In June, the Town of Gilbert approved a draft water lease agreement with the San Carlos Apache Tribe. Under the agreement, the town will lease up to 5,925 AF per year of the tribes Central Arizona Project (“CAP”) allocation for 100 years.
Upon execution of the agreement, the town will pay the tribe $31,208,238—which calculates to a one-time payment of approximately $5,267/AF. The town will also pay the Central Arizona Water Conservation District’s OM&R charge in accordance with their own CAP delivery contract.
In the event of a shortage, the water will retain the same priority as when it was allocated or reallocated to the tribe under the San Carlos Apache Tribe Water Rights Settlement, much of which has CAP Municipal and Industrial Priority water.
The town can use the water for any permissible use, including municipal and industrial, recharge, or underground storage, but cannot sell, sublease, transfer, or otherwise dispose of it. The town also cannot allow the water to be used for golf courses or mining.
The parties had developed a similar agreement in 2010 but were unable to move forward with it because of objections by the Bureau of Reclamation (“Reclamation”). They have been working with Reclamation since then to resolve those objections. Because of the passage of time, the town and tribe revisited pricing terms to reflect the current value of the water supply. The final agreement will incorporate terms to comply with Reclamation’s requirements.
Written by Marta L. Weismann