Presentation 8

Municipal Water Use in the Phoenix Active Management Area

Mark Frank

Contents: Introduction - Overview of Demand and Supply Trends - Identification of Major Characteristics of Sector Which Influence Water Use - Brief Big Picture Overview of SMP Programs and Evaluations - Sector-Specific Issues - Relationship of Sector to Achievement of Management Goal - Appendix: 1994 Phoenix Management Area Large Municipal Providers

1. Introduction

In 1980 the Arizona Department of Water Resources (Department) was established to administer provisions set forth in the Groundwater Management Act. The Groundwater Code gives the Department broad authority over state water concerns and requires the development of five groundwater management plans that are progressively more stringent for each of the State's five active management areas (AMA). Each management plan is comprised of three primary components: 1) mandatory water conservation requirements for agricultural, municipal, and industrial groundwater users and groundwater distribution systems; 2) a groundwater quality assessment and management program; and 3) a water supply augmentation and reuse program.

On a long-term average basis, groundwater withdrawals in central and southern Arizona have exceeded recharge by approximately two million acre-feet per year. Groundwater overdraft has resulted in the lowering of groundwater levels in many areas. In some locations, groundwater depletion has made it economically infeasible to pump water for some uses and has caused a lowering or fissuring of the land surface as well as water quality problems. These trends, if allowed to continue, would be disastrous for Arizona's expanding population and economy. top

Arizona's Groundwater Code was enacted in 1980 to address the groundwater overdraft problem occurring in several areas of the state and to provide a means for allocating Arizona's limited groundwater resources to most effectively meet the state's changing water needs. The first step in addressing the Code's objectives was to establish four Active Management Areas where groundwater overdraft was most severe: Phoenix, Tucson, Pinal, and Prescott. A fifth Active Management Area was established in 1995, the Santa Cruz Active Management Area was separated from the Tucson Active Management Area to address unique water management issues in this area. The Code requires the Department to develop a series of five management plans covering the period from 1980 to 2025.

The water management goal of the Phoenix Active Management Area is to achieve safe-yield by the year 2025 or earlier. Safe-yield is a concept where annual groundwater withdrawals do not exceed annual recharge of the aquifer. This does not mean that no groundwater may be pumped. However, the amount of groundwater that can be withdrawn and still maintain safe-yield will not be a fixed volume; it will vary based primarily on annual variations in artificial recharge credits, incidental recharge, and natural recharge. If long-term water level trends show declining water tables, groundwater withdrawals would have to be reduced and the safe-yield estimate adjusted accordingly. top

The Code provides the Department with many management tools that vary in their flexibility and approach. The Department has strived to develop programs using a water management philosophy based on the following principles:

• Effective water management must include both water supply and demand management programs. Comprehensive supply and demand management allows the flexibility needed to address changing water resources issues. Supply management includes substitution of renewable water sources for non-renewable groundwater resources. Demand management, which includes water conservation efforts, allows available water supplies to serve more users or to extend supplies over a longer period of time.
• Groundwater right holders must be an integral part of the management structure. Right holders are the most familiar with their individual needs and ability to respond to water resources issues. They should play a major role in program development and implementation.
• Public education on water matters and public involvement in management program development are essential to sustaining a strong and effective water management effort. top
• Water management efforts should consider economic impacts and feasibility. Attaining the water management goals of the active management area will require public and private expenditures. Water management programs, however, should be based on sound economic planning principles.
• Exchanges and transfers of water and water rights are important tools for allocating supplies in response to changing water use patterns. Public policy should allow and encourage the transportation of water from areas of resource surplus to areas of resource deficit.
• Water management efforts should be consistent with and enhance the quality of life in the community. Conservation practices and the substitution of renewable water supplies for non-renewable groundwater will provide a secure future for all water user in the AMAs. Many conservation investments will reduce costs, reduce labor, and increase aesthetic amenities for water users. Social values, public and environmental quality considerations must also be recognized.
• Water management programs should provide a stable institutional structure that brings certainty to water resource issues. Groundwater right holders must implement long-range plans. This can only be accomplished within a structure that provides regulatory stability. Management programs must be clear and free of ambiguity.

