Title
Authorization to Enter into an Agreement with Salt River Project for Access to Water Storage Capacity (Ordinance S-44995)
Description
Request authorization for the City Manager, or his designee, to enter into an Agreement between the City of Phoenix and the Salt River Valley Water Users' Association and the Salt River Project Agricultural Improvement and Power District, also known as Salt River Project (SRP), for priority access to storage capacity in SRP's groundwater savings facility and in SRP's storage space at the Granite Reef Underground Storage Project. Further request authorization for the City Controller to disburse all funds necessary for this item.
Report
Summary
SRP owns and operates a portion of the Granite Reef Underground Storage Project (GRUSP), as well as a groundwater savings facility (SRP GSF) located within its service area. Phoenix also owns a portion of GRUSP and uses both GRUSP and the SRP GSF to store portions of its Colorado River allocation. This Agreement will give Phoenix priority access to up to 15 percent of SRP’s available capacity at GRUSP in exchange for payment of the associated operating and maintenance costs, and priority access of up to 15 percent of the SRP GSF available capacity in exchange for a reduced payment to Phoenix (in the case of GSF storage, the owner of the facility pays the water provider). This Agreement allows Phoenix to maximize the potential to store water during non-shortage years and increase stored water available to pump within the SRP service area during times of shortage.
Contract Term
The term is for 10 years effective Oct. 1, 2018, through Sept. 30, 2028, with an option to extend for an additional ten years, which may be exercised by the City Manager or his designee.
Financial Impact
The financial impact of this Agreement to Phoenix is the additional operating and maintenance costs associated with the increased use of GRUSP capacity, as well as the reduction in fees paid to Phoenix by SRP for additional storage capacity made available in the SRP GSF. Those costs are variable based on the amount of capacity Phoenix uses, but will total $1,939,620 over the 10-year contract term in the event Phoenix maximizes the use of storage capacity during each year of the Agreement. Funding is available in the Water Services Department's Capital Improvement Program budget.
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and the Water Services Department.