Annual report / Central Arizona Project

              New Frontiers
2009
Annual Report
Central Arizona Project
To Our Constituents
Introduction
Challenge 1 Climate Change
Challenge 2 New Water Supplies
Challenge 3 Navajo Generating Station
Challenge 4 Business Planning
Community Investments
Financial Highlights
The CAWCD Board
02
06
10
20
24
34
42
44
54
Contents
Central Arizona Project (CAP) delivered
1,610,237 acre-feet of water to its
customers in Maricopa, Pima and Pinal
counties in 2009. CAP accomplished its
core mission, delivering water, while it
began to tackle new frontiers and faced
many changes.
In 2009:
• Hired David V. Modeer to replace the retiring
David S. “Sid” Wilson, Jr. Modeer has an extensive
background in managing water and water issues.
• Worked collaboratively to ensure the future of the
Navajo Generating Station, CAP’s source of power
that is being threatened by proposed new rules
and regulations.
• Worked cooperatively with stakeholders to develop
comprehensive responses to river flows that vary
due to the impacts of climate change on the
Colorado River.
• Explored new power sources that are necessary
to move Colorado River water through the
336-mile-long system.
l e t t e r
“...a dream that became a reality and spread
throughout the stars” — Captain James T. Kirk
02 03
• Created a new business planning department that
will look to the future in helping CAP assure itself
that it is working smarter and leaner in its relations
with customers, politicians and the public.
• Made significant progress with the ADD Water
process. ADD Water, which stands for Acquisition,
Development and Delivery of new water supplies,
is a combined effort between CAP staff and
stakeholders to find the “next bucket” of water,
determine who will buy it and how it will be
apportioned among the customers.
Thanks to all of our elected Board members, our
employees, customers and stakeholders for collaborat-ing
with us to make 2009 a truly exceptional year. We
look forward to 2010 and beyond as we deliver water
and improve our reputation as a regional water sup-plier,
manager, and problem solver with the best inter-ests
of Arizona in mind.
We also pledge to continue to work for Arizona’s
residents and its best interests as we continue to
struggle with the issues that have brought CAP
into a new frontier.
04 05
David V Modeer
D avid v. modeer g e n e r a l m a n a g e r , c a p s u san bitter smith p r e s i d e n t , c a w c d b o a r d o f d i r e c t o r s
SusanBitter Smith Lake Mead
In 2009, Central Arizona Project (CAP)
embarked on a new course.
CAP commenced its voyage in 1968 with the stroke of
the pen wielded by President Lyndon B. Johnson. CAP
began to take form in 1971 when the Central Arizona
Water Conservation District (CAWCD) was created to
provide a means for Arizona to repay the federal
government for the reimbursable construction costs.
Construction began in 1973 and the first water
delivery was to the Harquahala Valley Irrigation
District in 1985. In 1993, the 336-mile-long water
supply system ended just south of Tucson and CAP
was declared “substantially complete.”
Throughout the years CAP’s leadership dealt with
many issues while working to protect Arizona’s share
of the Colorado River and in 2008, it seemed CAP
achieved a time of smooth sailing.
Gone were many of the problems of the past.
An agreement among the seven basin states put to
rest many of the squabbles as it called for conjunctive
management of Lakes Powell and Mead and set the
trigger points for a shortage declaration based on the
water levels in Lake Mead.
But, a change was in the wind.
06 07
I n t r o d u c t i o n
“Random chance seems to have operated in our favor”
— Mr. Spock
“In plain, non-Vulcan English, we’ve been lucky”
— Dr. Leonard ‘Bones’ McCoy
“I believe I said that, Doctor”
— Mr. Spock
08 09
David S. “Sid” Wilson Jr. retired and David V. Modeer
was appointed as the new General Manager.
Modeer has significant experience in all areas of
water system operations, financing, customer service
and planning, and has a thorough understanding of
the water issues facing water systems in the western
United States. Prior to his appointment as general
manager of CAP, Modeer was the Director of Water
Services for the City of Phoenix and spent 10 years as
the Director of Water in Tucson.
Modeer understood that whenever any plateau is
reached new frontiers remain to be conquered.
Under Modeer’s direction, CAP began to prepare
to navigate these changing waters.
Some of the major challenges are dealing with climate
change, compensating for projected shortages on the
Colorado River, determining how to acquire and dis-tribute
new water supplies in cooperation with CAP’s
customers and maintaining and possibly acquiring the
new power supplies necessary to move Colorado River
water into central Arizona.
To help meet the challenges, Modeer created a new
department to deal with long-term business planning,
intergovernmental relations, customer relations and
added power issues to Operations, Planning
& Engineering.
Yet, throughout 2009, CAP continued to complete its
core job of delivering 1,610,237 acre-feet of Colorado
River water to customers in its three-county service
area—Maricopa, Pinal and Pima counties—while
continuing to work with the seven basin states on
Colorado River water issues.
Delivered.
A variety of academic studies made
it clear that climate change—and its
impact on Central Arizona Project and
its supply of Colorado River water—
was an immediate issue for
David V. Modeer when he assumed
his duties as CAP’s general manager.
Climate scientists debate heatedly whether global
climate change is caused by human activities or by
natural variability. Most studies projected that, along
with other changes to our climate, the southwestern
United States will become hotter and drier over the
next 50 to 100 years possibly leading to declining
supplies of Colorado River water.
Some have predicted that the Colorado River flows
could be reduced by 5 percent, others as much as
20 percent. No matter which prediction one chooses
to accept, with continued population growth in the
west it is clear that there will be increasing
competition for water and finding new supplies
will likely become a necessity for CAP.
“I see us taking a multi-pronged approach to the
issue which includes steps like managing the river
C h a l l e n g e 1
Climate Change
“By golly, Jim...I’m beginning to think
I can cure a rainy day!”
— Dr. Leonard ‘Bones’ McCoy
10 11
responsibly, conserving our existing supplies,
augmenting the system to yield more water, storing
our excess water, and then planning well for our
future,” Modeer said.
As a leader in Arizona water issues CAP was a
participant along with the seven basin states that
share Colorado River water in developing ways to
manage the River.
One of the ways is through conjunctive management.
Conjunctive management is a way of coordinating the
operations of Lake Powell and Lake Mead to minimize
shortages in the Lower Basin while at the same time
avoiding the risk that the Upper Basin States of
Wyoming, Colorado, Utah and New Mexico might
have to curtail their use of Colorado River water.
The guidelines adopted by the Secretary of the Interior
for coordinated reservoir operations include criteria
for declaring shortages to Lower Basin users. Those
criteria provide some certainty as to when and how
much shortage Arizona will experience. That allows
CAP to put a plan in place to carry it through the
shortage years. Because CAP is the junior rights
holder on the Colorado River, it is the first to lose
water in times of shortage.
