REGULAR MEETING OF THE BOARD OF DIRECTORS October 3, 2013 The regular meeting of the Central Arizona Project ( CAWCD or CAP ) Board of Directors was called to order by President Pamela Pickard on October 3, 2013, at 10:03 a.m. The meeting was held at the Central Arizona Project Headquarters Building, located at 23636 North Seventh Street, Phoenix, Arizona, in the Board Room. Secretary Lisa Atkins was present. Board members present were President Pamela Pickard, Maricopa County; Secretary Lisa Atkins, Maricopa County; Gayle Burns, Maricopa County; Guy Carpenter, Maricopa County; Frank Fairbanks, Maricopa County; Terry Goddard, Maricopa County (by teleconference); Jim Hartdegen, Pinal County; Jim Holway, Maricopa County; L.M. "Pat" Jacobs, IV, Pima County; Mark Lewis, Maricopa County; Heather Macre, Maricopa County; Sharon Megdal, Pima County; Cynthia Moulton, Maricopa County; Vice President Warren Tenney, Pima County; and Carol Zimmerman, Pima County. Staff members present were David Modeer, General Manager; Ted Cooke, Assistant General Manager, Finance; Jay Johnson, General Counsel; Tom McCann, Assistant General Manager, Operations, Planning & Engineering; Marie Pearthree, Assistant General Manager, Business Planning and Government Programs; Greg Ramon, Assistant General Manager, Maintenance Administration; Kathryn Royer, Associate General Manager, Communications and External Affairs; and Donna Micetic, Management Liaison to the Board of Directors. PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE AND SAFETY MINUTE Director Macre led the Directors and public in reciting the pledge of allegiance to the flag of the United States of America and a moment of silence. Director Macre presented a safety minute on garage door safety. RECOGNITION OF EMPLOYEES CELEBRATING 25 YEARS OF SERVICE Mr. Modeer introduced George Carlin, Gerald Lubash, Reuben Ruiz and Samuel Thomas and thanked them for 25 years of service to CAP. Rory Crane and Michael Vigil, 25 years of service, were unable to attend the meeting. President Pickard, on behalf of the Board, expressed appreciation to these employees for their service to CAP. RECOGNITION OF PURCHASING DEPARTMENT FOR ACHIEVEMENT OF EXCELLENCE IN PROCUREMENT AWARD FROM THE NATIONAL PROCUREMENT INSTITUTE FOR 2013 The Board recognized and congratulated Purchasing Department employees who, for the sixth time, received the Achievement of Excellence in Procurement Award from the National Procurement Institute for 2013.
CAWCD Regular Meeting October 3, 2013 Page 2 CONSIDERATION OF ACTION TO APPROVE MINUTES OF THE SEPTEMBER 5, 2013, REGULAR BOARD MEETING On a motion (Director Carpenter) and second, the Board approved the minutes of the September 5, 2013, Regular Meeting. Approved: Minutes of Sept 5, 2013 Board Mtg; REPORT OF PUBLIC POLICY COMMITTEE MEETING Committee Chairman Burns reported on the October 3, 2013, meeting of the Public Policy Committee. The proposed 2014 state legislative agenda includes support of funding for the Arizona Department of Water Resources and for Arizona Game and Fish Department s contribution toward the Multi-Species Conservation Program; monitor funding for Arizona Water Protection Fund and legislation to implement the Hualapai settlement; and actively participate in any proposed legislation that could impact the Central Arizona Groundwater Replenishment District s operations and new efforts to address in-state and interstate water resources. On a motion (Director Burns) and second, the Board adopted the Proposed 2014 State Legislative Agenda. The proposed 2014 federal legislative agenda includes CAP s involvement in the following efforts: Environmental Protection Agency (EPA) rulemaking regarding Navajo Generating Station (NGS) emissions controls; cybersecurity threats and legislation impacting critical infrastructure and vital computer systems; Clean Water Act; Navajo/Hopi water rights settlement legislation; Colorado River Basin Salinity Control Forum; Colorado River Basin water supply and energy legislation; Hualapai water rights settlement legislation; Pascua Yaqui Tribe Trust Land Act; EPA rulemaking on greenhouse gas emissions; and water quality. On a motion (Director Burns) and second, the Board adopted the Proposed 2014 Federal Legislative Agenda REPORT OF FINANCE, AUDIT & POWER COMMITTEE MEETING Committee Chairman Tenney reported on the September 19, 2013, meeting of the Finance, Audit & Power Committee. In preparation of the Board s consideration of the 2014 and 2015 budget, Mr. Dunlap provided a general overview of key budget components. Adopted: Proposed 2014 State & Federal Legislative Agenda Adopted: Proposed 2014 Federal Legislative Agenda REPORT OF CAGRD & UNDERGROUND STORAGE COMMITTEE Committee Chairman Atkins reported on the CAGRD 2015 Plan of Operation Stakeholder Meetings that began in April 2013. Staff will present a comprehensive report of the stakeholder discussions and next steps at the committee s October 24 meeting. Committee Chairman Atkins reported that the committee discussed the principles CAWCD would follow to acquire water for the CAGRD and asked staff