In the Phoenix Active Management Area, emphasis has been put on the municipal sector to contribute to the achievement in the goal of safe-yield. Because this sector has the highest potential for growth and increased water use, programs have been developed to encourage water conservation and move municipal water providers towards the use of renewable water supplies. top

2. Overview of Demand and Supply Trends

Figure 1

Municipal water providers include cities, towns, private water companies or irrigation districts serving potable water to residential users and both potable and non-potable supplies to non-residential customers. In 1980, total municipal water use was estimated to be 416,636 acre-feet in the Phoenix AMA, approximately 20 percent of the total AMA water use. By 1994, municipal water use totaled 755,742¹ acre feet, representing 40 percent of the total Phoenix AMA water use. The AMA's Large Municipal Providers, listed in Appendix I, used 624,031 acre-feet in 1994. Renewable water sources supply 73 percent of the demand, resulting in a reduction of groundwater dependence by 11 percent from 1985². Renewable supplies used by municipal providers in the Phoenix AMA include Salt and Verde River water from Salt River Project (SRP) and other diversions, Colorado River water through Indian Water Rights Settlements and other agreements, both treated and untreated Central Arizona Project (CAP) Water, and effluent.

In the Phoenix AMA there are 33 large municipal providers (those individually serving over 250 acre-feet annually), who account for approximately 99 percent of the AMA's total municipal water supply, and 80 active small providers, comprised primarily of private water companies, well cooperatives, and home owner associations. The City of Phoenix provides the majority of the municipal water supplying 41 percent of the municipal water to approximately 45 percent of the AMA's population. top

Projected demands indicate that the water use in the municipal sector will continue to increase, becoming a larger overall portion of the total water use in the AMA. Population projections estimate an increase of 93 percent, or an additional 2,155,970 people, by 2025. The goal of the Phoenix AMA municipal program is to ensure a safe, sufficient, and secure water supply to meet the increasing needs of this area.

a. Historic Trends: 1985 - 1994
Table 1 illustrates historic Phoenix AMA large provider total population, total water use, and GPCD rates for the years 1985 through 1994. top

Population - The Phoenix AMA contains the largest population centers for the State of Arizona, including eight of the top ten largest cities. Based on U.S. Bureau of Census data, the City of Phoenix is the seventh largest city in the United States and has the fastest growth rate among the top ten cities. Additionally, in 1994, the City of Chandler was named the third fastest growing city in the nation. Population in the large provider service areas has increased approximately 30 percent from 1,808,409 in 1985 to 2,326,906 in 1994. Eleven of the 33 large municipal providers have had population increases of more than 80 percent in that same period. Increases in AMA population are expected to continue past 2025, adding increased requirements for a safe and reliable water supply.

Figure 2. Phoenix AMA large municpial provider's historic supplies - percent of total use

Water Use - In 1980, municipal providers in the Phoenix AMA used approximately 184,000 acre-feet of groundwater or 44 percent of the total municipal water used. In 1985, groundwater use increased to 192,454 acre-feet but decreased to 39 percent of the total municipal use. By 1994 groundwater use decreased to 171,007 acre-feet and 27 percent of the total municipal use (Figure III.B.2). Municipalities (incorporated towns and cities) continue to use a larger volumetric portion of the groundwater, however, since 1985 groundwater use by municipalities has declined 20 percent while groundwater use by private water companies has increased approximately 19 percent. top

Historically, municipal providers in the Phoenix AMA relied solely on groundwater supplies to provide a potable water source for its residents and industries. Renewable supplies used for potable uses were established by the City of Phoenix in 1931. Since that time, the larger communities in the valley have built treatment facilities to utilize their SRP surface water supplies, however, groundwater continued to be the primary source of potable water. In 1986, the Central Arizona Project (CAP) canal was completed and began supplying water from the Colorado River to the Cities of Phoenix, Glendale, Mesa, Tempe, Scottsdale and Chandler. Since the completion of the canal, only 4 additional water providers have begun utilizing renewable supplies: Chapparal City Water Company in Fountain Hills, AWC - Apache Junction, Cave Creek Water Company and Carefree Water Company. Additionally, the City of Peoria and the Town of Gilbert are currently in the process of building treatment facilities to utilize their available non-groundwater supplies. top

