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L E T T E R
P O W E R O F W A T E R
C A P R E V I E W
F I N A N C I A L S
T H E B O A R D
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C O N T E N T S
DAVID S.“S I D” W I L S O N JR. G E N E R A L M A N A G E R
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TERT O O U R C U S T O M E R S A N D C O N S T I T U E N T S :
The first year in the new millennium was a chal-
lenging one for Central Arizona Project as it was for
all Americans. The tragedy of September 11 stunned
all of us and the images, feelings and actions on that
and following days will be with us forever.
But, just as the United States was staggered yet
continued and recovered, so, too, did Central Arizona
Project. Not only did CAP fill all customer water
orders and deliver a total of 1,321,657 acre-feet of
water, but it did so while increasing its security meas-
ures both internally and externally.
In addition, CAP overcame a myriad of operational
challenges during 2001. Those challenges, such as
shutting down and recoating the Salt River Siphon,
installing the new ERP computer system, installing a
new impeller in the Mark Wilmer Pumping Plant and
starting a new recharge project in Maricopa County,
are discussed in this annual report.
However, there is not enough room in this report
to explain the true success and highest accomplish-
ments of CAP because that would require that we talk
about each and every one of our employees.
The people of CAP — from those who work on the
aqueduct to those who work in the water control cen-
ter, from those who work inside our plants to those
who patrol the 336-mile-long system — are the ones
who make it possible to bring the desperately needed
water from the Colorado River to the cities, towns,
businesses, Indian communities and agricultural
fields in central and southern Arizona.
That is important because, while water is one of
the simplest compounds in nature, it also is one of
the most powerful.
Water means life. While that is true everywhere, it
is especially evident in the desert. In fact, in all places
through all time water has been required not only for
life, but for mankind’s livelihood, success, economy,
and community. That is what gives water its power.
The Central Arizona Project, its leadership and
employees, understand the power of water and are
dedicated to making sure its presence in Arizona
remains assured. That way, ultimately, the power of
that water lies in the hands and imagination of the
people of Arizona.
For Central Arizona Project the year 2001 was a year of challenge.
LET a r 01
Nearly 2.2 billion people
in more than 62 countries,
one-third of the world’s
population, are starved
for water.
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H2OWater.
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THE POWER OF WATER CAN BE DESTRUCTIVE DURING FLOODS, BUT IT ALSO HASCREATED THE GRANDEUR AND AWESOME BEAUTY OF THE GRAND CANYON.
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WATER GENERATES POWER. COLORADO RIVER WATER, AS IT PASSES THROUGHGLEN CANYON, HOOVER AND OTHER DAMS, PRODUCES POWER USED BY PEOPLETHROUGHOUT THE SOUTHWEST.
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WATER MAKES UP ALMOST TWO-THIRDS OF THE HUMAN BODY AND 70 PERCENT OF THE BRAIN.
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e
In healthcare, ice-water is poured
into the pericardial sack to slow and
preserve the heart duringa bypass operation.
MED
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One of the simplest compounds in nature: Two hydrogen molecules
combined with one oxygen molecule. This microscopic, inaudible, odorless, and texture free particle of no particular tang
determines human destiny. Civilization evolved at the confluence of rivers. The Romans built great aqueducts to expand
their empire. In all places, through all time, water has directed man’s livelihood, success, economy, and community.
As a natural force, water is p o w e r f u l .
The southwestern United States was molded by the power of Colorado
River water. That water carved the Grand Canyon. Its flood has scoured the Canyon and adjacent flood plains. At one
point, the floodwater breached a canal and created the Salton Sea. Water, released through Glen Canyon, Hoover and
other dams, generates electricity used throughout the Southwest.
For individuals, water is powerful.
The impact of water on mankind is immeasurable, ranging from
determining where you can live to how much land you can farm or develop. Humans can live without food for a far longer time
than without water.
As a political force, water is powerful.
The pursuit of water can unite people as it did with the con-
struction of Hoover Dam or it can lead to disputes. For example, the long battle over Colorado River water saw the mobilization
of the Arizona National Guard at one point in time. The Guard was sent to the river to prevent California from building a dam.
That dispute, like many others, eventually was settled.
Regionally, water remains a force and source of dispute.
Some issues coming to the fore in the 21st century are the
movement to provide more water for the Mexican Delta,
the cry to drain Lake Powell, the proposed lining of
Imperial Irrigation District’s All-American Canal, the
implementation of California’s 4.4 plan, interstate water
banking and the Multi-Species Conservation Program.
In Arizona, the Governor’s Water Management Commission
met throughout the year with the intent of “tweaking” the state’s water laws. The recommendations should eventually result in
new legislation for the state.
The impact of water’s power on cities is tremendous. The decision
by the U.S. Environmental Protection Agency to change the allowable arsenic levels in drinking (potable) water from 50 parts
per billion (ppb) to 10 ppb will force many cities to depend more upon surface supplies. In addition, the state’s requirement of
proving an assured 100-year water supply before building permits are issued also pushes cities to higher use of renewable surface
water supplies. The scramble to secure more surface water will result in pressure to settle Indian water rights disputes and for
CAP to develop a wheeling policy.
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Meteorologists do not caution us of the sunny day with blue sky.They inform us of the approach of water vapor: The pleasure of a spring shower, prudencefor a monsoon, and dry shelter from a hurricane.
aR
Central Arizona Project has the power to provide water.
CAPThe various demands and impacts of water on Arizona are being
monitored and met by the water managers at Central Arizona Project.
Central Arizona Project, its leadership and
employees, understand the power of water and
are dedicated to providing that water, and its
power, to the people of Arizona.
P O W E R
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he pictures and videos of aircraft crashing into the twin towers of the World Trade Center, the
collapse of the buildings, the later crashes into the Pentagon and in Pennsylvania, brought the
nation to a standstill.
Terrorism, and the declaration of war against terrorists by the United States, sent ripples of
confusion, fear, sadness and determination throughout the country.
Although water played no role in the initial volley of the war on terrorism, it wasn’t long before
everyone’s attention turned to nature’s most essential element, water.
Nationwide, people feared a follow-up attack and, in Arizona, they began to ask if Arizona’s water
supply — Colorado River water brought into the state by Central Arizona Project—was safe.
It is virtually impossible to fully protect a system that wends its way 336 miles through the
desert in an open canal. Central Arizona Project (CAP) stretches from Lake Havasu — where
CAP draws water out of the Colorado River – to Phoenix and the Valley and on to Tucson. But
CAP does protect its system. Armed security agents patrol the aqueduct and provide aerial sur-
veillance as well. Other security measures are also in place.
There are still other factors that make CAP’s water system safe.
First, water is not a good delivery system for most known bioterrorism weapons. The dilution
factor and the fact that drinking water is treated also protect the supply.
Patients withwounds and
injuries are given saline solutions—
ninety fivepercent water,five percent
sodium—tostabilize
circulation,respiration,
and cognition.The wonder that isa human being is
sustained by water.
Ronald Dick, director of the FBI’s National Infrastructure Protection Center, told a Congressional
committee: “Contamination of a water reservoir with a biological agent would probably not pose
a large risk to public health because of the dilution effect, filtration and disinfection of the water.
To contaminate the water supply with a hazardous industrial chemical, it would take a truckload
of the chemical to have any effect.’’
CAP’s system contains far more water than most reservoirs. There are more than 25,000 acre-
feet of water in the CAP system at any given time. One acre-foot is about 326,000 gallons,
which is enough to fill about 20 backyard swimming pools. Lake Pleasant, CAP’s storage reser-
voir, contains another 500,000 acre-feet of water. That is a total of about 170 billion gallons of
water in the CAP system. It would take an enormous amount of any material to make that much
water harmful, let alone deadly. While that does not mean CAP is immune from a bioterrorism
attack, it does make the danger of such an attack small.
Security, while always paramount, was only one part of CAP’s concerns in 2001. Most CAP
activities during the year fall into one of five general categories: operations, internal matters,
recharge, political activities and regional issues.
09 11 01
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PROVIDING THE WATERS A F E
WHILE EVERYONE KNOWS A PERSON CANNOT LIVE WITHOUT WATER, MOST DON’T REALIZETHAT 75 PERCENT OF AMERICANS ARE CHRONICALLY DEHYDRATED, THAT IN 37 PERCENTOF AMERICANS THE THIRST MECHANISM IS SO WEAK IT IS OFTEN MISTAKEN FORHUNGER, THAT EVEN MILD DEHYDRATION WILL SLOW DOWN ONE’S METABOLISM AS MUCHAS 3 PERCENT AND THAT A MERE 2 PERCENT DROP IN BODY WATER CAN TRIGGER FUZZYSHORT-TERM MEMORY, TROUBLE WITH BASIC MATH AND DIFFICULTY FOCUSING ON THECOMPUTER SCREEN OR ON A PRINTED PAGE.
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The defining moment of 2001 came on the morning of September 11 when terrorist attacks stunned the United States.
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During 2001, CAP delivered 1,321,657 acre-feet of water to
its four major categories of customers in Maricopa, Pinal and
Pima counties. The customer categories are municipal and
industrial (M&I), Non-Indian Agricultural users, Indian com-
munities and recharge sites.
The more than 1.3 million acre-feet of water were delivered
even though CAP had to overcome two major obstacles: First,
it had to cease deliveries for a month to all customers south of
the Salt River while it made siphon repairs. Second, it had to
replace an impeller at the Mark Wilmer Pumping Plant in
Lake Havasu.
T H E S I P H O N R E P A I R
Just past midnight on November 1, 2001 the CAP Control
Center lowered the gates at Check 25 and water stopped mov-
ing through the canal. Crews from more than 14 CAP depart-
ments gathered in the pre-dawn hours to begin the work that
would consume them for the
next four weeks.
The Salt River Siphon
repair project had begun.
Siphons carry CAP’s water
under riverbeds and large
washes to protect the delivery
system in times of flood and
ensure that the Colorado
River water is not contami-
nated by material carried by
floodwaters.
The Salt River Siphon,
which is 21 feet in diameter
and about 8,700 feet long, showed abrasion and coating
defects during a 1999 inspection. Making repairs and
recoating the siphon was a huge undertaking.
First, the siphon had to be drained. Two high-lift pumps
capable of moving more than 2,000 gallons per minute were
put to work. At one location, the water had to be lifted 70 feet
to reach the surface.
Once the siphon was empty, special lights that run off air,
originally designed more than 100 years ago for mining, were
used to illuminate the otherwise pitch-black underground work
area. Each unit had a small air-driven generator that developed
enough power to cause a 60-watt bulb to burn brightly.
Rolling scaffolding were created by CAP employees to give
the repair teams mobility and access to the 21-foot diameter
siphon. The four scaffolds were built on modified wheel
assemblies of old Volkswagen “Beetles,” which allowed them
to move easily through the siphon.
Crews used an ultra high-pressure water jetting system to
remove corroded material which was cleaned up by two 8-
foot-tall vacuums before the more than two miles of siphon
were recoated.
The crews opted to stay and work Thanksgiving Day. Their
turkey dinner was brought in and the crews shared their meal
off the back of a flatbed trailer between shifts.
On Friday, November 30—one full week ahead of schedule—
water went back into the siphon and deliveries resumed.
T H E I M P E L L E R
The second major operations hurdle that CAP employees
successfully overcame was the continuing effort to replace the
impellers at the Mark Wilmer Pumping Plant.
The first, and largest, pumping plant on
the CAP system is Mark Wilmer in Lake
Havasu. Six 60,000 horsepower pumps
drive impellers that scoop up water from
the Colorado River and hurl it 824 vertical
feet through pipes up the side of a moun-
tain. The water then enters an approxi-
mately 7 mile long tunnel through the
Buckskin Mountains before it emerges
into the aqueduct and begins its journey
across the state.
The impellers are being replaced to
increase the efficiency of the pumping
plant and to reduce the noise and vibra-
tion produced by the hydraulic pulsations
of the original impellers.
CAP decided to install new, computer
designed impellers that lower the intensi-
ty of the pulsations, which in turn lowers
the sound and vibration levels. As a
bonus, they each pump an additional 100-
plus cubic feet per second (cfs) of water.
Four of the six impellers have been
replaced to date, and the last two will be
replaced over the next two years. The
project will be complete in 2004.
OPER
ATIONSNote: This tabulation is based on diversions including underground pumping, less measured return flow and less current estimated unmeasured return flow to the river.
COLORADO RIVER WATER USE FOR LOWER BASIN
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MODIFIED VOLKSWAGEN “BEETLE” WHEELASSEMBLIES WEREUSED TO BUILDROLLING SCAFFOLDSSO CREWS COULD WORK INSIDE THE 21-FOOT DIAMETER SIPHON.
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5,211,827
C A L I F O R N I A :
A R I Z O N A :
N E V A D A :
2,641,943
acreFT
310,978
8.17
WHERE THE LARGEST AZ CITIES GET THEIR WATER
P H O E N I X
S C O T T S D A L E
M E S A
G L E N D A L E
P E O R I A
T E M P E
C H A N D L E R
CAP SRP GROUND
63% 33% 4%
CAP SRP GROUND OTHER
41% 10% 1%48%
CAP SRP GROUND OTHER
30% 53% 9.5%7.5%
CAP SRP GROUND
39% 48% 13%
DIRECT DELIVERED CAP RECHARGED CAP GROUND
14% 70% 16%
CAP SRP GROUND OTHER
7% 90% 2%1%
CAP SRP GROUND
21% 72% 7%
Source: Arizona Republic 03.24.02
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acreFT
CAP implemented an Enterprise Resource Planning (ERP) system
consisting of a “best of breed” approach that integrates two software
products, one for finance, accounting and human resources functions
and a second for maintenance and asset management. The two prod-
ucts run on the same database and work together.
Prior to the implementation of the ERP, CAP had separate systems
for finance/ accounting and maintenance that could not “communi-
cate” with each other, and human resources used mostly manual
processes. This resulted in departments that worked in isolation, or
“silos.” While both systems collected “costs,” they were often on differ-
ent bases. This required duplicative input and reconciliation between
the two systems. In addition, the financial and maintenance systems
were becoming obsolete, and various departments were considering
stand-alone replacement strategies. All this was compounded by out-
dated desktop hardware and software throughout CAP. The network,
servers and database software were also in need of replacement.
INTERNALAs the calendar changed
to the 21st Century, CAP’s internal capabilitiesalso reflected the newcentury as it completed an 18-month upgrade to itscomputer systems and programs.
Most critically, the rates CAP charges its customers are based on its
costs. Several rates require reconciliation of actual costs to set rates
after the fact. Reliable capture of costs, access to cost details and visi-
bility into reasons for cost variances are critical for CAP to manage its
costs, properly set rates and forecast future costs and rates. Aging,
stand-alone systems that only captured some of the required data
would not support these needs.
In addition, in 1998 CAP began to implement a Balanced Scorecard
program, consisting of the identification of key performance indica-
tors (KPIs) that would be used to identify gaps between its overall
performance and its strategic goals. KPIs must be defined and meas-
ured, and the existing systems placed serious limitations on what
could be accurately measured.
CAP employees were involved at every level during the implementa-
tion of ERP. The Senior Management Team (SMT) appointed one of
its members as “executive sponsor” of the project and authorized him
to create a steering committee composed of members from the various
functional groups. Twelve steering committee members spent all their
time on the project. In addition, there were approximately 50-60
“super users,” or functional experts, who were heavily involved in ERP
configuration, testing and training.
Every one of CAP’s approximately 450 employees had an average of
16 hours of ERP training, ranging from basic computer training for
those who needed it to all employees learning a new e-mail and calen-
dar system.
Benefits of the system relate primarily to improved work processes,
elimination of duplicative data, manual work and reconciliation
among various “silo” databases. Many improvements are tangible and
measurable. For example, the replacement of a paper process, which
required completing, reviewing, approving and inputting two
timesheets, with a paperless single-entry process will save an estimat-
ed $200,000 per year.
CAP now is a pioneer in the integration of Oracle 11i and
Datastream MP5i. The implementation of an Enterprise Resource
Planning system at CAP incorporated a number of best practices and
unique approaches that helped to make the project a success.
CAP COMPLETED AN 18-MONTH UPGRADE TO ITS COMPUTER SYSTEMSAND PROGRAMS THAT INCLUDED AN AVERAGE OF 16HOURS TRAINING FOR EVERY ONE OFCAP’S APPROXIMATELY450 EMPLOYEES.
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If, as expected, the number of people on earth increases by more than a third, to more than 8 billion, by 2025, 40 percent more water will be needed.
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WATER WELL CAP CANAL
WATER TABLE
AQUIFER
LOW CAPACITYAQUIFER
LOW CAPACITYAQUIFER
DEEP SALTYAQUIFER
VOLCANICROCK
GRANITEBEDROCK
IMPERMEABLE LAYER
RECHARGE ZONE
SATURATED ZONE
With the Governor’s Water Management Commission completing its study of Arizona’s water
policy in 2001, it was anticipated that several bills dealing with water and water issues would be
introduced into the Legislature in January 2002.
CAP provided many participants who served on the Commission, which spent more than a
year reviewing Arizona’s water laws. Several Central Arizona Water Conservation District
(CAWCD) Board members, who oversee CAP operations, served as chairmen or key members of
committees. This included CAWCD Board President George Renner and Board members Grady
Gammage and Steve Weatherspoon. Former CAWCD Board members Ron Rayner and Karl
Polen also served on the Commission. In addition, many CAP employees worked for the
Commission as committee members.
To prepare for the January 2002 Legislative session, CAP launched a series of CAP tours for
key members of the Legislature. During October and November, CAP General Manager Sid
Wilson and some CAWCD Board members conducted a series of briefings, tours and helicopter
flights with members of the Arizona Legislature in an attempt to help them become familiar with
Central Arizona Project, its operations and Colorado River water issues.
POLITICS
Arizona’s share of the Colorado
River by storing this water under-
ground for future use. By encourag-
ing the use of surface water, which
is a renewable water supply,
instead of continued reliance on
groundwater, AFRRP mitigates the negative impacts of
groundwater overdraft such as land subsidence, aquifer
compaction and earth fissures.
AFRRP has two primary components, a four-mile in-chan-
nel recharge area where water is recharged in the natural
river channel and a constructed facility where recharge
occurs through 115 acres of spreading basins.
The first phase of the AFRRP became operational in 2001.
Water was released into the riverbed at a rate of 40 cubic
feet per second (cfs), which recharges about 80 acre-feet per
day, or about 26 million gallons. The second phase of the
project, which will utilize the spreading basins to increase
the flow of recharge water to a maximum of 325 cfs, should
begin in the first half of 2002. When complete and fully in
operation, the $10 million project will be capable of storing
up to 100,000 acre-feet of water a year.
In addition to the AFRRP, CAP also has recharge sites in
Pima County. They are the Avra Valley Recharge Project, the
Pima Mine Road Recharge Project and the Lower Santa
Cruz River Recharge Project.
