Q & A Tell

Below is a listing of all the questions posed about the Project ADD Water proposal. To see a response to a specific question click on the "view" link to the right of the question. To view all of the questions and answers in one document click here.

Question #	Question	Response
1	How was the volume of water for Just Water determined?	VIEW
2	Has the strawman been evaluated against the current CAWCD enabling legislation to determine if any, or all, of the proposal can be implemented under the current powers and duties of the District?	VIEW
3	What specific statutes provide the authority for CAWCD to use the tax levy for purposes of acquiring, developing and delivering non-Project (ADD Water) water supplies?	VIEW
4	Is there a timeline that lays out the steps necessary (e.g. stakeholder processes, Board approval, legislative changes, NEPA, ESA consultation etc.) to have the first ADD Water deliveries begin in 2015?	VIEW
5	What criteria will be used to determine that there are no additional supplies available and the 300,000 AF goal can't be reached?	VIEW
6	How (e.g. where will the money come from) will CAWCD acquire additional supplies before contracts are offered?	VIEW
7	How will the negative impacts on existing CAP contractors, subcontractors and excess water contractors of obtaining water currently unused (currently project water) be mitigated?	VIEW
8	For imported groundwater acquisitions, is only the renewable portion of that resource going to be acquired or will mined groundwater be included in the acquisition?	VIEW
9	For brackish groundwater acquisitions, is only the renewable portion of that resource going to be acquired or will mined groundwater be included in the acquisition?	VIEW
10	Is brackish groundwater that exists inside AMAs being targeted for acquisition?	VIEW
11	Are there legal issues with pumping brackish groundwater inside AMAs?	VIEW
12	Will hydrologic analyses be performed to insure that groundwater rights of water users adjacent to brackish groundwater will not be negatively impacted?	VIEW
13	Is the right acquired to be held by CAWCD with contracts with customers for permanent service as agreed to in the SEC?	VIEW
14	What sideboards will be put on the management of the single supply portfolio that cuts across phases?	VIEW
15	Is the 80%/20% long-term/short term portfolio illustrative or is that ratio set in stone?	VIEW
16	If the portfolio has a short term component in it, how does the permanent service contract work?	VIEW
17	Does the inclusion of replacement costs for non-permanent supplies in the context of one portfolio mean that a contractor is on the hook forever for paying for water acquisition?	VIEW
18	How is the expressed need for certainty and a finite cost for water supplies met under the replacement cost rate structure proposal?	VIEW
19	Is the concept that Assured Water Supply will be met with this proposal that 80% of the water (long-term permanent) purchased is eligible or is the proposal to allow 100% of the supply to be eligible by changing the AWS statutes or rules?	VIEW
20	How does "allocating" available water in each phase meet the SEC proposal that each provider determines their own need?	VIEW
21	What is the thought process in prohibiting the AWBA from participating while at the same time proposing to convert excess water that has been historically available to the Bank into non-project ADD Water by buying unused Colorado River water?	VIEW
22	Since the proposal contemplates allowing the sale for profit ("assignment") of an ADD Water supply, how will remarketers be defined and prohibited?	VIEW
23	Are the CAWCD standards for approval of assignment or lease to protect operational impact only or are other issues included in that concept?	VIEW
24	What conditions, if any, will be placed on the ADD Water reserve fund e.g. can it be used to subsidize the cost of future phases of ADD Water?	VIEW
25	What is the policy purpose for a bidding process that would result in any contractor paying more than the actual cost incurred by CAWCD to purchase the water supplies?	VIEW
26	Why wouldn't any revenue above the floor be set aside to replace the short term component of the water acquired for that phase, knowing that those water supplies need to be replaced and having had the contractor who needs that water replace already paying more than the actual cost?	VIEW
27	Are the above floor revenues carried forward to the next phase solely for acquisition cost offsets or can that money be used to offset energy or fixed OM&R?	VIEW
28	Will CAWCD reject all bids if there are no bids above the floor?	VIEW
29	Will CAGRD as a bidder be able to borrow money, as it is currently able to do, from non-CAGRD CAWCD sources and outbid the subcontractors and post-ADD member service areas and member lands?	VIEW
30	If after all rounds of a bidding process are completed and not all the water was bought, why would early round bidders who dropped out not be able to purchase that water if they are willing to pay the ultimate bid price?	VIEW
