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I I I I I I I I I I I I I I I I I I I 2. If LA WMA does reduce its pumping by members, there will be a decrease in revenue. Approximately 55% of LA WMA revenues are directly related to the level of member pumping. In a dry year, assuming that member plUl1ping is restricted by less available replacement water, revenues could decrease by 12%. Because much of LA WMA total expenses are in the forrn offIxed payments for loans, a revenue shortfall could create serious cash flow situation. 3. Over time, LA WMA members will want to change the amOlll1t of their plUl1ping to adjust to different economic conditions. Because the current organization is based on past plUl1ping records, it is difficult for members to change either the amount or type of well they operate. LA WMA needs to develop a curtailment method that minimizes adverse impacts on revenues, but allows member long-term flexibility to adjust their irrigation systems. The following two sections describe two methods within LA WMA's current organization that curtail member pumping to levels consistent with available replacement water in any year: I) the relative supply allocation method of curtailment~ and 2) the relative demand allocation method of curtailment. Current Organization: Relative (Normal-Year) Supply Allocation Method (C1) The simplest method for LA WMA to deal with a water short year is to allocate the available supply across members based on the same percentage amounts implied in a norrnal-year allocation. In other words, under this allocation method the available water supply in any year is allocated to a user group based on that group's share of the normal year supply. This allocative method is indicated in Table 3. The table shows that, of the available water supply in a norrnal year (18,049 af), supplemental users receive (i.e., are EnWater Resource Consultants September 5, 1997 Final Report 23