| ITEM #: 3. DATE: 11/02/2026 AI #:3502 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | APPROVAL OF FIRMING WATER DELIVERY AGREEMENT WITH CENTRAL ARIZONA WATER CONSERVATION DISTRICT (CAWCD) |
| STAFF PRESENTER(S): | Barbara Chappell, Water Services Director |
SUMMARY
When Colorado River water supplies delivered through the Central Arizona Project (CAP) are reduced, backup water, known as “firming water delivery”, from the Arizona Water Banking Authority (AWBA) can help cover the shortage. To secure this backup supply, the city must enter into a formal Firming Water Delivery Agreement with the Central Arizona Water Conservation District (CAWCD). This agreement sets clear guidelines for delivery obligations, operational triggers, and coordination between both parties.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
Approve the Firming Water Delivery Agreement with Central Arizona Water Conservation District (CAWCD) and provide authorization and direction to the City Manager, or designee, to take actions and execute documents necessary to carry out the intent of the agreement. (Barbara Chappell, Water Services Director)
FISCAL IMPACT
Due to ongoing shortages along the Colorado River, the city faces an annual reduction of 1,504 acre-feet (AF) of its regular Central Arizona Project (CAP) water deliveries. To replace this lost water supply volume, the CAWCD offers to recover firmed water supplies at a rate of $400 per acre-foot, resulting in a gross recovery cost of $601,600. However, because the city will not incur the standard $326 per acre-foot cost for the 1,504 AF reduction in the delivery of CAP water, the city will also have a gross operational cost savings $490,304. As a result, the net fiscal impact to the city is up to $111,296. The additional cost can be accommodated within the Water Services Department’s budget.
BACKGROUND AND PREVIOUS ACTIONS
Goodyear holds a CAP Municipal and Industrial (M&I) subcontract with the CAWCD for the delivery of Colorado River water. The AWBA was established in 1996 to store the unused portion of Arizona’s annual Colorado River entitlement in Central and Southern Arizona. The AWBA stores water in underground aquifers to earn long-term storage credits (LTSCs) to be used as a backup supply in years of Colorado River shortages. Through 2024, the AWBA has accrued 3,800,000 AF in LTSCs for CAP M&I subcontract holders and communities along the Colorado River.
Pursuant to a recently published Record of Decision (ROD) by the Bureau of Reclamation (BOR), Goodyear's allocation of CAP water under its CAP M&I Subcontract in 2027 will be reduced by 1,504 acre-feet (AF). When allocations of CAP water are cut, Goodyear and other water providers look for alternative sources of water that may be delivered using CAP facilities (Non-Project Water). The Non-Project Water sources are collectively referred to as "Firming Water" and one source of Firming Water developed by the CAWCD is an exchange of LTSCs banked by the AWBA. AWBA LTSCs may also be recovered and delivered by a water provider using the water provider’s own wells rather than through CAP facilities.
Pursuant to a recently published Record of Decision (ROD) by the Bureau of Reclamation (BOR), Goodyear's allocation of CAP water under its CAP M&I Subcontract in 2027 will be reduced by 1,504 acre-feet (AF). When allocations of CAP water are cut, Goodyear and other water providers look for alternative sources of water that may be delivered using CAP facilities (Non-Project Water). The Non-Project Water sources are collectively referred to as "Firming Water" and one source of Firming Water developed by the CAWCD is an exchange of LTSCs banked by the AWBA. AWBA LTSCs may also be recovered and delivered by a water provider using the water provider’s own wells rather than through CAP facilities.
STAFF ANALYSIS
The city’s current M&I Subcontract with CAWCD does not specify how CAWCD would recover and deliver the stored AWBA LTSCs on the city’s behalf. The Firming Water Delivery Agreement with the CAWCD (Attachment A) provides rules, operational triggers, and coordination protocols to replace portions of those supplies. Adopting the agreement provides a supplemental water supply for the city.
Some key provisions:
Some key provisions:
- Recovery options
- Dependent Recovery: CAWCD water that is stored in the CAP system and delivered through the CAP canals.
- Independent Recovery: Goodyear uses their own wells to pump AWBA LTSCs
- Exchanges with others: would require an agreement with another entity but would allow delivery via the CAP.
- Payment: The CAWCD Firming Rate is set by the CAWCD Board based on costs for developing and delivering Firming Water, including incentives, well work, wheeling fees, recovery fees, delivery, and capital needs. The Board will establish and publish the rate. Invoicing and payment will follow CAWCD’s standard procedures.
- Term of the Agreement: Agreement shall be effective when executed by the CAWCD and Goodyear and the initial term of this Agreement expires on December 31 of the year in which it is executed. This Agreement will be automatically renewed for successive one-year terms unless either party notifies the other by October 1 of any year that it does not wish to renew the Agreement for the following year.
- Water Quality: CAWCD does not warrant the quality of Firming Water delivered to Goodyear and is under no obligation to construct or furnish water treatment facilities to maintain or better the quality of any water transported through the CAP System. Goodyear assumes all responsibility for purifying or otherwise treating Firming Water received to meet applicable water quality standards.