COB Policy on Water Acquisitions & Funding.pdf

City of Buckeye Water Policy
Title: City of Buckeye Policy on Water Acquisitions and Number:
Funding
Drafted by: Terry Lowe, Water Resources Director Date: April 20, 2026
Revised by: Date:
I. INTRODUCTION
The purpose of this policy is to establish the framework by which the City of Buckeye will
fund the acquisition of water resource assets and implement water portfolio-focused projects
and programs to expand and strengthen the City’s Water Resource Portfolio. Assets, projects,
and programs shall be evaluated for both designated and non-designated water service areas.
During periods in which the city is not a designated water provider, certain water assets may
not be available for acquisition or use. Acquisition and utilization of those assets shall occur
upon the City’s receipt of a Designation of Assured Water Supply (DAWS).
The City shall maintain a current Integrated Water Master Plan (IWMP), updated at least
every five (5) years, to provide guidance in identifying and quantifying long-term water
resource needs and priorities for the Water Resource Portfolio.
II. DEFINITIONS
For purposes of this policy, the following definitions shall apply:
Area of Impact (AOI): The geographic area influenced by groundwater pumping from a
water well and where recharge activities may provide hydrologic benefit.
Assured Water Supply: A legal determination by the Arizona Department of Water
Resources (ADWR) that sufficient, continuously, legally, and physically available water
supplies exist to meet projected demand for at least one hundred (100) years.
Central Arizona Groundwater Replenishment District (CAGRD): An entity that provides
groundwater replenishment to offset excess groundwater pumping by its members and
participants.
Central Arizona Project (CAP): A system of canals, pipelines, and related infrastructure
that delivers Colorado River water throughout central and southern Arizona.
Designation of Assured Water Supply (DAWS): Formal designation issued by ADWR
confirming that a municipal water provider has sufficient water supplies to serve its service
area for at least one hundred (100) years.
Effluent: Treated wastewater or reclaimed water that may be reused for recharge, irrigation,
industrial, or other non-potable or potable purposes, as allowed by law.
Excise Tax Bonds: Bonds secured by specific excise tax revenues and used to finance public
infrastructure or acquisitions.
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Extinguishment Credits (ECs): Rights to access groundwater based on the permanent
retirement of irrigated agricultural land. Groundwater replenishment is not required. ECs are
generally considered a one-time-use asset.
Groundwater Savings Facility (GSF): A facility or arrangement that allows groundwater to
remain in storage by substituting another water source for groundwater pumping.
Integrated Water Master Plan (IWMP): A City Council-adopted comprehensive planning
document that identifies current and future water supply, infrastructure, and resource needs.
Long-Term Storage Credits (LTSCs): Credits represent water legally stored underground
for future recovery. LTSCs are generally considered a one-time-use asset.
Non-Irrigation Grandfathered Right (Type I): A groundwater right associated with retired
irrigated land or other qualifying uses that may be transferred subject to statutory limitations.
Legal Water (also known as Paper Water): Water rights, credits, or entitlements that
represent legal access to water but are not necessarily physically delivered or immediately
available for use.
Phoenix Active Management Area (AMA): The groundwater management region
designated by the State of Arizona in which Buckeye is located and subject to specific
groundwater regulations.
Physical (Wet) Water: Water supplies that are physically available for immediate use,
treatment and delivery, or storage.
Public-Private Partnership: A contractual arrangement between a public entity and one or
more private entities to finance, construct, or operate infrastructure or programs.
Recharge: The process of storing water underground for future recovery or aquifer
replenishment.
Renewable Water Supply: Water supplies that are naturally or contractually replenished,
such as CAP water, reclaimed water, or surface water.
Surface Water: Water flowing or stored above ground, including rivers, reservoirs, lakes,
and streams.
Underground Storage Facility (USF): A permitted facility used to recharge water into an
aquifer for long-term storage.
Water Portfolio: The total combination of the City’s water supplies, water rights, credits,
infrastructure, and related programs used to meet current and future demand.