As the per capita use of groundwater has declined over the past ten years, the use of renewable supplies has increased. Additionally, as the total water use increases in the municipal sector, renewable supplies are being utilized instead of groundwater. The use of CAP water has increased 28 GPCD while groundwater use declined 20 GPCD. Municipal subcontractors in the Phoenix AMA are entitled to 299,208 acre-feet of CAP. In 1994, 49 percent of the total Phoenix AMA municipal CAP entitlement was utilized. Surface water from Salt River Project (SRP) continues to be the primary surface water supply in the Phoenix AMA. This supply of water for member lands is the least expensive source of water and in wet years the availability of free water, "spill water", encourages the use of this supply. Direct use of effluent has increased as a replacement source of potable water for non-potable uses (ie: turf landscape watering and aesthetic lakes). As potable demands increase, effluent reuse will play an increasingly important role in water management.

Figure 3. Comparison of historic total GPCD use rates and measured evapotranspiration rates

GPCD top- The total per-capita rate for the Phoenix AMA has decreased 5 percent from 253 GPCD in 1987 to 239 GPCD in 1994. GPCD rates have fluctuated from a high of 256 GPCD in 1989 to a low of 225⁴ GPCD in 1992. Higher GPCD rates have coincided with years of low measurable rainfall (resulting in high evapotranspiration rates) and low GPCD rates are due in large part to the larger cities receiving spill water from high rain and snowfall amounts on the Salt and Verde River watersheds. GPCD rates for municipalities are somewhat lower than those for private water companies. This average may be skewed somewhat by private water company service areas dominated by resorts and/or golf courses whose demand for non-residential water far exceeds their residential demand. Since 1987, AMA total GPCD rates have consistently declined with the exception of 1989 and 1994 which have been shown to be years with high evapotranspiration rates (See Figure III.B.3).

b. Trends and projections by sub-groups
In the Phoenix AMA, projections are commonly broken down and analyzed by separating the east and west valley providers and the City of Phoenix because of its dominance in total water use and population. Additionally, because ownership of a water distribution system creates unique water use patterns and limitations, municipalities (incorporated towns and cities) and private water companies are separately analyzed. top

Table 2 compares 1994 populations, GPCD use rates, and percent groundwater use to projected 2025 use, assuming providers remain at their 1991 water use levels. Additionally, current and projected 2025 GPCD rates are compared to the AMA total SMP Final GPCD requirement of 219 which was to be achieved by 2000. Based on current demand levels, the total AMA GPCD rate is estimated to be 241 in 2025, far short of the final SMP target of 219. Projected demand and population is expected to increase significantly in the entire AMA, with the largest increases exhibited in the west valley. Renewable supplies are currently being utilized primarily in the City of Phoenix, the east valley, and by the City of Glendale in the west valley. When looking at the projected increases in population and demand, especially in the west valley where there still exists a large reliance on groundwater supplies, it becomes apparent that the need for renewable supplies will become more significant, especially in light of the new assured water supply rules which require new growth to be supplied with renewable resources.

	SMP Final GPCD Target	1994 Population	1994 Demand	1994 GPCD	1994% GW Use	2025 Projected Population	2025 Projected Demand	2025 Projected GPCD
AMA Total	219	2,326,906	623,432	239	28%	4,482,876	1,207,982	241
East Valley	221	896,845	261,360	260	35%	1,780,184	485,428	243
West Valley	197	360,977	89,897	222	70%	998,006	256,637	230
Phoenix	224	1,069,084	272,175	227	7%	1,704,686	465,916	244
Municipalities	215	2,167,200	567,040	234	21%	4,043,675	1,058,696	234
PWC	263	159,706	56,392	315	88%	439,201	149,286	303

The Department recognizes east valley water providers for their efforts in acquiring and utilizing renewable supplies as well as participation in groundwater recharge projects. The use of renewable supplies in place of groundwater is fundamental to achieving the goal of safe-yield, however, efficiency of use is still important. Although the population of the east valley is 23 percent larger and the use of renewable supplies is greater than those in the west valley, the 1994 per capita use of water is 38 GPCD greater on average than the average GPCD rate for west valley providers. Additionally, the City of Phoenix, whose population is 6 percent higher than that of the east valley providers, has a per capita use rate 33 gallons per person per day lower than that of the east valley providers and only 5 gallons per day higher than west valley providers. However, based on projected 2025 demand, the east valley is expected to become more efficient on a per capita basis, while the west valley and the City of Phoenix show projected increases in per capita use.