A shortage to CAP would affect the lowest priority
CAP customers first. Within the CAP system,
municipal and industrial (M&I) subcontractors and
Indian tribes share the highest priority, followed by
the settlement pool for non-Indian agricultural users
and, finally, other excess CAP water users such as the
Arizona Water Banking Authority. For the next
several years, a shortage would only affect the last
Lake Mead
12 13
Shortage declarations for the Lower Basin States are based on the elevation
of Lake Mead above sea level.
Elevation Shortage to Arizona Shortage to CAP
1,075 ft 320,000 af 288,000 af
1,050 ft 400,000 af 360,000 af
1,025 ft 480,000 af 432,000 af
14 15
category of excess water use, most of which is not
being stored underground. Significantly, M&I and
Indian CAP water users would not be affected until
after their demands have built up, which is not
expected before the mid-2020s.
To reduce the risk of future shortages, CAP is actively
engaged in projects to conserve water in the Colorado
River system, such as:
The Yuma Desalting Plant (YDP).
The YDP was authorized in 1974 to improve the
quality of agricultural drain water from the Wellton-
Mohawk Irrigation and Drainage District so that it
could be delivered to Mexico in satisfaction of the
1944 Treaty on the Colorado River. The YDP began
operation in mid-1992 but was shut down in January
1993 after flooding on the Gila River damaged the
plant’s intake canal. Plans are underway for the
Bureau of Reclamation (BOR) to conduct a one-year
pilot run at one-third capacity beginning in May 2010.
The pilot run will be funded, in part, by CAP, the
Southern Nevada Water Authority (SNWA) and the
Metropolitan Water District of Southern California
(MWD) and is expected to conserve about 29,000
acre-feet of water in Lake Mead. CAP will receive
about 3,000 acre-feet of the water that is saved.
If operated at full capacity, the YDP could save more
than 75,000 acre-feet per year of Colorado River
water in Lake Mead.
Yuma
Desalting
Plant
Drop 2 Reservoir.
The Drop 2 Reservoir is an 8,000 acre-foot “pass
through” reservoir off the All-American Canal near
the Mexican border. It is designed to temporarily store
Colorado River water that would otherwise have been
16 17
lost due to schedule changes. It takes several days for
water released from Lake Mead to reach water users
in the Yuma area and Imperial Valley. From time to
time—such as following an unexpected rain storm—
those water users are unable to take delivery of water
that was previously released for them from Lake
Mead. Today, water that is released but not taken
flows into Mexico but does not count toward the US
treaty obligation to Mexico. The Drop 2 Reservoir proj-ect
will allow that water to be stored until it is needed
by U.S. water users, saving an estimated 75,000 acre-feet
per year in Lake Mead. Like the YDP pilot run,
this project was funded by NSWA, MWD and CAP.
Vegetation management.
Non-native plants such as the tamarisk (salt-cedar)
and Russian olive are pervasive along the lower
Colorado River. These thirsty plants grow quickly and
cover a larger area than native vegetation such as cot-tonwood
and willow. It is estimated that as much as
2 million acre-feet of water could be saved by remov-ing
the non-native invaders and replacing them with
native plants. CAP is working with other Colorado
River water users to remove the non-native plants
using a variety of methods, including tamarisk beetles,
hand or machine removal and herbicides.
In addition to conserving water that is already part
of the Colorado River system, CAP is investigating
methods to augment the flow of the River and to
develop new supplies to meet the current and future
Drop 2
Reservoir
Desalination
Vegetation
Management
demands of our growing population. Several options
are being considered:
Desalination.
Ocean water desalination is used today in many parts
of the world to produce water for municipal, industrial
and agricultural uses. CAP has been investigating the
possibility of producing water at a desalination plant
on the Sea of Cortez in Mexico and transporting that
water to Imperial Dam where it could be exchanged
for water currently delivered out of Lake Mead.
Obviously, such a project would be very costly and
would require extensive consultation and collaboration
with Mexico.
CAP also has been looking at opportunities for treat-ing
poor quality groundwater within Arizona. Brackish
groundwater is found in many parts of the State,
including the Phoenix metropolitan area, and costs far
less to desalt than ocean water.
Imported Water.
Another option is to import water from another basin
to meet demands within the Colorado River basin.
Importation from the Columbia River basin was one
concept discussed by Congress in the 1960s when
it was debating the CAP, but Pacific Northwest
legislators opposed the
idea and succeeded in
prohibiting any such
project. More recently,
the Basin States have
explored the possibility
of importing water from
the Mississippi River.
18 19
Weather
Modification
Weather Modification.
Weather modification or cloud seeding programs have
been active in the Colorado River basin for many
years. For the past several years, CAP, SNWA and a
number of California water agencies have funded cloud
seeding programs in Colorado, Utah and Wyoming.
Studies performed by BOR and by the Upper Basin
have concluded that large-scale weather modification
programs could increase runoff to the Colorado River
by as much as 1.3 million acre-feet at an estimated
cost of only $10 to $25 per acre foot. Imported
Water
21
Augmenting the Colorado River flows
and reducing system losses are critical
steps in reducing the risk of shortage
to CAP due to climate change and
other factors.
But even a healthy Colorado River supply will likely
not provide enough water to meet the future demands
that are expected to accompany Arizona’s continuing
growth.
Therefore, it makes sense now to develop a
comprehensive strategy for the acquisition and
delivery of water to meet those future demands.
CAP has a key role to play in that effort because
CAP infrastructure will be needed to bring new water
supplies into central Arizona.
Project ADD (Acquire, Develop and Deliver) Water
was created to engage stakeholders in a public
dialogue on developing new supplies and to address
CAP’s role in that process. For nearly two years, CAP
staff and board members have been engaged in an
intensive, collaborative effort with a wide range of
external stakeholders to develop an “emerging
consensus” as to how new water supplies should be
shared and paid for by water users within the CAP
service area. The emerging consensus is based on a
C h a l l e n g e 2
New Water Supplies
“I take it the odds are against us and the situation’s grim.”
— Capt. James T. Kirk
“You could say that.”
— Capt. Jean Luc Picard
“If Spock were here, he’d say that I was an irrational,
illlogical human being for going on a mission like this...
sounds like fun!”
— Capt. James T. Kirk
20
framework of 28 key questions, addressing such topics
as: governance management structure, participation
eligibility, need determination, priorities and condi-tions
of use, ownership interest, use of unscheduled
supply, capital costs for supply and infrastructure,
OM&R costs, assured water supply, Central Arizona
Groundwater Replenishment District (CAGRD),
use of CAP canal capacity and acquisition of water
for users outside the CAP service area.
This last topic led to the concept of Just Water.
