In July 2016, the Gila River Indian Community (“GRIC”) and the City of Chandler executed four interrelated agreements that will provide the city with a sustainable water supply to meet demand projections at build-out. The agreements include a purchase of long-term storage credits (“LTSC”), a 100-year lease of Indian Priority Central Arizona Project (“CAP”) water, a 100-year reclaimed water exchange and a contributed funds agreement.
Under the LTSC purchase agreement, Chandler is acquiring 25,000 AF of LTSC in the Phoenix Active Management Area (“AMA”) at a price of $396/AF. Payments and transfer of the credits is scheduled to occur over four years—353 AF in 2016, 1,515 AF each in 2017 and 2018 and the remaining 21,617 AF in 2019. Chandler is also purchasing 125,000 AF of LTSC in the Pinal AMA, which will be exchanged for CAP water under the interrelated lease agreement. Payments for the Pinal AMA LTSC will be $196/AF for 35,000 AF and $220/AF for the remaining 90,000 AF over the three-year period from 2016 to 2018. Transfers of LTSC must be approved by the Arizona Department of Water Resources.
Under the 100-year lease agreement, Chandler will acquire 2,450 AF/year Indian Priority CAP water. The city will pay a total of $4.56 million for 1,200 AF/year. The city will acquire the remaining 1,250 AF/year (or 125,000 AF over the term of the lease) in exchange for the Pinal AMA LTSC acquired under the LTSC purchase agreement.
Under the reclaimed water agreement, the city will provide GRIC with 4,400 AF/year of reclaimed water and will receive 0.8 AF of CAP water for each acre-foot of reclaimed water—for total of 3,520 AF/year of CAP water.
The CAP water provided under these agreements will come from the 311,500 AF allocated to GRIC under the Arizona Water Settlements Act. The agreements involving CAP water require approval by the U.S. Bureau of Reclamation. Chandler will pay any Operation, Maintenance and Repair (“OM&R”) fees assessed by the project operator (currently the Central Arizona Water Conservation District).
The contributed funds agreement is designed to help GRIC develop infrastructure on its reservation to recover the Pinal AMA LTSC and to utilize the reclaimed water. Chandler will provide $1.74 million toward those infrastructure costs, and GRIC will be solely responsible for developing the necessary infrastructure.
Written by Marta L. Weismann