,088,000 $258,000

Shortage Reparations - NV $0 $3,000,000 $0 $3,000,000 $0

Ad valorem Tax $0 $246,747,000 $13,826,000 $123,076,000 $123,672,000

Withdrawal Fees $3,118,000 $39,240,000 $2,839,000 $39,074,000 $166,000

           

TOTAL $3,145,000 $416,403,000 $16,691,000 $292,308,000 $124,096,000

Monies Collected and Expended(see page 16, Tables 1 and 2, of 2011 Annual Report)

Number and Location of Storage Credits(see page 17 and 18, Tables 3 and 4, of 2011 Annual Report)

   

LTSC Accrued

Annual Cumulative

Phoenix AMAIntrastate 61,983 1,612,603

Interstate - 51,009

Subtotal 61,983 1,663,612

Pinal AMAIntrastate 30,948 944,769

Interstate - 439,851

Subtotal 30,948 1,384,620

Tucson AMAIntrastate 34,674 540,977

Interstate - 109,791

Subtotal 34,674 650,768

All AMAsIntrastate 127,605 3,098,349

Interstate - 600,651

Grand Total 127,605 3,699,000

Location and Objective

Funding Source

Goal (AF)

Credits Accrued

(AF)

Percent Goal/Oblig. Achieved

Estimated

Remaining Costs

($ Million)

Phoenix AMA

M&I Firming Ad valorem tax 1,566,000 1,271,392 81% $44

Groundwater MgmtWithdrawal

Fees   278,253 99%  

Pinal AMA

M&I Firming Ad valorem tax 243,000 181,373 75% $5

Groundwater MgmtWithdrawal

Fees   381,796 232%  

Tucson AMA

M&I Firming Ad valorem tax 864,000 361,150 42% $21

Groundwater MgmtWithdrawal

Fees   89,952 52% $57

On-River M&I Firming General Fund 420,000 403,830 96% $2.5

Use of AWBA Credits through 2011(see page 20, Tables 5, of 2011 Annual Report – Part 1 M&I Firming)

Use of AWBA Credits through 2011(see page 20, Tables 5, of 2011 Annual Report – Part 2 Indian Firming)

Location and Objective

Goal (AF) Obligation

Non-Credit Goal/Oblig. Achieved

Credits Accrued

(AF)

Percent Goal/Oblig. Achieved

Estimated

Remaining Costs

($ Million)

GRIC Firming 350,000 up to 15,000 AF/YR   0 0% $14

Future Settlements 200,000 up to 8,724

AF/YR   0 N/A $18

Federal Assistance   $3,000,000 $3,000,000 34,102 100% $0

Southside Replenishment

Bank 

15,000 AF Direct

Delivery  3,000 20% $1.8

Location and Objective

Funding Source Goal Obligation

(AF)Non-Credit Goal/Oblig. Achieved

Credits Accrued

(AF)

Percent Goal/Oblig. Achieved

Estimated

Remaining Costs

($ Million)

Interstate Water Banking - NV

Contract with Nevada   1,250,000   600,651 48% $152

Shortage Reparation –Nevada

Gifts, Grants, Donations $8,000,000   $2,999,748 82,375 37% $5

Pinal Redirect Credits n/a        14,125   

Use of AWBA Credits through 2011(see page 20, Tables 5, of 2011 Annual Report – Part 3 Interstate Obligation)

Ten-Year Plan (2013-2022)Evaluate Ability to Meet Goals and

Obligations

Evaluate Ability to Engage in Other Banking Activities

Updated Annually Based on Current Priorities

Tool for Developing Plan of Operation and guidelines for Future AWBA Activities

AWBA – Ten-Year Plan (2013 to 2022)(see page 25, Tables 7, of 2011 Annual Report – Part 1 of 3)

YEAR

CAP Water Available for

AWBA (AF)

CAP M&I Firming (4-cent tax)

Water Management (Withdrawal Fees)

Appropriation from General Fund

Delivery (AF)

Credits (AF)

Delivery (AF)

Credits (AF)

Delivery (AF)

Credits (AF)