Whereas ADD Water is focused on water use within
CAP’s three-county service area, Just Water is
envisioned to address water needs in other parts
of Arizona. Under Just Water, providers could
participate with CAP in acquiring new water supplies
rather than competing independently. CAP would
not be the delivery agent and the CAP system would
not be used to deliver the new supplies to other parts
of the state—i.e., what the provider would receive
from the arrangement is “just water.”
Following Board approval, CAP staff will continue
working with interested stakeholders to refine the
“emerging consensus” and to reduce the concepts
developed so far into specific programs and
agreements that can be implemented.
Specific tasks will include:
• Resolve remaining issues in the emerging
	 consensus
• Develop a standard form of ADD Water
	 contract
• Develop a wheeling agreement between
	 CAP and the Bureau of Reclamation
• Identify potential sources of water and cost
• Develop potential financing mechanisms
	 for ADD Water
• Address issues related to the next CAGRD
	 plan of operation
• Further define the Just Water program
• Draft any necessary enabling legislation
CAP expects to complete the policy development
phase of ADD Water and gain approval from its
Board to proceed with implementation in 2010.
22 23
25
While dealing with climate change,
augmenting the Colorado River supplies
and finding new supplies are daunting
tasks; all is for naught if there is not
enough power available to move the
water to the customer.
CAP faces many challenges on the power front as
it seeks more resources while dealing with the
environmental issues surrounding its current supplies.
While many people know that the Central Arizona
Project is the largest source of renewable water in
Arizona, they normally are surprised to learn that
CAP also is the biggest user of electricity in the state.
Consider: a gallon of water weighs approximately 8
pounds. CAP’s annual allocation is 1.5 million acre-feet.
One acre-foot is about 326,000 gallons. CAP
moves that much water 336 miles and that includes
lifting the water about 2,900 vertical feet. That’s a lot
of weight to push around and it takes power, massive
amounts of electricity.
In 2009, CAP used 2.8 million megawatt hours of
electricity to deliver more than 1.6 million acre-feet
of water through a complex system of aqueducts,
siphons, tunnels and pumping plants.
C h a l l e n g e 3
Navajo Generating
Station
“After a time, you may find that “having” is not so
pleasing a thing, after all, as “wanting.” It is not
logical, but it is often true.” — Mr. Spock
24
Virtually all of the power needed to pump CAP water
comes from the Navajo Generating Station (NGS),
a coal-fired power plant, located on the Navajo
Reservation near Page. In fact, about one quarter
of the total output of NGS is dedicated exclusively
to CAP operations, and power that is not needed
for pumping water is sold to help repay CAP
construction costs and fund Indian water rights
settlements through the Lower Colorado River
Basin Development Fund.
The Navajo Generating Station was originally built
in the early 1970s as an environmentally friendly
alternative to putting additional dams along the
Grand Canyon to supply CAP power and revenues
for CAP repayment. Now, however, NGS has come
under attack for the emissions it produces. In May
2009, the House Energy and Commerce Committee
passed legislation that places a cap on all carbon
pollution and requires a 17 percent reduction in
emissions of greenhouse gases by 2020 and an
83 percent reduction by 2050. This legislation will
require utilities to generate about one-fifth of all
energy from renewable sources by 2020.
The cap and trade bill, as it is called, contains emis-sion
allowances for most electrical utilities, which will
reduce or delay the financial impact of the legislation
on power providers. Unfortunately, because of the way
eligible utilities are defined, it appears that none of
these allowances will be available for the CAP share
of the NGS. Unless this technicality is corrected, CAP
could face a considerable financial burden.
Another key factor in the NGS debate is regional haze.
The Environmental Protection Agency (EPA) main-tains
that the emissions from NGS reduce visibility
in the national park areas around the Grand Canyon,
26 27
NGS
and have asked the NGS participants to evaluate
the Best Available Retrofit Technologies (BART)
to mitigate the problem.
The NGS partners, which include Salt River Project,
Arizona Public Service, the Bureau of Reclamation
(for CAP), Nevada Energy, Los Angeles Department
of Water and Power, and Tucson Electric Power, have
already installed state-of-the-art controls for sulfur
dioxide and are achieving high levels of control for
particulate matter emissions.
In addition, the partners are voluntarily installing low-nitrogen
oxide (NOx) combustion technology, at a cost
of more than $40 million to reduce NOx emissions to
levels that are lower than the BART limit. In spite of
this, the EPA is evaluating another technology called
Selective Catalytic Reduction (SCR) as the means for
further reducing NOx emissions.
Susan Bitter Smith, President of the CAWCD Board
of Directors which is responsible for overseeing CAP,
called this the most serious crisis CAP has ever faced.
Initial studies suggest that installing the SCR
technology would cost more than $660 million, and
may create the need for additional measures that
could bring the total cost to $1 billion. It would also
create more than $13 million in additional operation
and maintenance expenses each year. These increased
costs might be justifiable if the technology produced
superior results. However, the analysis shows that
SCR would produce no perceptible improvement in
visibility over what could be achieved with the low-
NOx combustion technology alone.
This level of expenditure, and the related operational
difficulty and risk, would raise significant concerns
about increases in the cost of power from NGS and
about its operational viability. The impacts to CAP
could be quite devastating.
28 29
Grand Canyon
If the EPA requires SCR emission control technology
on NGS it will significantly increase CAP energy costs.
CAP would then have to include the higher energy
costs in its water rates. Those increased rates, which
could be as high as $10 per acre-foot of water, would
be paid by CAP customers such as the City of Phoenix.
Phoenix, which annually uses more than 100,000 acre-feet
of CAP water, would see a potential cost increase
of more than $1 million per year.
The cost increase also would be passed on to the
agricultural customers and the Indian communities
that use CAP water, potentially pricing CAP water
too high to be used by the agricultural sector.
NGS power not used by CAP is sold to help repay
CAP’s construction costs and to pay some of the costs
of Indian water rights settlements in Arizona. Any
increase in the cost of power generation at NGS will
reduce the net market value of surplus NGS power.
That could require CAP to raise additional revenues
from other sources to cover its repayment obligation.
While it is unknown how much carbon emissions con-trols
might eventually cost under the new legislation,
the impact could be substantial. In round numbers,
NGS emits about one ton of carbon dioxide (CO2) for
each megawatt hour of energy produced. CAP uses
about two megawatt hours of energy for each acre-foot
of water delivered. Therefore, multiply the cost per
CO2 allowance by two gives a rough estimate of the
impact of CO2 controls on CAP delivery charges. For
example, if CO2 allowances cost $100 per ton, that
would increase the energy cost for pumping CAP water
by about $200 per acre-foot.
By comparison, CAP’s energy costs in 2009 were about
$50 per acre-foot of water delivered. A $200 per acre-foot
increase in CAP energy rates would represent a
400 percent increase to its water users.