III. RELATED POLICIES
a. Water Conservation
b. Use of Reclaimed Water
c. Strategic Water Planning
d. Water Allocations for Designation of Assured Water Supply Areas
IV. PURPOSE
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This policy identifies available funding mechanisms, the types of acquisitions best suited to
each funding source, and the strategies for acquiring, developing, and managing safe,
adequate, and reliable water supplies for current and future use.
The city’s acquisition strategy shall consider:
• The type of water asset;
• The intended use of the asset in meeting current or future demand;
• Potential funding sources; and
• The extent to which the asset strengthens and diversifies the city’s Water Resource
Portfolio.
V. WATER ASSETS
The following water-related assets are not listed in order of priority. All are considered
essential to maintaining a reliable, resilient, and sustainable water portfolio.
a. Physical Wet Water
The city will purchase physical water supplies (rights) when available and beneficial
to the city’s water portfolio. The following supplies are the water assets associated
with a particular water rights:
i. Central Arizona Project (CAP) Water
When available, the city shall pay for and take delivery of 100% of its CAP
allocations. Pursuant to the 1980 Groundwater Management Act, the city’s
primary water supply should come from renewable sources whenever feasible.
CAP water shall be used for aquifer recharge, recovery, and storage purposes
until such time as direct use is deemed appropriate. The city shall pursue
lawful opportunities to utilize CAP water within its service area.
The city shall seek to acquire additional CAP supplies or rights, including
leases, whenever available and beneficial.
Funding: CAP acquisitions may be financed through funding opportunities
offered by CAP, WIFA loans, revenue bonds, or excise tax bonds.
ii. Other Supplies
 Surface Water: The city shall actively pursue and invest in the acquisition
of Colorado River and in-state surface water supplies.
 Irrigation Districts: The city shall partner with local irrigation districts to
identify opportunities to convert agricultural water supplies to municipal
use and utilize district infrastructure for conveyance of other wet water
assets into Buckeye.
 Non-AMA Groundwater Importation: The city shall evaluate and, where
beneficial, invest in groundwater supplies from outside the Phoenix AMA
for importation into Buckeye through wheeling agreements or new
infrastructure.
 Regional Projects: The City shall explore partnerships with regional
agencies and invest in projects that provide additional long-term,
sustainable water supplies. Such projects may include desalination
facilities and other local, statewide, or interstate water delivery projects.
Funding: These acquisitions are generally large-scale and intended to provide
long-term or permanent water supplies. Participation in regional projects may
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include treatment facilities, distribution systems, desalination facilities, and other
large-scale investments.
Funding may include:
• Revenue bonds;
• Excise tax bonds;
• Low-interest, long-term loans; and
• Public-private partnerships.
Repayment may be supported through developer reimbursements, development
impact fees, and water rates, depending on the scope and frequency of
acquisitions.
b. Water Leases/Options to Water
i. City as Lessee
The City shall evaluate leasing water supplies to preserve or expand the Water
Resource Portfolio. Potential leased supplies may include CAP allocations,
effluent, and other renewable water supplies.
Leased water may be:
• Recharged to generate Long-Term Storage Credits (LTSCs); or
• Treated and delivered directly to customers to preserve groundwater
reserves.
Funding: Development impact fees for water rates will be used for these investments.
ii. City as Lessor
The city may lease water assets it deems non-critical. Revenues generated
from such leases shall be used to acquire additional water supplies or rights to
expand the portfolio.
c. Paper Water
i. Extinguishment Credits (ECs)
Maintaining a minimum reserve of ECs equivalent to anticipated demand is
critical because the timing and duration of their use may be uncertain.
As a non-designated provider, the city may acquire and accrue ECs only. Upon
receiving a DAWS, ECs may be used to avoid replenishment and reduce
Central Arizona Groundwater Replenishment District (CAGRD) fees or
reduce the need to recharge other water supplies to offset groundwater
pumping.
ii. Long Term Storage Credits (LTSCs)
Long-Term Storage Credits represent water stored underground for future
recovery and are also considered one-time-use assets. The city shall maintain
sufficient LTSC reserves to meet anticipated demand.
