Discussion and possible action to approve entry into "New River Agua Fria Underground Storage Project Partial Temporary Assignment Between the City of Avondale and the City of Peoria for a Portion of Avondale’s Storage Entitlement" to maintain City of Peoria’s underground storage capacity for the reclaimed water produced by the Butler Drive Water Reclamation Facility.

The City of Peoria (“Peoria”) owns a 20% Storage Entitlement in the New River and Agua Fria Underground Storage Project (“NAUSP”), operated by Salt River Project (“SRP” or Operating Agent). The NAUSP Partial Temporary Assignment Between the City of Avondale and The City of Peoria for a Portion of Avondale’s Storage Entitlement (“Agreement”) provides Peoria additional storage capacity needed by the City.

Since 2019, Peoria needs on average 595 acre-feet each month, up to a maximum of 760 acre-feet, to handle the reclaimed water production from the Butler Drive Water Reclamation Facility (“Butler WRF”). However, Peoria’s owned Storage Entitlement of 20% translates to only 480 acre-feet per month. The NAUSP Intergovernmental Agreement (“NAUSP IGA”), dated August 4, 2004, and amended April 2, 2008, and August 28, 2023, allows a partial temporary assignment of Storage Entitlement by one Participant to another [See Section 30.1]. Since 2013, due to the difference between reclaimed water production at Butler WRF and Peoria’s NAUSP Storage Entitlement, Peoria has participated in similar agreements to temporarily purchase capacity from other facility participants.

Through this Agreement, the City of Avondale (“Avondale”) agrees to temporarily assign Peoria a monthly amount of Storage Entitlement equivalent to 5% through at least April 30, 2026, which will temporarily increase Peoria’s Storage Entitlement to 25% or an average of 600 acre-feet per month based on historic Operating Capacity. In return, Peoria agrees to pay Avondale for 5% of the reconciled Operating Costs for NAUSP invoiced to Avondale by SRP.

The Agreement is a critical component of facilitating the continued beneficial use of Peoria’s reclaimed supply.

On November 14, 2023, Council approved Amendment No. 2 of the NAUSP IGA, reflecting conveyance of 18 percent of the City of Chandler’s Storage Entitlement to the City of Avondale.

Staff recommends Council approve entry into the agreement presented.

Peoria agrees to pay Avondale 5% of the reconciled NAUSP Operating Costs invoiced to Avondale by SRP. Peoria’s fiscal year (“FY”) 2025 budget request includes $31,388 for this projected cost.

The Agreement also contemplates that the Parties may mutually agree to temporarily alter the Storage Entitlement percentage being assigned, in which case payment owed by Peoria to Avondale will be adjusted based on the percentage of Storage Entitlement assigned and the number of months the alternative assignment percentage is in effect.