30 31
Phoenix
CAP is working to amend the current legislation to
allow the CAP share of NGS, including the Navajo
surplus, to receive emission allowances in the same
manner as the other utility owners of NGS. This
would relieve—though not eliminate—much of the
financial impact.
In addition, CAP has urged the EPA to select the
less-expensive low-NOx combustion technology that
is being installed currently as the appropriate means
of addressing regional haze concerns. Once all three
units at NGS are retrofitted with this technology and
are operating at the lower emission rate, the remaining
visibility impact of Navajo’s NOx emissions, if any,
could be evaluated as part of EPA’s comprehensive
“reasonable progress” review, and any additional
control options could be assessed at that time.
“I think we have had some successes with our
congressional delegation, and now it’s about trying
to keep the momentum going forward to get the best
positive result,” said General Manager David Modeer.
“There is a range of possible outcomes that go from
bad to something we can maybe live with,” he said.
“We have to recognize that carbon-based fuels will
continue to be under assault, and we’re going to have
to look for opportunities not only to increase our energy
portfolio, but also to find alternative power sources.”
32 33
1,610,237
acre-feet
2009
CAP Deliveries
M&I
509,695
AG
397,074
INDIAN
233,539
UNDERGROUND
STORAGE
(RECHARGE)
469,929
The newfound emphasis on climate
change, finding new water supplies and
maintaining current power supplies
while developing new sources, are new
challenges for CAP. In order to maintain
its status as a leader in water
management, CAP had to reach out
to new people with the expertise to help
deal with the new challenges.
“We want to set our priorities and our vision for the
next 25 years and then develop the strategic initiatives
that will help us accomplish the vision that we see for
our organization for the future,” said General Manager
David Modeer.
To do that, Modeer made a number of organizational
changes. Most notably, he has created a new group
responsible primarily for Business Planning. He
reached out to Marie Pearthree and hired her to be
Assistant General Manager of Business Planning.
“The idea is to support the Board Strategic Plan
internally and wrap it into all the other planning
elements including integrated water and energy
C h a l l e n g e 4
Business Planning
“Change is the essential process of all existence.”
— Mr. Spock
34 35
“Live long and prosper.” — Mr. Spock
planning, financial planning, human resource
planning and maintenance planning,” Pearthree said.
“All those elements need to be factored in so that we
have a coherent internal strategic plan that supports
the organization.”
Pearthree’s first step was to begin meeting with
departments across the company to look at the
trends developing in areas like Human Resources,
Maintenance, Finance, Information Technologies,
Engineering, and others. Virtually every internal
organization was involved in the process to provide
a clear and cohesive picture of what to expect
in the coming years.
“We want to get management’s thoughts first and
we’ve already begun that process,” she said. “Then
we’ll take their input out to all employees through a
series of meetings and workshops. We want to know
what our co-workers see coming down the road in the
next five years and we’ll move forward from there.”
Pearthree estimated that it will take about 18 months
to complete the planning process.
“Ultimately,” she said, “we want to end up with a
concise blueprint that the entire organization has had
a part in developing and that everyone understands.
The blueprint will address the direction in which we
are heading, and the strategic initiatives that will
enable us to move in that direction.”
While the plan itself is being developed internally, it
will be driven in some measure by external factors
such as the emerging political landscape, population
growth and global climate change.
Energy and additional water supplies are two major
areas of focus for the coming years.
Energy has been on the immediate horizon because
of the impending EPA regulations that will affect the
Navajo Generating Station. CAP has taken the lead
on this issue because it has such a vested interest
36 37
CAP Canal
in the continued operation of the plant. Ninety five
percent of its power comes from NGS.
The debate has been heated and some stakeholders
have suggested that CAP begin moving to renewable
power sources such as solar power. However, solar
power and other such options are not a complete
answer for CAP because the canal is operated 24 hours
a day, seven days a week.
CAP needs a reliable source of baseload power. Solar
power during peak hours could certainly add to CAP’s
portfolio, but another source of baseload power is needed.
The issue is further complicated because CAP is a
water provider, not a power company. Currently CAP
is lobbying to clarify its authority to evaluate and
enter into business arrangements for alternative
sources of power such as solar, wind, natural gas or
nuclear power.
The hope is that the EPA and federal legislation will
allow NGS to continue operation until these new
sources can be developed. In the meantime, other
issues are on the horizon.
Most of the new federal regulations are aimed at
reducing greenhouse gas emissions which are believed
to cause global climate change. But as an organization
that relies heavily on precipitation, CAP also is con-cerned
with global climate change.
“Whatever the cause of it is we know that climate
change is occurring and there is a strong likelihood
that the annual flows on the Colorado River are going
to decrease,” Modeer said. “So we not only have the
issue of trying to find additional water for growth
when it continues in Arizona and our service area,
but also the issue of finding these additional supplies
that will bolster our current allocation if we go into
shortages on the River.”
38 39
Wind
Nuclear
Solar
Natural Gas
Experts have long predicted shortages on the river.
Now, however, they fear that the first shortage could
arrive in the next few years.
“If what people are saying about climate change proves
to be true,” said Tom McCann, Assistant General
Manager of Operations, Planning & Engineering,
“our Colorado River supply may not be as reliable as
we thought it was, and that might mean we have to
go develop additional water supplies just to be able
to reliably deliver the CAP subcontract amounts that
people are counting on. Even if nothing happens with
climate change or it doesn’t affect the flows on the
River, there is the separate issue of population growth
in the three-county area, and where the new water
supplies are going to come from to serve them.”
There are a number of reasons why CAP is the logical
entity to go out and acquire these new supplies, and
that work will fall under the direction of the Planning
and Replenishment department. But related legisla-tive
issues and interagency relations will fall under
the Business Planning group.
“What I see happening state wide is that CAP has a
real opportunity to be a leader in water and energy
issues for Arizona,” Pearthree said. “The agencies that
have typically taken that role, Arizona Department of
Water Resources, for example, are having to endure
serious budget cuts and other hardships, and the polit-ical
climate is such that CAP is being recognized more
and more as a leader.”
As these new issues arise and the new frontiers
appear, CAP promises its customers, its stakeholders
and the residents of Arizona that it will continue to
be a leader in water and water issues. Just as it has
started to shift emphasis to deal with today’s new
challenges, it will continue to be on the lookout for
future issues and make the necessary adjustments
to deal with them as well.
40 41
Colorado River
Some of the organizations that were selected for contributions
in 2009 include:
AZ Homegrown Solutions $2,500
AZ Envirothon $4,000
Children’s Museum of Phoenix $5,000
Maricopa Agricultural Center $5,000
UA Water Resources Research Center, Project WET $4,769
Arizona Hydrological Society $2,200
East Maricopa Resource Education Center $5,000
Natural Resource Education Center $5,000
Tucson Pima Arts Council $2,500
Tucson Unified School District Science Resource Center $3,900
Water Resources Research Center (Sunnyside $1,820
Water Resources Research Center (Flowing Wells) $1,300
CAP has encouraged wise water use in our communities through
the Community Investment Program since 1997.