Water use patterns between municipalities and private water companies also show significant differences. Municipalities account for 91 percent of the AMA demand but use significantly less groundwater on a per capita basis than private water companies: 50 GPCD by the municipalities as opposed to 257 GPCD by the private water companies. Population projections show increases occurring in both municipal sectors, however, growth within municipal provider service areas will be limited to the ability of providers to become designated or developers to obtain certificates of assured water supply. top

In summary, the desired switch to renewable supplies has occurred in some areas of the AMA but not to the levels assumed by the Department. Providers are using the same supplies as they were at the inception of the management plans, with the exception of CAP water which was not available until 1986. As desired, the use of CAP water has replaced groundwater pumping in some of the large provider service areas. The availability of spill water, which is not regulated by the Department, had a significant impact in 1992 and 1993 on total water use and groundwater pumping, however, due to the construction of New Roosevelt Dam, the availability of spill water in the future may be limited. Based on preliminary projections, providers have ample renewable supplies available, but the ability to utilize these supplies may be limited due to seasonal availability, infrastructure limitations, and financing. Population and total water use are steadily increasing, however, GPCD rates have decreased slightly since the beginning of the FMP, an indication that the existence of the municipal conservation program has had some impact on water use in the AMA. Projections indicate that significant increases in both population and demand are expected into the future. top

3. Identification of Major Characteristics of Sector Which Influence Water Use

Large Municipal Providers are those providers delivering 250 acre-feet of water or more each year within their service areas, and have strict regulatory requirements. In 1990, 49 large providers were noticed of their GPCD requirements. This number was reduced to 33 due to a legislative change increasing the regulatory threshold of large municipal providers from 100 AF/year or 500 people to 250 AF/year (Small Rights Bill). Municipal providers in the Phoenix AMA can be characterized in several ways: based on geographic location, supply source availability, growth potential, and system ownership. These characteristics have significant impacts on the type of water a provider will supply and the ability of the service area to grow. Of the current 33 large municipal providers in the Phoenix AMA, 14 are publicly-owned and operated systems within municipalities and 19 are privately-owned companies (including well cooperatives, home owner association's, and institutional facilities). Distinct water use differences have developed between municipalities and private water companies because of institutional constraints and water use perspectives. A historic comparison of population and water use trends is outlined in Table 3.

Private water companies in the Phoenix AMA have historically relied on groundwater supplies as a source for their customers. Since 1985, water use by private water companies has increased 30 percent, with only 4 providers actively utilizing renewable supplies. The purpose of private utilities is to sell water and make a profit doing so. Private water companies are regulated by the Arizona Corporation Commission (ACC), in addition to ADWR, for the purpose of controlling rates they charge for their services. The ACC has commonly tended to be conservative in the rate-setting arena and in the past has not been open to conservation-oriented rate structures, recoupment of costs for conservation programs, or up-front financing of infrastructure to develop renewable supplies. Because the regulatory approach of the Department allows providers discretion as to how they achieve their GPCD requirements and does not mandate specific conservation programs, the ACC has not allowed private utilities to pass along the costs of conservation on existing ratepayers. Because of this inability to structure rates to effect conservation programs or develop renewable supplies, the majority of the private water companies continue to rely groundwater.

Municipalities in the Phoenix AMA account for 92 percent of the total water used by large providers and 93 percent of the total AMA population. Since 1985, water use in these service areas has increased 25 percent. Renewable supplies make up 79 percent of the total water delivered by municipalities. Municipalities also account for 99 percent of all renewable supplies used in the municipal sector. Municipalities have more flexibility to enact conservation measures or develop renewable supplies through municipal financing and ordinances. However, the same municipalities who were utilizing renewable supplies prior to the SMP are the same ones currently doing so (Peoria and Gilbert are both planning to open their own treatment facilities). The ability to recharge directly or indirectly could play a major role in development of renewable supplies for providers who are unable to finance or build the necessary infrastructure. top

