Arizona Municipal Water Users Association

Transcription

1 Public Notice Pursuant to A.R.S ARIZONA MUNICIPAL WATER USERS ASSOCIATION BOARD OF DIRECTORS A. Call to Order MEETING NOTICE AND AGENDA Thursday, April 26, :00 a.m. Arizona Municipal Water Users Association Board Conference Room 3003 North Central Avenue, Suite 1550 Phoenix, Arizona B. General Business Items for Discussion and Possible Action 1. Approval of the Minutes from the March 22, 2018 Meeting 2. Schedule Next Meeting Date: Thursday, May 24, 2018, 11:00 a.m Legislative Update 4. Update on Water Quality Standards for Non-Project Water 5. AMWUA Fiscal Year 2019 Preliminary Draft Budget C. Executive Director s Report D. Future Agenda Items E. Adjournment *The order of the agenda may be altered or changed by the AMWUA Board of Directors. More information about AMWUA public meetings is available in the AMWUA office, online at or by request. Arizona Municipal Water Users Association 3003 North Central Avenue, Suite 1550, Phoenix, Arizona (602) amwua.org

2 AGENDA ITEM #1 BOARD OF DIRECTORS MEETING MINUTES March 22, 2018 VOTING MEMBERS PRESENT Mayor Jim Lane, President, Scottsdale Councilmember Eddie Cook, Gilbert, via teleconference Councilmember Lauren Kuby, Tempe Councilmember René Lopez, Chandler Councilmember Joanne Osborne, Goodyear Councilmember Kevin Thompson, Mesa Councilmember Bart Turner, Glendale Councilwoman Thelda Williams, Phoenix VOTING MEMBERS NOT PRESENT EXCUSED Mayor Cathy Carlat, Peoria Councilmember Pat Dennis, Avondale OTHERS PRESENT Cindy Blackmore, Avondale Alan Dulaney, Peoria Javier Setovich, Goodyear Jessica Blazina, Avondale Kathy Ferris, AMWUA Tony Staffaroni, CAP Rob Bohr, Goodyear Sam Jaskolski, AMWUA Drew Swieczkowski, Glendale Eric Braun, Gilbert Brian Payne, AMWUA Warren Tenney, AMWUA Cynthia Campbell, Phoenix Stuart Peckham, SRP Carol Ward-Morris, AMWUA Gregg Capps, Chandler Diana Piña, AMWUA A. Call to Order Mayor Lane called the meeting to order at 10:08 a.m. B. General Business Items for Discussion and Possible Action 1. Approval of the Minutes from the February 22, 2018 Meeting Upon a motion by Councilmember Thompson and a second by Councilwoman Williams, the AMWUA Board of Directors unanimously approved the February 22, 2018 meeting minutes.

3 2. Next meeting scheduled: Thursday, April 26, 2018, 11:00 a.m., at the AMWUA office Legislative Update Mr. Tenney reported that today is the last day for bills to be heard in committee, so Mr. Aarons and Ms. Ulmer are currently at the Legislature juggling a number of activities. Mr. Tenney stated that AMWUA s expectations for any significant water legislation to pass are low. He said only a few bills are moving forward and they would most likely receive a veto, if passed. He reported that SB 1507 failed to pass the Senate two weeks ago, while HB 2512 passed the House as amended and was heard in Senator Griffin s committee this week. Mr. Tenney reported that there is a last-minute push to address the Central Arizona Water Conservation District s (CAWCD) claim to sovereign immunity. He said last April, the AMWUA Board took a position against CAWCD s claim to sovereign immunity when it was exerted in their lawsuit against the Ak-Chin Tribe. Last month, CAWCD filed a motion to vacate a previous decision against their claim to sovereign immunity. Mr. Tenney stated that this action raised concerns about CAWCD s determination to ensure they have sovereign immunity. He added that the Yuma region is concerned about CAWCD s claim and is pushing for legislation. He said AMWUA has also voiced support for such legislation; however, he cautioned that what could be bargained for in order to pass the legislation could be of concern, such as adequate water supply legislation dealing with Sierra Vista being attached to sovereign immunity legislation. Mr. Tenney stated that Representative Bowers and Senator Griffin are asking for input on water issues from different regions of the State. He reported that the first meeting was held two weeks ago in Casa Grande and another hearing will be held tomorrow in Yuma. He said the primary issue discussed at the Casa Grande meeting was extinguishment credits. He noted that the Governor approved a rulemaking exemption, so the Arizona Department of Water Resources (ADWR) can address the issue of Pinal Active Management Area (AMA) extinguishment credits, which may affect legislation. Mr. Tenney said Pinal Agriculture interests continued to state their need for mitigation if the Drought Contingency Plan (DCP) is enacted and their belief that the cities and tribes should provide money and/or water to keep agriculture from being cut. He also stated that while wanting mitigation, Pinal Agriculture also continues to voice opposition to the State pursuing its own conservation program for Lake Mead. He noted that based on those comments, AMWUA may want to more clearly explain to policymakers how AMWUA cities are fully utilizing their water resources, and the importance policymakers hold in planning for our future. Regarding CAWCD and its motion last month to vacate a previous decision against their claim to sovereign immunity, Mr. Tenney and Mayor Lane discussed that CAWCD is not March 22, 2018 AMWUA Board of Directors Meeting Minutes Page 2 of 6