31	What will pre-qualification of bidders entail?	VIEW
32	How is limiting max/min volumes per bidder consistent with "each participant will develop its own needs?"	VIEW
33	Is the establishment of an account in January 2012 to track expenditures applicable to ADD Water only or will Just Water expenditures be tracked in this account or some other account?	VIEW
34	Given discussions about future impacts on repayment, OM&R, and energy due to Navajo Generating Station environmental compliance, shutdown or replacement, how can the concept of "unused" taxing authority be valid?	VIEW
35	How will CAWCD insure that rates and taxes will not increase due to ADD Water borrowing from CAWCD?	VIEW
36	If purchasing a voucher, to create a borrowing option, how would the voucher be redeemed in light of the auction proposal?	VIEW
37	If a water option contract designed to create security for a loan is exercised who loses their existing water supply or is CAWCD going to hold some volume of water from the auction block?	VIEW
38	What infrastructure costs are contemplated for Phase 1? Is the SEC concept that every AF of ADD Water would include and infrastructure component separate from water acquisition costs still in play?	VIEW
39	How will CAWCD know the market clearing price in Phase 1 that will be charged at the time of contracting?	VIEW
40	If the actual price exceeds the market clearing price paid for in the contract what happens? (i.e., without money how does CAWCD secure water at a fixed cost and without a fixed cost how does CAWCD set a firm price in a contract.)	VIEW
41	Why is there a need for a peak capacity surcharge to discourage use of CAP delivery capacity since all CAP capacity is protected and senior to ADD Water delivery capacity?	VIEW
42	Why is a conservation charge needed for entities subject to ADWR mandatory conservation programs?	VIEW
43	What is the definition of "working capital" for an ADD Water Reserve fund and does it include a component of money that would be used to buy water in subsequent phases so that post-Phase 1 contractors don't need to pay all their money up front unlike Phase 1 contractors?	VIEW
44	What is contemplated for Pre-ADD water supplies that do not otherwise meet the requirements for inclusion in the ADD Water supply portfolio since the ADD portfolio proposal include short term supplies?	VIEW
45	Is the proposal to create all Just Water supplies to be available for delivery from the River creating a superior right to Colorado River supplies for Just Water, especially since ADD Water has a component of short term supplies that require perpetual payments by ADD Water contractors?	VIEW
46	Is there a potential conflict problem for ADWR being assigned Just Water supplies when ADWR may have to approve transfers or forbearance to effectuate the purchase of Colorado River water?	VIEW
47	Does the revision upon non-timely payment by ADWR or other for Just Water mean that CAWCD is going to front the money to acquire Just Water rather than have Just Water pay 100% of the acquisitions costs upfront?	VIEW
48	Will questions and issues that arise from the CAWCD strawman be addressed in the existing task team process?	VIEW
49	What happens if there is not enough water available in a phase to meet the 50,000 AF goal? Will the launch of the next phase be accelerated or delayed, or will the five year schedule be maintained?	VIEW
50	What happens if a water acquisition is more than 50,000 AF, for example if a seller demands CAWCD purchase an entire supply or if it is more cost-effective to develop a large groundwater basin as a larger unit?	VIEW
51	If an ADD water contract does not link a water supply to a specific source, how will contractors justify to ADWR that this water will meet the requirements for an Assured Water Supply?	VIEW
52	Will the ability to assign or sublease ADD water contracts result in a secondary market for ADD water that may tend to drive the price up?	VIEW
53	Are there examples of the market-based allocation process featuring an auction process currently used in other water arenas? What was the source of this idea, and has it been successfully employed elsewhere?	VIEW
54	What is the rationale for a rather complex auction process, if as the Summary of Emerging Consensus states, "costs are determined at the time of contracting" (Q7, #2)? What policy purpose does the auction serve?	VIEW
55	Rather than discouraging speculation, won't the carryover revenue mechanism instead serve to subsidize later purchasers of water with funds paid by those that contract early?	VIEW
56	On what basis does CAWCD staff believe that hoarding and speculation will be a serious problem? Won't the high cost of ADD water discourage entities from purchasing more than they absolutely need?	VIEW
57	What statutory changes will be needed to authorize the ADD water and Just Water programs?	VIEW
