FINAL MEETING MINUTES

AUTHORITY MEMBERS
Rita P. Pearson, Chairman
Tom Griffin, Vice-Chairman
Bill Chase, Secretary
Grady Gammage, Jr.
Richard S. Walden

EX OFFICIO MEMBERS
Senator Pat Conner
Rep. Gail Griffin

Welcome / Opening Remarks

Vice Chairman, Tom Griffin chaired the meeting in Chairman Pearson’s absence. All other Water Banking Authority members (Authority) were present except the two ex officio members.

Adoption of Minutes of July 15 Minutes

The July 15 minutes were adopted as submitted.

Discussion of the 1998 Annual Plan of Operation and Staff Activities

Tim Henley, Manager of the Arizona Water Banking Authority (AWBA), discussed operation of the AWBA and monthly water deliveries for July. Mr. Henley explained that July deliveries were low (around 9800 af) due to a number of circumstances, mostly financial considerations and wet weather conditions. The AWBA has been informed that RWCD will not take any AWBA water for the rest of 1998. MWD may begin in-lieu recharge with the cities, and the AWBA may need to give up some MWD storage capacity. Tonopah Irrigation District will not be using the AWBA water it planned for the remainder of 1998. Several months of low deliveries combined with some irrigation districts’ decision to rely on groundwater make it unlikely that the AWBA will meet its recharge goals for 1998. Mr. Henley stated that he will continue to work to develop other potential partners.

Mr. Henley explained that the purpose for creating the AWBA was to maximize Arizona’s use of its 2.8 million acre foot allotment of CAP water, and the AWBA should not impede efforts to accomplish this goal by other methods (e.g., if irrigation districts or cities find ways to accomplish this goals without the direct involvement of the AWBA). The public policy of the state can still be served even if the AWBA falls below its goals for one year. Some additional recharge may result from increased GRUSP deliveries and deliveries to the Pima Mine Road USF in the Tucson AMA. In addition, the AWBA is currently holding meetings with other potential partners: Vicksburg Farms and Vidler Water Company.

Other Issues

Kim Kunasek of the AWBA stated that she was informed that Judge Carroll has accepted the Report and Recommendation of the Special Master to deny the U.S. Bureau of Reclamation’s (Bureau) motion to amend their counterclaim to include counts that pertain to the AWBA, specifically that the CAWCD was not legally entitled to sell its excess water to the AWBA. Larry Dozier explained that the first phase of the trial has concluded and that Judge Carroll will probably rule on the issues from the first phase of the trial before proceeding to the second phase. Phase II of the trial is scheduled to begin in October.

Grady Gammage, Jr., President of the CAWCD Board, explained that the State is waiting for the Interior Department’s response to the State’s last proposal on Indian water settlements. The Department is formulating a response that will address Gila River claims settlements.

The Gila River Indian Community claims are being actively negotiated. The federal government (in trust relationship with Indian communities) may respond to the most recent State offer in early September. The CAWCD-USBR lawsuit settlement negotiations are unlikely to proceed without a resolution of the Gila issues.

4¢ Tax Revenues

The CAWCD has formally notified the AWBA that it will make funds collected from the 4¢ ad valorem tax available to the AWBA.

Update on the Draft Facilities Plan

Mr. Henley walked the AWBA members through the Facility Plan for the Tucson AMA. AWBA staff will present the plan at the Tucson GUAC meeting on September 3 as part of the public notice process that is required by law. Mr. Henley stated he is hoping that the Plan will be approved at the upcoming AWBA meeting in September.

Mr. Henley explained that the AWBA does not need to investigate new facilities. Rather, the AWBA needs increased capacity at existing or planned facilities. Over the next few years, there will not be much opportunity for expanded capacity, but the availability will pick up over the next 5 -10 years, enabling the AWBA to firm approximately 350,000 acre feet over a ten-year period. The AWBA may need to request additional general fund monies from the Legislature in the future.

Mr. Henley explained that in addition to the facilities identified in the draft Plan, several additional facilities could be available with appropriate agreements. The Cañada del Oro facility could be available for interstate banking after the year 2005, and the San Xavier Arroyos, the Santa Cruz River, and the Pascua Yaqui sites could be used for Indian water rights settlements. By 2002 an additional 65,000 af per year could be available to the AWBA. This capacity will most likely exceed the AWBA’s funding capability for the Tucson area even if additional general funds are made available.

Update on CAWCD Facilities and Agreements

Mr. Henley reported that the Pima Mine Road (PMR) facility is recharging water more quickly than expected. The AWBA would like to recharge water at PMR by mid-September. PMR will charge the AWBA $10 per acre foot, which the AWBA staff believes is a good rate. The AWBA staff will seek approval from the Department of Administration’s Risk Management Division for an indemnity provision contained in the PMR and Avra Valley Recharge Project draft agreements. The indemnity provision concerns the state’s liability for any damage that arises out of commingling CAP water and groundwater. The agreement will be presented for formal approval at the September CAWCD Board meeting.

The Authority approved the agreements for Chairman Pearson’s signature contingent upon approval from Risk Management and by the CAWCD Board.

Update on Study Commission Activities

Mr. Henley summarized the recent Study Commission activities. The full Study Commission met on July 30 and reviewed the findings of two subcommittees (Interstate/Intrastate Marketing and Banking and Benefits Outside CAP Service Area). The Commission has begun drafting the final recommendations and plans to meet again on August 25 to consider some of the Indian Issues and the Finance & Tax Subcommittee issues. The Commission plans to have a draft ready in late September and to finalize the report by mid-October for November submission to the Legislature. The Study Commission will recommend certain statutory changes that will give the AWBA added responsibilities.

Update on Interstate Discussions

Federal Rule Governing Interstate Water Banking

The federal rule governing interstate water banking has not yet been released. The rule was to have been finalized prior to the next water operating year, but that may not happen. The Department of the Interior plans to release the final rule some time in the next few weeks.

Once the rule is published in final form in the Federal Register, the Congress cannot modify or amend it. Congress has the option of suggesting that the rule not be implemented.

If the rule is implemented, the AWBA would like Nevada to bring a proposed water storage agreement to an upcoming AWBA meeting. Mr. Henley hopes to see the negotiation process start in October with Nevada.

“4.4 Plan”

California is working toward finalizing the so-called “4.4 Plan.” Major financial issues are involved, including a $1 billion bond issue to help restore the Delta and to encourage more recharge and improve infrastructure. Some related agreements include a deal between San Diego County Water Authority and the Imperial Irrigation District to deliver 300,000 af of conserved agricultural water annually to San Diego County. Water watchers expect the bond issue to pass in the November election. Dennis Rule expressed some concern about the provision in the SDCWA-IID agreement that requires the USBR to guarantee a “full aqueduct” for 15 years.

Call to the Public

The next meetings are scheduled for September 16 and October 21. The meeting was adjourned at 10:45 a.m.