4 wavering from their stance and want to have the option to assert sovereign immunity in future legal cases. Mayor Lane asked if it is too late for language on this issue to be put together for legislative consideration. Mr. Tenney said there is a strong effort by the Governor s Office, Mohave and Yuma Counties, the tribes, AMWUA, and others to find a vehicle bill that could address the issue of sovereign immunity. Ms. Ferris added that ADWR filed a petition with the court to file an amicus brief objecting to CAWCD s efforts to vacate the lower court ruling. She said although the lower court ruling does not have the same standing of an appellate court ruling, district court decisions have been used as precedent in other cases. Councilmember Osborne expressed disappointment that AMWUA s top concerns have not been addressed in this legislative session, and concern about AMWUA s voice being heard and if AMWUA s stances need to be more proactive. Councilmember Kuby appreciated Councilmember Osborne s comments and said AMWUA s approach needs to be more proactive with long-term vision. Mayor Lane agreed to an extent, noting AMWUA s concern over the years about crossing the line of political issues. Councilmember Turner questioned if the individual AMWUA cities intergov staffs are being utilized on water issues. He suggested that between now and the next legislative session, AMWUA look at a strategy that better incorporates the cities intergov staffs and that the cities intergov staffs actively support AMWUA s positions. Mr. Tenney noted that AMWUA attempted to better coordinate with the cities intergov staffs this session by having meetings, starting back in November He added that AMWUA has developed and shared talking points with the cities intergov staffs as the session progressed. Mr. Tenney agreed that it is important to use the entire team. Councilmember Osborne echoed Mr. Tenney s statement about using the entire team and said her city staff would like to help and be involved in the efforts. Councilwoman Williams commented that this year was unique due to all of the hearings and the Governor s Office not coming through as expected. She said the City of Phoenix s intergov staff has worked closely with AMWUA and has tried to get the Governor s Office more active and supportive. She stated that we should take this year as a learning lesson and be prepared next year. Councilwoman Williams also reported that the City of Phoenix s Water Services Director, Kathryn Sorensen, is currently testifying at a hearing with Senator Flake in Washington, DC, talking about the importance of water in Arizona. Councilmember Turner noted that AMWUA s water issues are not high on Glendale s legislative priorities. He said perhaps thought should be given on how to ensure that the water package is a priority on the legislative agenda for each city. Mayor Lane agreed. Councilmember Lopez stated that he appreciated when Mr. Tenney went around to each of the AMWUA cities and sat down with staff to get a pulse and learn about their concerns. He said he hopes Mr. Tenney will continue that practice to ensure cohesiveness. March 22, 2018 AMWUA Board of Directors Meeting Minutes Page 3 of 6

5 4. AMWUA Annual Action Plan Mr. Tenney stated that because AMWUA s current annual action plan is still relevant, AMWUA is presenting an updated version for Fiscal Year He said AMWUA received feedback from the Water Resources Advisory Group (WRAG) and the AMWUA Management Board. He noted that at its March 14 th meeting, the AMWUA Management Board recommended that the AMWUA Board of Directors approve the annual action plan. Mr. Tenney detailed that the annual action plan alphabetically highlights thirteen areas of focus with the knowledge that priorities will be adjusted accordingly as other issues arise throughout the year, just as the Governor s Water Solutions Conversation did this year. The areas of focus include: Adjudication, Augmentation, Central Arizona Groundwater Replenishment District (CAGRD), Colorado River Drought & Shortage, Demand Management & Sustainability, Finances & Water, 4 th Management Plan, Legislation, Regional Recharge Efforts, Recovery Implementation Plan, System Use Agreement, and Water Reuse Rules. Councilmember Thompson voiced appreciation for the annual action plan being proactive rather than re-active and getting AMWUA in front of the issues. He added that the proactive approach gives the cities confidence knowing that their policies will be proactive for years to come. Mayor Lane asked if AMWUA s Legislative Contractors need any additional direction on the issue of CAWCD and sovereign immunity. Mr. Tenney and Ms. Ferris discussed that AMWUA has been pursuing the CAWCD sovereign immunity issue based on the AMWUA Board of Directors April 2017 motion to send the CAWCD Board members a letter urging the CAWCD to refrain from asserting it has sovereign immunity. Ms. Ferris noted that roughly three years ago, the AMWUA Board approved a legislative policy in which the AMWUA Executive Director and Legislative Contractor may act in accordance with the AMWUA Board s position unless and until the AMWUA Board changes that position. Councilmember Lopez asked if there is anything that the AMWUA Board members can do in regard to engaging with their local legislators for additional voices to help move this issue along. Mayor Lane and Mr. Tenney agreed that it would be helpful for the AMWUA Board members to reach out to their local legislators. Councilmember Osborne said it would be helpful to give each of the cities councilmembers clear statements of AMWUA s legislative positions. Mayor Lane echoed Councilmember Osborne s comment. Upon a motion by Councilmember Kuby and a second by Councilmember Thompson, the AMWUA Board of Directors unanimously approved the annual action plan through Fiscal Year The order of the agenda was altered by the AMWUA Board of Directors March 22, 2018 AMWUA Board of Directors Meeting Minutes Page 4 of 6

