Title
Agreement with Central Arizona Water Conservation District and Others to Participate in the Colorado River 500+ Plan (Ordinance S-48254)
Description
Request to authorize the City Manager, or his designee, to enter into an agreement with the Central Arizona Water Conservation District to forgo delivery of a volume of Phoenix's Colorado River entitlement in 2022, as system conservation, in return for compensation. Further request to authorize the City Treasurer to accept all funds related to this item for a creation of a water conservation fund within the Water Services Department. The compensation will not exceed $4,163,765.97.
Report
Summary
Conditions on the Colorado River system have not improved since the briefing at the City Council's June 8, 2021 Policy Session. Based on recent modeling on the Colorado River, the U.S. Bureau of Reclamation and the Lower Basin states of Arizona, California and Nevada have determined there is an unacceptable risk of the water volumes in Lake Mead dropping below the elevation of 1,030 feet before 2026, despite delivery reductions agreed to in the Lower Basin Drought Contingency Plan. The Lower Basin States and the Bureau of Reclamation have determined that it will require an additional 500,000 acre-feet (af) reduction in deliveries from Lake Mead each year through 2026 to feasibly protect Lake Mead from catastrophic risk.
The Lower Basin States have developed a plan (called the 500+ Plan) to request individual Colorado River users in the Lower Basin states to voluntarily contribute a combined 500,000 acre-feet (af) each year from 2022 through 2026 to leave in Lake Mead. Because the proposed contributions would be compensated at the rate of $260.60/af, the plan also requires funding of $100 million each year. These reduced deliveries are in addition to the reductions in deliveries Arizona agreed to in the Drought Contingency Plan. The target volumes for the 500+ Plan in 2022 are 223,000 af from Arizona, 215,000 af from California and 62,000 af from Bureau of Reclamation.
Presumably, similar volumes would be sought in subsequent years through 2026. The State of Arizona has already committed funding in the amount of $40 million in 2022, and it is expected that the major water agencies with taxing authority in each state will contribute the remainder of the funding. Those agencies are the Central Arizona Water Conservation District, the Metropolitan Water District of Southern California and the Southern Nevada Water Authority.
In 2022, Phoenix is scheduled to receive its total Colorado River allocation of 186,557 af. That includes 15,977 af of "mitigation water" under the Arizona Drought Contingency Plan implementation agreement. This "mitigation water" is Non-Indian Agricultural (NIA) Priority water that would have otherwise been unavailable to Phoenix without the mitigation measures taken by Arizona to deliver water from reserves in Lake Mead. Moreover, if Phoenix forgoes delivery of the NIA mitigation water, that volume of water will remain in Lake Mead. Currently, if Phoenix receives the mitigation water in 2022, the plan is to store it in Tucson for future shortage conditions. If Phoenix chooses to forgo delivery of the NIA mitigation water, it will still be storing more than 26,000 af in Tucson.
Contract Term
This agreement will terminate on Dec. 31, 2026. While Phoenix is agreeing to forbear delivery of water in 2022, the Agreement will include options for additional forbearance through 2026. City Council approval will be required for each year Phoenix agrees to forbear water in the 500+ Plan.
Financial Impact
Phoenix will receive compensation in the amount of $4,163,765.97 for a contribution of 15,977 af ($260.61/af). The funds will come from Central Arizona Water Conservation District. The funds will be used to promote water conservation and implement water conservation programs.
Location
Out of City
Department
This item is submitted by Deputy City Manager Karen Peters and the Water Services Department.