A second Maricopa County recharge project, the Hieroglyphic
Mountains Recharge Project at about 163rd Avenue and the
CAP aqueduct, is scheduled to come on-line in 2002.
Other sites being considered for recharge include the
Queen Creek area and several other areas in extreme west-
ern Maricopa County and in La Paz County.
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R E C H A R G E
REOne of CAP’s four major customer
classes–recharge–is water delivered now for future use in
times of drought.
CAP protects against future shortages by partnering with
the Arizona Water Banking Authority (AWBA) and some
customers to recharge excess water by storing it underground
where it recharges depleted aquifers. The water can then be
pumped back out in times of shortage.
Excess water, that is water under contract but not taken
by the contract holder, is deemed to be excess water and can
be sold by CAP to any customer.
CAP has several recharge facilities and, in 2001, it broke
new ground with the creation of the Agua Fria River
Recharge Project (AFRRP).
On September 18, 2001 CAP unveiled AFRRP, Arizona’s
only recharge project that combines streambed recharge and
infiltration basins at a single facility. CAP developed this
project not only to better manage Arizona’s water supply,
but also to encourage the use of the state’s largest renewable
water supply, the Colorado River.
After the ground breaking in May, AFRRP began initial
operations with the release of Colorado River water from
CAP’s Agua Fria Siphon into the normally dry Agua Fria
riverbed. The project allowed CAP to increase use of
THE HIEROGLYPHIC MOUNTAINS RECHARGE PROJECT IS SCHEDULED TO BEGIN OPERATIONS IN 2002.
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RECHARGE
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Globalpopulation
has tripled inthe past 70 years
while water usehas grown six folddue to industrial
development, widespread
irrigation, andlack of
conservation.
THE AGUA FRIA RIVERRECHARGE PROJECTWILL BE CAPABLE OFSTORING UP TO100,000 ACRE-FEETOF WATER A YEAR.
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FINSTA
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION
D E C E M B E R 3 1, 2 0 0 1
C O N T E N T S
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STATEMENTS OF NET ASSETS
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
A U D I T E D F I N A N C I A L S T A T E M E N T S
O T H E R F I N A N C I A L I N F O R M A T I O N
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p. 20MANAGEMENT’S DISCUSSION AND ANALYSIS
REPORT OF INDEPENDENT AUDITORS
STATEMENT OF NET ASSETS — BY FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS — BY FUND
SCHEDULE OF SERIES A 1990, SERIES A 1993 AND SERIES A 2001 BOND FUND ACTIVITY
SCHEDULE OF SERIES B 1991, SERIES A 1994 AND SERIES A 2001 BOND FUND ACTIVITY
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S T A T I S T I C A L S E C T I O N
SCHEDULE OF AD VALOREM PROPERTY TAX — FULL CASH VALUE AND ASSESSED VALUE
SCHEDULE OF AD VALOREM PROPERTY TAX — TAX LEVY AND COLLECTIONS
SCHEDULE OF CUSTOMER ACTIVITY — WATER O&M CHARGES AND CAPITAL CHARGES
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REGIONAL
p. 1 8million acre-feet
of W A T E R
7.5
7.5CAP remained an active leader and participant in regional
water issues throughout 2001.
The Arizona Water Banking Authority (AWBA) approved an
agreement for Interstate Water Banking with the Southern
Nevada Water Authority and the Colorado River Commission
of Nevada. CAWCD President George Renner also serves as a
member of the Water Bank board.
This was the first of three agreements needed before Arizona
begins banking water for Nevada. The remaining two agreements,
a Storage and Interstate Release Agreement and an Agreement for
Intentionally Created Unused Apportionment, are scheduled to
be approved in 2002.
The Storage and Release Agreement deals with the physical
storage and recovery of Colorado River water by storing it under-
ground in Arizona. The agreement for the Intentionally Created
Unused Apportionment requires a negotiated agreement between
the AWBA and CAWCD. That agreement will deal with how
Nevada will recover, or collect, the water it has stored in Arizona.
In the future, when Nevada wants to recover a portion of its
banked water, CAP will intentionally leave some of its 1.5 million
acre-foot allocation in the Colorado River for Nevada. If CAP
needs the water it intentionally left in the river, it would recover
the water from the AWBA by pumping the stored water from the
ground and deliver it to its customers. The AWBA would then
deduct that amount of water from Nevada’s “account.”
For example, if Nevada wanted to recover 20,000 acre-feet
of water in 2020, CAP would take 1,480,000 acre-feet of
water from the river. Nevada would take its allocation of
300,000 acre-feet as well as the 20,000 intentionally left by
CAP. If CAP needed the 20,000 it left in the river, it would
take the water from one of the storage sites used by the AWBA.
Nevada would pay all costs of storing and recovering the water
as well as making some fiscal contribution toward capital
repayment. Those costs have not yet been determined.
In addition, CAP managers closely watched California’s
efforts to reduce its water usage as it struggled to comply with
its 4.4 Plan.
Currently, California uses more than 5.2 million-acre feet of
water each year. That is about 800,000 acre-feet more than its
annual allotment of 4.4 million acre-feet.
The Lower Basin states, Arizona, California and Nevada, are
allowed to take a total of 7.5 million acre-feet of water from the
Colorado River each year. Of the 7.5 million acre-feet, Arizona is
allowed to take a total of 2.8 million acre-feet, California is allot-
ted 4.4 million acre-feet and Nevada takes 300,000 acre-feet.
Arizona’s allotment of 2.8 million acre-feet is divided between
the communities and water users along the river who get 1.3 mil-
lion acre-feet and CAP, which is allotted 1.5 million acre-feet.
For years there were no disputes because Arizona never took
its full 2.8 million acre-feet. Before CAP went into operation,
California freely took whatever it needed. However, now that
CAP takes most or all of its 1.5 million acre-feet, California
must reduce its usage.
By an agreement with the U.S. and all seven basin states
(Colorado, New Mexico, Utah and Wyoming are the upper
basin states), California has a 15 year period to reduce its usage
from about 5.2 to 4.4 million acre-feet.
CAP is in the forefront of those issues, and many others, as
it monitors and strives to control the power of water so that its
benefits continue to flow to the people of Arizona.
2.8A z
4.4C a
.3N e
Annual Allotment for Lower basin States
f i g 0 7 . 5 -W
MANAGEMENT’S DISCUSSION AND ANALYSIS C O N T I N U E D
The following is management’s discussion and analysis of the 2001 financial performance of the Central Arizona Water
Conservation District (District). It provides an overview of the District’s financial activities and financial condition for the year
and should be read in conjunction with the District’s financial statements and accompanying notes.
DISCUSSION OF BASIC FINANCIAL STATEMENTS
The District’s annual financial reporting includes three basic financial statements and accompanying notes for an enter-
prise fund. The District reports on a calendar year basis and all financial statements are presented on a comparative basis for
2001 and 2000. The three basic financial statements include the statements of net assets; the statements of revenues, expens-
es, and changes in net assets; and the statements of cash flows. The statements of net assets summarize the District’s current
and long-term obligations (liabilities) and the assets available to meet those obligations. The difference between total assets
and total liabilities represents the District’s net assets. The statements of revenues, expenses, and changes in net assets sum-
marize the District’s operating and non-operating expenses for the year and the revenues that were available to cover those
expenses, as well as changes in net assets. The statements of cash flows summarize the District’s uses of cash during the year
and the sources of cash available to finance those uses. The statements of cash flows, as cash-based statements, include rec-
onciliations to the statements of revenues, expenses, and changes in net assets, which are prepared on an accrual basis.
Consolidating schedules of net assets and statements of revenues, expenses and changes in net assets, which provide more
detailed information on the District’s designated financial activities, are included after the notes to the financial statements.
The District’s activities are accounted for using the accrual method and incorporating the requirements of GASB
Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. Under
enterprise fund accounting, the District is a single accounting entity for financial reporting purposes. However, within this sin-
gle accounting entity the District has identified a number of financial activities that it wishes to track separately, referred to as
“funds.” These funds are as follows: General Fund, Central Arizona Groundwater Replenishment District (CAGRD) Fund,
State Demonstration Projects Fund, Ak-Chin Fund, and several Bond Funds. With the exception of the CAGRD Fund, which
is a component-unit enterprise fund within the District, the use of the term “fund” for these separate activities does not have
any particular accounting significance. The District is not required to and does not publish separate financial statements for
any of the individual funds, except for the consolidating statements referenced above.
The General Fund represents the District’s primary activity, the delivery of Colorado River water to central Arizona
through the Central Arizona Project (CAP) and is, by an order of magnitude, the largest fund within the District. The
CAGRD Fund represents the activities of the Central Arizona Groundwater Replenishment District. The State
Demonstration Project Fund represents the activities related to the construction of State Demonstration underground water
recharge projects. The Ak-Chin Fund represents the activities related to a trust fund established to acquire or conserve water
to supplement Colorado River supplies. The Bond Funds represent the activities related to several revenue bond series issued
by the District. Please refer to the notes to the financial statements for additional information on these funds.
C O N D E N S E D F I N A N C I A L I N F O R M A T I O N
The following condensed financial information provides an overview of the District’s financial activities for the years
ended December 31, 2001 and December 31, 2000.
Total Assets
Capital Assets: The largest component of the District’s capital assets is the permanent service right, net of accumulated
amortization. For 2001, the permanent service right (net) decreased from $1.59 billion to $1.56 billion. The permanent service
right represents the District’s right to operate the Central Arizona Project system and collect revenues from operations, for
which the District has incurred a repayment obligation to the United States. While property and equipment assets grow annu-
ally as a result of ongoing capital projects, such additions are presently more than offset by amortization of the permanent
service right, which is approximately $31 million per year. As a result, net capital assets tend to decrease each year.
Other Assets: Other asset categories include cash, receivables and other current assets, restricted and unrestricted reserves
and investments, and funds held by or advanced to the federal government. The net decrease of $32 million or 9 percent is pri-
marily associated with a reduction of $14 million in cash and investments and a $23 million reduction in the repayment cred-
it. Cash and investments declined in 2001 primarily due to two factors. First, spending on pumping power was greater due to
an increase in the cost and use of over-threshold power. Second, interest earnings were lower than in 2000 due to falling inter-
est rates. The repayment credit resulted from the settlement Stipulation, which is discussed in Note 3 of the Financial
Statements, and is used to offset the amount needed to meet the District’s annual repayment obligation. This credit will be
exhausted in 2002.
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2001
Central Arizona Water Conservation District
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Total Liabilities
Long-Term Liabilities: The two largest components of the District’s long-term liabilities are the federal repayment obliga-
tion and the contract revenue bonds. The long-term federal repayment obligation decreased from $1.53 billion in 2000 to $1.51
billion in 2001. In addition, contract revenue bonds decreased $20 million. Generally, long-term liabilities will decrease each
year as the repayment obligation and revenue bonds are paid off.
2001 2000 Change
Capital Assets:Permanent service right, net $ 1,555 $ 1,586 $ (31)
Property and equipment, net 32 23 9
Other Assets:Cash and Investments 264 278 (14)
Repayment Credit 13 36 (23)
Other 62 57 5
Total assets $ 1,926 $ 1,980 $ (54)
( D o l l a r s i n M i l l i o n s )
MANAGEMENT’S DISCUSSION AND ANALYSIS C O N T I N U E DM A N A G E M ENT’S DISCUSSION AND ANALYSIS C O N T I N U E D
2001 2000 Change
AssetsCapital assets, net $ 1,587 $ 1,609 (22) (1%)
Other assets 339 371 (32) (9%)
Total assets 1,926 1,980 (54) (3%)
LiabilitiesLong-term liabilities 1,676 1,714 (38) (2%)
Other liabilities 107 111 (4) (4%)
Total liabilities 1,783 1,825 (42) (2%)
Net AssetsInvested in capital assets, net of debt (109) (126) 17 (13%)
Restricted 63 60 3 5%
Unrestricted 189 221 (32) (14%)
Total net assets 143 155 (12) (8%)
Total liabilities and net assets $ 1,926 $ 1,980 (54) (3%)
Other Liabilities: Other liabilities include payables, accrued interest, current principal obligations, and the OM&R obliga-
tion. Overall, the net decrease in other liabilities was $4 million for 2001. The OM&R obligation decreased $12 million and
represents the rebate liability owed to subcontract and Federal customers associated with the difference between the reconciled
water rates and the set rates. Offsetting this decrease is an accumulation of several items, the largest of which is accrued lia-
bilities for pumping power and a land easement associated with the Agua Fria Recharge Project.
Central Arizona Water Conservation District
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2001 2000 Change
Long-Term Liabilities:Repayment obligation, net $ 1,506 $ 1,526 $ (20)
Contract revenue bonds 152 172 (20)
Other 18 16 2
Other Liabilities:OM&R reconciliation provision 4 16 (12)
Other 103 95 8
Total liabilities $ 1,783 $ 1,825 $ (42)
( D o l l a r s i n M i l l i o n s )
Total Net Assets
Net assets, the difference between assets and liabilities, decreased 8 percent or $12 million from 2000. In comparison,
net assets for 2000 decreased 11 percent or $16 million from 1999.
( D o l l a r s i n M i l l i o n s )
Investments in capital assets, net of related debt, increased 13 percent or $17 million in 2001. This increase reflects that the
District is paying off the debt faster than the associated amortization and depreciation on these assets. Over time, investments
in capital assets (net) will become less negative and become positive. The decrease in the debt associated with the contract rev-
enue bonds accounts for $18 million of the increase in investments in capital assets (net). As discussed in Note 10 of the
Financial Statements, the contract revenue bonds will be paid off in 2011. Also, property and equipment (net) increased about
$9 million in 2001. Offsetting these increases is a decrease in the net investment in the District’s interest in the Central
Arizona Project. As discussed in Note 2 of the Financial Statements, the District’s interest in the Central Arizona Project rep-
resents a permanent service right pursuant to the Master Repayment Agreement and the settlement Stipulation. Currently,
amounts associated with the amortization of the permanent service right (asset) exceed the District’s annual principal pay-
ment to the federal government for the repayment obligation (liability). The annual repayment obligation is based on paying
a percentage (which increases over time) of the remaining outstanding balance, plus interest, over a 50-year period, while
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 5 percent or $3 million. The majority of the increase is attributable to the funding of the
repayment and emergency OM&R reserve funds required under terms of the Master Repayment Agreement and discussed in
Note 7 of the Financial Statements. Offsetting this increase is a reduction in the amount set aside for the rebate liability asso-
ciated with the District’s contract revenue bonds. The amount needed to fund this reserve is determined by the annual arbi-
trage calculation and the rebate fund is adjusted accordingly.
Unrestricted net assets decreased 14 percent or $32 million primarily due to increased expenses for pumping power and
lower interest earnings caused by falling interest rates.
The change in restricted and unrestricted net assets will fluctuate depending on operational needs and any actions that
may result from the District’s reserve study.
Total Revenues
The District’s principal sources of revenues are water delivery charges, water service capital charges, power sales, property
taxes, and interest earnings. Total revenues for 2001 declined $4 million or 2 percent from 2000 to $185 million, primarily
due to decreased water deliveries, a decrease in rates for water service capital charges, and a decline in interest rates. Offsetting
these decreases was an increase in other Basin Development Fund revenues associated the Navajo Generating Station O&M
(timing) and new Calpine transmission revenues.
2001 2000 Change
Operating revenues $ 145 $ 144 $ 1
Nonoperating revenues 40 45 (5)
Total revenues $ 185 $ 189 $ (4)
( D o l l a r s i n M i l l i o n s )
Change In Net Assets and Ending Net Assets
As shown below, the decrease in net assets for 2001 was $12 million, which is 8 percent lower than 2000 primarily due to
higher expenses in 2001.
MANAGEMENT’S DISCUSSION AND ANALYSIS C O N T I N U E DM A N A G E M ENT’S DISCUSSION AND ANALYSIS C O N T I N U E D
Central Arizona Water Conservation District
f i n 01
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p. 24F
Total Expenses
Total expenses for 2001 exceeded 2000 by $24 million as shown below. Several factors influenced the increase in 2001
expenses. First, pumping power costs experienced a significant increase. Second, costs associated with the enterprise resource
planning system (ERP) and repair of the Salt River Siphon caused increases in several line items. Third, spending increased on
State Demonstration Projects for the construction of several projects.
The District sets rates annually each June for the following year. Rates are set in a manner that will recover an appropriate
share of the District’s expected operating expenses from customers while maintaining adequate reserve levels. Since rates are set
in advance, actual expenses may differ from the estimates used to calculate rates, and reserves may consequently fluctuate. The
District is in the process of finalizing a reserve study, the purpose of which is to develop a model that can be used to forecast
future repairs and replacements that will assist the District in setting appropriate reserve targets and setting rates accordingly.
T O T A L R E V E N U E S
$80�
$60�
$40�
$20�
$ 0
WATER CAPITAL�CHARGES
POWER TAXES INTEREST OTHER
MI
LL
IO
NS
5761
25 28
5752
24 24
1621
6 4
2001
2000
2001 2000 Change
Operating expenses $149 $123 $26
Nonoperating expenses 48 50 (2)
Total expenses $97 $173 $24
( D o l l a r s i n M i l l i o n s )
ANALYSIS OF OVERALL FINANCIAL POSITION AND RESULTS OF OPERATIONS—CURRENTLY KNOWN
FACTS, DECISIONS OR CONDITIONS THAT ARE EXPECTED TO HAVE A SIGNIFICANT EFFECT ON
FINANCIAL POSITION
The overall financial position of the District is strong. The District has General Fund cash reserves of over $200 million,
which represents in excess of one year’s cash expenditures including operating expenses, capital projects and debt service (the
Bond Funds have their own restricted reserves as required by the applicable Indentures). The restricted portion of the General
Fund cash reserves, approximately $40 million, is required under the District’s Master Repayment Agreement (see Note 3 of
the Financial Statements). The balance of the General Fund cash reserves has accumulated over the years, funded primarily
through property tax collections and interest earnings in excess of operating cost subsidies required for rates which are set
lower than cost by District policy.
The cash reserves serve several purposes. First, there is a great deal of seasonality in the District’s cash flow. The annual
installment on the repayment obligation to the United States occurs each January 15, and usually involves a substantial cash
payment. Timing of electricity purchases is another consideration, since most of the diversions from the Colorado River take
place from late fall to early spring as Lake Pleasant is filled. During the summer, the lake is drawn down. The District’s power
sales contracts (see Note 4 of the Financial Statements) specify a “threshold” level of electricity that can be purchased essen-
tially at cost. At current water delivery levels, the threshold purchases are exhausted in the late third quarter of each year, requir-
ing the District to purchase power on the open market, which is more expensive. The combination of the timing impacts of
water diversions and electricity prices has the net effect of concentrating over one-half of the District’s electricity costs into a
few months in the winter and early spring. Property tax and water service capital charge revenues are received in two semi-
annual installments in the spring and the winter. The combination of all of the seasonal effects results in the reserve levels fluc-
tuating up to $40 million between the high points at the end of the year and during the summer and the low points in mid-
winter and late fall.