Since then, CAP has awarded nearly $500,000 to support water
and environmental projects.
S o l u t i o n s
Community
Investments
“Compassion — that’s the one things no machine ever had.
Maybe it’s the one thing that keeps men ahead of them.”
— Dr. Leonard ‘Bones’ McCoy
3424 43
Central Arizona Project (CAP)’s community investments
program was developed in 1997 as part of an overall
strategy to strengthen business relationships, answer
community needs and reinforce lasting commitments
to the people and communities that CAP serves. Grants
are awarded to organizations located primarily in
Maricopa, Pinal and Pima counties that are involved
in water education issues and environmental projects
which support CAP’s mission. The contributions
committee is comprised of CAP Board members,
management, customers and water resource specialists
from throughout CAP’s service territory.
CONDENSED FINANCIAL INFORMATION
The following financial information and narrative will provide the reader with an overview of the District’s
financial activities, including comparisons, for the years ending December 31, 2009, December 31, 2008
and December 31, 2007. This discussion will highlight areas within the financial statements that support and
advance CAWCD’s operations and business purpose to the residents of the State of Arizona.
Assets
Current Assets: Current assets include cash, receivables, inventory and other current assets. In 2009, current assets
increased by $38.9 million. The largest increase was in the water storage tax accounts, which increased $23.7
million during 2009. The water storage tax is collected at the same rate for all three counties. Pinal County has
the highest need based on its tax base and requirements, so the tax is set at the highest authorized level of $0.04
per $100 of assessed valuation. This tax rate causes the Maricopa County account to increase significantly year
over year. Also, there was a reduction in water available for the Arizona Water Banking Authority in Maricopa
and Pima counties, which resulted in less money being expended. Other cash and investments increased
an additional $4.5 million. In addition, there was an increase of $7.3 million in water inventory, mostly
attributable to Lake Pleasant. The District was also notified that it is receiving a refund of $1.6 million for
the investment in the Drop 2 Reservoir that increases receivables. Other receivables increased $2.4 million.
Prepaid expenses decreased by $0.6 million.
In 2008, current assets decreased by $20.3 million. Cash and investments decreased by $19.9 million.
The majority of the decrease came from CAWCD’s contribution of $28.7 million in May 2008 to fund
the LCR Drop 2 Reservoir. These decreases were offset by a $25.0 million increase in the water storage
tax. Additional decreases were related to the repayment of the federal obligation and a $1.9 million write
off attributed to the Lehman Brothers bankruptcy. Other changes were a $3.7 million decrease in accounts
receivables and interest receivables, a $2.3 million increase in water inventory and a $1.0 million increase
in prepaid invoices.
Noncurrent Assets: Included in the noncurrent assets are funds held by/advanced to the federal government,
investments and restricted assets, and capital assets. The largest capital asset is the permanent service right (PSR)
and for this reason is broken out in the following table. The PSR represents the District’s right to operate and
maintain the CAP system and collect revenues from operations, for which the District has incurred a repayment
obligation to the United States (see Notes 4 and 5 for detailed information). The PSR is amortized each year
and consequently decreases year over year. Capital assets are discussed in more detail in the Capital Asset and
Long-Term Debt Activity section of the Financial Highlights.
In 2009, noncurrent assets decreased by $8.8 million. In January, $15.0 million was used from the capital
reserve investment account for the annual repayment obligation, which was offset somewhat by $3.2 million in
favorable fair market adjustments during the year. This net decrease was offset by an increase in the restricted
assets of $11.5 million and are mainly related to power revenues and related interest being deposited into
major repair and replacement reserves instead of being used for bond repayment obligations that have been
fully funded and have been discharged. The PSR decreased by $29.7 million and funds held by the federal
government decreased by $1.0 million. Other assets are primarily the Agricultural Water Rights, which
increased by $10.6 million due to the termination of the Arizona State Land 9(d) debt and the related increase
in water rights that CAWCD is holding for future allocation. This noncurrent asset increase is offset by a related
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
44 45
The management of Central Arizona Water Conservation District (the District or CAWCD) offer
the readers of CAWCD’s financial statements this analysis and overview of the financial activities for
the calendar year ending December 31, 2009 and December 31, 2008. Readers are encouraged to
consider the information presented here in conjunction with the District’s financial statements,
including accompanying notes, to enhance their understanding of the District’s financial performance.
The narrative will guide the readers through the District’s financial performance and how it relates to
CAWCD’s stewardship of Central Arizona’s Colorado River water entitlement and its vision to enhance
the quality of life and ensure sustainable growth for current and future residents of Arizona.
FINANCIAL HIGHLIGHTS
The District’s financial results are largely impacted by rainfall and snowfall levels which affect customer
water delivery needs. Other factors impacting the District’s financial position include fluctuations in
property valuations and power usage. The following are some of the key highlights for the year ended
2009. A more detailed narrative analysis occurs in the Condensed Financial Information section.
• Assets of the District exceeded liabilities (net assets) at the end of 2009 by $448.8 million,
an increase of $49.9 million over 2008.
• The District’s unrestricted cash reserve balance at the end of 2009 was $51.3 million compared
to $46.1 million at the end of 2008. The unrestricted reserves or working capital reserves are
used to meet CAWCD’s ongoing obligations to customers and creditors.
• Operating revenues increased $28.7 million in 2009 and decreased $58.3 million in 2008.
• Operating expenses increased $12.1 million in 2009 and $5.5 million in 2008.
• Non-operating revenues increased $6.0 million in 2009 and decreased $13.1 million
in 2008.
• Non-operating expenses, mostly interest expense due to the annual repayment and revenue
bonds, decreased $3.6 million in 2009 and decreased $1.7 million in 2008.
• Capital expenditures for 2009 were $21.6 million and $48.4 million in 2008,
a $26.8 million decrease. In 2008, CAWCD entered into a contract to fund a portion
of the Lower Colorado River (LCR) Drop 2 Reservoir. The LCR Drop 2 Reservoir will store
ordered but unused Colorado River water that would otherwise flow to Mexico, and improve
operational control on the Lower Colorado River. CAWCD contributed $28.7 million
of which $1.6 million was setup as a receivable from Southern Nevada Water Authority
in 2009 due to a refund notification.
• In 2009, the District discharged the Series A Bonds as the bonds were fully funded.