For the SMP, the Department developed regulations within the municipal program for providers serving untreated water, primarily for urban irrigation, through a system separate from their potable distribution system. Thirty-one Large Untreated Providers ⁵ have been identified in the Phoenix AMA. Sources of untreated water include groundwater, CAP and Salt and Verde River water. These providers reported delivering 128,726 acre-feet of untreated water in 1993 to approximately 395,071 acres. Urban irrigation has increased 10 percent in the AMA since 1985. Increases have been significantly high in the Salt River Project irrigation district service area, from 61,230 acre-feet in 1985 to 112,700 acre-feet in 1993. It is projected that as agricultural lands urbanize, irrigation districts, such as MWD and RWCD, will begin supplying more water to urban irrigation. Urban irrigation demands are projected to increase in the Phoenix AMA to 140,434 acre-feet by 2010 and 154,608 acre-feet by 2025, based on projected urbanization patterns.

Distinct differences in water use characteristics also exist between large water providers in the eastern and western portions of the Phoenix AMA. Providers in the western portion of the AMA, except the City of Glendale, are primarily serving groundwater to their customers. The location of the CAP canal and extent of the SRP service area has limited the ability to provide renewable supplies to west side water users. Most east valley providers, including the entire City of Phoenix service area, have acquired new sources of water in addition to developing and implementing large recharge and recovery projects during the second management period. top

All municipal providers are required to achieve additional reductions in per capita use for each management period. The SMP assumed separate reductions in both the residential and the non-residential water use sectors. New residential growth was expected to come in at a lower use rate than that for existing; and non-residential uses were expected to come in using best available management practices. Under the SMP GPCD program, the Department assumed providers would implement conservation measures to ensure the efficiency of use in both sectors.

Although some comprehensive and effective conservation programs have been developed by large providers, many providers have not adopted conservation programs to the degree the Department assumed in the SMP. The majority of the programs implemented have been targeted to residential users with only four providers implementing non-residential programs. Even with the lack of instituted measures, non-residential use has remained fairly consistent, between 65 to 75 GPCD, throughout the FMP and the SMP. Residential uses have fluctuated somewhat, more closely following weather patterns. top

Recently, providers have begun to change their focus to acquisition of renewable supplies, de-emphasizing conservation. Uncertainty about conservation program effectiveness, GPCD targets which appear to be easily met, excess availability of CAP and effluent, and lax enforcement efforts have all contributed to the growing unwillingness to invest in conservation, limiting the implementation of programs. Additionally, the lack of detailed monitoring and analysis has made it difficult to determine the positive impacts of conservation measures⁶. Table 4 summarizes the conservation programs that have been implemented in the Phoenix AMA and the participating providers.

4. Brief Big Picture Overview of SMP Programs and Evaluations

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The objective of the Municipal Conservation Program is to gradually increase the efficiency of water use by municipal water providers through reasonable reductions in per capita use, in addition to developing conservation measures appropriate for individual users (eg: turf-related facilities, public right-of-ways, and new large cooling users - discussed in the Industrial Chapter, see Section C).

a. Large Provider Programs

The SMP municipal conservation program consists of four regulatory programs, developed to address unique service area characteristics of large municipal providers: the Total GPCD Program, the Alternative Conservation Program (ACP), the Non Per Capita Conservation Program (NPCCP), and the Institutional Provider Program (IPP). The Total GPCD program requires an assigned three-step reduction in per capita use during the SMP. The ACP allows providers, who can demonstrate an overall reduction in groundwater pumping, to separate compliance by a residential GPCD rate and implementation of prescribed non-residential conservation measures. The NPCCP, instituted in 1995, allows large providers, who agree to eliminate groundwater mining, to implement recommended conservation measures (RCMs) for residential and non-residential water users instead of meeting a gallons per capita per day requirement. The IPP provides those municipal water providers, who cannot eliminate groundwater pumping, supplying more than 90 percent of their water to institutions, a separate residential GPCD requirement and assignment of appropriate conservation measures for non-residential water uses as a point of compliance.