Pre-Plan n/a   1,899,944   534,674   403,830

2013 82,800 43,942 40,866 4,372 3,136 0 02014 78,400 42,207 39,253 4,129 2,910 0 02015 72,400 41,742 38,820 3,881 2,679 0 02016 66,500 37,340 34,727 3,753 2,560 0 02017 155,700 125,403 116,625 3,685 2,497 0 02018 154,200 124,495 115,780 3,669 2,482 0 02019 152,800 121,141 112,661 3,640 2,455 0 02020 151,300 115,316 107,244 3,611 2,429 0 02021 149,900 115,417 107,338 3,583 2,402 0 02022 148,400 115,017 106,966 3,555 2,377 0 0

TOTAL     2,720,224   560,601   403,830

AWBA – Ten-Year Plan (2013 to 2022)(see page 25, Tables 7, of 2011 Annual Report – Part 2 of 3)

YEAR

Shortage Reparations Indian($8 Million) Settlement

Delivery (AF) Credits (AF) Delivery (AF) Credits (AF)Pre-Plan   82,651   244,408

2013 9,414 8,755 25,072 23,3172014 8,845 8,226 23,150 21,5292015 5,499 5,114 21,278 19,7882016 5,287 4,917 20,119 18,7112017 0 0 21,668 20,1522018 0 0 21,660 20,1432019 0 0 21,537 20,0292020 0 0 21,415 19,9162021 0 0 21,295 19,8042022 0 0 21,175 19,693

TOTAL   109,663   447,490

AWBA – Ten-Year Plan (2013 to 2022)(see page 25, Tables 7, of 2011 Annual Report – Part 3 of 3)

YEARWater Available

(AF)

AWBA Capacity Available

(AF)Credits

(AF)ICUA

(AF)

Remaining Credits

(AF)Pre-Plan     600,651

   

2013 0 248,000 0 0 600,6512014 0 264,509 0 0 600,6512015 0 270,959 0 0 600,6512016 0 276,542 0 0 600,6512017 4,944 191,286 4,598 0 605,2492018 4,377 192,219 4,070 0 609,3192019 6,483 195,725 6,029 20,000 595,3482020 10,958 201,700 10,191 30,000 575,5392021 9,605 200,605 8,933 40,000 544,4712022 8,652 200,252 8,046 40,000 512,517

TOTAL     642,518 130,000  

AWBA % of Goals Achieved through 2022(see page 26, Tables 8, of 2011 Annual Report – Part 1 M&I Firming)

Location and Objective Funding Source

Goal (AF)

Credits Accrued (AF)

Percent Goal/Oblig. Achieved

Phoenix AMA

M&I Firming Ad valorem tax 1,566,000 2,138,563 137%

Groundwater Mgmt Withdrawal Fees   118,855  

Pinal AMA

M&I Firming Ad valorem tax 243,000 220,575 91%

Groundwater Mgmt Withdrawal Fees   216,058 180%

Tucson AMA

M&I Firming Ad valorem tax 864,000 482,665 56%

Groundwater Mgmt Withdrawal Fees   121,351 70%

On-River M&I Firming General Fund 420,000 403,830 96%

AWBA % of Goals Achieved through 2022(see page 26, Tables 8, of 2011 Annual Report – Part 2 Indian Firming)

Location and Objective

Goal

(AF)Obligation

Non-Credit Goal/Oblig. Achieved

Credits Accrued

(AF)

Percent Goal/Oblig. Achieved

GRIC Firming 350,000up to 15,000

AF/YR   350,000 100%

Future Settlements 200,000up to 8,724

AF/YR   200,000 100%

Federal Assistance   $3,000,000 $3,000,000 34,102 100%

Southside Replenishment Bank  

15,000 AF Direct

Delivery   14,000 93%

AWBA % of Goals Achieved through 2022(see page 26, Tables 8, of 2011 Annual Report – Part 3 Interstate Obligation)

Location and Objective Funding Source Goal

Obligation

(AF)

Non-Credit Goal/Oblig. Achieved

Credits Accrued

(AF)

Percent Goal/Oblig. Achieved

Interstate Water Banking - Nevada

Contract with Nevada   1,250,000   642,518 51%

Shortage Reparations-Nevada

Gifts, Grants, Donations $8,000,000   $8,000,000 109,663 100%

Pinal Redirect Credits n/a       14,125 

ConclusionsThere may not be sufficient excess CAP water to meet

the state’s obligation to Nevada.

Funding becomes a limiting factor in both Pinal and Pima Counties.

The magnitude of carryover funds in Maricopa County could become an issue in future years.

Absent future appropriations, withdrawal fees will become the principle source of funding for Indian firming.