The S&P rating on the revenue bonds was raised to ‘AA’ from ‘AA-’.
central arizona water conservation district
Financ i a l Hi g h l i g h t s
for year ended december 3 1 , 2 0 0 9 and 2 0 0 8
noncurrent liability of $10.6 million in Non-Indian Agricultural (NIA) 9(d) debt. Capital assets increased by
$11.6 million in 2009.
In 2008, the major change in restricted assets was a result of $12.0 million in power revenues which were
deposited into major repair and replacement reserves instead of being used for bond repayment obligations
that had been fully funded and was offset by negative fair value adjustments on funds held by the Arizona State
Treasurer’s office. Funds held by/advanced to federal government decreased by $14.7 million mainly due to
CAWCD’s decision not to sell SO2 credits owing to the temporary decline in market value.
Total Liabilities
Current Liabilities: Current liabilities include payables, deferred revenue, accrued interest, and current principal
obligations. Overall, current liabilities increased by $7.7 million in 2009. This increase is primarily due to
a $7.1 million increase in accounts payable and accrued payroll as well as a $1.9 million increase in deferred
revenue at the end of the year, which is mostly related to the change in the water rates. These increases were
offset slightly by $1.3 million decrease in interest payable.
Current liabilities decreased by $2.5 million in 2008. Accounts payable was lower by $3.8 million as a result
of the lack of interstate water deliveries and lower over-threshold energy purchases in December (December
purchases were made in November 2008 due to rate favorability). These decreases were offset by an increase
in CAGRD’s replenishment obligation. Deferred revenue increased $1.5 million, which is again mostly related
to the change in the water rates.
Long-Term Liabilities: The largest component of the District’s long-term liabilities is the federal repayment
obligation. The decrease in the long-term federal repayment obligation was $25.1 million in 2009 and
$25.2 million in 2008 in accordance with the annual payment schedule. The revenue bonds final payment
is in 2010 and is classified as a current liability. The non-Indian agriculture 9(d) debt obligation increased
$10.6 million as discussed in noncurrent assets.
46 47
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
(dollars in millions) 2009 2008 change
Current Assets
Cash and cash equivalents $ 197.5 $ 169.4 $ 28.1
Other current assets 69.6 58.8 10.8
Total current assets 267.1 228.2 38.9
Noncurrent Assets
Funds held by /advanced to federal gov’t 23.8 24.8 (1.0)
Investments and restricted assets 177.6 177.9 (0.3)
Capital Assets, net 136.6 125.0 11.6
Permanent service right 1,309.3 1,339.0 (29.7)
Other assets 88.7 78.1 10.6
Total Noncurrent assets 1,736.0 1,744.8 (8.8)
Total assets $ 2,003.1 $ 1,973.0 $ 30.1
(dollars in millions) 2009 2008 change
Current Liablilities
Accounts payable $ 38.0 $ 30.9 $ 7.1
Water operations and capital charges
Deferred revenue 24.3 22.4 1.9
Other current liabilities 69.7 71.0 (1.3)
Total Current Liabilities 132.0 124.3 7.7
Noncurrent Liablilities
Repayment obligation 1,321.2 1,346.3 (25.1)
Non-Indian Ag debt 88.7 78.1 10.6
Other noncurrent liabilities 12.4 25.4 (13.0)
Total Noncurrent Liabilities 1,422.3 1,449.8 (27.5)
Total Liabilities $ 1,554.3 $ 1,574.1 $ (19.8)
Total Net Assets
Net assets, the difference between assets and liabilities, increased $49.9 million (12.5%) in 2009 and increased
$20.3 million (5.4%) in 2008.
Investment in capital assets, net of related debt, increased $21.2 million in 2009 and $45.4 million in 2008
(post-retroactive adjustment). Due to Government Accounting Standards Board (GASB) 51, the Drop
2 Reservoir was reclassified from unrestricted net assets to capital assets in 2009. The change was posted
retroactively for comparison purposes (it was included in unrestricted net assets in previous 2008 statements).
The 2008 increase was mostly a result of this $28.7 million investment. In addition, during 2009 CAGRD’s
water rights were recorded for $3.4 million in accordance with GASB 51 and other property and equipment
(net) increased $8.3 million. The revenue bonds accounts decreased $14.0 million in 2009 and 2008 as the
bond principal is being paid off. Offsetting these increases is a decrease in the net investment in the PSR. In
both years, amounts associated with the amortization of the PSR (asset) exceed the District’s annual principal
payment to the federal government for the repayment obligation (liability). The annual repayment obligation
is based on paying a percentage of the remaining outstanding principal balance, which increases over time, plus
interest, over a 50-year period; however, the amortization remains relatively flat over time. Consequently, the
asset is presently being amortized more quickly than the debt is being paid. As the payment percentage increases,
the annual principal payment will exceed amortization.
Restricted net assets increased $12.3 million in 2009 primarily due to the Major Repair/Replace Reserve which
increased due to power revenue payments (as indicated in noncurrent assets). Restricted net assets increased
$13.0 million in 2008 for the same reason.
Unrestricted net assets increased $16.4 million in 2009 and decreased $38.1 million in 2008. The main
reason for the 2009 increase is due to the timing of tax revenue and water charges as compared to the
incurrence of expense. For instance, taxes are received and recorded in primarily May in and November,
but expenses are incurred throughout the year. The 2008 decrease was a result of the LCR Drop 2 Reservoir
payment from the District’s Working Capital Reserve. The change in investment in capital assets, restricted
and unrestricted net assets will fluctuate depending on operational needs and any Board actions.
48 49
Total revenues for 2008 decreased by $71.4 million (22.1%) compared to 2007. The 2007 reallocation of
65,647 acre-feet of M&I water resulting from the Arizona Water Settlement Act resulted in one time charges
in 2007 of $31.5 million for back capital charges and associated interest income of $12.1 million. As there
was 148,417 acre-feet less water available for delivery in 2008, there were not any Interstate water deliveries,
decreasing revenue by $19.0 million. This revenue decrease was offset by increases of $4.2 million in federal
deliveries and $3.6 million in Municipal and Industrial (M&I) deliveries. Power and BDF revenues were lower
primarily due to the District’s decision to not sell SO2 credits in 2008 (due to the significant decline in their
market price), decreasing revenue by $10.7 million. Increased capital costs at the Navajo Generating Station
reduced net Navajo revenue by $3.9 million. Lower interest rates and decreases in the fair market value of
investments held at the Arizona State Treasurer’s office resulted in a $9.0 million decrease. Property taxes
collected increased $8.0 million in 2008 due to previously higher assessed valuations.
Water deliveries were 1,622,134 acre-feet (A/F) in 2009 and 1,557,489 acre-feet in 2008. The 2009 increase
was due in part to Nevada providing some of its allotment to Arizona at the end of the year that will be stored
for interstate deliveries in 2010 (~20,000 A/F), Bureau of Reclamation (BOR) released additional supplies
(~20,000 A/F) and CAWCD took additional water to ensure it got its full allocation (~20,000 A/F).