In the Phoenix AMA, the Total GPCD program has been the program in which all 33 large municipal providers have participated to date. SMP GPCD requirements were set by determining the conservation potential for each large provider based on a detailed analysis of existing and projected water use patterns. Existing residential uses were analyzed, and if conservation potential existed, a reduction was set based on assumed implementation of conservation programs that had been determined to be cost effective. Non-residential use was assumed to grow in proportion to residential use and reductions were assumed based on implementation of conservation measures. A model was developed for new residential uses based on the use of low-flow plumbing, water efficient landscaping and water conservation behavior. The model use rates for new residential were assigned to projected new users and factored into the projected rates for existing users. Each provider was assigned a first interim GPCD target for 1992 through 1994 (SMP1), a second interim GPCD target for 1995 through 1999 (SMP2), and a final GPCD target for the year 2000 through the first compliance date of the TMP (SMP Final). top

During the first interim of the SMP, 1992 through 1994, 15 municipal providers exceeded their Total GPCD requirements. Due to the uniqueness of each service area, many factors affect a provider's ability to meet their targets. Of those who exceeded their targets, 9 have experienced disproportionate increases in non-residential water use, although none have implemented non-residential conservation measures. Weather also can affect the ability of a provider to meet its requirements. This was recognized in the development of the SMP, when the Department established a flexibility account which provided a mechanism to accumulate credits in low water use years and established a maximum allowable debit to be utilized in high water use years. Consequently, compliance is not based on the GPCD targets alone, rather the provider's ability to remain above their maximum allowable debit balance. No GPCD compliance action has been taken against any large provider during the SMP. In part this is due to the lag in resolution of administrative reviews⁸, which must be completed prior to determination of compliance. Another reason no enforcement action has been taken in the SMP is staff turnover and increasing workload as a result of increasing program complexity. New legislation, policies and management plan requirement changes have added to the exclusion of compliance actions. These actions limit the effectiveness of the SMP and the ability of the Department to manage the required programs. top

The SMP2 target went into effect beginning January 1, 1995 marking the first required reduction in the Total GPCD targets for municipal providers. If the 1994 water use trends are repeated in 1995, 20 large municipal providers could exceed their SMP2 target, and begin to debit their flexibility account balances. (Providers regulated under the Total GPCD Program may debit their flexibility account by 20 GPCD before compliance action is initiated.)

b. Small Provider Programs
Small municipal providers represent only a small volume of water use, less than one percent, and typically have limited conservation potential. Small water system owners also generally lack resources to implement conservation programs. There are currently 80 active small municipal providers in the Phoenix AMA. Of those, 12 are former large providers redefined as small providers in 1994 as a result of the small rights bill.

The SMP Small Provider Program has a simplified regulatory approach. Small providers are required to (1) minimize waste of all water supplies, (2) maximize efficiency of outdoor watering, (3) encourage reuse of water supplies, and (4) reduce total GPCD usage. top

c. SMP Program Incentives
In order to facilitate the use of non-groundwater supplies, the Department developed several renewable supply incentives. The direct reuse of effluent and use of spill water in a municipal service area are not counted in a provider's Total GPCD compliance. Providers who are actively developing effluent reuse operations are allowed to utilize untreated CAP, until the effluent becomes available, without it counting toward GPCD compliance. Beginning in 1995 through 1999, if total groundwater use does not exceed 30 percent of a provider's total water use in a calendar year, GPCD compliance is based on the more lenient SMP1 target for that calendar year. Providers have utilized these incentives to varying degrees. Effluent reuse has increased since 1985 and several providers are using the CAP exclusion to allow development of effluent supplies for new non-residential users. top

d. Monitoring, Reporting, and Distribution System Requirements
The SMP contains substantial annual reporting requirements for municipal water users. Providers are required to meter all service connections and report all water delivered to residential customers (single family and multi-family units) separately from non-residential uses. Municipal distribution systems are required to maintain their lost and unaccounted for water to no more than 15 percent for small providers and 10 percent for large providers by the year 2000.

The average lost and unaccounted for water figure for Phoenix AMA large municipal providers has been around 10 percent. Many large providers have stated that the 10 percent threshold is too low for a well run system, maintaining that total unaccounted for water will range between 5 and 25 percent for a very efficient system⁹. Additionally, meter inaccuracies due to meter size and flow volumes have been identified as adding to inaccurate lost and unaccounted for figures. This is one area that has been identified for analysis while developing TMP distribution system requirements. top

5. Sector Specific Issues

Many activities contribute to the Department's goal of ensuring a long-term, safe, sufficient and secure water supply to meet Arizona's current and future needs. For the SMP, the Department attempted to develop programs to address unique characteristics of municipal water providers. Since 1992, the management plan has also been modified twice to further address unique situations, complicating interpretation, implementation and regulation of the SMP.

