SCR 26 Committee

Meeting

April 26, 2006

EXHIBIT C – WATER RESOURCESMeeting Date: 04-26-06Document consists of 29 slides.Entire Exhibit Provided

Introduction Situation Analysis

All statistics in this presentation are based on State Engineer’s data

• Lack of water is one of the top challenges facing our region today with both short and long-term impacts.

• Efforts to manage current water resources and procure new resources are fragmented among the different local government bodies who have been unable to agree on a centralized plan.

Situation Analysis

• Long-term litigation for those resources has forced rapidly growing areas, like Southern Nevada, to aggressively pursue water resources for importation. Their efforts are well organized, well funded and representative of the entire region, not just one government body. Make no mistake, they are coming into our backyard for water.

• Existing and planned water importation projects do not have the capacity to meet current needs or future requirements.

Situation Analysis

• Rural communities, like Fernley, are experiencing rapid growth and in many cases have overextended their commitments for service.

• The tremendous demand for water in the West has thrown potential water resources (Colorado River & Truckee River Settlement) into the courts bringing uncertainty as to if and when those resources can be accessed.

The economic vitality of our community is being challenged by the lack of available water and related cost escalation, a factor of more than 2,300%.

• 2001 Cost - $3,000 /AF• 2004 TMWA cost - $20,000

/AF• February 2005 Washoe

County sold 140 acre feet at auction for $40,400 /AF

• Private auction rates are now exceeding $70,000 /AF $-

$10

$20

$30

$40

$50

$60

$70

$80

2001 2004 2005 2006

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Situation Analysis

Situation Analysis• At this time, no one is attempting to change the way we locate and analyze new water sources.

• Ground water basin yields within the State of Nevada, in most cases, have not been updated by any State agency since the 1970’s. The advent of new technology, exploration methods, testing and new equipment now allow research to be performed to determine more accurate sustainable yields within both designated and non-designated basins.

Satellite Imagery

Aqua Trac, LLC is a company formed for the express purpose of locating, proving and developing unappropriated ground water resources within the arid basins of northern Nevada to supply the needs of our rapidly growing urban areas.

The Aqua Trac project seeks not only to prove the amount of available water in the various basins but to develop the resource and provide the required infrastructure to transport water to central distribution points at a reasonable price.

Background• Beginning in April of 2005, Aqua Trac filed numerous water rights claims in three basins in northern Nevada.

• The basins include Winnemucca Lake Valley, Granite Springs Valley and Kumiva Valley, all of which are located to the north and east of the Pyramid Lake Paiute Indian Reservation.

• None of these basins are designated as closed by the Nevada State Engineer.

Resource Availability

• The three basins identified in the Aqua Trac project are not designated, but appear by the State’s records to be totally appropriated.

• A compilation of newer data indicates that the State allocation is drastically low. A comparison of the area is shown on the following slides and indicates that even though rainfall, soil types and elevations are approximately equal, the State’s perennial yield figures in the various basins deviate by up to a factor of 40.

Annual basin yield State annual rainfall

Display Map

Prism rainfall versus state annual rainfall

Area (sq. mi)State Precip.

(in)

State annual accumulation

(Ac*ft.)

Prism annual accumulation

(Ac*ft)

Granite Springs 967 7.2 383,950 630,165Winnemucca

Lake 371 7.2 148,531 200,436

Kumiva 333 7.2 119,731 179,563

652,212 1,010,164

Difference between prism and state annual accumulation (Ac*ft) = 357,952

Accumulation ComparisonFor Granite Springs, Winnemucca Lake, and Kumiva basins

Winnemucca Lake Valley

- 370 sq. mi.- 20,000 to 30,000 ac-ft anticipated

GraniteSpringsBasin

• 970 sq. Miles

• 45,000 to 60,000 ac-ft anticipated

Project Description• 2 – 3 phases

• 50 – 125 mi. source-to-market

pipelines

• 40 production wells in 3 fields

Basin Boundaries

Winnemucca Lake

(371 sq. mi)

Kumiva (333 sq. mi)

Granite Springs

(967 sq. mi)

Phase 1 Concept• The alignments chosen to deliver water from Granite Springs and Winnemucca Lake valleys to both Fernley and northern Spanish Springs Valley near the Sparks city limits are preliminary.

• The alignments are intended to be completely within disturbed areas, thus making the project more sensitive to the environment.

Phase 1 Distribution

Concept

Goal to Deliver to Fernley/

Wadsworthby

2007-2008

Current Status• To date, 6 exploration wells have been drilled in the Winnemucca Lake - Granite Springs area.

• All 6 wells have been cased, 4 of the areas reclaimed to BLM standards, and are proposed to be used for monitoring wells during test pumping.

• Two wells in Granite Springs exhibited the potential for very high production and are currently being enlarged.

GraniteSprings1st Test Pumping

December2005

•ExceptionalWater Quality

•Transmissivityof 200,000

GPD/ft

Current Status Consensus Building

“The Pyramid Lake Paiute Tribe has been involved in the Aqua Trac project almost from its inception. We have enjoyed a constructive relationship and believe, if successful, Aqua Trac and the Tribe could finally bring consensus to what has historically been an ongoingcontentious water need issue.

We support Aqua Trac and will stay actively involved to give theproject every opportunity to find and deliver critical water resources for the long term benefit of the Tribe and our northern Nevada neighbors. Critically important to the Tribe, the Aqua Trac project could finally lessen the heavy water demand placed on the Truckee River giving us the chance to preserve one of Nevada’s most valued resources, and become the catalyst for strong economic development critical to our future.”

Norm Harry, ChairmanPyramid Lake Paiute Tribe

Consensus Building• The Tribe and their consultants continue to provide extremely valuable input as to the best and most acceptable methods to make the project a reality. They understand the necessity and the urgency of providing new resources which will lessen dependence on the Truckee River.

• Items such as easements across Tribal land will allow Aqua Trac to expedite the delivery of water to various end users.

Federal Consensus Building

•Presentations have been made to and input received from the following Federal, State, and Local entities and officials:

•United States Senator Harry Reid & Staff•United States Senator John Ensign & Staff•United States Congressman Richard Pombo•United States Bureau of Reclamation•United States Bureau of Land Management

State and Local Consensus Building

•Governor Kenny Guinn and Staff

•Office of the Nevada State Engineer

•Various Nevada State Legislators

•Reno Mayor Bob Cashell & various Councilmen

•Reno City Staff

•Sparks Mayor Geno Martini & various Councilmen

•Sparks City Staff

•Fernley Mayor Dave Stix and various Councilmen

•Washoe County Commissioners•Staff and Board Members of the Truckee

Meadows Water Authority