CAWCD Regular Meeting October 3, 2013 Page 3 to present two alternative Resolutions to the Board for consideration. Alternative 2 includes a description of a third-party impact study that CAGRD will fund in 2014. On a motion (Director Atkins) and a second, the Board adopted the October 3, 2013, Water Supply Program Principles (labeled Alternative No. 1), which describes the factors to consider and principles that will guide the acquisition of water supplies for the CAGRD. Adopted: Water Supply Program Principles Alternative #1 REPORT OF BYLAWS COMMITTEE MEETING Committee Chairman Fairbanks reported on the August 15, 2013, meeting of the Bylaws Committee. Chairman Fairbanks summarized conceptual amendments to provisions of the CAWCD Bylaws. Directors discussed other provisions that could be included for consideration by the Board in November. Public Comment: Patrick O Malley questioned the legality of requiring a Board member to declare the position of the Board before publicly expressing their own opinion. UPDATE ON ISSUES RELATED TO NAVAJO GENERATING STATION Ms. Pearthree provided an update on issues related to Navajo Generating Station (NGS). The EPA issued its supplemental proposed rule, which focuses on NOx emissions from NGS and consists in large part, of the technical work group s (TWG) Better than BART proposal. The EPA s supplemental proposal does not address visibility or Clean Air Act issues. The public comment period on the Better than BART proposals has been extended to January 6, 2014. DISCUSSION AND CONSIDERATION OF ACTION TO APPROVE AN AMENDMENT TO THE HOOVER POWER AGREEMENT Mr. Johnson summarized the proposed amendment to the Hoover Power Agreement. As a party to an agreement with the Arizona Power Authority for Hoover power, CAWCD must authorize and agree to refinancing Arizona s proportionate share of the federal debt associated with the Hoover Dam Visitor Center and air slots. The refinancing will save CAP approximately $236,000 annually. On a motion (Director Tenney) and a second, the Board adopted the "Resolution of the Central Arizona Water Conservation District Authorizing Execution and Delivery of Amendment No. 1 to its Power Sales Contract with the Arizona Power Authority and Ratifying and Confirming the Original Resolution Authorizing Execution of the Original Power Sales Contract." Adopted: Res of the CAWCD related to Hoover Power Agrmt CONSIDERATION OF ACTION TO GO INTO EXECUTIVE SESSION On a motion (Director Fairbanks) and a second, the Board convened in Executive Session pursuant to A.R.S. 38-431.03.A.3 to obtain legal advice from the District's attorneys on any matter listed on the agenda.
CAWCD Regular Meeting October 3, 2013 Page 4 The Board convened in executive session at 12:20 p.m. and reconvened in open session at 12:59 p.m. REPORT ON DISCUSSIONS WITH RECLAMATION REGARDING WHEELING OF NON- PROJECT WATER Mr. Seasholes reported on discussions with the local Bureau of Reclamation representatives regarding wheeling of non-project water through the CAP system. Recently, computer modeling has been developed and shared with Reclamation to demonstrate how the system could be used to accommodate existing uses, in addition to new uses. Also impacting the discussions are talks between Reclamation and the Pascua Yaqui Tribe regarding their unsettled water rights claims. CAP staff have meetings planned with the Pascua Yaqui Tribe, as well as a coalition of stakeholders to discuss issues and concerns related to wheeling non-project water. REPORT ON COLORADO RIVER ACTIVITIES, INCLUDING BUT NOT LIMITED TO WATER SUPPLY AND DISCUSSIONS AMONG THE SEVEN BASIN STATES ON MANAGEMENT OF THE RIVER Mr. McCann reported that discussions among the Basin States are ongoing regarding short-term reservoir elevations in Lake Mead and Lake Powell and possible initiatives that could be implemented to effect long-term sustainability. REPORT ON CAP OPERATIONS, INCLUDING BUT NOT LIMITED TO CAP WATER DIVERSIONS AND CAP DELIVERIES Mr. McCann reported that most 2014 water orders have been received and follow the anticipated trend of M&I and Indian water orders increasing slightly. REPORT ON CAP MAINTENANCE ACTIVITIES Mr. Ramon reported on maintenance activities related to replacing the plant annunciators with human machine interface annunciators, which provide statistics and alarms on equipment in support of the reliability centered maintenance program. REPORT ON LEGAL MATTERS, INCLUDING ARIZONA'S CONFLICT OF INTEREST LAWS Mr. Johnson reported that CAWCD coordinated with other defendant interveners and filed a motion to dismiss in Navajo Nation vs. U.S. Department of Interior. The Navajo Nation has until November to respond. Mr. Johnson reviewed the requirements of the Arizona Conflict of Interest laws and invited Board members to contact him if they need specific personal guidance pertaining to their role as a Board member. DIRECTORS' REPORTS ON CURRENT EVENTS Directors reported on various meetings and events they attended.
CAWCD Regular Meeting October 3, 2013 Page 5 PRESIDENT'S REPORT ON CURRENT EVENTS President Pickard reviewed current events and future meeting dates. GENERAL MANAGER'S REPORT ON CURRENT EVENTS Mr. Modeer reported on current events. There being no further business to come before the Board, the meeting adjourned at 2:23 p.m. Lisa Atkins, Secretary All documents distributed in conjunction with this meeting and transcripts of its proceedings are on file at CAWCD headquarters.