6 5. Analysis of Water Transfers This agenda item was tabled due to time constraints. C. Executive Director s Report Mr. Tenney reported that yesterday, the WRAG had an informational discussion with Bruce Hallin, the Salt River Project s (SRP) Director for Water Supply, and his staff who reviewed the water situation, flowtography update, groundwater well development and recharge, and forest initiatives. He also said based on the dry winter, SRP is preparing its spring messaging campaign about water and plans to coordinate with the cities. Mr. Tenney said AMWUA has issued a request for proposals seeking a new financial and accounting consultant for the Association. He noted that proposals are due March 30 th and that AMWUA has worked with the AMWUA Management Board and AMWUA Finance Group to locate firms or individuals to send the request to. Mr. Tenney announced that today is World Water Day and this week is Fix a Leak Week. D. Future Agenda Items Councilmember Kuby stated that she met with Mary Ann Dickinson of the Alliance for Water Efficiency (AWE) and the City of Tempe is considering membership. She is intrigued by AWE s assistance in messaging, particularly customized videos for communicating with residents about their city s water rate policy. She said this topic does not have to be an agenda item, but it would be good if information about AWE membership was distributed to the entire AMWUA Board. Mr. Tenney said Carol Ward-Morris serves on the AWE Board, and AMWUA would be happy to provide information and have a discussion on the topic. E. Executive Session Pursuant to A.R.S. Section A.1 and upon a motion by Councilmember Lopez and a second by Councilmember Thompson, the AMWUA Board of Directors unanimously voted to convene in Executive Session to discuss the annual evaluation of the AMWUA Executive Director. F. Consideration of Action Pursuant to Executive Session Pursuant to the discussion in Executive Session and upon a motion by Mayor Lane and a second by Councilmember Lopez, the AMWUA Board of Directors unanimously voted to increase Mr. Tenney s annual salary by 4%. March 22, 2018 AMWUA Board of Directors Meeting Minutes Page 5 of 6

7 G. Adjournment Upon a motion by Councilwoman Williams and a second by Councilmember Thompson, Mayor Lane unanimously adjourned the meeting at 11:41 a.m. March 22, 2018 AMWUA Board of Directors Meeting Minutes Page 6 of 6

8 AGENDA ITEM # Legislative Update STRATEGIC PLAN REFERENCE BOARD OF DIRECTORS INFORMATION SUMMARY April 26, 2018 Objectives Safeguard Water Supplies; Reinforce Groundwater Management; Prepare for Impacts of Drought & Shortage; Augment Supplies; Elevate the Benefit of Water Reuse; Minimize Financial Impacts Collaboration Legislature; Arizona Department of Water Resources; Salt River Project; Central Arizona Project; Water Community SUMMARY The Legislature has largely moved from hearing bills in committees to having the full House or Senate consider bills. Furthermore, the Legislature is moving through the budget development phase of the session. To date, there have been no significant developments for moving forward water legislation this session. The Governor s Office and the Arizona Department of Water Resources (ADWR) have placed renewed focus on addressing the Central Arizona Water Conservation District s (CAWCD) claim to sovereign immunity through legislation, but at the present time it is unclear how they will move legislation forward. With respect to the State s forbearance proposal, Legislative Council recently issued a legal opinion that argued the State s forbearance proposal would violate federal law. Subsequently, ADWR issued its own legal opinion arguing that the State s forbearance proposal is in fact legal. The effect of these opinions is unclear. However, the resulting confusion probably decreases the likelihood of the Legislature addressing Colorado River water issues this session. RECOMMENDATION It is recommended that the AMWUA Board of Directors discuss and ask questions regarding legislation impacting AMWUA s members. Depending on legislative developments before the April 26, 2018 meeting, the Board may be asked to take further action.

9 Key Water Legislation SB 1507 & HB 2512: Water program amendments (Griffin, Bowers). As amended, the most substantive portions of these omnibus water bills do the following: (1) Requires the ADWR Director to prepare a desalination action plan and present it to key state leaders; (2) Requires notification of key legislative leaders when ADWR receives an application to transfer water out of State, whether it be surface water, groundwater, or other water; (3) Allows persons holding a certificate of irrigation grandfathered right to exercise that right to withdraw groundwater for containerized plants; (4) Provides detailed criteria for the ADWR Director to calculate the volume of extinguishment credits for the extinguishment of grandfathered rights in the Pinal Active Management Area (AMA); (5) Creates an additional 10-year active management plan the Sixth Management Plan from 2025 to 2035; (6) Places oversight of the Division of Natural Resource Conservation in the Arizona Department of Forestry and Fire Management; (7) Allows the board of supervisors in a non-ama county that has adopted a mandatory 100-year adequate water supply requirement to vote unanimously to not readopt the requirement. At the present time, the Senate version of this bill has stalled. The House version of the bill has passed the House, moved through the relevant Senate committees, but the full Senate has not voted on the bill. AMWUA Position: Oppose SB 1507, HB 2512, and the related individual component bills. As these bills move forward, AMWUA recommends supporting ADWR s position unless it negatively impacts AMWUA members. SB 1508 & HB 2551: Water; desalination action plan (Griffin, Bowers). As introduced, these bills require the ADWR Director to prepare a desalination action plan that, among other things, considers costs of brackish water treatment, and identifies areas of the State where brackish groundwater exists and areas that could benefit from treated brackish supplies. The Director must submit a report to designated State leadership by September 30, The Senate version of this bill has moved through the Senate, moved through the relevant House committees, but has not yet come to the House floor for a vote. The House version of this bill became a vehicle for an unrelated strike everything amendment. AMWUA Position: Oppose SB 1509: Water; interstate sales (Griffin). As amended, this bill requires the ADWR Director to notify the President of the Senate and the Speaker of the House of Representatives when the ADWR Director receives an application to transport water out of State. This bill appears to have stalled for this session. AMWUA Position: Oppose SB 1510: Irrigation grandfathered right; containerized plants (Griffin). This bill states that in an initial Active Management Area, a person who holds a certificate of irrigation grandfathered right April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 2 of 8