Phoenix AMA staff organized several sessions to obtain feedback from the regulated community prior to the writing of this document. This section identifies the issues raised by both the Department and providers which will be considered as we develop the Third Management Plan.

a. The Role of Resource Based Planning
The goal of safe-yield has been defined as a balance between total recharge in the AMA and total withdrawals. To accomplish this goal requires the knowledge of groundwater movement, groundwater volumes, and locations of withdrawals and recharge. Because of the large size of the AMA, hydrologic conditions vary considerably across the AMA resulting in various water management implications. The Third Management Plan is intended to be a resource based plan, taking into account more localized groundwater conditions and the availability of all water supplies. As part of the recharge and CAP utilization programs being implemented by Phoenix AMA large providers, the Department needs to examine the role of recharge in reversing areas of major groundwater drawdown, as well as water quality, soil aquifer treatment, and long term storage issues. top

b. Supply Augmentation or Conservation
In the SMP the Department has focused primarily on conservation regulations. The new assured water supply rules initiated renewable supply requirements for municipal growth. The Department believes water use efficiency, increased use of renewable water and effluent, limited restrictions on inappropriate uses of certain sources, and recharge are each critical to ensuring a secure water supply. A number of providers argue that these goals conflict or that they have insufficient resources to pursue both conservation and renewable supplies simultaneously. Some have recommended that the use of renewable resources should be facilitated by exempting such deliveries from conservation requirements. However, the Department's long term demand and supply projections indicate Phoenix AMA providers will fully utilize their CAP and other renewable resources, justifying the continued attention on efficient use of all water supplies. In the development of the TMP, the Department will evaluate each strategy (conservation and renewable supply augmentation) however, conservation is still considered to be a critical element in achieving the goal of the AMA. top

c. Conservation as a Water Management Strategy
Although some providers have comprehensive and effective conservation programs, many providers have not adopted conservation programs to the degree ADWR assumed for the SMP. Additionally, some providers who initiated comprehensive programs are reducing their earlier efforts. Uncertainty about program effectiveness, inability to earn ACC approval for recovery of program costs, GPCD targets which were easily accomplished, and lax enforcement efforts have all contributed to the unwillingness to invest in conservation. Because the TMP requires additional reductions in per capita use, the Department needs to examine new information on the water savings, costs and benefits of water conservation measures.

d. Institutional/Jurisdictional Issues
There exists an inequity between those who have developed the ability to utilize their CAP subcontracts, effluent, and other surface water supplies and those who do not have the infrastructure or whose proximity to renewable supplies impedes their ability to utilize these supplies. Additionally, the Department's methods of establishing conservation requirements may result in some providers having to do little or no conservation while other providers must establish comprehensive conservation programs to meet their targets. In order to address the municipal sector's contribution to safe-yield, the Department needs to evaluate the disparity between providers within the municipal program. top

e. Private Water Companies
ACC policies relative to cost recovery for conservation programs and renewable supply acquisition are a key issue in all AMA's for private water companies that have growth potential. Some private water companies are choosing not to maintain their designation of assured water supply or may relinquish their CAP allocation because of their inability to gain ACC approval for financing. The Department needs to analyze the ability of private water companies to achieve the requirements of the municipal program in conjunction with the requirements and limitations of other regulatory agencies and to develop a workable solution for increasing the development of renewable supplies needed for the contribution to achieving the goal of safe-yield.

Mechanisms are needed to provide private water companies the ability to overcome the obstacle of no ability to grow without infrastructure and no ability to afford infrastructure without a larger tax/rate base. Regionalization or financing mechanisms are needed so that both small cities and private water companies can afford the infrastructure for receiving, treating, and delivering renewable water supplies. top

f. GPCD Program Issues
After the SMP GPCD requirements were assigned in 1990, the Department was inundated with requests for administrative reviews, diminishing the ability to effectively administer the existing programs. Several issues were addressed including inaccurate population projections, seasonal population, disproportionate increases in non-residential growth, and inaccurate assumptions for new residential growth (ie: lot size and exterior landscape patterns). The Department's answer to disproportionate non-residential growth has continued to be the availability of alternative programs. However, the Department has begun to look at the adequacy of the alternative programs to address this issue. The possibility of alternative GPCD target calculations to address the issue of inaccurate population projections is another area the Department will be addressing as part of the TMP development.

