Title
Salt River Valley Water Users' Association and Salt River Project Agricultural Improvement and Power District Well Capacity Agreement (Ordinance S-44332)
Description
Request authorization for the City Manager, or his designee, to enter into an agreement with the Salt River Valley Water Users' Association and the Salt River Project Agricultural Improvement and Power District (SRP) for use of SRP groundwater wells for a total not to exceed $12,300,000. Further request authorization for the City Controller to disburse all funds related to this item.
Report
Summary
The Water Services Department (WSD) continues to undertake efforts to ensure reliable water deliveries during extreme drought and shortage conditions on the Colorado River. WSD will secure the rights to use SRP groundwater wells to recover long-term storage credits that Phoenix has stored within the SRP system. During the term of the agreement SRP shall provide Phoenix up to a maximum of 20,000 acre-feet of water per year pumped from SRP's wells located within the Salt River Reservoir District. The legal nature of the pumped water shall be long-term storage credits owned by Phoenix created from storage of water within the Salt River Reservoir District. Phoenix shall be entitled to use such water anywhere within its water service area. Phoenix shall pay SRP a one-time fee of $12,300,000 for reservation of pumping capacity in SRP's wells. In addition, Phoenix shall pay SRP $55.82 for each acre-foot up to 100,000 acre-feet and $151.17 for each acre-foot above 100,000 acre-feet pumped by SRP for Phoenix during the term of the agreement. Such prices shall be adjusted annually for inflation.
Contract Term
The term of this agreement shall begin on July 1, 2018, and shall be for 40 years.
Financial Impact
The initial cost to the City of Phoenix to fund this agreement is $12,300,000. Funding is available in the Water Services Capital Improvement Program budget. Payments may be made up to the agreement limits for all rendered services, which may extend past the agreement termination. Additional spending authority will be sought in the future to cover per-acre-foot pumping charges during years in which WSD intends to employ SRP's pumping capacity under this agreement.
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and the Water Services Department.