10 may exercise that right to withdraw groundwater to water plants in containers on or above the surface. This proposal was among the issues discussed as part of the Governor s workgroups last year. Upon passing both the Senate and House, Governor Ducey vetoed this bill. In his veto letter, the Governor stated that his administration has publically reiterated the need for a comprehensive water legislative package, and this bill by itself, does nothing to address the consumer protections, legal protections, or conservation that are needed to secure the future of Arizona s most precious resource. AMWUA Position: Oppose SB 1511: Pinal AMA; groundwater; extinguishment credits (Griffin). This bill provides detailed criteria for the ADWR Director to calculate the volume of extinguishment credits for the extinguishment of grandfathered rights in the Pinal AMA. Under the 100-year assured water supply rules, a farmer within an AMA with irrigation rights can choose to extinguish those rights anytime in exchange for what is called an "extinguishment credit" that can be used to demonstrate a 100-year assured water supply for new development. During the Governor's Water Solutions Conversation, water users in the Pinal AMA came to a compromise with each other and ADWR on the amount of credits received upon extinguishment. AMWUA staff understands that the language in the current bill is essentially the compromise that was reached. AMWUA staff also understands that the Governor s Office has expressed its intent to resolve this issue by promulgating the compromise in a new rule. This bill has passed the full Senate, passed through the relevant House committees, but has not yet come to the House floor. AMWUA Position: Oppose SB 1512: Active management areas; sixth management period (Griffin). This bill creates an additional 10-year active management plan the Sixth Management Plan from 2025 to 2035 under the Groundwater Management Act for each initial Active Management Area. The State proposed during the Governor s Water Solutions Conversation to extend the safe-yield goal for three 10-year management periods. This bill passed the Senate, but has not come to a vote in the House. AMWUA Position: Oppose SB 1513: Effluent; recycled water; definition (Griffin). This bill states that for the purposes of ADWR s informational materials, the word effluent should be defined as recycled water. ADWR has raised concerns that this bill could create confusion based on the various regulatory meanings for effluent, remediated, reuse, and recycled. This bill has been amended by a strike everything amendment and no longer deals with the definition of effluent. AMWUA Position: Oppose SB 1514 & HB 2596: Natural resource conservation districts; administration (Griffin, Toma). These bills place oversight of the Division of Natural Resource Conservation in the Department of Forestry and Fire Management. It currently resides in the State Land Department. The Senate April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 3 of 8

11 version of this bill has passed the Senate, passed through the relevant House committees, but has not come to the House floor. The House version of this bill became a vehicle for an unrelated strike everything amendment. AMWUA Position: Oppose SB 1515 & HB 2553: Adequate water supply; county review (Griffin, Bowers). This bill essentially allows a county that is not in an Active Management Area, through a unanimous vote of the county board of supervisors, to vote not to readopt the 100-year adequate water supply water requirement if certain conditions are met. The bill states that the board of supervisors must review and may, by a unanimous vote, not readopt the 100-year requirement within five years of the bill s effective date, and at least every ten years thereafter. The Senate version of this bill has passed the Senate and appears to have stalled in the House Rules committee. The House version of this bill has passed the House, passed through the relevant Senate committees, but has not come to a vote on the Senate floor. AMWUA Position: Oppose SB 1516: Central Arizona Project; sovereign immunity (Griffin). This bill states that a multi-county water conservation district (i.e. CAWCD) shall not assert the defense of immunity under the Eleventh Amendment in litigation brought by a water user to enforce the terms of a Central Arizona Project (CAP) water delivery contract or subcontract. This bill has stalled for this session. AMWUA Position: Oppose April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 4 of 8

12 Other Legislation SB 1039: Arizona water protection fund (Griffin). This bill, as amended, appropriates $400,000 from the State general fund in fiscal year to the Arizona Water Protection Fund. The Arizona Water Protection Fund is a State-run program that funds projects to protect and enhance water quality and quantity in Arizona's rivers, streams, and riparian areas. Some of these efforts include revegetation, erosion control, channel stabilization, research, and water conservation. This bill passed the Senate, and is currently in the House Rules committee. AMWUA Position: Support SB 1493: Environmental quality; dredge, fill permits (Griffin). Under current law, the United States Environmental Protection Agency (EPA) issues permits under the Clean Water Act for the discharge of dredged or fill materials into waters that meet the definition of Waters of the United States. This bill essentially authorizes the Arizona Department of Environmental Quality (ADEQ) to establish a Dredge and Permit Program that is consistent with, and no more stringent than, the federal program. The bill lists requirements for the rules ADEQ would adopt to implement the program. ADEQ and the State pursued this legislation as a means of attempting to have the EPA assign responsibility to the State over this federal program. The Governor signed this bill into law on April 12 th. AMWUA Position: Monitor SB 1494: Environment; underground injection control program (Griffin). The Underground Injection Control Program is a program primarily overseen by EPA in cooperation with ADEQ that regulates the underground injection or discharge of both hazardous and nonhazardous liquid and gas. This bill requires ADEQ to establish a permit program that meets the minimum federal requirements for permitting injection wells in Arizona and requires the ADEQ Director to adopt rules for that purpose. ADEQ and the State are pursuing this legislation as a means of attempting to have EPA assign responsibility to the State over this federal program. To date, only four individual Underground Injection Control permits have been issued in Arizona, primarily for mining purposes. The Governor signed this bill into law on April 10 th. AMWUA Position: Monitor HB 2203: Wildland fuel loads; watershed protection (Finchem). As introduced, this bill authorized a mayor, chairman of the board of supervisors, or a county sheriff to make a formal determination that a catastrophic wildland fuel load exists on state or federal land located in the borders of the city, town or county, and to take several enumerated actions to address the condition. This bill recently became a vehicle for an unrelated strike everything amendment. AMWUA Position: Monitor April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 5 of 8