The cash reserves also serve as a hedge against operating uncertainties, which include changes in water demand, electric-
ity costs and water supply. In 2001, falling interest rates also impacted the District’s cash flows.
2001 2000 Change
Total operating revenues $ 145 $ 144 $ 1
Total operating expenses (149) (123) (26)
Operating income (loss) (4) 21 (25)
Nonoperating revenues (expenses) (8) (6) (2)
Change in net assets (12) 15 (27)
Beginning net assets 155 140 (15)
Ending net assets $ 143 $ 155 $ (12)
( D o l l a r s i n M i l l i o n s )
p. 25F
TOT A L E X P E N S E S
$80�
$60�
$40�
$20�
$ 0
SALARIES POWER PSR AMORT INTEREST OTHER
MI
LL
IO
NS
31 31 3128
59
45 49 50
2719
2001
2000
The cash reserves also serve as a source of funds for capital projects and other project spending. The District recovers a
portion of its ongoing capital expenditures through rates, since depreciation is included as a recoverable cost. In addition,
beginning in 2002, the District has included $2/acre-foot in the fixed OM&R rate component as a contribution towards ongo-
ing replacements. The balance of capital spending is funded through property tax revenues and interest income. As the CAP
ages there may be capital spending for major repairs, replacements or refurbishment that are not entirely predictable. Finally,
reserves are a hedge against strategic uncertainties, which at the present time are primarily those surrounding the repayment
dispute and settlement Stipulation (see Note 3 of the Financial Statements), not the least of which is the amount of the repay-
ment obligation itself.
Results of operations may be evaluated by both analyzing the change in net assets versus expectations and the change in
General Fund cash reserve levels. The consolidated change in net assets may be difficult to assess, since it includes the Bond
Funds (which should typically experience an increase in net assets because revenues are sufficient to cover both interest expense
and principal payments) and the State Demonstration Project fund (which should typically experience a decrease in net assets,
since the tax proceeds collected in earlier years that are now being spent have already been recorded as non-exchange transaction
revenues). The General Fund in the near future can usually be expected to experience a decrease in net assets, due to timing dif-
ferences between the effectively straight-line amortization of the permanent service right and the associated debt service.
In 2001, the General Fund experienced a decrease in net assets of $22 million, which is somewhat more than expected
due to higher energy costs and lower interest rates. However, this performance is within the normal range of expected fluctu-
ation. The change in net assets for the General Fund over the last five years has fluctuated between a nominal increase (2000)
and a decrease of $28 million (1999).
The current policy of the District’s Board of Directors is to set rates in such a way that cash reserves can be maintained at
approximately the same level, until such time as uncertainties associated with the settlement Stipulation are resolved or the
reserve strategy is modified. Over the last five years, total General Fund cash reserves have fluctuated between $203 million
(1996) and $229 million (1998), the absolute value of any annual change has not exceeded 7 percent, and the cumulative
change over that period of time is less than 1 percent, which management considers to be an indication of satisfactory operat-
ing results and the successful implementation of the Board’s cash reserve policy. An example of the operation of this policy is
the reduction in the ad valorem property tax and M&I capital charge rates by 10 percent each beginning in 2001 in conjunc-
tion with the reduced level of debt service arising out of the settlement Stipulation.
CAPITAL ASSET AND LONG-TERM DEBT ACTIVITY
Capital Assets: At December 31, 2001, the District had a net investment of $1.587 billion in capital assets. This amount repre-
sents a net decrease (including additions and deductions) of $22 million, or 1.4 percent from the prior year as follows.
MANAGEMENT’S DISCUSSION AND ANALYSIS C O N T I N U E DM A N A G E M ENT’S DISCUSSION AND ANALYSIS C O N T I N U E D
SCHEDULE OF CAPITAL ASSETS (Net of Depreciation and Amortization)
Central Arizona Water Conservation District
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More information about the District’s capital assets is provided in Note 2 of the Financial Statements.
Long-Term Debt: As of December 31, 2001, the District’s long-term debt decreased $39 million from the prior year as follows.
2001 2000 Change
Permanent service right $ 1,555 $ 1,586 $ (31)
Other capital assets Land 1 — 1
Construction in progress 12 11 1
Capital equipment 18 11 7
Structures and improvements 1 1 —
Total other capital assets 32 23 9
Total Capital Assets $ 1,587 $ 1,609 $ (22)
( D o l l a r s i n M i l l i o n s )
2001 2000 Change
Repayment obligation $ 1,526 $ 1,546 $ (20)
Reneue bonds 171 190 (19)
Total Long-Term Debt $ 1,697 $ 1,736 $ (39)
( D o l l a r s i n M i l l i o n s )
More information about the District’s repayment obligation is provided in Note 3 of the Financial Statements. During
2001, the District refunded a portion of the Series A 1990 and Series B 1991 bonds. The major factor that drove this refund-
ing was the savings the District realized from lower interest rates. The refunding bonds were sold at an average yield of 2.5 per-
cent versus an average coupon rate on the refunded debt of approximately 6.4 percent. The net present value of the savings to
the District from this transaction was approximately $1.1 million. More information about the District’s revenue bonds is pro-
vided in Note 10 of the Financial Statements.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
The information contained in the Management’s Discussion and Analysis is intended to give our customers, taxpayers,
and bond holders a general overview of the District’s finances, issues that impact the District’s financial position, and account-
ability for the money it receives. If you have questions about the report or need additional financial information, contract
Theodore C. Cooke, Assistant General Manager of Finance at:
Post Office Box 43020Phoenix, Arizona 85080-3020623-869-2167tcooke@cap-az.com
p. 26F p. 27F
SCHEDULE OF LONG-TERM DEBT (Including Current Portion)
S T A T E M E N T S O F N E T A S S E T S
D E C E M B E R 3 1
2001 2000
A S S E T S
Current assets:
Cash $ 152 $ 38
Investment in Arizona Local Government Investment Pools 2,586 5,896
Total cash and cash equivalents 2,738 5,934
Receivables:
Accrued interest receivable on unrestricted investments 1,731 4,142
Due from water customers, less allowance for doubtful accounts
of $2,007 and $1,875 at December 31, 2001 and 2000, respectively 3,239 1,866
Other 313 669
Repayment Credit (Note 3) 12,865 35,584
Materials and supplies inventory 3,497 2,939
Water Inventory 14,868 12,647
Other 4,165 918
Total current assets 43,416 64,699
Noncurrent assets:
Funds held by federal government 32,559 26,679
Investment in State Treasurer CAP investment pool (Note 6) 160,602 172,962
Restricted assets (Note 7) 100,593 99,130
Advances to federal government (Note 8) 378 5,930
Property and equipment, less accumulated depreciation of $18,545
and $14,966 at December 31, 2001 and 2000, respectively 32,011 23,192
Permanent service right, less accumulated amortization of $239,390
and $208,851 at December 31, 2001 and 2000, respectively 1,555,307 1,585,846
Bond issuance costs, net of accumulated amortization of $1,954
and $2,726 at December 31, 2001 and 2000, respectively 1,145 1,252
Total noncurrent assets 1,882,595 1,914,991
Total assets $ 1,926,011 $ 1,979,690
See accompanying notes.
( I n t h o u s a n d s )
R E P O R T O F I N D E P E N D E N T A U D I T O R S
Central Arizona Water Conservation District
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The Board of DirectorsCentral Arizona Water Conservation District
We have audited the accompanying statements of net assets of Central Arizona Water Conservation District as of
December 31, 2001 and 2000, and the related statements of revenues, expenses and changes in net assets, and cash flows
for the years then ended. These financial statements are the responsibility of the District’s management. Our responsibili-
ty is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits pro-
vide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
Central Arizona Water Conservation District at December 31, 2001 and 2000, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements of the Central
Arizona Water Conservation District as of and for the years ended December 31, 2001 and 2000 taken as a whole. The
other financial information is presented for purposes of additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures applied in our audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken
as a whole.
Management’s discussion and analysis is not a required part of the basic financial statements but is supplementary
information required by the Governmental Accounting Standards Board. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on it. The statistical section
has not been subjected to the procedures applied in the audit of the financial statements and, accordingly, we express no
opinion on it.
M a r c h 1 5 , 2 0 0 2
Fp. 28F
D E C E M B E R 3 1
2001 2000
O P E R A T I N G R E V E N U E S
Water operations and maintenance charges $ 56,892 $ 60,516
Water service capital charges 25,417 28,283
Power and Basin Fund revenues (Note 5) 56,747 51,533
Reimbursements and other operating revenues 5,561 3,729
Total operating revenues 144,617 144,061
O P E R A T I N G E X P E N S E S
Salaries and related costs 30,908 27,933
Pumping power 58,559 44,564
Power transmission 1,601 1,922
Hoover capacity charges 2,785 3,072
Amortization of permanent service right 30,538 30,538
Depreciation 4,315 3,393
Provision for OM&R reconciliation (Note 14) 304 —
Provision for doubtful accounts 138 28
Other operating expenses 19,493 11,974
Total operating expenses 148,641 123,424
Operating income (loss) (4,024) 20,637
N O N O P E R A T I N G R E V E N U E S ( E X P E N S E S )
Property taxes, less assignment to Arizona Water Banking Authority
of $10,691 and $9,967 in 2001 and 2000, respectively 24,152 23,629
Interest income and other nonoperating revenues 15,201 19,526
Interest income reserved for Ak-Chin fund 244 336
Interest income and other nonoperating revenues reserved
for State Demonstration Project 965 1,147
Interest expense and other nonoperating expenses (48,553) (49,895)
Total nonoperating revenues (expenses) (7,991) (5,257)
Change in net assets (12,015) 15,380
Net assets at beginning of year 155,030 139,650
Net assets at end of year $ 143,015 $ 155,030
See accompanying notes.
( I n t h o u s a n d s )
S T A T E M E N T S O F R E V E N U E S , E X P E N S E S A N D C H A N G E S I N N E T A S S E T S
D E C E M B E R 3 1
2001 2000
L I A B I L I T I E S
Current liabilities:
Accounts payable $ 21,748 $ 12,901
Accrued payroll, payroll taxes and other accrued expenses 5,044 4,479
Current liabilities payable from restricted assets, advances to federal
government, and other noncurrent assets:
Accrued interest payable 37,721 38,580
Repayment obligation, due within one year (Note 3) 20,272 20,272
Contract revenue bonds, due within one year (Note 10) 18,915 18,050
OM&R reconciliation obligations (Note 14) 3,618 16,240
Total current liabilities 107,318 110,522
Noncurrent liabilities:
Repayment obligation, due after one year (Note 3) 1,505,741 1,526,013
Contract revenue bonds, due after one year, net of unamortized discounts
of $13,680 and $16,015 at December 31, 2001 and 2000, respectively (Note 10) 152,331 171,768
Provision for retiree health insurance 300 313
Water operations and capital charges deferred revenue 17,306 16,044
Total noncurrent liabilities 1,675,678 1,714,138
Total liabilities 1,782,996 1,824,660
N E T A S S E T S
Investment in capital assets, less related debt (108,795) (125,812)
Restricted 62,533 60,114
Unrestricted 189,277 220,728
Total net assets 143,015 155,030
Total liabilities and net assets $ 1,926,011 $ 1,979,690
See accompanying notes.
S T A T E M E N T S O F N E T A S S E T S C O N T I N U E D
( I n t h o u s a n d s )
Central Arizona Water Conservation District
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O R G A N I Z A T I O N A N D R E P O R T I N G E N T I T Y
The Central Arizona Water Conservation District (District) is a multi-county water conservation district organized with-
in the state of Arizona encompassing Maricopa, Pima, and Pinal counties. The District’s popularly elected Board of Directors
serves as its governing body. Under the requirements of Governmental Accounting Standards Board (GASB) Statement No.
14, The Financial Reporting Entity, the District is a primary government, which includes an ancillary project, the Central Arizona
Groundwater Replenishment District (CAGRD). The District was authorized in 1971 by the Arizona State Legislature for the
primary purpose of creating a single entity to enter into an agreement (Note 3) with the United States Department of the
Interior, Bureau of Reclamation (Reclamation), for repayment of the reimbursable cost of the Central Arizona Project (CAP).
The District is further empowered to serve as the operating agent of the CAP (see Note 15).
In 1993, the State legislature gave the District additional authority to provide replenishment services within the District’s
three-county service area. This authority is commonly referred to as the Central Arizona Groundwater Replenishment District.
The CAGRD began enrolling members in 1995, and as of December 31, 2001, there were 390 member lands (individual sub-
divisions) and 17 member service areas. The CAGRD is responsible for using renewable water supplies to replenish (or
recharge) excess groundwater used by its members. All costs of the CAGRD are to be paid by its members through assess-
ments based on replenishment services provided. Through 2001, the CAGRD’s total net replenishment obligation was approx-
imately 7,463 acre-feet.
The CAP is a multi-purpose water resource project authorized by the Congress of the United States in 1968 by the
Colorado River Basin Project Act and was constructed by Reclamation. The CAP is intended to deliver an average of approxi-
mately 1.5 million acre-feet of Arizona’s annual share of Colorado River water to central and southern Arizona, which will par-
tially replace existing groundwater uses and supplement surface water supplies. It also provides flood control, power, recre-
ation, and fish and wildlife benefits. The major authorized project features include (1) a 335-mile aqueduct system (water sup-
ply system), (2) New Waddell and Modified Roosevelt Dams (regulatory storage facilities), (3) replacement features or pro-
grams for Cliff Dam (Cliff Dam Alternative), (4) Hooker Dam or suitable alternative (Hooker Dam Alternative), (5) Buttes
Dam, (6) Navajo Power Project (Navajo), and (7) Indian and non-Indian water distribution systems.
The District has the authority to levy ad valorem taxes against all taxable property within its boundaries. The first ad val-
orem tax, which may not exceed 10 cents per $100 of assessed valuation, is for the District’s operations and repayment of the
construction cost repayment obligation of the CAP (Note 3). The second ad valorem tax, which may not exceed 4 cents per
$100 of assessed valuation, is for water storage to the extent that it is not required for the District’s operations or repayment
of the construction cost repayment obligation of the project. Through December 1995, this tax was used to fund water recharge
activities under State Demonstration Projects and was levied only in Maricopa and Pima Counties (see Note 7). In April 1996,
the Arizona State Legislature amended the law relating to this second ad valorem tax (see Note 7). The ad valorem tax for oper-
ations and repayment was levied at 10 cents per $100 of assessed valuation for the tax year ending June 30, 2000, and 9 cents
per $100 of assessed valuation for the tax years ending June 30, 2001 and June 30, 2002. The ad valorem tax for water stor-
age was levied at 4 cents per $100 of assessed valuation in the tax years ending June 30, 2001 and June 30, 2002, and pro-
ceeds have been transferred to the Arizona Water Banking Authority (see Note 7). Property taxes are collected on behalf of the
District by the respective counties.
1
N O T E S T O F I N A N C I A L S T A T E M E N T S D E C E M B E R 3 1 , 2 0 0 1
D E C E M B E R 3 1
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIESCash received from customers $ 75,050 $ 90,429Cash received from power sales 50,867 54,090Cash paid to employees (30,343) (25,554)Cash paid to suppliers (79,629) (69,180)Net cash provided by operating activities 15,945 49,785
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESCash received from property taxes, net 24,152 23,629Net cash provided by noncapital financing activities 24,152 23,629
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESPayments on contract revenue bonds, including interest and other expenses (30,871) (27,681)Payments on repayment obligation, including interest (57,277) (58,616)Additions to property and equipment (13,134) (10,327)(Increase)/Decrease in Repayment Credit 22,719 (35,584)Decrease in Repayment Obligation -0- (101,553)Decrease in advances to federal government 5,552 (908)Decrease in permanent service right -0- 144,806Net cash used in capital and related financing activities (73,011) (89,863)
CASH FLOWS FROM INVESTING ACTIVITIES(Increase) in restricted assets (1,463) (6,504)Decrease in investment in state pool 12,360 515Interest on investments 18,821 18,456Net cash provided by investing activities 29,718 12,467Net (decrease) in cash and cash equivalents (3,196) (3,982)Cash and cash equivalents at beginning of year 5,934 9,916Cash and cash equivalents at end of year $ 2,738 $ 5,934
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIESNet operating income (loss) $ (4,024) 20,637Adjustments to reconcile operating income (loss) to net cash used in operating activities:Amortization of permanent service right 30,538 30,538
Depreciation 4,315 3,393Provision for doubtful accounts 138 28Changes in operating assets and liabilities:Due from water customers (1,511) 82
Due from other receivables 356 (121)Inventory (558) (212)Lake Pleasant Inventory (2,221) (6,166)Other (3,247) 817Funds held by federal government, net (5,880) 1,110Accounts payable 8,847 (996)Increase (decrease) in deferred payment 1,261 (257)OM&R reconciliation obligation (12,622) (1,760)Accrued payroll, payroll taxes and other accrued expenses 565 2,379Accrued pension (12) 313
Net cash provided by operating activities $ 15,945 $ 49,785
See accompanying notes.
S T A T E M E N T S O F C A S H F L O W S
( I n t h o u s a n d s )
Central Arizona Water Conservation District
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Permanent Service Right
The District’s interest in the CAP represents a permanent service right pursuant to the Master Repayment Agreement and
the settlement Stipulation (Note 3). The permanent service right represents the District’s right to use the CAP water delivery sys-
tem for the purpose of fulfilling its responsibility of delivering water as provided in the Master Repayment Agreement. The
District has used the repayment obligation specified in the settlement Stipulation, plus certain advances to the federal govern-
ment and other adjustments, in recording the permanent service right. The cost of the permanent service right may be adjusted
in the future as a result of determinations to be made as a consequence of the settlement Stipulation (see Notes 3 and 11).
Although the District’s interest in the CAP is reflected in the accompanying balance sheets, the United States retains a
paramount right or claim in the CAP arising from the original construction and operation of the CAP as a Federal Reclamation
Project. The District’s right to the possession and use of, and to all revenues produced by, the CAP is evidenced by the Master
Repayment Agreement, various laws, and other agreements with the United States. Legal title to the CAP will remain with the
United States until otherwise provided by Congress.
The District amortizes the permanent service right on the straight-line method over the estimated useful lives of the major
components of the CAP, generally 100 years for the aqueduct, 30 years for the Navajo power plant and related transmission
facilities, 50 years for buildings and structures, and 20 years for the pumping plant equipment.
The cost of periodic maintenance is charged to operations expense and the cost of major replacements is capitalized.
Bond Issuance Costs, Discounts and Premiums
Bond issuance costs, discounts and premiums are deferred and amortized over the term of the related bonds on the inter-
est method. Bond discounts and premiums are presented as a reduction or increase of the face amount of bonds payable
whereas issuance costs are recorded as deferred charges.
