SCIA No. 23-XX-30-W0778 US Bureau of Reclamation, CAWCD Agreement Final

To: Your Agency for Signature of the System Conservation
Implementation Agreement (SCIA)

From: Nancy DiDonato — Bureau of Reclamation

Date: April 21, 2023

We are pleased to enclose the original of the SCIA for signature by your agency.
Please sign the three signature pages and return the SCIA and the three signed
signature pages to me by overnight mail to the address below.

Nancy DiDonato, LCB-4405
Contract and Repayment Specialist
Bureau of Reclamation

Boulder Canyon Operations Office
500 Date Street, Building 900
Boulder City, NV 89005

Should you have questions, please contact me at 702-293-8532 or
ndidonato@usbr.gov.

Thank you,
Nancy Di Donato

SCIA No. 23-XX-30-W0778

SYSTEM CONSERVATION IMPLEMENTATION AGREEMENT (SCIA) AMONG THE
UNITED STATES BUREAU OF RECLAMATION, THE CENTRAL ARIZONA WATER
CONSERVATION DISTRICT, AND THE CITY OF GLENDALE TO IMPLEMENT THE
LOWER COLORADO CONSERVATION AND EFFICIENCY PROGRAM
(LC CONSERVATION PROGRAM)

i. PREAMBLE This SCIA to implement the LC Conservation Program is entered into this
____ day of , 2023, by and between the United States, Department of the Interior,
Bureau of Reclamation (“Reclamation”), acting through the Regional Director of the Lower
Colorado Basin Region of the Bureau of Reclamation, the Central Arizona Water Conservation
District (““CAWCD”), and the City of Glendale (“Glendale”), hereinafter referred to singularly as
“Party” or collectively as “Parties” and pursuant to the Act of Congress approved June 17, 1902
(32 Stat. 388), designated the Reclamation Act, and acts amendatory thereof or supplementary
thereto, the Act of December 21, 1928 (45 Stat. 1057), designated the Boulder Canyon Project
Act, the Act of September 30, 1968 (82 Stat. 885), designated the Colorado River Basin Project
Act, Public Law 116-14, the Colorado River Drought Contingency Plan Authorization Act dated
April 16, 2019, and the Inflation Reduction Act of 2022, Public Law 117-169.

2. EXPLANATORY RECITALS

2.1 WHEREAS, the Colorado River Basin is experiencing the driest 23-year period in
the historical record, and Lake Mead’s elevation has dropped to levels where the Secretary of the
Interior (“Secretary”) determined shortage conditions for Lake Mead in calendar years 2022 and
2023;

2.2. WHEREAS, prior to the Secretary declaring shortage conditions for Lake Mead in
calendar years 2022 and 2023, Public Law 116-14, the Colorado River Drought Contingency Plan
Authorization Act (“Act”), was signed into law on April 16, 2019. This Act directed the Secretary
to execute several agreements hereinafter referred to collectively as (“DCP Agreements’’), and the
DCP Agreements were subsequently executed on May 20, 2019;

2.3 WHEREAS, one of the DCP Agreements that was executed on May 20, 2019, was
an agreement between the United States and the Colorado River Basin States entitled, Agreement
Concerning the Colorado River Drought Contingency Management and Operations (Companion
Agreement), that provided implementation of several interstate agreements including the Lower
Basin Drought Contingency Plan Agreement (“LB DCP Agreement”) which is Attachment B to
the Companion Agreement, that included Exhibit 1 entitled, Lower Basin Drought Contingency
Operations that was designed to create new flexibility to incentivize additional voluntary
conservation of water to be stored in Lake Mead;

2.4 WHEREAS, Section 3 b. of the LB DCP Agreement, among other things, provides
that, subject to appropriations, (1) the Secretary will take affirmative actions to implement Lower
Basin programs designed to create or conserve 100,000 acre-feet per annum or more of Colorado
River System water to contribute to conservation of water supplies in Lake Mead and other
Colorado River reservoirs in the Lower Basin and (2) the other Parties to the LBDCP shall not

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request delivery of, and the Secretary shall not deliver to any Party or Contractor the volumes of
Colorado River System water conserved through such programs;

2.5. WHEREAS, on September 22, 2022, the Department of the Interior
(“Department”) announced that it is taking additional steps to address drought in the Colorado
River Basin;

2.6 | WHEREAS, the Department, through the Bureau of Reclamation, created a new
LC Conservation Program, similar to the previous program entitled, Pilot System Conservation
Program and Colorado River System water conservation activities under the LBDCP;