13 SB 1229: Water infrastructure finance authority; appropriation (Mendez and 16 others). This bill appropriates $30 million from the State general fund to the Water Infrastructure Finance Authority (WIFA). WIFA is a State agency that provides low-interest loans to water providers. This bill has not moved. AMWUA Position: Monitor SB 1475 & HB 2581: Ecological water; program; fund (Dalessandro, Gabaldon, and others). These bills establish the Ecological Water Stewardship Program and directs the ADWR Director to adopt rules to carry out its mission. The bills direct the ADWR Director to establish a set of standard measures to define ecological water needs in Arizona, including criteria for examining the relationship between ecological water and groundwater and surface water in Arizona. The bills direct the Director to take all reasonable steps necessary to monitor, maintain, improve and restore the surface water systems of Arizona. After making a determination of the ecological water needs for each watershed or subwatershed, the Director would publish a preliminary report that includes a determination of the ecological water and monitoring methods necessary to maintain and restore freshwater ecosystems. If the Director determines in any watershed or subwatershed that there is insufficient ecological water, the Director shall take all steps necessary to appropriate any unappropriated water to maintain the ecological water requirements or acquire by purchase or lease existing water rights. These bills have not moved this session. AMWUA Position: Monitor HB 2214: WQARF; appropriation (Gabaldon). This bill appropriates $15 million from the general fund to the Water Quality Assurance Revolving Fund (WQARF) in addition to any other appropriations made in Fiscal Year WQARF is a State-sponsored program established by the Legislature to clean up hazardous soil and groundwater contamination. This bill has not moved. AMWUA Position: Support HB 2291: Groundwater basin; department survey (Cobb). This bill requires ADWR to conduct a survey of areas in the groundwater basin of the Upper Colorado River Planning Area to determine the status and resiliency of groundwater supplies, and submit a report to the House Speaker, Senate President, legislators in affected areas, and relevant County Supervisors. ADWR would be required to gather extensive data, including well usage information. The bill also allows the County Board of Supervisors to recommend metering and monitoring of wells to ADWR. This bill has not been assigned to a committee and has not moved. AMWUA Position: Monitor HB 2352: Appropriation; lead screening; charter schools (Engel and 14 others). This bill appropriates $100,000 from the general fund in addition to other appropriations for Fiscal Year April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 6 of 8

14 to ADEQ for screening for lead in drinking water in charter schools. This bill has not been assigned to a committee and has not moved. AMWUA Position: Monitor HB 2410: Geologists; landscape architects; regulatory repeal (Mosley). This bill eliminates certain Board of Technical Registration requirements and related statutory language for geologists and landscape architects. This bill is similar to provisions in a bill from 2016 that sought to deregulate the professional geological practice. The 2016 bill resulted in a legislative compromise that resulted in the voluntary licensure of geologists. Under current law, geologists make certifications under the groundwater code. This bill has not moved. AMWUA Position: Oppose HB 2429: Public works contracts; prevailing wage (Cardenas and 14 others). This bill states that a public works contract that is valued at two hundred fifty thousand dollars or more shall contain a provision requiring the wages paid by the contractor or any subcontractor to be at least the prevailing rate of wages for work of a similar nature in the State or political subdivision in which the project is located. AMWUA staff does not anticipate that this bill will move forward this session. AMWUA Position: Monitor HB 2552: Desalination action study committee (Bowers). This bill establishes a 13-member desalination action study committee comprised of political leaders and representatives from relevant agencies, water users, and other stakeholders. The bill directs the committee to (1) Consider State statutory or regulatory impediments to using high salinity water; (2) Consider the economic impact resulting from the amount and effect of high salinity water; and (3) Submit a report regarding the committee's activities, findings and recommendations on or before December 31, To date, this bill has not moved. AMWUA Position: Monitor HB 2556: Environment; water quality; brine (Nutt and six others). This bill directs the ADEQ Director, in coordination with the ADWR Director, by December 1, 2019 to "review existing data on the use and reuse of high salinity water and identify locations in this state, including hydrologically isolated areas, as potential sources for supplementing water supplies in this state." The bill also directs the ADEQ Director to post the report on ADEQ's webpage. This bill passed the House, but has not moved forward in the Senate, and therefore appears unlikely to move this session. AMWUA Position: Monitor HB 2608: Well reporting; Mohave, La Paz basins (Cobb). This bill requires the owner of a well in one of four groundwater basins located in Northwest and Western Arizona to annually report April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 7 of 8

15 groundwater withdrawals, if the well was drilled on or after January 1, 2012 and the well has a capacity of more than 100 gallons per minute. The bill states that a well owner that does not use a meter can maintain records of the estimated water use. The bill requires reporting for a period of three years, and the bill is repealed after December 31, This bill has not moved. AMWUA Position: Monitor April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #3 Page 8 of 8