Revenue Recognition
The District records revenue from the sale of water, the sale of power, the collection of property taxes and the provision of
certain contract services to other outside entities. Water rates consist of a water service capital charge and an operations, main-
tenance and replacement (OM&R) charge (see Note 4). Generally, OM&R charges are determined by the Board of Directors
after giving consideration to the amount of OM&R costs to be paid by the various subcontractors and through property taxes.
Water is delivered to subcontractors and other customers based on delivery requests. Revenue from OM&R charges is recog-
nized as it is earned and revenue from water service capital charges is recognized ratably over the period of the billing.
Generally, OM&R charges for scheduled water deliveries are due in advance.
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S U M M A R Y O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
Basis of Accounting
The accounting policies of the District conform to generally accepted accounting principles as applicable to an enterprise
fund of a governmental unit. Accordingly, the accrual basis of accounting is utilized, whereby revenues are recorded when they
are earned, and expenses are recorded when the liability is incurred. The District has elected, in accordance with GASB
Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Activities That Use Proprietary Fund
Accounting, and GASB Statement No. 29, The Use of Not-for-Profit Accounting and Financial Reporting Principles by Governmental
Entities, not to apply Financial Accounting Standards Board Statements and Interpretations issued after November 30, 1989.
The District elected to implement GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis
for State and Local Government, as well as GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, in
2000. The District’s books and records include separate accounts and projects that are described as “funds”: a general fund,
Ak-Chin fund, State Demonstration Project fund, CAGRD project, and debt service funds. These “funds” have been combined
in the accompanying financial statements. All material interfund transactions have been eliminated.
Use of Estimates
The preparation of financial statements that conform to generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. See also Notes 3 and 11 regarding the District’s repayment obligation and the
settlement Stipulation.
Cash and Unrestricted Investments
All funds are to be invested in obligations issued or guaranteed by the United States or any of its agencies, collateralized
repurchase agreements, obligations of the state and local governments, prime quality commercial paper, and other instruments
as set forth in the District’s enabling legislation. Investments are managed by the State Treasurer and maintained in invest-
ment pools (the CAP Pool, the state of Arizona Local Government Investment Pool and the state of Arizona Pool 3). The Local
Government Investment Pool (LGIP) consists of investments with maturities of less than one year and therefore are recorded
at cost. The CAP Pool and Pool 3 are recorded at fair value in accordance with GASB Statement No. 31, Accounting and Financial
Reporting for Certain Investments and for External Investment Pools (see Note 6).
Inventory
Inventory is comprised of maintenance, office, auto, and safety supplies and was carried at the lower of cost (first-in, first-
out) or market until September 2001. Effective September 2001, when the new computer system was implemented, the inven-
tory valuation method used is average costs. The effect of this change was not material to the financial statements.
Property and Equipment
Property and equipment are stated at cost. Assets are depreciated on the straight-line method over the estimated useful
lives of the assets ranging from five to forty years.
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The Agreement
Reclamation and the District entered into a contract for delivery of water and repayment of costs of the CAP in December
1972 (1972 Master Repayment Agreement). The 1972 Master Repayment Agreement implemented the Colorado River Basin
Project Act of 1968 (Project Act). Among other things, Reclamation agreed in the 1972 Master Repayment Agreement to con-
struct the CAP and the District agreed to repay (1) the reimbursable construction costs of the CAP properly allocated to the
municipal and industrial (M&I) and non-Indian agricultural water supply and the commercial power functions of the CAP, (2)
OM&R costs during construction properly allocated to the non-Indian water supply and commercial power functions, and (3)
interest during construction on costs allocated to the M&I water and the commercial power functions. An amended contract
(1988 Master Repayment Agreement) was executed in December 1988, which superseded and replaced the 1972 Master
Repayment Agreement. (The 1972 Master Repayment Agreement as superseded and replaced by the 1988 Master Repayment
Agreement is referred to herein as the Master Repayment Agreement.)
Commencement of Repayment
The Master Repayment Agreement provides that the Secretary of the Interior (Secretary) shall issue notice of completion
of each CAP construction stage. Reclamation notified the District that the water supply system, the first construction stage,
was substantially complete on October 1, 1993. This notification initiated repayment by the District for the water supply sys-
tem. Reclamation notified the District that the regulatory storage facilities stage, consisting of New Waddell and Modified
Roosevelt Dams, was substantially complete on September 30, 1996. This notification initiated repayment by the District for
the regulatory storage facilities stage.
The Master Repayment Agreement requires the District to make annual payments to the United States on the repayment
obligation related to the completed construction stages. These payments are required to be made over a 50-year period and are
based on paying a percentage of the remaining outstanding repayment obligation, plus interest, with each construction stage
having a separate 50-year repayment period as follows: contract years 1-7: 1 percent; 8-14: 1.3 percent; 15-21: 1.6 percent; 22-28:
2 percent; 29-35: 2.6 percent; and 36-50: 2.7 percent.
Repayment Litigation and Stipulation
In July 1995, the District filed a lawsuit against the United States seeking a judicial determination of the District’s repay-
ment obligation. The United States also filed a lawsuit against the District. The two lawsuits were consolidated into a single
action in the Federal District Court (the Court) in Phoenix, Arizona (the Repayment Litigation). In May 2000, the District
and the United States entered into a Stipulation Regarding a Stay of Litigation, Resolution of Issues During the Stay and for
Ultimate Judgment upon the Satisfaction of Conditions (the Stipulation) to resolve all the issues in the Repayment Litigation.
The Stipulation was approved by the Court on May 9, 2000.
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S U M M A R Y O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S C O N T I N U E D
Revenues from contract services and the sale of power are recorded when earned.
Property taxes are recorded as revenue when received. Tax equivalency charges are recorded when received if there is no
obligation to deliver any services or provision for refund.
Statement of Cash Flows
For the purpose of the statement of cash flows, investments in the state of Arizona Local Government Investment Pools
are treated as cash equivalents due to their liquidity.
Water Inventory Adjustment
In 1998, the District adopted a new accounting policy for recording changes in the water inventory stored in Lake
Pleasant. The water inventory adjustment is a means to adjust the pumping energy component of water service charges to rec-
ognize that the cost of power used to pump water into Lake Pleasant should be recovered, through OM&R charges, in the year
the water is delivered to customers, not the year in which it is pumped into Lake Pleasant. Based on a typical operating year,
which involves pumping water into Lake Pleasant between late October and April and releasing water from Lake Pleasant in
June through early October, the expected amount of storage at year end is approximately 300,000 to 325,000 acre-feet. Since
the District’s share of Lake Pleasant storage at December 31, 1997 was approximately 324,000 acre-feet, this level was chosen
as a base level storage from which future deviations would be measured. The value of the water storage inventory below
324,000 acre-feet was included in the permanent service right.
In 2000, the District further modified this policy to reclassify the water storage inventory below 324,000 acre-feet from
the permanent service right to the water inventory adjustment. The amount of this adjustment was $9,790,000. In 2000, the
water inventory adjustment represented the weighted average energy cost associated with the change in storage level in Lake
Pleasant over the calendar year. In 2001, the water inventory adjustment is valued at the threshold rate only. It does not include
surcharge rates. The District’s share of Lake Pleasant storage as of December 31, 2001 and 2000 was 485,000 acre-feet and
359,000 acre-feet, respectively.
Application of GASB Statement No. 31
GASB Statement No. 31 changed the current practice of reporting most investments held by governmental entities from
a cost basis to a fair value basis. At December 31, 2000, fair value exceeded cost by $232,000. At December 31, 2001, cost
exceeded fair value by $678,000. These adjustments are included in interest income in the statements of revenues, expenses
and changes in net assets.
Reclassification
Certain amounts in the 2000 financial statements have been reclassified to conform with the 2001 presentation.
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interest, while costs allocated to the M&I water supply and the commercial power functions were to be repaid with interest at
3.342 percent per annum. The Master Repayment Agreement also provided that Reclamation would periodically revise its cost
allocation to reflect actual water deliveries, which could have the effect of altering the percentage of the District’s repayment
obligation that bears interest.
In the Repayment Litigation,the District disputed Reclamation’s cost allocation.If the litigation resumes,the portion of the District’s
repayment obligation that bears interest would be subject to periodic revision by Reclamation based on its cost allocations.
Construction Deficiencies
When Reclamation issued notices of completion for the water supply system and regulatory storage facilities stages of the
CAP, a number of construction deficiencies remained. The Stipulation provides that the construction deficiencies will be cor-
rected without increasing the District’s repayment obligation. The Stipulation identifies those deficiencies that will be cor-
rected by the United States, at no additional cost to the District, and those that the District will correct itself and for which it
will receive a corresponding credit against its annual repayment obligation. The Stipulation also provides a repayment credit
for the District’s past expenditures to correct construction deficiencies.
In the Repayment Litigation, the District had sought to hold the United States responsible for costs incurred by the
District in correcting CAP construction deficiencies. The United States had argued that it had no obligation to fund the cor-
rection of CAP construction deficiencies because of the dispute regarding the Repayment Ceiling and the fact that Reclamation
had determined that the ceiling had been exceeded. The United States had also disclaimed any responsibility for costs incurred
by the District in correcting those deficiencies.
Application of Development Fund Revenues
The Stipulation provides that all miscellaneous revenues and net power revenues accumulating in the Lower Colorado
River Basin Development Fund (Development Fund) of the United States Treasury in each year will be credited annually
against the amount due from the District on its repayment obligation.
In the Repayment Litigation, the United States had asserted that it was not obligated to apply Development Fund
revenues toward the District’s repayment obligation, but could use those revenues to pay Reclamation’s operating costs.
Payments Due on the District’s Repayment Obligation
The Stipulation establishes a new repayment schedule based on the revised $1.65 billion repayment obligation and
reconciles the District’s past payments, Development Fund credits and construction deficiency credits against that revised
payment schedule.
The annual payments due from the District and the credits available from Development Fund revenues, construction defi-
ciency corrections and other sources were among the issues in dispute in the Repayment Litigation. As of January 15, 2000,
there was a difference of $118,903,000 between the amounts billed by the United States and the amount acknowledged by
Reclamation to have been paid by the District on the District’s repayment obligation. At that time, Reclamation was assessing
penalties of approximately $1,189,000 per month against the District on the amounts in dispute.
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M A S T E R R E P A Y M E N T A G R E E M E N T C O N T I N U E D
The ultimate effectiveness of the Stipulation is subject to a number of conditions, including settlement of certain Indian
water rights claims, and will require certain State of Arizona and federal legislation. If the conditions are not met by May 9,
2003, and the parties do not amend the Stipulation or extend the deadline, the Stipulation will terminate and litigation will
resume. If it appears prior to May 9, 2003, that the conditions cannot be met by the deadline, the parties may agree to amend
the Stipulation, or either party may petition the Court to terminate the Stipulation and resume litigation. The District has con-
cluded that all of the conditions will not be met by May 9, 2003. The District and the United States are discussing possible
amendment of the Stipulation. It is not possible to predict whether the Stipulation will become finally effective, be amended,
or terminate, or whether litigation will resume. If litigation resumes, it is not possible to predict the outcome of such litiga-
tion. If litigation resumes, and results in an adverse determination on any of the major issues raised, it could have a material
adverse effect on the financial operations of the District. The major issues addressed in the Stipulation are described below.
Repayment Obligation
The Stipulation establishes the District’s repayment obligation for the CAP water supply system and the regulatory stor-
age facilities at $1.65 billion, premised on a total allocation of 665,224 acre-feet of CAP water for federal use. Currently,
453,224 acre-feet of CAP water is allocated for federal use; one condition of the Stipulation is that additional CAP water be
made available for federal use. The Stipulation provides that the $1.65 billion repayment obligation is subject to adjustment if
the total amount of CAP water ultimately made available for federal use is not 665,224 acre-feet.
In the Repayment Litigation, Reclamation had taken the position that the repayment ceiling in the Master Repayment
Agreement on the District’s repayment obligation for the water supply system and the regulatory storage facilities (Repayment
Ceiling) was $2.0 billion. The District had argued that the Repayment Ceiling on these facilities was not more than $1.781 bil-
lion. Notwithstanding the Repayment Ceiling, Reclamation contended that the District’s repayment obligation for these facil-
ities was $2.183 billion, premised on a total allocation of 453,224 acre-feet of CAP water for federal use.
In November 1998, the Court issued an interlocutory order to the effect that the District’s repayment obligation for the
water supply system and regulatory storage facilities is limited to $1.781 billion. However, the United States appealed the Court
order. After the Stipulation was entered, the appeal was voluntarily dismissed without prejudice. The Stipulation preserves the
United States’ appeal rights if the Repayment Litigation resumes.
Interest on Repayment Obligation
The Stipulation provides that 73 percent of the District’s $1.65 billion repayment obligation will bear interest at the rate
established in the Master Repayment Agreement of 3.342 percent per annum, and 27 percent of the repayment obligation will
be non-interest bearing. The Stipulation fixes these percentages for the duration of the repayment period.
Before the Stipulation, the Master Repayment Agreement provided that Reclamation would perform a cost allocation that
would then determine both the amount of the District’s repayment obligation and the portion of that obligation that would
bear interest. Costs allocated to the non-Indian agricultural water supply function were to be repaid by the District without
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Operations and Maintenance Agreement
Reclamation has transferred responsibility for operation and maintenance of completed CAP features to the District. The
District performs these responsibilities under the Master Repayment Agreement, a 1987 agreement with Reclamation for the
operation and maintenance of the facilities (the OM&R Transfer Contract), and an Operating Agreement between
Reclamation and the District that took effect as part of the settlement Stipulation.
Water Delivery Contracts and Subcontracts
Long-term CAP water service began pursuant to contracts and subcontracts on October 1, 1993, upon issuance by the
Secretary of notice of completion of the water supply system. The term of the contracts and subcontracts is generally 50 years
beginning January 1, 1994, and the contracts and subcontracts are renewable. Water deliveries for 2001 were 1,321,657 acre-feet.
Long-term subcontracts have been signed by M&I entities for approximately 87 percent of the total CAP M&I water allo-
cation of 638,823 acre-feet. All ten Indian entities originally allocated CAP water by the Secretary have signed long-term CAP
contracts for the CAP Indian water allocation of 309,828 acre-feet. An additional 355,396 acre-feet of CAP water has been or
is expected to be allocated to Indian entities or treated as Indian water supplies as a result of completed, pending or future
Indian water rights settlements. The remaining available CAP water was allocated to non-Indian agricultural entities. The cities
of Tucson, Phoenix, Mesa, Scottsdale, Peoria and Glendale account for approximately 67 percent of the CAP water currently
under M&I subcontracts.
The non-Indian subcontracts require the payment of a water service capital charge and an OM&R charge. For the M&I sub-
contractors, the water service capital charge is applicable to each subcontractor’s maximum annual entitlement to CAP water.
Under the current M&I water service subcontracts and current District pricing structure, the M&I water service capital charge is
an escalating charge, which began at an annual rate of $10.50 per acre-foot of entitlement in 1994, increasing to $48 per acre-
foot of entitlement by 1999. The M&I water service capital charge remained at $48 per acre-foot for 2000 and was reduced to
$43 per acre-foot for 2001. The amount of this M&I water service capital charge may be adjusted periodically by the District as
a result of repayment determinations provided for in the Master Repayment Agreement and to reflect all sources of revenue, but
the water service capital charge will not be greater than necessary to amortize project capital costs allocated to the M&I function
with interest. Indian contractors of CAP water pay no water service capital charge, since the capital costs associated with the
delivery of CAP water to Indian entities are not reimbursable by the District pursuant to the Master Repayment Agreement.
The OM&R costs of the CAP are of two types: energy costs and fixed costs. Energy costs are incurred to pump water from
the Colorado River through the CAP aqueduct system and fixed costs are the non-energy costs associated with operation,
maintenance and replacement. The District has completed a cost of service study to better define what components properly
constitute fixed OM&R costs and how to allocate those costs among classes of CAP water users.
M&I subcontractors and Indian contractors must pay OM&R charges on water scheduled for delivery.
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M A S T E R R E P A Y M E N T A G R E E M E N T C O N T I N U E D
Amounts Recorded in Financial Statements
The repayment obligation and amounts due on that obligation reported in these financial statements reflect the terms of
the Stipulation, including credit amounts that were revised as a result of continuing negotiations. The District’s repayment
obligation and the amounts due could be adjusted in the future if the Repayment Litigation resumes.
Payments to Maturity
The required payments on the repayment obligation are the following:
Principal Interest Total
2002 $ 20,272 $ 36,365 $ 56,637
2003 20,272 35,724 55,996
2004 21,450 35,083 56,533
2005 21,450 34,403 55,853
2006 21,450 33,713 55,163
Thereafter 1,421,119 545,642 1,966,761
Total $ 1,526,013 $ 720,930 $ 2,246,943
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O P E R A T I O N S C O N T I N U E D
As of December 31, 2001, nine existing and former subcontractors of agricultural CAP water had contracts with the
District for the delivery of CAP water for agricultural purposes on these conditions. The contract terms are in effect through
December 31, 2003, but delivery of water is subject to (1) the availability of CAP water in each year after first providing for the
delivery of water to contractors and subcontractors of long-term water service, including existing M&I subcontractors, Indian
contractors and agricultural subcontractors who retained a percentage entitlement of CAP agricultural water under their CAP
subcontracts, and (2) payment of water service charges determined by the District in each year. In the Repayment Litigation,
the United States disputed the validity of these contracts. The Stipulation required certain revisions to the form of those con-
tracts, but confirmed the District’s right to sell CAP water under such alternative contracts. If the litigation resumes, the valid-
ity of these contracts will again be in issue.
The District’s Board of Directors reviews charges annually and sets a schedule for the succeeding five years. The water
service charges to be charged M&I subcontractors and the United States on behalf of Indian contractors of CAP water service
for 2002 were confirmed by the Board of Directors in June 2001. In order to facilitate water planning, and subject to the
assumptions contained in the Plan, the Board of Directors also established advisory rates for the period 2003 through 2006.
During 1997, The Board amended the Plan to provide for a computation of the M&I water service charge by dividing the
District’s estimated annual operation and energy costs by the total estimated annual water delivery volume.
If the assumptions reflected in the Plan prove to be materially incorrect or the objectives of the Plan are not achieved, and
the Stipulation does not remain effective, the capital repayment and OM&R costs allocated to M&I subcontractors, and the
OM&R costs allocated to the United States on behalf of Indian contractors, could be significantly higher than anticipated. M&I
subcontractors use CAP water in their total water supply in various percentages and fund their payment of the District’s charges
in a variety of ways. Therefore, it is difficult to estimate the effect of possible increases in the water service charges on M&I sub-
contractors and on retail ratepayers, if applicable, including households in the service areas of CAP M&I subcontractors.
