| ITEM #: 8. DATE: 12/05/2022 AI #:1190 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | INTERGOVERNMENTAL AGREEMENT BETWEEN THE ARIZONA WATER BANKING AUTHORITY AND CITY OF GOODYEAR FOR M&I FIRMING |
| STAFF PRESENTER(S): | Ray Diaz, Water Resources & Sustainability Manager |
SUMMARY
The Arizona Water Banking Authority (AWBA) has stored long-term storage credits (LTSC) intended to be distributed to the Central Arizona Water Conservation District (CAP) or its Municipal and Industrial (M&I) subcontractors when necessary to meet water demands during times in which CAP water has been or will be disrupted by shortages along the Colorado River. The AWBA long-term storage credits can be used by M&I subcontractors to offset any reductions in CAP water supplies.
Recommendation
Approve and authorize the city manager to execute the IGA between the Arizona Water Banking Authority and the city of Goodyear. (Ray Diaz, Water Resources & Sustainability Manager)
FISCAL IMPACT
There is no cost to the city to enter into the IGA; however, the city of Goodyear would be responsible for all costs associated with any credits obtained from AWBA. Costs would include ADWR ground water pump tax ($3.25/af), ADWR recovery fee ($1.00/af) and depending upon whether the city uses the credits to support additional ground water pumping (no SRP wheeling fee) or to take delivery of physical water supplies (our current SRP wheeling fees of $69.42/af). In addition, the City would be responsible for any administrative fees established by ADWR to effectuate the assignment of the credits; however, to date, no such fee has been adopted. The amount would vary depending on the credits obtained and there is no charge if we do not obtain any credits from AWBA.
BACKGROUND AND PREVIOUS ACTIONS
Over the years the Arizona Water Banking Authority has stored excess CAP water that was not allocated to any user. This water has been stored at various CAP and SRP facilities across the state, with the intent to be distributed in times of drought. The regional southwest has been under a severe drought for over the last twenty years. As a result, the Colorado River and its reservoirs have seen a dramatic decline in water levels. Increased monitoring and proactive measures are underway to stabilize the overall system. Despite these efforts, however, potential impacts to CAP supplies are very high due to the continued degradation of the regional hydrology.
Falling water levels within Lake Mead and Lake Powell subject lower basin states like Arizona, to reductions in Colorado River water supplies. The system is currently under a Tier 2a shortage declaration. A Tier 2a does not have a direct impact on the city of Goodyear’s CAP allocation. However, should the conditions continue to decline and the hydrology worsen, a Tier 3 declaration could be implemented as early as midyear 2023. In a Tier 3 water shortage declaration, Goodyear would see a 10% - 15% reduction in CAP supplies.
To help mitigate the impacts to CAP subcontractors, long-term storage credits would be available to the city from the AWBA to offset any reductions in its CAP water supply. The credits available to the city can be used to support additional ground water pumping or the city can use them to take delivery of water being stored at the CAP or SRP Facilities. The IGA is needed to allow easy transfer of those credits between the city and the AWBA that will allow the city to increase its ground water pumping or to take delivery of water being stored by AWBA.
Falling water levels within Lake Mead and Lake Powell subject lower basin states like Arizona, to reductions in Colorado River water supplies. The system is currently under a Tier 2a shortage declaration. A Tier 2a does not have a direct impact on the city of Goodyear’s CAP allocation. However, should the conditions continue to decline and the hydrology worsen, a Tier 3 declaration could be implemented as early as midyear 2023. In a Tier 3 water shortage declaration, Goodyear would see a 10% - 15% reduction in CAP supplies.
To help mitigate the impacts to CAP subcontractors, long-term storage credits would be available to the city from the AWBA to offset any reductions in its CAP water supply. The credits available to the city can be used to support additional ground water pumping or the city can use them to take delivery of water being stored at the CAP or SRP Facilities. The IGA is needed to allow easy transfer of those credits between the city and the AWBA that will allow the city to increase its ground water pumping or to take delivery of water being stored by AWBA.
STAFF ANALYSIS
The city of Goodyear currently has a robust water portfolio. Our ability to provide both groundwater and surface water puts the city in a great position to manage any foreseeable impacts of the current drought. Having the ability to acquire LTSC from the AWBA allows greater flexibility for the city and it further enhances its capability to serve water to its customers without disruption.