16 AGENDA ITEM #4 BOARD OF DIRECTORS INFORMATION SUMMARY April 26, 2018 Update on Water Quality Standards Proposal for Non-Project Water STRATEGIC PLAN REFERENCE Objectives Prepare for Impacts of Drought & Shortage; Minimize Financial Impacts Collaboration Central Arizona Project; Bureau of Reclamation; Southern Arizona; Salt River Project; Gila River Indian Community SUMMARY AMWUA facilitated the development of a water quality standards proposal for non-project water put in the Central Arizona Project (CAP) canal among the AMWUA cities, Southern Arizona utilities, Apache Junction, the Gila River Indian Community (GRIC), and the Salt River Project (SRP). After presenting the proposal to the Central Arizona Water Conservation District (CAWCD) Task Force, the Water Quality Group has worked with the staffs of CAWCD and Bureau of Reclamation to refine the proposal further and to further discuss the issues. In February, the CAWCD Water Quality Standard Task Force directed CAWCD staff to develop its own proposal. CAWCD staff met with the stakeholders to review the proposal prior to presenting it to the Task Force. The Task Force was scheduled to meet on April 3 rd but did not convene due to a lack of a quorum. CAWCD staff and those in attendance decided to still meet and further discuss the staff proposal. Subsequently, the stakeholders group met April 17 th to discuss the differences between our proposal and CAWCD staff s proposal. The stakeholders group and CAWCD staff are trying to continue the dialogue before the Task Force has its next meeting on May 10 th. AMWUA staff will give an overview of CAWCD staff s proposal and how it compares with the proposal prepared by the stakeholders. A presentation was given to the AMWUA Management Board at its April 11, 2018 meeting. RECOMMENDATION The AMWUA Board of Directors is encouraged to ask questions and provide feedback regarding proposals for the water quality standards for non-project water in the CAP canal.

17 ATTACHMENT Presentation: Update on Water Quality Standards for Non-Project Water April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #4 Page 2 of 2

18 Update Water Quality Standards for Non-Project Water AMWUA Board of Directors April 26, 2018 Credit: City of Phoenix Credit: CAP

19 Proposal Participants

20 Timeline Summer 2017 Stakeholder Water Quality Group developed proposal September 2017 Presented Proposal to the CAWCD Water Quality Task Force October 2017 Proposal further refined Nov 2017 Jan 2018 Water Quality Group answered CAWCD staff s questions; discussed proposal; CAWCD presented concepts February 2018 Update given Task Force; Task Force directs staff to develop proposal April 3, 2018 Task Force did not review staff s proposal due to lack of quorum; Attendees met with CAWCD staff to review proposal April 17, 2018 Stakeholder Water Quality Group continue dialogue

21 Stakeholder Proposal Overview Maintain the quality of water within Project Water s historical ranges Avoids impacts to current treatment operations Measure in-canal water quality standard at diversion points through a model that includes in-canal blending to determine discharge limits to best protect users. Not-to-exceed discharge (introductory) limit debate Review every 5 years; Monitoring required by CAWCD Addresses current situation. While it does not consider deep shortage situations, the concept can apply to shortage scenarios

22 CAWCD Staff Proposal Overview Point of Delivery Standard Applied during evaluation period; Shortage reduced CAP supply to 1 MAF; Includes all other projects Delivery Standard to determine project approval; NOT guarantee of specific water quality delivered Introduction Standard based on multiple factors Equity; flexibility; certainty; risk; margin of safety; public acceptance; likely sources; mixing capacity; geography; cost; existing standards; operational factors Uses Buildout Projection of 300,000 AF Applied on an ongoing basis, and fully enforceable Review at least every10 years or 100,000 AF of approved projects

23 Points to Resolve Equity & Certainty vs. Flexibility Consider how to address concern about long-term equity Ensure long-term equity does not prevent near-term projects No guarantees balanced with certainty Delivery Standard vs. Introductory Standard Both are needed but which is the primary focus? What is guaranteed delivery or introductory? The role of modeling to determine introductory standard Modify Standards for Small Projects Monitoring, Modeling and Water Quality Staff Frequency of Review of Standards

24 Next Steps Another meeting among stakeholders, CAWCD, and Reclamation May 10 th CAWCD Task Force Meeting CAWCD Board Recommendation Reclamation Process & Decision

25 AGENDA ITEM #5 BOARD OF DIRECTORS INFORMATION SUMMARY April 26, 2018 AMWUA Fiscal Year 2019 Preliminary Draft Budget STRATEGIC PLAN REFERENCE Operational Principles Manage an Efficient and Effective Association SUMMARY Attached is the preliminary draft of the Fiscal Year 2019 annual budget, which includes a summary page with comments to explain increases or decreases to particular line items. Development of the Fiscal Year 2019 budget was guided by AMWUA s Strategic Plan and the Annual Action Plan for Fiscal Year 2019 approved last month. This budget allows AMWUA to continue to be a forum for its members to collaborate on water issues; to develop and advocate positions that safeguard our water resources; to promote continual planning and investment in water resources and infrastructure with the Legislature, Arizona Department of Water Resources (ADWR), Central Arizona Water Conservation District (CAWCD), Salt River Project (SRP) and other stakeholders; and to be at the forefront of demand management and water conservation efforts. This preliminary draft budget shows an increase of $48,748 (3.61%) from the approved Fiscal Year 2018 budget. The following summarizes the budget categories and provides explanation for line items that have an increase or decrease from last year s budget. Administration This includes salaries and Arizona State Retirement System (ASRS) retirement contributions, reflecting an increase of $16,267. What AMWUA is able to accomplish is directly linked to its staff and their time and effort to perform. The increase under Administration is primarily due to the following: Most of staff received a 2.5% performance award half-way through the Fiscal Year 2018, which is now reflected for the 12 months of the preliminary Fiscal Year 2019 budget. Position Increases Salary increases are included for the Programs Assistant and for the part-time Receptionist. The increases to these positions are due to exemplary performance and to better reflect the duties of similar positions. Performance Awards An up-to 3% performance award for each full-time employee, except the Executive Director, is recommended for employees who excel in their performance. The awards would occur half-way through Fiscal Year 2019.