The increased 2007 deliveries were accomplished through a drawdown of Lake Pleasant.
Total Net Assets
Total Revenues
Total revenues include operating revenues, such as water delivery operation and maintenance (O&M) charges,
water service capital charges, Power & Basin Development Fund (BDF) revenues, and nonoperating revenues,
such as property taxes and interest earnings.
Total revenues for 2009 increased by $34.7 million (13.8%). The main increase is in water O&M revenues
due to a higher 2009 water rate, phasing out of the incentive recharge rate and an increase of 64,645 acre-feet
of deliveries. Property taxes also increased about $4.9 million for the period due to previous housing bubble
(lag of a little over 2 years from valuation to collection). Capital charges, BDF revenues and interest revenues
were fairly consistent with 2008.
(dollars in millions) 2009 2008 change
Assets
Capital assets $ 1,445.9 $ 1,463.9 $ (18.0)
Other assets 557.2 509.1 48.1
Total assets 2,003.1 1,973.0 30.1
Liabilities
Current liabilities 132.0 124.3 7.7
Noncurrent liabilities 1,422.3 1,449.8 (27.5)
Total liabilities 1,554.3 1,574.1 (19.8)
Net Assets
Invested in capital assets, net of related debt 85.8 64.6 21.2
Restricted, net 78.2 65.9 12.3
Unrestricted, net 284.8 268.4 16.4
Total net assets 448.8 398.9 49.9
Total liabilities and net assets $ 2,003.1 $ 1,973.0 $ 30.1
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
TOTAL REVENUES
$120
$100
$80
$60
$40
$20
$ 0
WATER
O&M
capital
charges
Power &
bdf
Taxes interest &
other
$ MILLIONS
2009
2008
127
98
14 14
49
70 65
27 26
49
(dollars in millions) 2009 2008 change
Operating revenues
Water O&M charges $ 127.4 $ 97.7 $ 29.7
Water service capital charges 13.8 13.8 –
Power and other BDF 48.6 49.6 (1.0)
Reimbursements & other 15.0 15.0 –
Total operating revenues $ 204.8 $ 176.1 $ 28.7
Nonoperating revenues
Property taxes $ 69.9 $ 65.0 $ 4.9
Interest income & other 11.8 10.7 1.1
Total nonoperating revenues $ 81.7 $ 75.7 $ 6.0
Total revenues $ 286.5 $ 251.8 $ 34.7
water deliveries (af)
600
500
400
300
200
100
0
m&i ag federal interstate recharge
thousands
2009
2008
50 51
Total Expenses
Total expenses include operating expenses, which include employee and professional services expenses, pumping
power and power transmission, depreciation as well as most other expenses, and nonoperating expenses, which are
primarily interest and other financial expenses. Rates are set in a manner that will recover an appropriate share of
the District’s expected operating expenses from customers. Since rates are set in advance, actual expenses may differ
from the estimates used to calculate rates, and reserves may consequently fluctuate.
Total expenses for 2009 increased $8.5 million (3.7%). As can be seen in the chart, pumping power costs
increased $14.2 million due to an increase in the average rate from $27.33/ mega watt hour (MWH) to $32.14/
MWH. Salaries and related costs increased by $2.7 million, due mostly to increased headcount and retirement
costs. Other costs decreased by $4.8 million, which includes outside services, overhead (amount transferred to
capital), materials and supplies.
Total expenses for 2008 increased by $3.8 million (1.7%). Salaries and related costs increased $2.4 million.
Pumping power decreased by $2.4 million due to lower average power costs of $28.01/MWH in 2007 to
$27.33/MWH in 2008. Other expenses increased $4.7 million driven mainly by increases of $0.8 million in
overhead, $1.5 million for raising the canal lining by 2 ½ feet, and $4.3 million increase in accretion expense
due to the updated Navajo Decommissioning Study. These expenses were offset by a $1.5 million decrease for
CAGRD’s 2007 purchase of an M&I allocation that did not occur in 2008. Non-operating expenses decreased
by $1.7 million corresponding with lower interest expense due to the reduction of the federal repayment
obligation debt and revenue bonds.
Cumulative Effect of Change in Accounting Principle – M&I subcontract allocations that were considered expense in 2004
and 2007 totaling $3.4 million are now capitalized as Intangible Assets due to the accounting change per
Government Accounting Standards Board (GASB) no. 51.
TOTAL expenses
$80
$60
$40
$20
$ 0
power salaries amortization interest other
$ MILLIONS
2009
2008
89.6
75.4
49.1 46.4 41.0
32.2 35.8
28.1 32.9
41.0
(dollars in millions) 2009 2008 change
Operating expenses
Salaries & related costs $ 49.1 $ 46.4 $ 2.7
Pumping power 89.6 75.4 14.2
Amortization of PSR 29.7 30.4 (0.7)
Depreciation 11.3 10.6 0.7
Other 28.1 32.9 (4.8)
Total operating expenses $ 207.8 $ 195.7 $ 12.1
Non-operating expenses 32.2 35.8 (3.6)
Total expenses $ 240.0 $ 231.5 $ 8.5
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
Change In Net Assets and Ending Net Assets
Net assets increased $49.9 million in 2009 and $20.3 million in 2008.
CAPITAL ASSET AND LONG-TERM DEBT ACTIVITY
Capital Assets: The District’s net investment in capital assets decreased $18 million and ended at $1.45 billion
for 2009. The largest component of the District’s capital assets is the PSR, net of accumulated amortization.
The PSR (net) has decreased from $1.34 billion in 2008 to $1.31 billion in 2009 per the amortization
schedule, which is approximately $30 million per year. Investment in the LCR Drop 2 Reservoir Project of
$28.7 million, as discussed above, was reduced by $1.6 million due to the District being notified of a refund.
Due to GASB 51, an intangible capital asset was recorded for CAGRD’s M&I water right for $3.4 million. A net
of $4.2 million in projects were transferred from construction in progress to structures and improvements.
More information about the District’s capital assets is provided in Note 3 of the financial statements.
