BOARD00031 ‎(2)‎

• Board Meeting Date: 9/20/2006
• Description: CWCB Director's Report
• Board Meetings - Doc Type: Memo

years. GRUSP, SRP's first water-recharge facility, is the most successful recharge project in Arizona and
one of the largest in the United States.

Located in the Salt River bed north of Mesa on the Salt River Pima-Maricopa Indian Community
reservation, GRUSP has "banked" more than 800,000 acre-feet of water - enough to fill Saguaro Lake
more than 12 times - on behalf of the Arizona Water Banking Authority and other water organizations.
GRUSP, which is permitted by the Arizona Department of Water Resources to store 200,000 acre-feet per
year, was developed through a partnership among SRP, the municipalities of Chandler, Gilbert, Phoenix,
Mesa, Scottsdale and Tempe, and the Salt River Pima-Maricopa Indian Community.

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Associate General Manager John Sullivan, who heads SRP's Water Group, said NAUSP is permitted to
store up to 75,000 acre-feet of water per year in an area of the Valley that is experiencing a declining
groundwater table. An acre-foot of water is equal to 325,851 gallons, or enough to meet the annual water
needs of a typical household.

More information about SRP's innovative water-storage efforts is available on SRP's website at
www.sronet.com/water/grusp.asp SRP is the largest provider of water to the Phoenix metropolitan area,
delivering about 1 million acre-feet to agricultural, urban and municipal water users.

Secretary Kempthorne Approves Master Agreement for Arizona Water Settlements Act: On
August 22 Secretary of the Interior Dirk Kempthorne approved the Master Agreement for the Arizona
Water Settlements Act, paving the way for reallocating water from the Central Arizona Project (CAP)
between Indian and non-Indian user groups.

Reallocating water from CAP, a federal system that delivers Colorado River water to the state, is
authorized under the Arizona Water Settlements Act. The law ended a decade of negotiations among
representatives of the federal government, the states of Arizona and New Mexico, local governments, the
Gila River Indian Community, the Tohono O'odham Nation and other Native American groups. The Act
was shepherded through Congress by Arizona Sen. Jon Kyl and signed into law by President Bush on
Dec. 10, 2004.

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The Master Agreement - negotiated among the Interior Department, the Arizona Department of Water
Resources and the Central Arizona Water Conservation District -- provides the mechanism through which
non-Indian agricultural groups and agencies in Arizona with contracts for CAP water can relinquish that
water.

This action will make approximately 300,000 acre-feet of CAP water available annually. About 200,000
acre-feet ofthis water will be used for Indian water rights settlements in the state. The remainder will be
retained by the Arizona Department of Water Resources for future use by non-Indian municipal and
industrial entities in Arizona. The Master Agreement also serves as the trust contract under which the
Arizona Department of Water Resources will hold the water for these entities.

The Interior Department will now be able to publish a final decision re-allocating CAP water among
Indian and non-Indian water user groups in Arizona. The initial CAP water allocations were made in
March 1983; these were modified in February 1992. Today's action modifies the 1983 decision and
rescinds the 1992 decision.

The final decision:
. designates permanent supplies of CAP water for Indian uses, as well as for non-Indian municipal
and industrial uses or non-Indian agricultural use;
. reallocates CAP water that was classified for municipal and industrial use, but never contracted,
to 20 specific municipal entities in Arizona; and,

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