26 Employee Benefits This includes payroll processing, taxes, various insurances, and cell phone allowances. The main changes include: Payroll Processing and Taxes The increase of $1,700 is due to the above-noted administration increase. Health Insurance The $9,000 increase is due to increases from calendar year 2018 and projected for next calendar year. While the actual health costs for Fiscal Year 2018 are below budget, costs did increase in January 2018 by 13% that will carry forward into Fiscal Year Plus, our insurance broker is projecting another 18% increase for calendar year Cell Phone Allowance The $2,580 increase is offset by the decrease of $2,500 for cell phone coverage under Occupancy Telecommunications under Occupancy. Part of staff had received a cell phone allowance and others received full coverage through an AMWUA-sponsored plan. A uniform practice was established for full-time employees to receive a cell phone allowance for using an employee-owned cell phone for business purposes. Professional Services This includes outside services that AMWUA utilizes throughout the year. The budget reflects an increase of $10,500 from last year. The main changes include: Legislative A $2,500 increase is sought based on performance and to establish a new agreement. Financial and Accounting Services The increase on this line item is due to the current process to select a new consultant to provide financial and accounting services. An increase is anticipated for this service, but the exact amount will not be known until the selection is made in May. Audit The $1,000 increase is under the current agreement with Heinfeld Meech. Occupancy These items are related to the leasing of office and meeting space for AMWUA and reflect a $1,300 decrease. Building Operating Costs This line item is for AMWUA s proportionate share of building common area maintenance costs and is non-negotiable. Telecommunications This line item decreased due to the cell phone plan being discontinued shifting costs to the Employee Benefits line. The line also includes the office phone service. /Webpage/Internet Access This line item increased by $200 due to anticipated actuals in Fiscal Year Training and Travel This category covers items involved with staff participating in conferences, workshops, and training along with the related travel expenses. This category includes no proposed changes. Capital Outlay This category covers AMWUA s primary capital property. There are no proposed changes. April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #5 Page 2 of 4

27 Office Operating Expenses These items cover AMWUA s day-to-day office operating expenses. Each line item remains the same under this category except for a $10,000 increase due to one particular line item. Outreach Efforts This line item was increased by $10,000. This is to continue to do outreach efforts particularly with the Legislature. Also, March 2019 is the 50 th anniversary of AMWUA s establishment and we would like to have funds available to assist with commemorating that accomplishment. Water Conservation This category remains at $90,000. One-third of the amount is committed to the contract with the University of Arizona for ongoing implementation of the Smartscape program in Maricopa County. The Smartscape program, a long-standing effort, provides training to landscape professionals in the proper design, installation, and maintenance of low-water-use landscape. ADWR provides matching funding for the program in the Phoenix Active Management Area (AMA). Another $30,000 is designated to develop the website and data management system for the Smartscape program, which the Conservation Committee has prioritized as the key initiative for this next fiscal year. Funds from Fiscal Year 2018 were set aside for this project. Tucson Water is also contributing funds to assist in consolidating the online management of the program across Maricopa and Pima counties. The remaining $30,000 supports and maintains various other Regional Conservation Program projects and efforts identified by the Conservation Committee. Members Assessments The draft Fiscal Year 2019 budget is $48,748 more than the approved Fiscal Year 2018 budget or a 3.61% increase. Unlike the prior year, no carryover is anticipated from the Fiscal Year This results in a $62,618 (4.69%) increase for the total assessments to members. The proposed increase is well within the range of past budget increases approved by AMWUA s Board of Directors over the last twenty years. Largely due to rising health care costs and compensation increases necessary to remain competitive, it is anticipated that future budgets will see modest increases to ensure that AMWUA can continue to accomplish its mission. Since 1999, AMWUA s Board has approved budgets between $1.213 million and $1.528 million. When adjusted for inflation (CPI-U index), the draft Fiscal Year 2019 budget is $461,000 lower than it was in Please note that this is the third budget to reflect the new allocation process for membership assessments, which was approved in One-half of the proposed water budget is allocated evenly among all the members and the other half is based on the proportion of each member s population to the total population. The population figures are taken from the Maricopa Association of Governments (MAG) 2017 official population estimates. The wastewater portion of the budget continues to be allocated based on percentage of ownership at the 91 st Avenue Wastewater Treatment Plant (WWTP). April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #5 Page 3 of 4

28 RECOMMENDATION The Fiscal Year 2019 preliminary draft budget was presented to the AMWUA Management Board at its April 11, 2018 meeting. The AMWUA Board of Directors is requested to review and provide feedback regarding the Fiscal Year 2019 preliminary draft budget. The AMWUA Board s feedback will be included when the draft budget is presented to the AMWUA Management Board on May 9, 2018 to consider recommending adoption to the AMWUA Board of Directors. A final budget for Fiscal Year 2019 will be presented to the AMWUA Board of Directors on May 24, 2018 for consideration to adopt. ATTACHMENT AMWUA Fiscal Year 2019 Preliminary Draft Budget April 26, 2018 AMWUA Board of Directors Meeting Agenda Item #5 Page 4 of 4