(dollars in millions) 2009 2008 change
Total operating revenues $ 204.8 $ 176.1 $ 28.7
Total operating expenses (207.8) (195.7) (12.1)
Operating income (loss) (3.0) (19.6) 16.6
Nonoperating revenues 81.7 75.7 6.0
Nonoperating expenses (32.2) (35.8) 3.6
Change in net assets $ 46.5 $ 20.3 $ 26.2
Beginning net assets 398.9 378.6 20.3
Cumulative effect of accounting change 3.4 – 3.4
Ending net assets $ 448.8 $ 398.9 $ 49.9
(dollars in millions) 2009 2008 change
Permanent service right $ 1,309.3 $ 1,339.0 $ (29.7)
Intangibles 31.1 29.5 1.6
Other capital assets
Land 1.1 1.1 –
Construction in progress 23.8 19.6 4.2
Capital equipment 31.7 30.6 1.1
Structures and improvements 48.9 44.2 4.7
Total other capital assets 105.5 95.5 10.0
Total capital assets $ 1,445.9 $ 1,464.0 $ (18.1)
Schedule of Capital Assets (Net of Depreciation and Amortization)
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
central arizona water conservation district
Financ i a l Hi g h l i g h t s for year ended december 3 1 , 2 0 0 9 & 2 0 0 8
Long-Term Debt: The District’s long-term debt decreased $38.8 million in 2009 and $39.2 million in 2008.
Schedule of Long-Term Debt
Long-term debt is discussed in the previous Total Liabilities section of the Financial Highlights.
More information about the District’s repayment obligation is provided in Note 5 of the financial statements.
Note 11 of the financial statements contains additional information on the District’s revenue bonds.
Contacting The District’s Financial Management
The information contained in this Financial Highlights is intended to give our customers, taxpayers, and
bondholders a general overview of the District’s finances, issues that affect the District’s financial position and
accountability for the money it receives. If you have questions about the report or need additional financial
information, contact:
Douglas A. Dunlap
Financial Planning and Analysis Manager
Post Office Box 43020
Phoenix, Arizona 85080-3020
623-869-2360
ddunlap@cap-az.com
Theodore C. Cooke
Assistant General Manager, Finance and Information Technologies
Post Office Box 43020
Phoenix, Arizona 85080-3020
623-869-2167
tcooke@cap-az.com
(dollars in millions) 2009 2008 change
Repayment obligation $ 1,321.2 $ 1,346.3 $ (25.1)
Revenue bonds – 13.7 (13.7)
Total long-term debt $ 1,321.2 $ 1,360.0 $ (38.8)
52 53
55
A David V. Modeer GENERAL MANAGER
B Donna Micetic EXECUTIVE ASSOCIATE
C Tom Delgado ASSISTANT GENERAL MANAGER,
	 employe services
D Greg Ramon ASSISTANT GENERAL MANAGER,
	 MAINTENANCE
E Larry Dozier DEPUTY GENERAL MANAGER,
	 OPERATIONS, PLANNING &
	 ENGINEERING
F Douglas Miller GENERAL COUNSEL
G Kathryn Schmitt DIRECTOR, COMMUNICATIONS,
	 PUBLIC AFFAIRS &
	 GOVERNMENTAL RELATIONS
H Ted Cooke ASSISTANT GENERAL MANAGER,
	 FINANCE & information technology
I Marie Pearthree ASSISTANT GENERAL MANAGER,
	 BUSINESS PLANNING
J Tom McCann ASSISTANT GENERAL MANAGER,
	 OPERATIONS, PLANNING & ENGINEERING
B C D
E F G
A
H
P H O E N I X
L A K E H A V A S U
T H E C A P S Y S T E M
c a p . 0 6 . 0 9 . s y s
.09
T U C S O N
A R I Z O N A
M E X I C O
B U C K S K I N
M O U N T A I N
T U N N E L
MA RI CO PA C OU NT Y
P IN AL C OU N T Y P I M A
C O U N T Y
H A S S A Y A M P A
B O U S E
H I L L S
L I T T L E
H A R Q U A H A L A
W A D D E L L
SALT-GILA
B R A D Y
P I C A C H O
R E D R O C K
T W I N P E A K S
S A N D A R I O
B R A W L E Y
S A N X A V I E R
S N Y D E R H I L L
B L A C K M O U N T A I N
the 2009 SENIOR MANAGEMENT TEAM
Central Arizona Project (CAP)
CAP COMMUNICATIONS group
Editor-in-Chief Kathryn Schmitt
Editor 	 Robert Barrett
Contributing Writers Crystal Thompson
	 Vicky Campo
	 Cathy Carlat
	 Kelli Ramirez
	 Mitch Basefsky
Photography Philip Fortnam
Design & Illustration Squeeze, Inc.
The decisions Board members make have
long-term consequences related to the quantity,
price and distribution of the approximately
1.5 million acre-feet of Colorado River water
Central Arizona Project annually delivers.
They arrive at their decisions by building
trust, developing relationships and considering
all the options, all the time.
The 15-member Board serves staggered
six-year terms without pay. Every two years,
as part of the general election ballot, the public
elects one-third of the 15-member CAWCD Board.
Candidates are drawn from CAP’s three-county
service area: Maricopa, Pinal and Pima counties.
The candidates must be residents of the county
they wish to represent.
The composition of the Board is based on
population, so 10 are from Maricopa County,
4 from Pima County and 1 from Pinal County.
The Board generally meets monthly at CAP
headquarters in Phoenix.
The leaders on the CAWCD Board receive,
review and comprehend extraordinary quantities
of information in order to make informed and edu-cated
decisions related to water policy and practice.
CAWCD Board members have consistently proven
themselves as prudent and responsible governors
of the system. In a world where ego sometimes
dictates decision-making, the Central Arizona
Project is fortified by a Board of fair and responsible
leaders who are intelligently planning for this
state’s water future well into the 21st century.
the cawcd board
Central Arizona Water Conservation District (CAWCD)
B C D E
F G H J
K L M N
A
I
O
CAP’s Board of Directors
maricopa county
A Susan Bitter Smith TERM ENDING 2010
B Daniel J. Donahoe TERM ENDING 2010
C Timothy R. Bray TERM ENDING 2010
D Paul Hendricks TERM ENDING 2010
E Mark Lewis TERM ENDING 2010
F Pam Pickard TERM ENDING 2012
G Jean McGrath TERM ENDING 2012
H Janie Thom TERM ENDING 2012
I Lisa Atkins TERM ENDING 2012
J Gayle Burns TERM ENDING 2012
PIMA county
K Pat Jacobs TERM ENDING 2014
L Sharon B. Megdal, PhD TERM ENDING 2014
M Warren Tenney TERM ENDING 2014
N Carol Zimmerman TERM ENDING 2014
PINAL county
O Terri Kibler TERM ENDING 2014
54
CAWCD Board members accept a huge responsibility on
behalf of their constituents, the citizens of Maricopa, Pima
and Pinal counties. They are representing more than five
million people, roughly 80 percent of the state’s population,
and all of Arizona’s largest cities including Phoenix,
Tucson, Mesa, Glendale, Peoria and Scottsdale.
I J
C E N T R A L A R I Z O N A P R O J E C T
P.O. B O X 4 3 0 2 0
P H O E N I X , A Z 8 5 0 8 0 - 3 0 2 0
6 2 3 8 6 9 2 3 3 3
w w w . c a p - a z . c o m