Title
Authorization to Enter into an Intergovernmental Agreement with the Arizona Water Banking Authority for Firming of Central Arizona Project Municipal and Industrial Water Supplies (Ordinance S-48786)
Description
Request to authorize the City Manager, or his designee, to enter into an Intergovernmental Agreement with the Arizona Water Banking Authority for firming (providing replacement supplies) of the City's Colorado River Central Arizona Project municipal and industrial water supplies during times of shortage through assignment to the City of long-term storage credits held by the Arizona Water Banking Authority.
Report
Summary
The Central Arizona Water Conservation District's (CAWCD) diversions from the Colorado River are subject to reductions during times of shortage on the Colorado River. In 2022, the United States Bureau of Reclamation declared a shortage on the Colorado River for the first time. Although that declaration did not impact the City's Colorado River Central Arizona Project Municipal and Industrial (CAP M&I) water supplies, further reductions could impact those supplies.
The Arizona Water Banking Authority (AWBA) has accrued or acquired long-term storage credits that are intended to be distributed to CAWCD or to M&I subcontractors, "…to the extent necessary to meet the demands of M&I subcontractors during times in which CAWCD's diversion from the Colorado river have been or will be disrupted by shortages on the Colorado river or by disruptions in operation of the Colorado River Central Arizona Project (CAP)…" pursuant to Arizona Revised Statutes section 45-2457(B)(7).
On March 4, 2019, the AWBA adopted the AWBA Policy Regarding the Distribution of Long-term Storage Credits for Firming CAP M&I Subcontractors to implement distribution of its long-term storage credits to offset shortages of CAP M&I water during operation of the Drought Contingency Plan (DCP). Through 2026, the AWBA will distribute long-term storage credits to meet all reductions to CAP M&I subcontractors for scheduled M&I Priority water due to shortage reductions or required DCP Contributions.
In order to access credits through AWBA, M&I subcontractors, including the City of Phoenix, must enter into a firming agreement with the AWBA to request a direct transfer of AWBA Credits for firming purposes pursuant to A.R.S. section 45-2457(B)(7).
Procurement Information
In accordance with the City of Phoenix Administrative Regulation 3.10, procurement did not occur since the City is not procuring goods and services for any consideration. Its participation will come at no cost to the City.
Contract Term
This agreement shall commence on the date of execution by all parties and continue in full force and effect until Dec. 31, 2026, unless it is terminated prior to this date due to default.
Financial Impact
There are no funds required for this Intergovernmental Agreement (IGA) as the City will absorb all costs related to accessing long term storage credits distributed through the AWBA.
Concurrence/Previous Council Action
The City Council approved:
- DCP IGAs (Ordinance S-45412) on Feb. 20, 2019; and
- DCP IGAs - Amendment (Ordinance S-45747) on June 5, 2019.
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and the Water Services Department.