conar€¦ · p. 01 p. 06 p. 14 p. 19 p. 57 letter power of water cap review financials the board...

p. 01

p. 06

p. 14

p. 19

p. 57

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

2 0 0 1

p a g e

a . R

a r 01

CONc a p

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

p. 0 2

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.

p. 0 3

2 0 0 1

a . Rc a p

w a t e r

1N o

F A C T

H20

David S. Wilson Jr.

POWp. 0 4 p. 0 5

P O W E R O W A T E RF

a r 01

H20

H20H20

H20

H20

H20H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20H20

H20

H20

H20

H20

H20

H20

H20

H20

H20

H20H20

H20

H2OWater.

p. 06 p. 0 7

G c

THE POWER OF WATER CAN BE DESTRUCTIVE DURING FLOODS, BUT IT ALSO HASCREATED THE GRANDEUR AND AWESOME BEAUTY OF THE GRAND CANYON.

pH 003

WATER GENERATES POWER. COLORADO RIVER WATER, AS IT PASSES THROUGHGLEN CANYON, HOOVER AND OTHER DAMS, PRODUCES POWER USED BY PEOPLETHROUGHOUT THE SOUTHWEST.

pH 002

WATER MAKES UP ALMOST TWO-THIRDS OF THE HUMAN BODY AND 70 PERCENT OF THE BRAIN.

pH 001

e

In healthcare, ice-water is poured

into the pericardial sack to slow and

preserve the heart duringa bypass operation.

MED

w a t e r

2N o

F A C T

H20

H

H

O

a r 01

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.

p. 0 8

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

p. 0 9

2 0 0 1

a . Rc a p

w a t e r

3N o

F A C T

H20

m O N s o o N

20

01

a .R

ca

p

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

T

p. 10

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.

pH 004

p. 1 1

The defining moment of 2001 came on the morning of September 11 when terrorist attacks stunned the United States.

w a t e r

4N o

F A C T

H20

s A

d E h

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

p. 12 p. 13

MODIFIED VOLKSWAGEN “BEETLE” WHEELASSEMBLIES WEREUSED TO BUILDROLLING SCAFFOLDSSO CREWS COULD WORK INSIDE THE 21-FOOT DIAMETER SIPHON.

pH 005

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%


30% 53% 9.5%7.5%

CAP SRP GROUND

39% 48% 13%

DIRECT DELIVERED CAP RECHARGED CAP GROUND

14% 70% 16%


7% 90% 2%1%

CAP SRP GROUND

21% 72% 7%

Source: Arizona Republic 03.24.02

acreFT

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.

pH 006

pH 007

p. 1 4 p. 15

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.

a R

P O P

w a t e r

5N o

F A C T

H20

2 0 0 1

a . Rc a p

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.

aF

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.

pH 009

RECHARGE

p. 1 6 p. 1 7

f i g 0 6 1 -B

w a t e r

6N o

F A C T

H20

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.

pH 008

a . Rc a p

2 0 0 1

hM

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

p. 28

p a g e

a r 01

p. 19

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

p. 29

p. 31

p. 32

p. 33

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

p. 57

p. 59

p. 60

p. 61

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

p. 63

p. 63

p. 64

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.


MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2001

Central Arizona Water Conservation District

f i n 01

c a p

p. 21Fp. 20F

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.


f i n 01

c a p

p. 23Fp. 22F

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)


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.


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)


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.



f i n 01

c a p

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


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)


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.


SCHEDULE OF CAPITAL ASSETS (Net of Depreciation and Amortization)


f i n 01

c a p

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)


2001 2000 Change

Repayment obligation $ 1,526 $ 1,546 $ (20)

Reneue bonds 171 190 (19)

Total Long-Term Debt $ 1,697 $ 1,736 $ (39)


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 [email protected]

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


f i n 01

c a p

p. 29

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



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


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



f i n 01

c a p

p. 31Fp. 30F

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


S T A T E M E N T S O F C A S H F L O W S



f i n 01

c a p

p. 33Fp. 32F

N o

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

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.

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

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.



f i n 01

c a p

p. 35Fp. 34F

2N o

M A S T E R R E P A Y M E N T A G R E E M E N T

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.


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.



f i n 01

c a p

p. 37Fp. 36F

3N o

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

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.



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



f i n 01

c a p

p. 39Fp. 38F

O P E R A T I O N S

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.



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



f i n 01

c a p

p. 41Fp. 40F

4N o


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.


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.



f i n 01

c a p

p. 43Fp. 42F

5N o

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):


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


f i n 01

c a p

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.

6N o

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).


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:




f i n 01

c a p

p. 47Fp. 46F

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.

7N o

8N o

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



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.



f i n 01

c a p

p. 49Fp. 48F

9N o 10N o

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).


B O N D S P A Y A B L E 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



f i n 01

c a p

p. 51Fp. 50F

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).

11N o



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.


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


f i n 01

c a p

12N o


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.


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.


f i n 01

c a p

p. 55Fp. 54F

13N o

14N o

15N o


OTHER FINANCIAL INFORMATION


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


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)

()


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


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)

()

( )


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


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

( )

( )

( ) ( )


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


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


f i n 01

c a p

p. 63Fp. 62F


STATISTICAL SECTION (UNAUDITED)


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


f i n 01

c a p

p. 65Fp. 64F



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


f i n 01

c a p

p. 67Fp. 66F









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


f i n 01

c a p

p. 69Fp. 68F









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


THE CAWCD BOARD



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


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

conar€¦ · p. 01 p. 06 p. 14 p. 19 p. 57 letter power of water cap review financials the board...

Documents