Staff has been conducting preliminary evaluations of the individual assumptions used in calculating the SMP requirements for new residential growth. Preliminary findings show the assumptions used for interior water consumption, evaporative cooler uses, pool uses, and lot sizes are both higher and lower than what was assumed in the model. However, so far, these factors have averaged fairly consistently to what the Department assumed in its new residential target-setting approach. top

g. Facilitate Increased Use of Effluent and Use of Poor Quality Water
Effluent use has increased since 1980, however, we are far short of the ambitious SMP goal of utilizing 75 percent of the regions effluent. Streamlining health and environmental regulations, educating the public and researching treatment and appropriate uses are all necessary to effectively utilize effluent during the third management period. Considerable capital investment is necessary for developing effluent resources, and the Department recognizes that regulatory certainty is necessary to facilitate these investments. However, as with all other water sources, efficient and appropriate use of effluent will be increasingly important as the region's water demands continue to grow. We can not afford to permanently grandfather in inefficient uses of effluent.

A number of providers and irrigation districts have requested the Department change its policy on counting beneficial uses of poor quality water against a provider's GPCD, and on sometimes counting pumping, even for remedial projects, as part of a provider's allowable groundwater use. As part of TMP preparation the Department needs to examine these issues and implement policies which facilitate integrated poor quality water and plume management. However, the Department does strongly adhere to the basic philosophy that consumptive uses of all groundwater should count against a provider's GPCD calculation. top

6. Relationship of Sector to Achievement of Management Goal

Since the beginning of the FMP, groundwater use in the municipal sector has decreased approximately 7 percent. As a percent of total municipal water use, groundwater is becoming a smaller ingredient, decreasing from 44 percent of total municipal use in 1980 to 27 percent of total municipal use in 1994. Municipal providers in the Phoenix AMA have expended enormous capital investments to acquire and build infrastructure to utilize renewable resources. Cooperative planning by the large municipalities has aided in the development of a regional recharge facility, the Granite Reef Underground Storage and Recovery Project, and establishment of intergovernmental agreements to provide transportation, treatment or use of renewable supplies. The table below illustrates the municipal sector's contribution to overdraft in the Phoenix AMA between 1985 and 1994. top

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Although they are not there yet, due to the adoption of the new assured water supply rules, requiring new growth to be supplied with renewable resources, the municipal sector is likely to come closer to safe-yield than the Industrial or Agricultural sectors during the next management period. It is assumed that most of the large municipalities will be seeking designations by the end of the SMP, accounting for the majority of the water use in this sector. These are the municipalities who are currently the principal users of renewable supplies. Although these providers will have the ability to phase in new growth using a 7.5 year allocation of groundwater, most large providers currently utilizing renewable resources have indicated that they will reserve this allowable groundwater for times when surface water availability is limited (including canal dry up, peak daily demands, treatment facility shut downs, and drought).

Institutional and geographic constraints still exist for other providers, particularly the private utilities who are choosing to put the burden on the individual developers to obtain certificates of assured water supply for new growth. This will facilitate participation in the Central Arizona Groundwater Replenishment District (CAGRD) which may allow small cities and private water companies to grow and establish sufficient demand and rate of tax bases to develop renewable supply infrastructure. On the other hand, the AWS rules are leading to an increase of developer interest in starting new private water companies, and the existence of the CAGRD could facilitate development in outlying areas, instead of encouraging development to go to where renewable supply infrastructure can be provided. top

The impact of the municipal sector on overdraft should decrease with the advent of the new assured water supply rules. However, because of the size and diversity of the Phoenix AMA, the Department needs to analyze safe-yield on a more localized basis, perhaps sub-basin determinations. Different areas of the AMA are utilizing groundwater or renewable supplies at various levels. While some areas of the AMA may be experiencing increases in groundwater levels, other areas have severe declines. Sub-basin management is one alternative that the Department will analyze in the development of the Third Management Period.

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