P O W E R
Navajo Power Plant
Reclamation is one of six participants in Navajo. Navajo consists of three 750,000 kilowatt coal-fired, steam-electric gen-
erating units which commenced operations in 1974 through 1976, a railroad to deliver fuel and 500 kilovolt transmission lines
and switching stations to deliver the power and energy to the various participants. An agreement among the participants gov-
erns the construction, operation, and maintenance of Navajo. Reclamation entered into this agreement in order to acquire a
portion of the capacity of Navajo for supplying the power requirements of the CAP. Reclamation has a 24.3 percent entitlement
in the generating station, resulting in a power entitlement of 547,000 kilowatts of nominal capacity. The District is charged
for the costs associated with the Navajo energy used to operate the CAP.
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
O P E R A T I O N S C O N T I N U E D
The District anticipates that Indian entities, or the United States on behalf of the Indian entities, will pay Indian fixed
OM&R charges. Payment by the United States of Indian fixed OM&R charges would require annual appropriations by
Congress, specific net billing arrangements, or other special arrangements that do not currently exist. The United States has
paid OM&R charges on water delivered to the Ak-Chin Indian Community. Disputes that existed with respect to the
amounts of those charges and the proper method of calculating OM&R charges were conditionally resolved as part of the
settlement Stipulation.
District Repayment Plan
An important assumption in the development of the CAP was that non-Indian agricultural water users would take and pay
for significant quantities of CAP water, particularly during the early years of project operation when M&I and Indian uses of CAP
water were expected to be relatively low. The Secretary’s allocation of CAP water, the physical configuration of the water delivery
system, and the financial structure of the CAP were predicated upon such participation by non-Indian agricultural water users.
Long-term subcontracts for approximately 70 percent of the total non-Indian agricultural CAP water supply were signed.
Two irrigation districts represented approximately 38.5 percent of that total. The non-Indian agricultural CAP subcontracts
have been understood to require those subcontractors to pay fixed OM&R charges based on the full amount of CAP water
available for delivery to the subcontractor, not just the amount scheduled for delivery (the take-or-pay OM&R charges), plus
energy charges and a $2 per acre-foot water service capital charge for water scheduled for delivery. Many of the District’s non-
Indian agricultural subcontractors indicated that the take-or-pay requirement and the cost of CAP water would result in sub-
stantial reductions in CAP water use by the agricultural subcontractors and potential default by the subcontractors on their
obligations under the subcontracts. Under the Master Repayment Agreement, prior to its modification by the Stipulation,
diminished use of CAP water by non-Indian agricultural water users would also have increased the interest bearing portion of
the District’s repayment obligation and would have reduced the number of revenue sources available to meet the District’s
repayment obligation and to pay the OM&R costs of the CAP. Furthermore, OM&R costs would be allocated among fewer
users, which would result in significantly higher per acre-foot charges to the remaining users.
As a result of these circumstances, the District’s Board of Directors adopted a repayment adjustment plan in October 1993
(Plan). Under the Plan, each non-Indian agricultural subcontractor was provided the opportunity to waive its percentage enti-
tlement to CAP agricultural water under its CAP subcontract and avoid its corresponding obligation for take-or-pay OM&R
charges. As of December 31, 2001, all of the remaining non-Indian agricultural subcontractors had waived some or all of their
long-term entitlements to CAP agricultural water under their CAP subcontracts. The District in turn waived its right to collect
take-or-pay OM&R charges from such subcontractors.
Existing and former subcontractors of non-Indian agricultural CAP water were also given the opportunity by the District
to enter into alternative contracts for the delivery of CAP water on a short-term basis. Under the Plan, the pool of CAP water
available for delivery to non-Indian agricultural water users has been divided into various categories for purposes of deter-
mining water delivery priority and water service charges. Water service charges are assessed only on the amount of CAP water
scheduled for delivery.
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
Central Arizona Water Conservation District
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P O W E R C O N T I N U E D
the District to meet CAP pumping requirements up to a defined threshold level for each contract year. If CAP energy require-
ments exceed the threshold, the District must purchase additional energy either from Salt River Project or through other ener-
gy sources. Under the contract, Salt River Project pays a monthly charge of $1,812,500 to the Development Fund. The District
records these revenues as funds held by the federal government as of December 31 of each year and then applies them against
the annual payment due from the District under the Master Repayment Agreement the following January 15. The extent to
which such revenues must be applied against the annual payments due from the District under the Master Repayment
Agreement is among the issues that were in dispute in the Repayment Litigation and were conditionally resolved in the
Stipulation (Note 3).
Hoover Surcharge
The Hoover Act also provided for the addition of a surcharge to the rates for energy sold from the Hoover and Parker-Davis
power plants of 4.5 mills per kilowatt-hour for energy sold in Arizona. Revenues from the surcharge on Hoover power sales
began in 1987 and revenues from Parker-Davis power sales will begin in 2005. Revenues from this surcharge are credited to the
Development Fund. The District records these revenues as funds held by the federal government as of December 31 of each year
and then applies them against the annual payment due from the District the following January 15. The extent to which such rev-
enues must be applied against the annual payments due from the District under the Master Repayment Agreement is among the
issues that were in dispute in the Repayment Litigation and were conditionally resolved in the Stipulation (Note 3).
I N V E S T M E N T S
As a multi-county water conservation district, the Arizona State Treasurer as prescribed by the District’s enabling act
holds the District’s investments. Beginning March 1, 2000, the District’s investments in the CAP pool were transferred to a
shared investment pool (Pool 3) in order to eliminate the need for a separate pool just for the District. Since the investment
policy objectives of the two pools are identical, the District has not experienced any material impact on safety of principal, liq-
uidity, or return on investment. The investment policy objectives of the Arizona State Treasurer, in order of priority, are safety
of principal, liquidity, and return on investments.
The District’s portion of investments held by Pool 3 as of December 31, 2001 and 2000, which are uncategorized, consist
of the following (stated at fair value):
( I n t h o u s a n d s )
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E DN O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
D E C E M B E R 3 1
Central Arizona Water Conservation District
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P O W E R C O N T I N U E D
Hoover B Power Purchases
The 1984 Hoover Power Plant Act (Hoover Act) authorized upgrading the Hoover power plant, located at Hoover Dam,
to increase generating capacity at the plant by 503 megawatts (MW). This additional capacity and its associated energy is
known as Hoover B Power. The Hoover Act allocated 188 MW and 212,000 megawatt hours (MWh) of associated firm annu-
al energy of the Hoover B Power to purchasers in Arizona. The Arizona Power Authority (Authority) distributes Arizona’s share
of the Hoover B Power. On September 15, 1986, the District entered into a contract with the Arizona Power Authority for the
purchase of Hoover B Power. On October 1, 1992, the Authority recaptured all but 26.5 MW of Hoover B Power from its other
contractors and initiated delivery of available Hoover B Power to the District.
Power Revenues
Power revenues are derived from the sale of surplus power from Navajo (power associated with Reclamation’s Navajo enti-
tlement which is in excess of the pumping requirements of the CAP) and from a surcharge on energy sold in Arizona from the
Hoover power plant.
Additional Rate Component
The Hoover Act authorized the establishment and collection of additional rate components on sales and exchanges of the
capacity and energy associated with Reclamation’s Navajo entitlement in excess of the pumping requirements of the CAP and
any needs for desalting and protective pumping facilities as may be required under the Colorado River Basin Salinity Control
Act (Navajo surplus). The Hoover Act further authorized the payment of revenues from such additional rate components to
entities that have advanced funds for the construction and repayment of construction costs of the CAP.
The Secretary of the Interior determined that the excess capacity and energy, which constitutes Navajo surplus to be mar-
keted pursuant to long-term contracts, is 400,000 kilowatts of capacity and 760 kilowatt hours of energy per year per kilo-
watt of such capacity. The District and Reclamation entered into power sales contracts with Salt River Project Agricultural
Improvement and Power District (Salt River Project) in 1990 and 1991 for the sale of an aggregate of 350,000 kilowatts of
such capacity and the associated energy from May 1993 through September 2011.
The additional rate component on the sale of such capacity has been established by the District at $6 per kilowatt of allo-
cated capacity per month. Revenues from the additional rate component are paid directly to the District’s bond trustee to repay
the contract revenue bonds sold by the District (Note 10).
Sale of Remaining Navajo Surplus
In March 1994, the District entered into a contract with Salt River Project, Reclamation and the Department of Energy for
the sale of the remaining Navajo surplus. The contract, which is for the period June 1994 through September 2011, grants Salt
River Project the use of the remaining United States entitlement to output of the Navajo Generating Station, the right to
schedule and integrate with the Salt River Project system the District’s contractual rights to Hoover capacity and energy and to
energy produced at New Waddell Dam, and certain transmission rights, and requires Salt River Project to sell energy at cost to
p. 45Fp. 44F
2001 2000
Federal Agency Securities $ 21,982 $ 10,732
Commercial Paper 63,811 32,716
Corporate Securities 115,424 165,891
201,217 209,339
Less restricted funds (repayment and operating reserves; not including accrued interest) (40,615) (36,377)
Investment of District $ 160,602 $ 172,962
The Board of Directors has designated $86,700,000 of the Pool 3 investments as capital projects and operating reserve
funds, and $2,000,000 as insurance reserves (see Note 11) at December 31, 2001.
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R E S T R I C T E D A S S E T S C O N T I N U E D
The amended statute expanded the District’s 4 cent ad valorem taxing authority to include Pinal County in addition to
Maricopa and Pima Counties and created the Arizona Water Banking Fund. The amended statute permits the District to trans-
fer revenues derived from this tax to the Arizona Water Banking Fund to fund AWBA activities if the District’s Board of
Directors approves the levy and concludes that the revenues are not needed for CAP operations or CAP repayment. Pursuant
to this authority, the District levied an ad valorem tax of 4 cents per $100 assessed valuation in Maricopa, Pinal, and Pima
Counties in 2000 and 2001 and approved the transfer of these revenues to the Arizona Water Banking Fund (Note 1). During
2001 and 2000, the District sold 294,813 and 293,576 acre-feet of excess CAP water to the AWBA at $45 and $44 per acre-
foot, respectively, for underground storage.
Master Repayment and Operating Reserves
The District is required under the terms of the Master Repayment Agreement to establish and fund over a ten-year peri-
od (1) an operations and maintenance reserve fund of $4,000,000 for extraordinary costs of operations, maintenance and
replacement of project works, and (2) a repayment reserve fund of $40,000,000 for the purpose of assuring payments of
future obligations. Funding of the operations and maintenance reserve fund and repayment reserve fund commenced on
October 1, 1993 and July 1, 1993, respectively. At December 31, 2001, the fair value of the reserves totaled $3,749,000, and
$37,133,000, respectively, including interest.
Ak-Chin Fund
In August 1985, the District’s Board of Directors approved participation in a fund established pursuant to legislation
enacted by the Congress of the United States for the acquisition or conservation of water to supplement CAP water supplies
(Ak-Chin fund). The District and the United States Government each have contributed $1,000,000 to this fund, which is
administered by the District. The District, acting as administrator of the fund, is empowered to direct the expenditure of the
trust funds in accordance with the provisions of a trust agreement between the District and the Arizona State Treasurer.
The Ak-Chin fund investment is in the LGIP, which invests primarily in certificates of deposit, commercial paper, federal
government and federal agency securities. Investments in the LGIP are recorded at cost as they consist of investments with
maturities of less than one year.
A D V A N C E S T O F E D E R A L G O V E R N M E N T
At December 31, 2001 and 2000, the District has incurred $378,000 and $5,930,000, respectively, in costs related to
repairs of CAP construction deficiencies which have been recorded in the accompanying financial statements as advances to
the federal government. The District applied these amounts against its annual payments due under the Master Repayment
Agreement on January 15, 2002 and 2001, respectively. On a cumulative basis, the District has incurred costs of $42,262,000
for the correction of CAP construction deficiencies and applied this amount against its annual payments under the Master
Repayment Agreement. Under the Stipulation, credits available for application against the amounts due from the District are
subject to audit by the United States (see Note 3).
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
R E S T R I C T E D A S S E T S
The District’s investments are categorized to give an indication of the level of risk assumed by the District at year-end.
Category 2 includes investments that are uninsured and unregistered investments for which the securities are held by the
counter-party’s trust department or agent in the District’s name. Investments held in pools are considered to be uncategorized.
The bond trust funds noted above are Category 2 investments; while the State Demonstration project fund, Master Repayment
Agreement and Operating Reserves, and the Ak-Chin fund, all held in pools, are considered to be uncategorized investments.
Restricted assets, including accrued interest receivable, consist of the following:
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
( I n t h o u s a n d s )
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D E C E M B E R 3 1
2001 2000
Bond trust funds, primarily debt service funds $ 36,796 $ 39,066
State Demonstration Project fund 17,283 17,908
Master Repayment Agreement repayment and operating reserves 40,882 36,767
Ak-Chin fund 5,632 5,389
$ 100,593 $ 99,130
Bond Trust Funds
Bond trust funds held by the trustee may be invested in direct obligations of, or obligations guaranteed by the U.S. gov-
ernment, FNMA or FHLMC securities, certificates of deposit, obligations of any state or political subdivision, or a guaranteed
investment contract, all subject to meeting certain ratings by national agencies, and maximum maturity limits. The trustee
holds the investments in trust for the District and the bondholders pursuant to the trust agreements.
State Demonstration Projects
The Arizona Legislature passed the original State Demonstration Recharge legislation in 1990 that authorized the
District to levy an ad valorem tax of 4 cents per $100 assessed valuation in Maricopa and Pima Counties. Tax revenues col-
lected through 1996 were deposited in the Arizona Water Storage Fund. Costs incurred by the District for planning and devel-
oping State Demonstration Recharge projects continue to be reimbursed from this fund.
The District is developing multiple State Demonstration Recharge Projects pursuant to its responsibilities under the
1990 legislation. During 2001, four recharge projects were operational, one project was under construction and two regional
recharge feasibility studies were being conducted. State Demonstration Recharge Projects store currently unused CAP water
underground to provide an additional source of water supply for future periods of shortage. Municipal water providers, the
Central Arizona Groundwater Replenishment District and the Arizona Water Banking Authority contract with the District to
purchase and store water at the recharge projects.
In April 1996, the State Demonstration Project statute was amended by the Arizona Legislature. The amended statute cre-
ated the Arizona Water Banking Authority (AWBA) for the purpose of increasing the utilization of Arizona’s allocation of
Colorado River water by delivering excess CAP water to various groundwater recharge projects through the CAP canal system.
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B O N D S P A Y A B L E
Bonds payable consist of the following:D E C E M B E R 3 1
2001 2000
Central Arizona Water Conservation District (Central Arizona Project) Contract Revenue Bonds, Series A 1990 (1990 Bonds) (original maturity amount of$19,470,000, excluding 1990 Bonds which have been refunded), due in varying annual amounts through 2011; interest rate for Capital appreciation is a yield of 7.25 percent
Serial $ — $ 9,985
Special term — 8,305
Capital appreciation (maturity value of $11,760,000) 7,763 7,230
7,763 25,520
Central Arizona Water Conservation District (Central Arizona Project) Contract Revenue Bonds, Series B 1991 (1991 Bonds) (original maturity amount of$29,685,000, excluding 1991 Bonds which have been refunded), due in varying amounts through 2011; interest rates vary among individual maturities ranging from 5.80 percent to 6.80 percent
Serial — 20,701
Term 100 109
Capital appreciation (maturity value of $23,095,000) 18,239 17,072
18,339 37,882
Central Arizona Water Conservation District (Central Arizona Project) Contract Revenue Refunding Bonds, Series A 1993 (1993 Bonds) (original maturity amount of $106,535,000), due in varying annual amounts through 2010; interest rates vary among individual maturities ranging from 5.0 percent to 5.50 percent 90,652 92,327
Central Arizona Water Conservation District (Central Arizona Project) Contract Revenue Refunding Bonds, Series B 1994 (1994 Bonds) (original maturity amount of $53,430,000), due in varying amounts through 2009; interest rates vary among individual maturities ranging from 4.50 percent to 4.75 percent
Serial 30,876 32,403
Subordinate serial 5,312 5,812
Deferred loss on refunding (3,583) (4,126)
32,605 34,089
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
( I n t h o u s a n d s )
U N D E R G R O U N D W A T E R S T O R A G E A N D R E C O V E R Y
In 1992, the District entered into an agreement with the Metropolitan Water District of Southern California (MWD) and
subsequently with Southern Nevada Water Authority (SNWA), whereby up to an aggregate of 100,000 acre-feet of interstate
underground water storage credits would be set aside for potential assignment to MWD and SNWA if the Secretary declares
a surplus of Colorado River water. Once assigned, MWD and SNWA can recover these credits in years in which the Secretary
has declared a normal supply of Colorado River water. The water will be delivered through exchange of the interstate under-
ground water storage credits back to the District for diversion of water from the Colorado River by MWD and SNWA. The
District must reduce its maximum level of diversions from the Colorado River equal to the amount diverted by MWD and
SNWA. In 1995, an amendatory agreement was executed between the District and MWD increasing the amount of water that
can be stored from 100,000 acre-feet to 300,000 acre-feet of water and the time for placing the water into storage from
December 31, 1996 to December 31, 2000. As of December 31, 1995, the District had received $11,386,000 related to 139,000
acre-feet that was recorded as a reduction in the costs capitalized in connection with the underground water storage projects.
As of December 31, 1998, all of the 139,000 acre-feet of underground storage credits were assigned to MWD (89,000 acre-
feet) or SNWA (50,000 acre-feet).
On November 1, 1999, the Secretary adopted a final rule entitled Offstream Storage of Colorado River Water and
Development of Intentionally Created Unused Apportionment in the Lower Division States. These regulations became effec-
tive on December 1, 1999, and allowed the Arizona Water Banking Authority (AWBA), with the approval of its governing
board, to engage in interstate banking of Colorado River water in cooperation with other states of the Lower Division.
On July 3, 2001, the AWBA entered into an Interstate Water Banking Agreement with SNWA. Under the terms of the
agreement, the AWBA will attempt to store approximately 1,200,000 acre-feet of credits in Arizona for SNWA. The District
will transfer credits previously stored by the District on behalf of SNWA to the AWBA to hold in its SNWA storage account.
However, prior to initiation of interstate water banking pursuant to this agreement, two additional agreements are required: A
Storage and Interstate Release Agreement among the AWBA, the Secretary of the Interior, and SNWA, and an Agreement for
Intentionally Created Unused Apportionment (ICUA) between the District and AWBA. Significant progress has been made
in 2001 toward the completion of these two agreements. It is anticipated that interstate storage may occur in 2002 or 2003,
pending approval by the District’s Board.
The agreement to develop ICUA will identify the process, mechanisms, and payment for the recovery of interstate storage
credits by the District and forbearance by the District of diversion of Colorado River water. The forbearance of Colorado River
water diversions by the District will provide unused apportionment of Colorado River water to SNWA consistent with the
rules adopted by the Secretary in 1999.