58	If CAWCD subcontractor and excess water contractor reserves are obligated for non-project purposes such as ADD water and Just Water during the pre-launch or other phases, how will these reserves be reimbursed should a shortfall occur prior to these reserve funds being repaid by these new programs?	VIEW
59	Why wouldn't self funding financing be available from ADD water contractors for the first Phase in a type of escrow arrangement?	VIEW
60	If it is not realistic to expect that CAWCD pledge its existing reserves, revenue streams, and taxing authorities for water supply acquisition costs during Phase I, why is it permissible to pledge those same resources for pre-launch expenses?	VIEW
61	What financial impact will the ability of CAWCD to "allocate" ADD supplies to pre-ADD obligations have on existing CAGRD users? On post-ADD CAGRD users?	VIEW
62	It sounds as if Just Water supplies will only be available from the Colorado River. It seems like this will essentially limit Just Water to higher-priority, less-costly on-river supplies – as opposed to limited and expensive groundwater supplies. If this is the intent, what is the justification?	VIEW
63	For ADD water contractors, CAWCD will own the water right (SEC Q13, #1). For Just Water, CAWCD plans to assign the water rights to a holding entity until a contract with an end-user is executed. What is the rational for the different approaches with respect to water rights between the two programs?	VIEW
64	Does the CAWCD have an obligation to protect and defend Just Water rights during the acquisition process? How will Just Water contractors pay for these costs prior to the time CAWCD assigns those water rights to the managing entity?	VIEW
65	The CAP Strawman proposal contemplates obtaining unused portions of sub-contract water entitlements: 1) Please define unused portions of sub-contract water entitlement; and 2) How would they be obtained?	VIEW
66	During the CAP Strawman presentation it was first indicated that 80% of the water supplies would be perpetual supplies; later the same 80% were referred to as 100 year assured water supplies; and later still they were referred to as a pool of differing water supplies; 1) what is the CAP definition of these 80% percent of water supplies as they relate to assured waters supply programs? (question 2 is addressed in question 67)	VIEW
67	During the CAP Strawman presentation it was first indicated that 80% of the water supplies would be perpetual supplies; later the same 80% were referred to as 100 year assured water supplies; and later still they were referred to as a pool of differing water supplies; 2) will all the water supplies that are required to meet assured water supply provisions be certified by ADWR as assured water supplies prior to contracting? (question 1 is addressed in question 66)	VIEW
68	During the CAP Strawman presentation it was indicated that CAP would not own water rights and that ADD Water would pay for itself however, later it was indicated that CAP would not only obtain but own the various ADD Water rights; 1) Is it the intention of the CAP to own all the ADD Water rights versus simply wheel various right holder water supplies?	VIEW
69	In the Strawman presentation it was indicated that ADD Water Contractors pay for this activity and CAP would not be obligated for financing or risk in accordance with the SEC. 1) Per the presentation it was proposed that based on target financial obligations, excess monies could be used to fund ADD Water by CAWCD, therefore how will the target or future financial targets be calculated in reference to their financing ADD Water versus CAP activities?	VIEW
70	What happens if entities bring water to the table as an ADD Water Contractor?	VIEW
71	What if the ADD Water Contractor or regulatory entity requires that the actual water supply be owned by the receiving entity especially if ADD Water Contractors are paying for all costs?	VIEW
72	The 100 million or more required to expand canal capacity will have to bond in requirements of a debt service structure. How will this debt service be repaid if very few ADD Water contractors apply for water supplies that will pay this debt service? Also keeping in mind that the ADD Water program cannot harm current CAP sub-contractors?	VIEW
73	Is the intent of CAWCD to borrow for pre-launch of ADD Water efforts? If so and ADD Water doesn't go forward, how will this debt be repaid and by whom?	VIEW
74	If CAWCD is going to use imported groundwater supplies as assured water supplies how will the CAP or ADD Water meet statutory damages provisions of pumping groundwater?	VIEW
75	How will CAWCD ensure a "no speculation or hoarding " policy regarding ADD Water contractors and at the same time stay out of the business activities of assignment with ADD Water contractors?	VIEW
76	What statutory changes would be required to allow for the ad valorem tax to be used for ADD Water contracts, and how would this potentially harm current CAP sub-contracts? How much of the Ad valorem tax is really available and based on decreased property values what is the total potential if CAP decided to use a viable portion of these proceeds?	VIEW