29 Preliminary Draft Budget Fiscal Year 2019

30 ARIZONA MUNICIPAL WATER USERS ASSOCIATION Fiscal Year 2019 Preliminary Budget ASSESSMENT SUMMARY WATER WATER WASTEWATER WASTEWATER TOTAL TOTAL FY 18 FY 19 FY 18 FY 19 FY 18 FY 19 CITY OF AVONDALE 68,481 72,699 68,481 72,699 CITY OF CHANDLER 95, ,980 95, ,980 TOWN OF GILBERT 93, ,066 93, ,066 CITY OF GLENDALE 93,613 98,976 14,335 13, , ,925 CITY OF GOODYEAR 68,180 72,670 68,180 72,670 CITY OF MESA 130, ,065 31,733 30, , ,943 CITY OF PEORIA 82,232 87,638 82,232 87,638 CITY OF PHOENIX 304, , , , , ,594 CITY OF SCOTTSDALE 93,652 99,421 21,992 21, , ,820 CITY OF TEMPE 83,866 89,002 31,527 30, , ,679 Total from Members 1,114,309 1,182, , ,105 1,336,397 1,399,015 Other Funding Sources: 2017 Carryover applied to Members 2018 assessments 13,871 13,871 TOTAL All Sources 1,128,180 1,182, , ,105 1,350,268 1,399,015 Note #1. The Assessment Structure is based on the following formula: 50% of the water portion of the budget is allocated equally with the remaining 50% based on population according to the MAG 2017 official population estimates. Note #2. Wastewater Assessments based on ownership in 91st Avenue Wastewater Treatment MGD.

31 ARIZONA MUNICIPAL WATER USERS ASSOCIATION Fiscal Year 2019 Preliminary Budget 2 EXPENDITURE SUMMARY WATER WATER WASTEWATER WASTEWATER TOTAL TOTAL FY 18 FY 19 FY 18 FY 19 FY 18 FY 19 ADMINISTRATION 562, , , , , ,315 EMPLOYEE BENEFITS 107, ,827 20,313 20, , ,400 PROFESSIONAL SERVICES 184, ,742 28,363 29, , ,400 OCCUPANCY 134, ,854 56,023 53, , ,600 TRAVEL,TRAINING & CONFER. 12,325 12,325 2,175 2,175 14,500 14,500 CAPITAL OUTLAY 9,380 9,501 1,820 1,699 11,200 11,200 OFFICE OPERATING EXPENSES 26,438 36,714 4,162 3,886 30,600 40,600 WATER CONSERVATION 90,000 90,000 90,000 90,000 TOTAL 1,128,180 1,182, , ,105 1,350,267 1,399,015

32 ARIZONA MUNICIPAL WATER USERS ASSOCIATION Fiscal Year 2019 Preliminary Budget 3 BUDGET COMMENTS BUDGET BUDGET ESTIMATED BUDGET TOTAL TOTAL ACTUAL TOTAL FY 17 FY 18 FY 18 FY 19 COMMENTS ADMINISTRATION Executive Director 135, , , ,208 Increase per Board's direction at 3/22/2018 meeting. Assistant Director 95,367 97,274 98,490 99,705 Increase per performance award effective 1/1/2018-based on performance evaluation. Water Policy Analyst 73,000 74,460 75,391 76,322 Increase per performance award effective 1/1/2018-based on performance evaluation. Water Policy Analyst 73,000 74,460 75,391 76,322 Increase per performance award effective 1/1/2018-based on performance evaluation. SROG Coordinator 70,000 70,000 73,128 65,000 Actual is higher due to PTO payout upon retirement. New employee in position Office Manager/Executive Asst. 70,000 71,400 72,293 73,185 Increase per performance award effective 1/1/2018-based on performance evaluation. Programs Assistant 42,124 47,124 47,124 50,000 Adjusted to better reflect job description duties as compared to similar positions, and strong performance. Receptionist (part-time) 22,880 22,880 23,700 Increase due to simillar positions and performance. Performance Awards 3,535 4,845 6,608 Up to 3% possible performance award for full-time employees after performance evaluation. Total Wages 562, , , ,049 Deferred Compensation: Arizona State Retirement 67,946 71,905 71,000 74,266 Increase due to proposed performance awards. Subtotal 629, , , ,315 EMPLOYEE BENEFITS Payroll Processing,Taxes, Insur 51,690 56,000 56,000 57,700 Increase required to meet projected salary increases. Medical, Dental, Life, Disability 69,000 69,000 66,000 78,000 Increase due to raise in health insurance costs and projected 18% increase in Cell Phone Allowance 3,120 3,120 4,715 5,700 Increase due to full-time employees receiving an allowance; shifted from telecommunications. Subtotal 123, , , ,400 PROFESSIONAL SERVICES Temp. Services/Receptionist 22, Website Maintenance 5,000 5,000 5,000 5,000 No change Audio/Visual Development 2,500 2,500 2,500 No change IT Services 5,000 5,000 5,000 No change Communication 40,000 40,000 40,000 40,000 No change Legal/Policy Consulting 60,000 60,000 60,000 60,000 No change Legislative 42,000 42,000 42,000 44,500 Increase adjustment for performance and proposed new agreement. Financial & Accounting Services 40,800 28,000 28,000 35,000 Increase to cover new firm or individual to perform services. Audit 29,500 30,400 30,400 31,400 Increase due to contractual agreement Subtotal 240, , , ,400 OCCUPANCY Office Space 172, , , ,200 No change Building Operating Costs 3,000 3,500 3,500 4,500 Increase in AMWUA's non-negotiable proportionate share of building common area maintenance costs. Telecommunications 10,000 9,000 6,404 6,500 Decrease due to discontinuing coverage of cell phones for certain employees. /Webpage/Internet Access 4,200 4,200 4,100 4,400 Increase to match anticipated actuals. Subtotal 189, , , ,600