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
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B O N D S P A Y A B L E C O N T I N U E D
The 1990 and 1991 Bonds are not subject to optional redemption. The 1994 Bonds are subject to optional redemption
commencing in 2004 at a price of 102 percent with a declining price to par in 2006.
Debt service requirements to maturity, which include the sinking fund requirement and interest of $37,966,000 are as
follows: Years ending 2002: $26,434,000; 2003: $26,889,000; 2004: $27,159,000; 2005: $27,157,000; 2006-2007:
$54,315,000; 2008-2011: $60,942,000.
In April 1993 and February 1994, the District refinanced through advanced refunding arrangements approximately
$89,545,000 and $44,525,000 of outstanding 1990 Bonds and 1991 Bonds, respectively. The net proceeds were used to pur-
chase U.S. Government securities. Those securities were deposited in an irrevocable trust to provide for all future debt service
payments on the refunded 1990 Bonds and 1991 Bonds. As a result, the refunded 1990 Bonds and 1991 Bonds are considered
to be defeased and the liability for those bonds of $134,070,000 at December 31, 2001 has been removed from the balance sheet.
In 1994, the District adopted Governmental Accounting Standard Board Statement No. 23 (GASB No. 23), Accounting and
Financing Reporting for Refundings of Debt Reported by Proprietary Activities, and has deferred the accounting loss of $8,109,000
related to the 1991 Bonds. The accounting loss is amortized to income on the interest method over the life of the 1994 Bonds.
In October 2001, the District issued $8,035,000 and $14,120,000 of the Series A 2001 and Series B 2001 Bonds with
interest rates of 3.30 to 3.75 percent to advance refund $10,775,000 of outstanding 1990 Bonds and $14,235,000 of out-
standing 1991 Bonds with interest rates of 7.30 to 7.65 percent and 6.30 to 6.40 percent, respectively. The net proceeds of
$8,032,000 and $14,116,000 (after premium of $114,900 and $200,754 and payment of $117,900 and $205,000 in under-
writing fees, issuance and other costs) were used to purchase U.S. Government securities. Those securities were deposited in
an irrevocable trust to provide for all future debt service payments on the refunded 1990 Bonds and 1991 Bonds. As a result,
the refunded 1990 Bonds and 1991 Bonds are considered to be defeased and the liability for those bonds of $25,010,000 at
December 31, 2001 has been removed from the balance sheet.
The 2001 refunding resulted in an accounting loss of $328,800 and $316,500 (on the 1990 Bonds and 1991 Bonds,
respectively), but a reduction in the aggregate debt service payments of approximately $5,120,788 over the next 10 years,
resulting in an economic gain of approximately $1,121,389. Under GASB No. 23, the District has deferred the accounting loss.
The accounting loss is amortized to income on the interest method over the life of the 2001 Bonds.
C O M M I T M E N T S A N D C O N T I N G E N C I E S
Insurance Reserve
The District’s Board of Directors has designated $2,000,000 of noncurrent unrestricted investments to act as a reserve
for property and liability damages to be available to respond to any claims, judgments, and related costs against the District,
its officers, directors, and employees, if any, in excess of the outstanding insurance coverage.
Litigation
The District is a party to certain litigation and other proceedings that could have the effect of increasing the District’s costs
or reducing or eliminating certain sources of revenues available to the District to meet those costs. The most significant of
these is the Repayment Litigation with the United States, in the event that the conditions to the Stipulation are not satisfied,
or if the Stipulation terminates and litigation resumes for any other reason (Note 3).
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
B O N D S P A Y A B L E C O N T I N U E D
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
BALANCE BALANCE AMOUNTS DUEDECEMBER 31 REDEMPTION/ ACCRETION AND DECEMBER 31 WITHIN ONE
2000 ADDITIONS REFUNDING AMORTIZATION 2001 YEAR
1990 BondsSerial $ 9,985 — $ 9,985 $ — $ —Special term 8,305 — 8,500 195 —Capital appreciation 7,230 — — 533 7,763
1991 BondsSerial 20,701 — 20,716 15 —Term 109 — 9 — 100Capital appreciation 17,072 — — 1,167 18,239
1993 Bonds 92,327 — 1,750 75 90,652 1,835
1994 BondsSerial 32,403 — 1,595 68 30,876 1,670Subordinate serial 5,812 — 505 5 5,312 475Deferred loss (4,126) — 543 (3,583)
2001 A BondsSerial(and Original Issue Premium) 8,150 (19) 8,131 8,035Deferred loss (329) 76 (253)
2001 B BondsSerial(and Original Issue Premium) 14,321 (34) 14,287 6,900Deferred loss (316) 38 (278)
$ 189,818 $ 21,826 $ 43,060 $ 2,662 $ 171,246 $ 18,915
( I n t h o u s a n d s )
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Changes in bonds payable during the year ended December 31, 2001, are summarized below:
D E C E M B E R 3 1
2001 2000
Central Arizona Water Conservation District (Central Arizona Project) Contract Revenue Bonds, Series A 2001 (2001 A Bonds) (original maturity amount of $8,035,000), due in 2002; interest rate is 3.75 percent
Serial $ 8,131 $ —
Deferred loss on refunding (253) —
7,878 —
Central Arizona Water Conservation District (Central Arizona Project) Contract Revenue Bonds, Series B 2001 (2001 B Bonds) (original maturity amount of $14,120,000), due in varying amounts through 2003; interest rates vary among individual maturities ranging from 3.30 percent to 3.75 percent
Serial 14,287 —
Deferred loss on refunding (278) —
14,009 —
171,246 189,818
Less current portion (18,915) (18,050)
$ 152,331 $ 171,768
The 1990 Bonds, 1993 Bonds and 2001 A Bonds are secured by a pledge of revenues, and related interest thereon, from theadditional rate component charged by the District to the Salt River Project on the sale of 200 MW of allocated capacity of sur-plus power associated with Reclamation's 24.3 percent entitlement in Navajo. The 1991 Bonds, 1994 Bonds and 2001 B Bondsare secured by a similar pledge of revenues from the additional rate component charged Salt River Project on the sale of anadditional 150 MW of allocated Navajo capacity (Note 5).
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( I n t h o u s a n d s )
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
P E N S I O N P L A N S
Retirement benefits are provided to District employees through two separate plans as of December 31, 2001. Benefits were
provided for service prior to July 1, 1998, through the Central Arizona Water Conservation District Retirement Plan (the
District Plan) and from July 1, 1998 through December 31, 2001, through the Arizona State Retirement System. Employees
retired or terminated prior to July 1, 1998, or their beneficiaries, continue to be provided benefits through the District Plan.
Central Arizona Water Conservation District Retirement Plan
The District maintains the Central Arizona Water Conservation District Retirement Plan, a single-employer defined ben-
efit pension plan covering substantially all of its employees who retired or terminated prior to July 1, 1998.
The District’s Board of Directors amended the District Plan on May 7, 1998, providing certain changes in benefits. The
amendment provides that active employees as of June 30, 1998, are eligible to participate in the District Plan as of their date of
employment. No credited service is earned or credited for any period of employment after July 7, 1998. Upon normal retirement
date, participants are entitled to a retirement income equal to 2 percent of their average monthly compensation multiplied by
years of service. Average monthly compensation is the average of monthly compensation during the 36 consecutive-month peri-
od within the last 120-month period of service that yields the highest average. The change in the present value of accumulated
benefits as a result of these amendments totaled $5,014,114 at December 31, 1998. There were no amendments in 2000 or 2001.
All active employees of the District Plan were given the option to transfer their accounts from the District Plan to the
Arizona State Retirement System Plan as of July 1, 1998. All active employees elected to transfer their accounts to the Arizona
State Retirement System Plan. Accordingly, funds in the amount of $18,581,000 were transferred from the District Plan to the
Arizona State Retirement System Plan in February 1999.
The District Plan also offers certain early retirement options and death benefits. These benefit provisions and all other
requirements are established by the District’s Board of Directors. The District Plan does not issue a stand-alone financial report.
As of December 31, 2001, there were 93 participants in the District Plan. There were 43 retirees and beneficiaries receiving
benefits and 50 terminated members and beneficiaries entitled to, but not yet receiving benefits.
The net pension benefit obligation and annual pension cost were computed as part of an actuarial valuation performed as of
January 1, 2001, the beginning of the District Plan’s year. The District Plan’s pension liability was determined in accordance with
the provisions of Governmental Accounting Standards Board Statement No. 27. Significant actuarial assumptions used in the val-
uation include a rate of return on the investment of present and future assets of 6.5 percent a year compounded annually, and pro-
jected salary increases of 4.0 percent a year compounded annually. In previous years, the District’s liability was calculated as of the
end of each plan year. Beginning in 1999, the liability is calculated looking forward at the beginning of each plan year.
The District’s funding policy provides for an actuarially determined contribution within the range of contributions as
specified under the Internal Revenue Code. The contribution for normal cost is determined using the entry-age normal cost
method. The District uses the level percentage of payroll method to amortize the unfunded liability. Beginning in 1998, the
District elected to change the amortization period for the unfunded liability from 30 to 15 years. A copy of the report is avail-
able at the District’s headquarters.
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
The significant actuarial assumptions used to compute the actuarially determined contribution requirement are the same
as those used to compute the pension benefit obligation. Contributions to the District Plan for the years ended December 31,
2001 and 2000, were approximately $83,000 and $64,000, respectively, each of which was made in accordance with actuar-
ially determined requirements. The District records the actuarially determined contributions for the Plan year as an expense in
the corresponding year.
P E N S I O N P L A N S C O N T I N U E D
The annual pension cost and net pension obligation (asset) for 2001 are as follows:
Annual required contribution for 2001 $ 82,883
Adjustment to annual required contribution 605
Annual pension cost 83,488
Contributions made for 2001 (82,883)
Increase in net pension obligation 605
Net pension obligation (asset), beginning of year (12,084)
Net pension obligation (asset), end of year $ (11,479)
December 31, 1997 $ 1,720,578 $ 1,718,833 99.9% $ (13,633)
December 31, 1998 629,941 629,466 99.9 (13,158)
December 31, 1999 72,564 72,049 99.3 (12,643)
December 31, 2000 64,537 63,978 99.1 (12,084)
December 31, 2001 83,488 82,883 99.3 (11,479)
December 31, 1997 $16,322,894 $17,951,007 $1,628,113 90.93% $18,221,264 8.94
December 31, 1998 20,407,198 26,710,573 6,303,375 76.40 19,846,370 31.76
January 1, 1999 21,036,664 21,686,104 649,440 97.01 19,470,069 3.34
January 1, 2000 2,687,777 3,237,970 550,193 83.01 221,649* 248.23*
January 1, 2001 2,556,276 3,232,498 676,222 79.08 95,039 711.52
Trend information for the District Plan years ended December 31, 1997 through 2001 is as follows:
PERCENTAGE OFANNUAL PENSION
ANNUAL AMOUNT COST NET PENSIONYEAR ENDING PENSION COST CONTRIBUTED CONTRIBUTED OBLIGATION
The actuarial value of the District Plan assets and actuarial accrued liabilities for plan years ended December 31, 1997 through2001 are as follows:
ACTUARIAL VALUE UNFUNDEDOF ASSETS AS ACTUARIAL ACCRUED
UNFUNDED PERCENTAGE OF LIABILITY ASACTUARIAL ACTUARIAL ACTUARIAL ANNUAL PERCENTAGE OF
VALUATION ACTUARIAL VALUE ACCRUED ACCRUED ACCRUED COVERED ANNUAL COVEREDDATE OF ASSETS LIABILITY LIABILITY LIABILITY PAYROLL PAYROLL
%
* During 1999, all but 4 active participants elected to forfeit all benefits under this plan in exchange for receiving credited service in the ArizonaState Retirement System for service accrued through June 1998 in this plan. The majority of remaining liabilities under this plan are for inac-tive participants.
The actuarial value of assets represents the market value as determined by the District Plan trustee. Investments with theFederal Home Loan Mortgage Corporation exceed 5 percent of total investments.
p. 53Fp. 52F
Central Arizona Water Conservation District
f i n 01
c a p
12N o
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
P E N S I O N P L A N S C O N T I N U E D
Arizona State Retirement System Plan
Effective July 1, 1998, the District became a member of the Arizona State Retirement System (ASRS), a cost-sharing, mul-tiple-employer, public employee retirement system established by the State of Arizona to provide benefits for employees of theState and participating political subdivisions and school districts. The ASRS Board administers the Arizona State RetirementSystem Plan (ASRS Plan), which is a defined benefit pension plan. The ASRS Plan provides for retirement, disability, healthinsurance premium benefits, and death and survivor benefits as established by State statute. Substantially all employees of theDistrict are covered by the ASRS Plan.
The ASRS Plan issues a Comprehensive Annual Financial Report, including financial statements and supplemental infor-mation, which may be obtained by writing to Arizona State Retirement System, 3300 North Central Avenue, P.O. Box 33910,Phoenix Arizona 85067-3910 or by calling (602) 240-2000 or 1-800-621-3778.
The Arizona Revised Statutes provide statutory authority for determining the employees’ and employers’ contributionamounts as a percentage of covered payroll. Employers are required to contribute at the same rate as employees. The employ-ee and employer contribution rates for the ASRS Plan years ending June 30, 2000 and June 30, 2001, were set at 2.66 percent,and for the plan year ending June 30, 2002, 2.49 percent of covered wages as determined by an actuarial computation basedon June 30, 2000 information. Contributions for 2001, 2000 and 1999 were $1,310,715, $1,254,395 and $1,411,536, respec-tively, for both employees and the District. The District pays both the employee and employer portions of the contribution.
Post Employment Benefit Plan
The District provides post employment health care benefits to employees who are eligible for monthly retirement bene-fits under the pension plan and who have received coverage under the District’s group medical plan for at least five years pre-ceding retirement. Coverage is also available to the employee’s legal spouse provided that certain conditions are met and toother dependents as required by law. This post employment benefit plan is funded on a pay-as-you-go basis and there are cur-rently 11 employees eligible to receive benefits. The current annual cost is $19,800 per year. Based on life expectancies, theDistrict recorded an expense and a liability of $313,000 during 2000. The liability on December 31, 2001 is $300,000.
D E F E R R E D C O M P E N S A T I O N A N D S A V I N G S P L A N
The District has adopted and maintains the Central Arizona Water Conservation District Savings Plan (Savings Plan) inaccordance with Section 401(k) of the Internal Revenue Code. The Savings Plan provides that all active, nonunion employeesare eligible to participate as of their date of employment. The Savings Plan was amended on December 7, 2000, to clarify thatcertain temporary and part-time employees do not participate.
Eligible employees are allowed to contribute up to 16 percent of their biweekly compensation, and the District has agreedto contribute to an employee’s account an amount equal to one-half of the amount contributed by the employee up to threepercent of the employee’s biweekly compensation. Contribution expense for the Savings Plan for the years ended December 31,2001 and 2000 was approximately $656,000 and $629,000, respectively. Accrued benefits attributable to the District’s con-tributions on behalf of participants vest 20 percent for each year of completed service.
O M & R C O S T R E C O N C I L I A T I O N
In accordance with CAP M&I and agricultural subcontracts, the District annually estimates its OM&R costs for the followingyear and uses that estimate along with projected water deliveries to establish water service OM&R charges for that following year.
N O T E S T O F I N A N C I A L S T A T E M E N T S C O N T I N U E D
The subcontracts also provide that the District will determine whether its actual OM&R costs for each year differed from the esti-mated OM&R costs that were used to establish water charges for that year, and the District will make adjustments in the followingyear’s charges to account for any difference identified.The District has determined that the annual OM&R cost reconciliationsshould include a reconciliation of both fixed OM&R and pumping energy costs for each year to charges for each year previ-ously established based on estimates.
The Stipulation specifies that actual OM&R costs allocable to federal customers are to be reconciled on a basis consistentwith the methodology used in each applicable year to assess charges. Reconciliations through 1999 were communicated inJanuary 2001, and customers were given a choice between receiving a credit or a refund. Beginning with 2000, annual costsare to be calculated and refunded, surcharged or offset, as the case may be, by May 30 of the following year.
The District recorded a provision at December 31, 1999 for its estimated OM&R reconciliation obligation through 1999in the total amount of $18 million. Subsequently, the District completed its analysis of OM&R costs through December 31,2000 and determined that the actual OM&R obligation through 1999 was $15.6 million and for 2000 the obligation was$707,500. Consequently, the District recorded a revenue item in 2000 in the amount of $1.7 million corresponding to thereduction in its OM&R reconciliation liability. For 2001, the analysis of the OM&R costs resulted in subcontract and federalcustomers owing the District for underpayment of OM&R expenses. As a result in 2001, the District recorded revenue of $3.2million and the corresponding receivable is included in other assets in the accompanying statement of net assets.
T A X L E V Y A U T H O R I T Y
The District has the authority to levy two limited ad valorem taxes against all taxable property within its boundaries. Thefirst ad valorem tax, which may not exceed 10 cents per $100 of assessed valuation, is for the District’s operations and pay-ment of the District’s repayment obligation to the United States. The second ad valorem tax, which may not exceed 4 cents per$100 of assessed valuation, is for water storage to the extent that it is not required for the District’s operations or payment ofthe repayment obligation. The ad valorem tax for operations and repayment was levied at 10 cents per $100 of assessed valu-ation for the tax year ending June 30, 2000, and 9 cents per $100 of assessed valuation for the tax years ending June 30, 2001and June 30, 2002. The ad valorem tax for water storage was levied at 4 cents per $100 of assessed valuation for the tax yearsending June 30, 2000, 2001, and 2002. The 2000, 2001, and 2002 ad valorem tax for water storage has been transferred tothe Arizona Water Banking Authority. The respective counties collect property taxes on behalf of the District.
The ad valorem property tax is levied against all taxable property in the District. In each county within the District, theCounty Assessor establishes a full cash value for each parcel of taxable property. Based on the applicable property classificationratio, the assessed value of each parcel is determined. (For example, commercial and industrial property is assessed at 25 per-cent of full cash value, owner occupied residential property is assessed at 10 percent of full cash value.)
The property taxes due to the District are billed, along with State, County and other property taxes, in September of eachyear and are payable in two installments, October and March. The delinquent tax dates are November 1 and May 1 and delin-quent taxes are subject to a penalty of 16 percent per annum unless the full year tax is paid by December 31. At the close of thetax collection period, the County Treasurer prepares a delinquent property tax list and the property so listed is advertised forsale in February of the succeeding year. In the event that there is no purchaser for the property at the tax sale, the title to suchproperty is vested in the State, and the property is reoffered for sale from time to time until such time as it is sold, subject toredemption, for an amount sufficient to cover all delinquent and current taxes.