P.O. Box 43020 Phoenix, AZ 85080-3020 P 623.869.2333 F 623.869.2678 contact: Crystal Thompson Login

Q & A Tell

1

How was the volume of water for Just Water determined?

2

Has the strawman been evaluated against the current CAWCD enabling legislation to determine if any, or all, of the proposal can be implemented under the current powers and duties of the District?

3

What specific statutes provide the authority for CAWCD to use the tax levy for purposes of acquiring, developing and delivering non-Project (ADD Water) water supplies?

4

Is there a timeline that lays out the steps necessary (e.g. stakeholder processes, Board approval, legislative changes, NEPA, ESA consultation etc.) to have the first ADD Water deliveries begin in 2015?

5

What criteria will be used to determine that there are no additional supplies available and the 300,000 AF goal can't be reached?

6

How (e.g. where will the money come from) will CAWCD acquire additional supplies before contracts are offered?

7

How will the negative impacts on existing CAP contractors, subcontractors and excess water contractors of obtaining water currently unused (currently project water) be mitigated?

8

For imported groundwater acquisitions, is only the renewable portion of that resource going to be acquired or will mined groundwater be included in the acquisition?

9

For brackish groundwater acquisitions, is only the renewable portion of that resource going to be acquired or will mined groundwater be included in the acquisition?

10

Is brackish groundwater that exists inside AMAs being targeted for acquisition?

11

Are there legal issues with pumping brackish groundwater inside AMAs?

12

Will hydrologic analyses be performed to insure that groundwater rights of water users adjacent to brackish groundwater will not be negatively impacted?

13

Is the right acquired to be held by CAWCD with contracts with customers for permanent service as agreed to in the SEC?

14

What sideboards will be put on the management of the single supply portfolio that cuts across phases?

15

Is the 80%/20% long-term/short term portfolio illustrative or is that ratio set in stone?

16

If the portfolio has a short term component in it, how does the permanent service contract work?

17

Does the inclusion of replacement costs for non-permanent supplies in the context of one portfolio mean that a contractor is on the hook forever for paying for water acquisition?

18

How is the expressed need for certainty and a finite cost for water supplies met under the replacement cost rate structure proposal?

19

Is the concept that Assured Water Supply will be met with this proposal that 80% of the water (long-term permanent) purchased is eligible or is the proposal to allow 100% of the supply to be eligible by changing the AWS statutes or rules?

20

How does "allocating" available water in each phase meet the SEC proposal that each provider determines their own need?

21

What is the thought process in prohibiting the AWBA from participating while at the same time proposing to convert excess water that has been historically available to the Bank into non-project ADD Water by buying unused Colorado River water?

22

Since the proposal contemplates allowing the sale for profit ("assignment") of an ADD Water supply, how will remarketers be defined and prohibited?

23

Are the CAWCD standards for approval of assignment or lease to protect operational impact only or are other issues included in that concept?

24

What conditions, if any, will be placed on the ADD Water reserve fund e.g. can it be used to subsidize the cost of future phases of ADD Water?

25

What is the policy purpose for a bidding process that would result in any contractor paying more than the actual cost incurred by CAWCD to purchase the water supplies?

26

Why wouldn't any revenue above the floor be set aside to replace the short term component of the water acquired for that phase, knowing that those water supplies need to be replaced and having had the contractor who needs that water replace already paying more than the actual cost?

27

Are the above floor revenues carried forward to the next phase solely for acquisition cost offsets or can that money be used to offset energy or fixed OM&R?

28

Will CAWCD reject all bids if there are no bids above the floor?

29

Will CAGRD as a bidder be able to borrow money, as it is currently able to do, from non-CAGRD CAWCD sources and outbid the subcontractors and post-ADD member service areas and member lands?

30

If after all rounds of a bidding process are completed and not all the water was bought, why would early round bidders who dropped out not be able to purchase that water if they are willing to pay the ultimate bid price?

31

What will pre-qualification of bidders entail?

32

How is limiting max/min volumes per bidder consistent with "each participant will develop its own needs?"

33

Is the establishment of an account in January 2012 to track expenditures applicable to ADD Water only or will Just Water expenditures be tracked in this account or some other account?

34

Given discussions about future impacts on repayment, OM&R, and energy due to Navajo Generating Station environmental compliance, shutdown or replacement, how can the concept of "unused" taxing authority be valid?

35

How will CAWCD insure that rates and taxes will not increase due to ADD Water borrowing from CAWCD?

36

If purchasing a voucher, to create a borrowing option, how would the voucher be redeemed in light of the auction proposal?

37

If a water option contract designed to create security for a loan is exercised who loses their existing water supply or is CAWCD going to hold some volume of water from the auction block?

38

What infrastructure costs are contemplated for Phase 1? Is the SEC concept that every AF of ADD Water would include and infrastructure component separate from water acquisition costs still in play?

39

How will CAWCD know the market clearing price in Phase 1 that will be charged at the time of contracting?

40