In addition to generating LTSCs through storage of reclaimed water, the city
shall pursue acquisitions and projects to expand LTSC supplies.
LTSCs may be generated from the following sources:
1. Effluent
As a non-designated utility, the city may purchase, generate, and
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accrue LTSCs derived from reclaimed water produced by the city or
another utility.
The City shall:
• Budget periodically for acquisition of effluent-generated
LTSCs when beneficial; and
• Construct, or require construction of, recharge infrastructure to
generate LTSCs.
Effluent LTSCs shall be used to offset groundwater pumping.
2. Surface Water Supplies
Upon receiving a DAWS, the City shall budget for periodic acquisition
of LTSCs generated from CAP or other renewable sources when
beneficial. These LTSCs shall be used as an offset to the groundwater
pumped by the City.
3. Regional Projects
The city will explore partnerships with regional agencies and invest in
regional projects that will provide Buckeye with LTSCs. Such projects
may include the construction of recharge facilities or establishment of
groundwater and underground water savings facilities (GSFs/USFs)
for the storage of water in Buckeye.
Funding: LTSC acquisitions shall be funded through customer rates.
Regional projects may be funded through impact fees, loans, and/or
customer rates.
d. Type-II Rights
The City shall seek to acquire these rights as they become available and when
beneficial.
Funding: Depending on the quantity of rights available, funding may be through
customer rates or other financing available to the city.
VI. MINIMUM ASSET BALANCES
To ensure sufficient reserves to meet demand and protect against temporary or permanent
resource loss, the city’s goal shall be to maintain the following minimum asset balances:
• Renewable Rights: 100% of the city’s service area demand
• Water Credits: 15 years, or 15 times the city’s service area net demand
VII. WATER PORTFOLIO PROJECTS
The city shall support and invest in in infrastructure necessary to perfect, store, treat, and
deliver its water supplies, including but not limited to:
• Recharge facilities;
• Raw water transmission systems; and
• Treatment facilities.
VIII. RECHARGE PROJECTS
The goal of groundwater recharge projects is to place water within the AOI, defined as the
area influenced by drinking water wells.
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Exact recharge facility locations shall be determined through hydrologic and engineering
analyses and identified in the IWMP.
These projects may be local or regional in nature and may benefit multiple water providers.
Funding: Due to the large-scale nature of these projects and the breadth of benefit, bonding
and public-private partnerships will generally be preferred funding mechanisms.
IX. WATER CONSERVATION PROGRAMS
Successful water conservation programs should take a broad, strategic approach while
addressing local needs and opportunities. These programs benefit the city as a whole and help
preserve water resources.
Funding: Program-specific funding may include water rates, grants, or public-private
partnerships.
X. FUTURE DEVELOPMENT
Upon receipt of the city’s DAWS, developers within Buckeye’s service areas may be
required, through Development Agreements, to acquire water supplies or rights and transfer
them to the city to expand the Water Resource Portfolio and serve new development.
XI. REPAYMENT ON INVESTMENT
Loans, bonds, and other financing obligations may be repaid through various revenue sources,
including but not limited to water rates, property taxes, or other lawful city revenue sources.
XII. LOCAL AND REGIONAL PARTICIPATION
The city shall establish and maintain strong working relationships with local and regional
partners to remain informed, collaborate effectively, and influence water acquisition and
funding decisions that may affect Buckeye.
The city shall remain engaged in local, county, regional, state, and national discussions
regarding water supply management and shall support efforts to expand the water future of
Buckeye and the West Valley.
Participation shall include engagement with, but not be limited to:
• Buckeye Water Conservation and Drainage District
• Roosevelt Irrigation District
• Central Arizona Project stakeholder processes;
• Arizona Department of Water Resources (ADWR);
• Water Infrastructure Finance Authority of Arizona (WIFA);
• Salt River Project (SRP); and
• Colorado River water user forums.
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