Additional information concerning the full cash value and assessed value of property within the District’s service territory,tax levies and tax collections appears in the other statistical section.
Central Arizona Water Conservation District
f i n 01
c a p
p. 55Fp. 54F
13N o
14N o
15N o
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
OTHER FINANCIAL INFORMATION
Central Arizona Water Conservation District
f i n 01
c a p
p. 57Fp. 56F
OTHFIN
S T A T E M E N T O F N E T A S S E T S — B Y F U N D
D E C E M B E R 3 1 , 2 0 0 1
( I n t h o u s a n d s )
AS
SE
TS
Cur
rent
ass
ets:
Cas
h$
152
$ q
$
151
$ x
$ x
$ 1
$ x
Inve
stm
ent i
n Ar
izon
a Lo
cal G
over
nmen
t Inv
estm
ent P
ools
2,586
2,586
Tota
l cas
h an
d ca
sh e
quiv
alen
ts2,738
2,737
1
Rece
ivab
les:
Accr
ued
inte
rest
rece
ivab
le o
n un
rest
ricte
d in
vest
men
ts1,731
1,731
Due
from
wat
er cu
stom
ers,
less
allo
wan
ce fo
r dou
btfu
l acc
ount
s
of$2
,007
and
$1,8
75 a
t Dec
embe
r 31,
2001
and
200
0,re
spec
tivel
y3,239
3,239
Oth
er313
247
66
Repa
ymen
t Cre
dit
12,865
12,865
Mat
eria
ls a
nd s
uppl
ies
inve
ntor
y3,497
3,497
Wat
er In
vent
ory
14,868
14,807
61
Inte
rfun
d re
ceiv
able
40,732
8,985
1,535
517
29,695
Oth
er4,165
4,249
84
Tota
l cur
rent
ass
ets
43,416
40,732
52,357
1,535
645
29,611
Non
curr
ent a
sset
s:
Fund
s he
ld b
y fe
dera
l gov
ernm
ent
32,559
32,559
Inve
stm
ent i
n St
ate
Trea
sure
r CAP
inve
stm
ent p
ool
160,602
160,602
Rest
ricte
d as
sets
100,593
40,882
5,632
17,283
36,796
Adva
nces
to fe
dera
l gov
ernm
ent
378
378
Prop
erty
and
equ
ipm
ent,
less
acc
umul
ated
dep
reci
atio
n of
$18,
545
and
$14,
966
at D
ecem
ber3
1,20
01 a
nd 2
000,
resp
ectiv
ely
32,011
32,011
Perm
anen
t ser
vice
righ
t,le
ss a
ccum
ulat
ed a
mor
tizat
ion
of$2
39,3
90
and
$208
,851
at D
ecem
ber3
1,20
01 a
nd 2
000,
resp
ectiv
ely
1,555,307
1,555,307
Bond
issu
ance
cost
s,ne
t ofa
ccum
ulat
ed a
mor
tizat
ion
of$1
,954
and
$2,7
26 a
t Dec
embe
r 31,
2001
and
200
0,re
spec
tivel
y1,145
1,145
Tota
l non
curr
ent a
sset
s1,882,595
1,821,739
5,632
17,283
37,941
Tota
l ass
ets
$1,926,011
$40,732
$1,874,096
$ 5,632
$ 18,818
$ 645
$ 67,552
CENTRAL
AZSTATE
GROUND W
ATER
RECLASSIFICATIONS
GENERAL
AK-CHIN
DEMONSTRATION
REPLENISHMENT
SERIES A
& B
TOTAL
AND
ELIMINATIONS
FUND
FUND
PROJECT
FUND
DISTRICT F
UND
BOND F
UNDS
( )
( )
( )
ST
AT
EM
EN
T
OF
N
ET
A
SS
ET
S—
BY
FU
ND
DE
CE
MB
ER
31
,2
00
1
(In thousands)
()
Central Arizona Water Conservation District
f i n 01
c a p
STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET ASSETS — B Y F U N D
D E C E M B E R 3 1 , 2 0 0 1
( I n t h o u s a n d s )
p. 59Fp. 58F
S T A T E M E N T O F N E T A S S E T S — B Y F U N D
D E C E M B E R 3 1 , 2 0 0 1
( I n t h o u s a n d s )L
IA
BI
LI
TI
ES
AN
D E
QU
IT
Y (
DE
FI
CI
T)
Cur
rent
liab
ilitie
s:
Acco
unts
pay
able
$
21,748
$ q
$ 21,410
$ x
$ x
$ x
$ 338
Accr
ued
payr
oll,
payr
oll t
axes
and
oth
er a
ccru
ed e
xpen
ses
5,044
5,044
Inte
rfun
d pa
yabl
e40,732
2,083
7,410
1,515
29,724
Cur
rent
liab
ilitie
s pa
yabl
e fr
om re
stric
ted
asse
ts,a
dvan
ces
to
fede
ral g
over
nmen
t,an
d ot
her n
oncu
rren
t ass
ets:
Accr
ued
inte
rest
pay
able
37,721
36,365
1,357
Repa
ymen
t obl
igat
ion,
due
with
in o
ne y
ear
20,272
20,272
Con
trac
t rev
enue
bon
ds,d
ue w
ithin
one
yea
r18,915
18,915
OM
&R
reco
ncili
atio
n ob
ligat
ion
3,618
3,618
Tota
l cur
rent
liab
ilitie
s:107,318
40,732
88,791
7,410
1,515
50,334
Non
curr
ent l
iabi
litie
s:
Repa
ymen
t obl
igat
ion,
due
afte
r one
yea
r $1,505,741
$ 1,505,741
Cont
ract
reve
nue b
onds
,due
afte
r one
year
,net
ofu
nam
ortiz
ed d
isco
unts
of$1
3,680
and
$16,
015
at D
ecem
ber3
1,20
01 an
d 20
00,r
espe
ctiv
ely152,331
152,331
OM
&R
reco
ncili
atio
n ob
ligat
ion
Prov
isio
n fo
r ret
iree
heal
th in
sura
nce
300
300
Wat
er o
pera
tions
and
capi
tal c
harg
es d
efer
red
reve
nue
17,306
17,306
Tota
l non
curr
ent l
iabi
litie
s:1,675,678
1,523,348
152,331
Tota
l lia
bilit
ies:
1,782,996
40,732
1,612,139
7,410
1,515
202,665
NE
T A
SS
ET
S
Inve
stm
ent i
n ca
pita
l ass
ets,
less
rela
ted
debt
108,795
61,304
170,100
Rest
ricte
d62,533
4,517
5,632
17,283
35,101
Unr
estr
icte
d189,277
196,134
5,875
870
112
Tota
l net
ass
ets:
143,015
261,957
5,633
11,406
869
135,112
Tota
l lia
bilit
ies
and
net a
sset
s:$1,926,011
$40,732
$ 1,874,096
$ 5,632
$ 18,818
$ 645
$ 67,552
CENTRAL
AZSTATE
GROUND W
ATER
RECLASSIFICATIONS
GENERAL
AK-CHIN
DEMONSTRATION
REPLENISHMENT
SERIES A
& B
TOTAL
AND
ELIMINATIONS
FUND
FUND
PROJECT
FUND
DISTRICT F
UND
BOND F
UNDS
( )
( )
( )
( )
()
( )
( )
( )
(
)
( )
OP
ER
AT
IN
G R
EV
EN
UE
S
Wat
er o
pera
tions
and
mai
nten
ance
char
ges
$ 5
6,892
$ —
$ 56,892
$ —
$ —
$ —
$ —
Wat
er s
ervi
ce ca
pita
l cha
rges
25,417
—25,417
——
——
Pow
er a
nd B
asin
Fun
d re
venu
es56,747
—31,547
——
—25,200
Reim
burs
emen
ts a
nd o
ther
ope
ratin
g re
venu
es5,561
828
4,860
—894
635
—
Tota
l ope
ratin
g re
venu
es144,617
828
118,716
—894
635
25,200
OP
ER
AT
IN
G E
XP
EN
SE
S
Sala
ries
and
rela
ted
cost
s30,908
$ —
29,968
—760
180
—
Pum
ping
pow
er58,559
—58,559
——
——
Pow
er tr
ansm
issi
on1,601
—1,301
——
——
Hoo
ver c
apac
ity ch
arge
s2,785
—2,785
——
——
Amor
tizat
ion
ofpe
rman
ent s
ervi
ce ri
ght
30,538
—30,538
——
——
Dep
reci
atio
n4,315
—4,315
——
——
Prov
isio
n fo
r OM
&R
reco
ncili
atio
n304
—304
——
——
Prov
isio
n fo
r dou
btfu
l acc
ount
s138
—138
——
——
Oth
er o
pera
ting
expe
nses
19,493
828
12,618
—6,946
745
12
Tota
l ope
ratin
g ex
pens
es148,641
828
140,826
—7,706
925
12
Ope
ratin
g in
com
e (l
oss)
bef
ore
unus
ual e
xpen
se it
em4,024
—22,110
—6,812
290
25,188
Unu
sual
exp
ense
item
Ope
ratin
g in
com
e (l
oss)
afte
r unu
sual
exp
ense
item
4,024
—22,110
—6,812
290
25,188
NO
NO
PE
RA
TI
NG
RE
VE
NU
ES
(E
XP
EN
SE
S)
Prop
erty
taxe
s,le
ss a
ssig
nmen
t to
Ariz
ona
Wat
er B
anki
ng A
utho
rity
of$1
0,69
1 and
$9,
967
in 2
001 a
nd 2
000,
resp
ectiv
ely
24,152
—24,152
——
——
Inte
rest
inco
me
and
othe
r non
oper
atin
g re
venu
es15,201
3612,251
——
32,983
Inte
rest
inco
me
rese
rved
for A
k-C
hin
fund
244
——
244
——
—
Inte
rest
inco
me
and
othe
r non
oper
atin
g re
venu
es re
serv
ed
for S
tate
Dem
onst
ratio
n Pr
ojec
t965
——
—965
——
Inte
rest
exp
ense
and
oth
er n
onop
erat
ing
expe
nses
48,553
3636,420
——
3612,133
Tota
l non
oper
atin
g re
venu
es (e
xpen
ses)
7,991
—17
244
965
339,150
Cha
nge
in n
et a
sset
s 12,015
—22,127
244
5,847
323
16,038
Net
ass
ets
at b
egin
ning
ofy
ear
155,030
—284,084
5,389
17,253
546
151,150
Net
ass
ets
at e
nd o
fyea
r$
143,015
$ —
$ 261,957
$ 5,633
$ 11,406
$ 869
$ 135,112
CENTRAL
AZSTATE
GROUND W
ATER
RECLASSIFICATIONS
GENERAL
AK-CHIN
DEMONSTRATION
REPLENISHMENT
SERIES A
& B
TOTAL
AND
ELIMINATIONS
FUND
FUND
PROJECT
FUND
DISTRICT F
UND
BOND F
UNDS
()
()
( )
( )
(
)
(
)
(
)
(
)
( )
( )
()
()
( )
(
)
(
)(
)
( )
( )
( )
( )
( )
( )
( )
( )
( )
ST
AT
EM
EN
T
OF
N
ET
A
SS
ET
S—
BY
FU
ND
DE
CE
MB
ER
31
,2
00
1
(In thousands)
STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET ASSETS —BY
FUND
DE
CE
MB
ER
31
,2
00
1
(In thousands)
()
( )
Central Arizona Water Conservation District
f i n 01
c a p
p. 61Fp. 60F
CENTRAL ARIZONA WATER CONSERVATION DISTRICT (Central Arizona Project)
Contract Revenue Bonds, Series A 1990, and Contract Revenue Refunding Bonds, Series A 1993 Contract Revenue Refunding Bonds, Series A 2001 Schedule of Activity – Bond Fund
D E C E M B E R 3 1 , 2 0 0 1
( I n t h o u s a n d s )
B O N D F U N D
Balance at January 1, 2000 $ 2,545 $ 1,052
Transfers from:Revenue Fund 9,933 6,140
Depository Trustee 10,858 —
Bond Proceeds — 26
Interest payments — 6,312
Redemptions 20,318 —
Interest earned on account 552 161
Interest transferred to revenue fund 552 161
Balance at December 31, 2001 $ 3,018 $ 906
Note 1: The above schedule discloses only activity in the Principal and Interest Accounts of the Bond Fund as establishedby the Bond Indenture relating to the Contract Revenue Bonds, and Contract Revenue Refunding Bonds betweenthe Central Arizona Water Conservation District and Bank of New York (California), as trustee, dated May 1, 1990as amended by the Supplemental Indenture dated March 1, 1993, and September 1, 2001, and does not includeactivity in various other accounts and funds held by the trustee pursuant thereto. There were no balances and noactivity in the Sinking and Subordinate Debt Accounts of the Bond Fund as of and for the year endedDecember 31, 2001.
Principal InterestDescription Account Account
( )
( )
( ) ( )
CENTRAL ARIZONA WATER CONSERVATION DISTRICT (Central Arizona Project)
Contract Revenue Bonds, Series B 1991, Contract Revenue Refunding Bonds, Series B 1994 and Contract Revenue Refunding Subordinate Bonds Series B 1994 Contract Reneue Refunding bonds, Series B 2001 Schedule of Activity – Bond Fund
D E C E M B E R 3 1 , 2 0 0 1
( I n t h o u s a n d s )
B O N D F U N D
Balance at January 1, 2000 $ 1,497 $ 489 $ 376
Transfers from:Revenue Fund 8,361 2,698 650
Depository Trustee 59,935 1,447 —
Bond Proceeds — 43 —
Interest payments — 4,264 196
Redemptions 68,020 — 505
Interest and dividends earned on account 179 53 26
Interest and dividends transferred to revenue fund 179 53 26
Balance at December 31, 2001 $ 1,773 413 $ 325
Note 1: The above schedule discloses only activity in the Principal, Interest, and Subordinate Debt Accounts of the BondFund as established by the Bond Indenture relating to the Contract Revenue Bonds, Contract Revenue RefundingBonds, and Contract Revenue Refunding Subordinate Bonds between the Central Arizona Water ConservationDistrict and Bank of New York (California), as trustee, dated August 1, 1991 as amended by the SupplementalIndenture dated February 1, 1994, and September 1, 2001, and does not include activity in various other accountsand funds held by the trustee pursuant thereto. There was no balance and no activity in the Sinking Account ofthe Bond Fund as of and for the year ended December 31, 2001.
Principal Interest SubordinateDescription Account Account Debt Account
( )( )
( ) ( )
( )
( )
( )
STATS
Central Arizona Water Conservation District
f i n 01
c a p
p. 63Fp. 62F
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
CENTRAL ARIZONA WATER CONSERVATION DISTRICT (Central Arizona Project)
Statistical Information (Unaudited)
1998 $ 167,921,203,091 $ 21,253,568,043
1999 181,711,885,622 23,318,202,275
2000 202,047,209,445 25,784,794,867
2001 224,701,894,776 28,142,398,130
Source: Maricopa, Pinal and Pima County Assessor’s Office
Tax Year Ended June 30 Full Cash Value Assessed Value
SCHEDULE OF AD VALOREM PROPERTY TAX — TAX LEVY AND COLLECTIONS
Source: Maricopa, Pinal and Pima County Treasurers’ Office
Fiscal Percent of Percent ofYear Tax Levy Amount Tax Levy Amount Tax Levy
1998-1999 $29,465,646 $28,867,580 97.97% $29,365,093 99.66%
1999-2000 32,363,032 31,414,064 97.07 32,171,187 99.41
2000-2001 33,248,229 32,209,138 96.87 32,675,568 98.28
2001-2002 35,748,795 (c) (c) (c) (c)
(a) Reflects collections made through June 30, the end of the taxing fiscal year, on each year’s levy.
(b) Reflects collections made through December 31, 2001 against current and prior levies.
(c) In the process of collection.
Collected to June 30End of Tax Fiscal Year (a) Total Collections (b)
SCHEDULE OF AD VALOREM PROPERTY TAX — FULL CASH VALUE AND ASSESSED VALUE
Central Arizona Water Conservation District
f i n 01
c a p
p. 65Fp. 64F
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
Schedule of Customer Activity—Water O&M Charges and Capital Charges
Y E A R E N D E D D E C E M B E R 3 1 , 2 0 0 1
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
Schedule of Customer Activity—Water O&M Charges and Capital Charges
Y E A R E N D E D D E C E M B E R 3 1 , 2 0 0 1
MUNICIPAL
& INDUSTRY
AGRICULTURE
RECHARGE
FEDERAL
TOTAL
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
9,761
$566,138
——
449
45,349
472,726
3,233
187,600
737,373
463
31,639
——
5,163
299,454
6606
——
——
——
5,127
517,827
360
22,040
1,202
69,716
1,110
64,380
——
——
6,003
348,174
——
Agua
Fria
(Citi
zens
)
Ak-C
hin
Indi
an C
omm
unity
Anca
la C
ount
ry C
lub
Apac
he Ju
nctio
n W
ater
Co.
AZ-
Amer
ican
Wat
er
AZ
Paci
fic M
ater
ials
AZ
Stat
e La
nd D
ept.
AZ
Wat
er B
ank
AZ
WAt
er C
o/Ap
ch.J
ct.
AZ
Who
lesa
le G
row
ers
ASAR
CO
,Ray
Min
e
Bern
eil W
ater
Com
pany
BHI C
oppe
r Com
pany
Cen
tral
AZ
Gro
undw
ater
Repl
enis
hmen
t Dis
t (b)
Car
efre
e W
ater
Com
pany
Cas
a G
rand
e Sy
stem
s (A
Z W
ater
Co.
)C
ave
Cre
ek W
ater
Co.
Cen
tral
Ariz
ona
Irrig
atio
n &
Dra
inag
e D
istr
ict
Cha
ndle
r Hei
ghts
Citr
us
Irrig
atio
n D
istr
ict
Cha
parr
al C
ity W
ater
Co.
Circ
le C
ity W
ater
Co.
