AWBA Purchases Long-Term Storage Credits from Tucson

The Arizona Water Banking Authority (“AWBA”) has entered into a three-year agreement with the City of Tucson to acquire up to 15,000 AF of Long-Term Storage Credits during each year of the agreement—for a total of up to 45,000 AF.

For 2015, AWBA is paying $208/AF to acquire 14,570 AF of credits accrued by recharging water at the Southern Avra Valley Recharge Project. To fund the purchase, revenues from the Central Arizona Water Conservation District (“CAWCD”) Pima County ad valorem tax will be transferred from CAWCD to AWBA.

CAWCD has been collecting the tax of four cents per $100 of assessed value (the “4-cent tax”) as authorized by state law for repayment of Central Arizona Project (“CAP”) construction costs and annual O&M costs. However, legislation passed in 2014 expanded the authorized use of the 4-cent tax revenues to include firming of M&I water supplies. Since M&I firming is AWBA’s responsibility, an intergovernmental agreement was executed between AWBA and CAWCD to guide the transfer of funds from CAWCD to AWBA to cover credit purchases of Long-Term Storage Credits for M&I firming.

The purchase agreement between AWBA and Tucson was signed in March 2015, with an effective date of February 18, 2015, and the CAWCD Board of Directors approved the transfer of funds from the 4-cent tax at its June 2015 meeting.

In addition to firming of M&I supplies, AWBA also has responsibilities to manage interstate water banking and to meet obligations to tribes, including firming Indian water supplies under various water settlement agreements and delivering water to the Southside Replenishment Bank under an agreement with the Gila River Indian Community.

 

Written by Marta L. Weismann