CU
ST
OM
ER
—$
—
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
132,404
3,736,076
848
24,092
——
——
—$
—
——
——
2,883
129,735
——
——
——
110,409
9,394,101
——
——
——
——
——
1,255
56,475
——
——
——
11,016
231,336
545
11,445
——
——
—$
—
64,124
3,744,596
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
9,761
$566,138
64,124
3,744,596
449
45,349
2,930
132,461
3,233
187,600
737,373
463
31,639
110,409
9,394,101
5,163
299,454
6606
——
——
——
6,382
574,302
360
22,040
1,202
69,716
1,110
64,380
143,420
3,967,412
1,393
35,537
6,003
348,174
——
11,093
$476,999
——
——
——
3,231
138,933
——
32,076
1,379,268
——
6,000
258,000
——
21,000
903,000
200
8,600
2,271
97,653
——
400
17,200
8,884
382,012
1,600
68,800
——
315
13,545
6,978
300,054
3,932
169,076
$ 1,043,137
3,744,596
45,349
132,461
326,533
7,373
1,410,907
9,394,101
557,454
606
903,000
8,600
97,653
574,302
39,240
451,728
133,180
3,967,412
49,082
648,228
169,076
WA
TE
R
O&
M
CH
AR
GE
SC
AP
ITA
L C
HA
RG
ES
TO
TA
L
PA
IDACRE-FEET
ALLOCATION
REVENUE
MUNICIPAL
& INDUSTRY
AGRICULTURE
RECHARGE
FEDERAL
TOTAL
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
4,746
275,268
4,980
293,538
1,898
118,001
18,152
1,227,572
——
21,853
1,267,474
2,994
174,493
106,781
6,193,298
37,641
2,183,178
——
4,397
258,552
19,176
1,112,208
——
——
——
——
——
——
162,768
265,794
——
474,747
——
City
ofA
vond
ale
City
ofC
hand
ler
City
ofE
loy
City
ofG
lend
ale
City
ofG
oody
ear
City
ofM
esa
City
ofP
eoria
City
ofP
hoen
ix
City
ofS
cott
sdal
e
City
ofS
urpr
ise
City
ofT
empe
City
ofT
ucso
n
Com
mun
ity W
ater
Co
ofG
reen
Val
ley
Coo
lidge
Sys
tem
(AZ
Wat
er C
ompa
ny)
Phel
ps D
odge
,Inc
.
Del
Web
b (A
k-C
hin)
Pine
Wat
er C
ompa
ny
Flow
ing
Wel
ls Ir
r.D
istr
ict
Gar
dner
Tur
fgra
ss
Gila
Riv
er In
dian
C
omm
unity
(Tok
a St
icks
)G
reen
Val
ley
Wat
er C
o.
H2O
,Inc
.
Har
quah
ala
Valle
y As
s.
CU
ST
OM
ER
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
186
6,696
1,553
69,900
23,888
1,074,960
——
——
17,670
795,550
80,000
3,600,000
——
——
9,115
414,515
——
10,007
450,315
4,306
202,865
——
——
——
——
——
——
——
——
——
——
——
——
7,658
444,164
——
5,355
310,590
——
4,924
285,592
——
13,232
767,456
688
39,904
——
188
10,904
——
——
——
——
9,500
572,576
——
——
——
——
——
——
——
6,299
345,168
36,526
1,812,662
1,898
118,001
23,507
1,538,162
17,670
795,550
106,777
5,153,066
2,994
174,493
120,013
6,960,754
47,444
2,637,597
——
14,592
719,771
23,482
1,315,073
——
——
——
9,500
572,576
——
——
162,768
265,794
——
474,747
186
6,696
4,746
204,078
3,668
146,060
2,171
93,353
14,183
601,685
3,381
145,383
36,388
1,557,160
19,709
847,487
113,914
4,884,670
48,529
2,086,471
7,373
317,039
4,315
185,269
138,920
5,973,560
1,337
57,491
2,000
86,000
2,906
124,958
——
161
6,923
4,354
187,222
——
——
1,900
81,700
——
——
549,246
1,958,722
211,354
2,139,847
940,933
6,710,226
1,021,980
11,845,424
4,724,068
317,039
905,040
7,288,633
57,491
86,000
124,958
572,576
6,923
187,222
2,768
5,794
81,700
4,747
6,696
WA
TE
R
O&
M
CH
AR
GE
SC
AP
ITA
L C
HA
RG
ES
TO
TA
L
PA
IDACRE-FEET
ALLOCATION
REVENUE
Schedule o
f Customer A
ctivity—Water
O&M
Charges
and
Capital
Charges
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1,
20
01
Schedule o
f Customer A
ctivity—Water
O&M
Charges
and
Capital
Charges
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1,
20
01
Central Arizona Water Conservation District
f i n 01
c a p
p. 67Fp. 66F
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
Schedule of Customer Activity—Water O&M Charges and Capital Charges
Y E A R E N D E D D E C E M B E R 3 1 , 2 0 0 1
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
Schedule of Customer Activity—Water O&M Charges and Capital Charges
Y E A R E N D E D D E C E M B E R 3 1 , 2 0 0 1
MUNICIPAL
& INDUSTRY
AGRICULTURE
RECHARGE
FEDERAL
TOTAL
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
——
——
——
——
554
34,249
81,096
——
262,626
707,070
——
——
——
——
——
608,220
——
——
Har
quah
ala
Valle
yIr
rigat
ion
Dis
tric
tH
oHoK
am Ir
rigat
ion
Dis
tric
tK
ai F
arm
s
Litc
hfie
ld P
ark
Serv
ice
Com
pany
Mar
icop
a C
ount
y Pa
rks
&Re
crea
tion
Dep
t.M
aric
opa
Dril
ling
&Eq
uipm
ent c
ompa
nyM
aric
opa-
Stan
field
Irr.
&D
rain
age
Dis
tric
tM
azat
zal T
ree
Farm
Mes
a Fa
mily
Gol
fCen
ters
Met
ro.D
omes
tic W
ater
Impr
ovem
ent D
istric
tM
etro
.Dom
estic
Wat
erIm
prov
emen
t Dist
.(U.S
.Ban
k Tr
ust)
Mid
vale
Far
ms
New
mag
ma
Irrig
atio
n &
Dra
inag
e D
istr
ict
New
Riv
er U
tility
Com
pany
Oas
is G
olfr
esor
t &C
omm
unity
,LLC
Odo
m F
arm
s
Oro
Val
ley (U
.S.B
ank
Trus
t)
CU
ST
OM
ER
102,980
3,621,072
20,545
703,800
——
——
——
——
129,692
3,659,548
——
——
——
——
——
42,546
1,194,684
——
——
133
4,788
——
——
54,928
1,153,488
1,110
23,310
——
——
——
47,755
1,002,855
——
——
8,000
360,000
——
——
44,835
941,535
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
102,980
3,621,072
75,473
1,857,288
1,110
23,310
——
554
34,249
81,096
177,447
4,662,403
262,626
707,070
8,000
360,000
——
——
87,381
2,136,219
——
608,220
133
4,788
——
——
——
——
5,580
239,940
665
28,595
——
——
——
——
——
8,858
380,894
1,500
64,500
——
1,885
81,055
——
——
642
27,606
3,621,072
1,857,288
23,310
239,940
62,844
1,096
4,662,403
2,626
7,070
360,000
380,894
64,500
2,136,219
81,055
8,220
4,788
27,606
WA
TE
R
O&
M
CH
AR
GE
SC
AP
ITA
L C
HA
RG
ES
TO
TA
L
PA
IDACRE-FEET
ALLOCATION
REVENUE
MUNICIPAL
& INDUSTRY
AGRICULTURE
RECHARGE
FEDERAL
TOTAL
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
——
232,827
388
39,188
——
——
997
85,733
764
77,164
——
747,906
545
59,725
121,644
176
10,208
——
——
——
——
——
——
——
——
419
51,391
Phoe
nix
Mem
oria
l Par
kC
emet
ery
Pica
cho
Elem
enta
ry S
choo
lD
istri
ct N
o.33
Pina
l cou
nty
Dep
t.of
Publ
ic W
orks
Pinn
acle
Wes
t Cap
ital C
orp.
Que
en C
reek
Irr.
Dis
tric
t
Que
en C
reek
Wat
er C
o.
Qui
nter
o G
olfC
ount
ry C
lub
Ranc
ho E
scal
ante
Recr
eatio
nal c
ente
r,In
c.
Red
Mou
ntai
n Ra
nch
Cou
ntry
Clu
bRe
d M
ount
ain
Ranc
hO
wne
rs A
ssoc
iatio
nRi
o Ve
rde
Util
ities
,Inc
.
Robs
on C
omm
uniti
es
Roge
rs,F
rank
Roos
evel
t Wat
erC
onse
rvat
ion
Dis
tric
tSa
lt Ri
ver P
roje
ct
San
Car
los
Apac
he T
ribe
San
Car
los
Irrig
atio
n &
Dra
inag
e D
istr
ict
San
Tan
Irrig
atio
n D
istr
ict
San
Xavi
er C
o-op
Far
m
Sono
ran
Land
Gro
up
CU
ST
OM
ER
——
——
——
——
26,094
707,386
——
——
1,059
38,124
——
——
——
——
——
925
33,300
3,604
129,744
——
——
1,173
42,228
——
——
——
——
——
——
1,003
47,060
9,280
194,880
——
——
——
——
——
——
——
1,000
45,000
——
——
14,935
313,635
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
4,166
241,628
——
——
820
69,600
——
——
232,827
388
39,188
1,033
47,060
35,374
902,266
997
85,733
764
77,164
1,059
38,124
747,906
545
59,725
121,644
176
10,208
1,000
45,000
925
33,300
3,604
129,744
14,935
313,635
4,166
241,628
1,173
42,228
——
820
69,600
419
51,391
843,612
——
——
——
——
348
14,964
——
——
——
——
——
812
34,916
——
——
——
——
——
——
236
12,182
——
——
3,612
2,827
39,188
47,060
902,266
100,697
77,164
38,124
7,906
59,725
1,644
45,124
45,000
33,300
129,744
313,635
241,628
42,228
12,182
69,600
51,391
WA
TE
R
O&
M
CH
AR
GE
SC
AP
ITA
L C
HA
RG
ES
TO
TA
L
PA
IDACRE-FEET
ALLOCATION
REVENUE
Schedule o
f Customer A
ctivity—Water
O&M
Charges
and
Capital
Charges
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1,
20
01
Schedule o
f Customer A
ctivity—Water
O&M
Charges
and
Capital
Charges
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1,
20
01
Central Arizona Water Conservation District
f i n 01
c a p
p. 69Fp. 68F
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
Schedule of Customer Activity—Water O&M Charges and Capital Charges
Y E A R E N D E D D E C E M B E R 3 1 , 2 0 0 1
CENTRAL ARIZONA WATER CONSERVATION DISTRICT
STATISTICAL SECTION (UNAUDITED)
Schedule of Customer Activity—Water O&M Charges and Capital Charges
Y E A R E N D E D D E C E M B E R 3 1 , 2 0 0 1
MUNICIPAL
& INDUSTRY
AGRICULTURE
RECHARGE
FEDERAL
TOTAL
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
——
558
56,358
——
——
——
—22,752
172,221
——
352
86,675
——
——
636,363
——
2,048
118,784
——
——
——
——
——
——
——
Span
ish
Trai
l Wat
er C
o.
Sprin
gfie
ld G
olfR
esor
t
Sun
City
Util
ities
(Citi
zens
Wat
er R
esou
rces
)Su
n C
ity W
ater
Com
pany
(Y
oung
tow
n)Su
n C
ity W
est U
tiliti
es
(Citi
zens
Wat
er R
esou
rces
)Su
n G
rove
s H
omeo
wne
rsAs
soc.
Sun
Stat
e Ro
ck &
M
ater
ials
Cor
p.Su
nris
e W
ater
Com
pany
Tem
pora
ry W
ater
Per
mits
Toho
no O
’Odh
am In
dian
Nat
ion
Tono
pah
Irrig
atio
n D
istr
ict
Tont
o N
atio
nal F
ores
t
Tow
n of
Buck
eye
Tow
n of
Flor
ence
Tow
n of
Gilb
ert
Tow
n of
Mar
ana
Tow
n of
Oro
Val
ley
Trip
le W
Far
ms
V.F.
Inve
stm
ents
Vail
Wat
er C
ompa
ny
Vidl
er W
ater
Com
pany
CU
ST
OM
ER
——
——
——
——
——
——
——
——
——
——
6,436
176,664
——
——
——
——
——
——
173
6,228
2,057
74,052
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
——
2,047
92,115
2,500
112,500
——
——
786
35,370
2,730
122,955
——
——
——
——
——
——
——
——
——
8,337
578,173
——
——
——
——
4,592
315,462
——
——
——
——
——
——
——
558
56,358
——
——
——
—22,752
172,221
——
352
86,675
8,337
578,173
6,436
176,644
636,363
——
2,048
118,784
4,592
315,462
2,047
92,115
2,500
112,500
173
6,228
2,057
74,052
786
35,370
2,730
122,955
3,037
130,591
——
3,809
163,787
380
16,340
2,372
101,996
——
——
944
40,592
——
——
——
——
434
18,662
2,048
88,064
7,235
292,661
472,021
1,652
71,036
——
——
786
33,798
——
130,591
56,358
163,787
16,340
101,996
22,752
2,221
40,592
86,675
578,173
176,644
6,363
18,662
206,848
608,123
94,136
183,536
6,228
74,052
69,168
122,955
WA
TE
R
O&
M
CH
AR
GE
SC
AP
ITA
L C
HA
RG
ES
TO
TA
L
PA
IDACRE-FEET
ALLOCATION
REVENUE
MUNICIPAL
& INDUSTRY
AGRICULTURE
RECHARGE
FEDERAL
TOTAL
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
A/F DELIVERED
REVENUE
426
56,922
——
——
——
——
——
——
263,284
$16,019,035
263,284
$16,019,035
View
poin
t R V
& G
olfR
esor
t
Wat
er U
tiliti
es C
om.
Faci
litie
s D
ist.
Wat
er U
tility
ofG
reat
er
Buck
eye,
Inc.
Wat
er U
tility
ofG
reat
er
Tono
pah,
Inc.
Web
b Fa
rms
Wes
t End
Wat
er C
o.
Whi
te T
ank
Syst
em(A
rizon
a W
ater
Co.
)
Subt
otal
Tran
sfer
ofs
tora
ge cr
edits
Tota
l
CU
ST
OM
ER
——
——
——
——
348
12,528
——
——
471,203
$14,170,990
471,203
$14,170,990
——
——
——
——
——
——
——
463,586
$20,875,900
360
$ 36,390
463,946
$20,912,290
——
——
——
——
——
——
——
123,584
$7,380,645
123,584
$7,380,645
426
56,922
——
——
——
348
12,528
——
——
1,321,657
$58,446,570
360
$ 36,390
1,322,017
$58,482,960
——
2,919
125,517
431,849
642,752
——
157
6,751
968
41,624
555,440
$23,825,954
555,440
$23,825,954
56,922
125,517
1,849
2,752
12,528
6,751
41,624
$82,272,524
$ 36,390
$82,308,914
WA
TE
R
O&
M
CH
AR
GE
SC
AP
ITA
L C
HA
RG
ES
TO
TA
L
PA
IDACRE-FEET
ALLOCATION
REVENUE
Not
es:
(a) E
xces
s w
ater
del
iver
ies
incl
ude
a co
mpo
nent
for f
acili
ty u
se.R
even
ues
of$1
,590
,816
wer
e co
llect
ed a
nd re
flect
ed in
Wat
er O
&M
char
ges,
but r
ecor
ded
in th
e St
atem
ent o
fOpe
ratio
ns a
s C
apita
l Cha
rges
.
(b) W
ater
O&
M ch
arge
s co
llect
ed fo
r wat
er d
eliv
erie
s to
the
Cen
tral
Ariz
ona
Gro
und
Repl
enis
hmen
t Dis
tric
t (in
ter-
com
pany
tran
sact
ion)
are
elim
inat
ed o
n th
e co
nsol
idat
ed S
tate
men
t ofO
pera
tions
.
Schedule o
f Customer A
ctivity—Water
O&M
Charges
and
Capital
Charges
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1,
20
01
Schedule o
f Customer A
ctivity—Water
O&M
Charges
and
Capital
Charges
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1,
20
01
THE CAWCD BOARD
Central Arizona Water Conservation District
THE CAWCD BOARD
Central Arizona Water Conservation District
Central Arizona Water Conservation District
f i n 01
c a p
p. 70F
M A R I C O P A C O U N T Y
A George L. Campbell T E R M E N D I N G 2 0 0 6
B Robert “Bob” Burns T E R M E N D I N G 2 0 0 6
C Daniel J. Donahoe T E R M E N D I N G 2 0 0 4
D Grady Gammage, Jr. Esq. T E R M E N D I N G 2 0 0 4
E Samuel P. Goddard, Jr. Esq. T E R M E N D I N G 2 0 0 4
F Mark Lewis T E R M E N D I N G 2 0 0 4
G William Perry T E R M E N D I N G 2 0 0 6
H Terry Goddard T E R M E N D I N G 2 0 0 6
I George Renner T E R M E N D I N G 2 0 0 6
J Susan Bitter Smith T E R M E N D I N G 2 0 0 4
P I M A C O U N T Y
K Robert M.“Bob” Beaudry T E R M E N D I N G 2 0 0 2
L Marybeth Carlile T E R M E N D I N G 2 0 0 2
M Marilyn Ronstadt T E R M E N D I N G 2 0 0 2
N Steve Weatherspoon, Esq. T E R M E N D I N G 2 0 0 2
P I N A L C O U N T Y
O Jim Hartdegen T E R M E N D I N G 2 0 0 2
B C D E
F G H J
K L M N
A
I
OBThe Central Arizona Water Conservation District
Board of Directors is responsible for managing
the Central Arizona Project (CAP) which annually
delivers up to 1.5 million acre-feet of Colorado
River water to most cities and many irrigation
districts in central and southern Arizona.
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.
p. 71F
p. 72F
THE SENIOR MANAGEMENT TEAM
Central Arizona Water Conservation District
SMTA David S.“Sid” Wilson, Jr. G E N E R A L M A N A G E R
B Donna Micetic E X E C U T I V E A S S O C I A T E
C Donna Murphy A S S I S T A N T G E N E R A L M A N G E R , H U M A N R E S O U R C E S E R V I C E S
D John Newman A S S I S T A N T G E N E R A L M A N A G E R , P L A N N I N G & R E S O U R C E S
E Larry Dozier D E P U T Y G E N E R A L M A N A G E R , O P E R A T I O N S , M A I N T E N A M C E & E N G I N E E I N G
F Douglas Miller G E N E R A L C O U N S E L
G Kathryn Schmitt D I R E C T O R O F C O M M U N I C A T I O N S , P U B L I C A F F A I R S & G O V E R N M E N T R E G U L A T I O N S
H Ted Cooke A S S I S T A N T G E N E R A L M A N A G E R , F I N A N C E
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 S Y S T E Mc a p . 0 6 . 0 1 . s y s
.01
T U C S O N
AR
IZ
ON
AM
EX
IC
O
BU C K S K I NM O U N T A I NT U N N E L
M AR I
C OP A
CO U
N TY
P IN A
L C O
U NT Y
P IM A
�
CO U
N TY
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 RS N Y D E R H I L L
B L A C K M O U N T A I N
C A P C O M M U N I C A T I O N S S T A F F
Editor-in-Chief Kathryn B. SchmittEditor Robert Barrett
Contributing Writers Crystal ThompsonVicky CampoCathy Carlat
Photography Philip Fortnam
Design & Illustration Squeeze, Inc.
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 0P h o e n i x , A r i z o n a 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
CAP
CAP
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