2.7 WHEREAS, the purpose of the LC Conservation Program is to increase system
conservation and efficiency opportunities to address the unprecedented drought in the Lower
Colorado River Basin and it is a part of the commitment made by the Department on August 16,
2022, to address the drought crisis with prompt and responsive actions and investment to ensure
the entire Colorado River Basin can function and support all who rely on it;

2.8 | WHEREAS, the LC Conservation Program is funded in part by the Inflation
Reduction Act of 2022 that provides $4 billion in funding specifically for water management and
conservation efforts in the Colorado River Basin and other basins experiencing comparable levels
of long-term drought;

2.9 WHEREAS, as a follow-up to the Department’s September 22, 2022,
announcement, by letter dated October 12, 2022, to interested parties having a Colorado River
water delivery contract or entitlement holders and Central Arizona Project (“CAP”) water delivery
contract or entitlement holders, Reclamation announced the funding opportunity for voluntary
participation in the new LC Conservation Program which included an enclosure entitled,
“Enclosure 1 - Requirements for Lower Basin System Conservation and Efficiency Project
Proposals” (“Enclosure 1”) that described the proposal and selection requirements under a set
fixed price (Program 1.a. in the letter) and under an agreed upon price (Program 1.b. in the letter);

2.10 WHEREAS, on October 28, 2022, the Department announced its intent to begin a
process for a Supplemental Environmental Impact Statement (“SEIS”) to the 2007 Record of
Decision associated with the Colorado River Interim Guidelines Jor Lower Basin Shortages and
Coordinated Operations for Lake Powell and Lake Mead that may result in a reduction in Lower
Basin deliveries in calendar years 2023, 2024, and potentially 2025 thereby impacting the amount
of System Conservation Water that can be created by Glendale in those years and how that water
is accounted for under this SCIA;

2.11 WHEREAS, Glendale holds a CAP water entitlement for a maximum of 17,236
acre-feet per year of CAP water under Subcontract No. 07-XX-30-W0493, dated May 25, 2007,
as amended (“Glendale Subcontract”), among the United States, CAWCD, and Glendale;

2.12 WHEREAS, CAWCD is a party to this SCIA as it is to the Glendale Subcontract
which are three-party subcontracts;

2.13 WHEREAS, Glendale submitted to Reclamation a LC Conservation Program
proposal received on April 11, 2023, to make available up to 7,000 acre-feet of Glendale’s CAP
water entitlement for the LC Conservation Program in calendar year 2023, up to 7,000 acre-feet in

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calendar year 2024, and up to 7,000 acre-feet in calendar year 2025 totaling up to 21,000 acre-feet
over three years, in exchange for monetary compensation;

2.14 WHEREAS, Glendale’s LC Conservation Program proposal was evaluated by
Reclamation pursuant to the proposal and selection requirements as shown in Enclosure 1 to
Reclamation’s October 12, 2022 letter;

2.15 WHEREAS, Glendale’s LC Conservation Program proposal was selected by
Reclamation for inclusion in the LC Conservation Program under a set fixed price of $400.00 per
acre-foot (Program 1.a.in the October 12, 2022 letter);

2.16 WHEREAS, a copy of Glendale’s LC Conservation Program proposal received by
Reclamation on April 11, 2023, is attached hereto as Exhibit A and made part of this SCIA:

2.17 WHEREAS, Glendale has a history of working with the United States, CAWCD,
and others in calendar year 2022 by entering into an agreement to help mitigate the impacts of the
drought by conserving water in Lake Mead as system water in exchange for financial
compensation; and

2.18 WHEREAS, the Parties desire to enter into this SCIA whereby Glendale agrees to
reduce its scheduled delivery volume from its CAP water delivery schedule by up to 7,000 acre-
feet of water in calendar year 2023 and intends to reduce its CAP delivery schedule by up to 7,000
acre-feet in calendar year 2024 and up to 7,000 acre-feet in calendar year 2025 under the conditions
of and as provided within this SCIA and allow such volumes to remain in Lake Mead in exchange
for financial compensation.

NOW, THEREFORE, in consideration of the terms and conditions set forth herein, the
Parties agree as follows:

3. DEFINITIONS

3.1 Colorado River Compact means the document signed on November 24, 1922, at
Santa Fe, New Mexico, pursuant to an act of Congress approved August 19, 1921 (42 Stat. 171).
The Colorado River Compact was approved in Section 13(a) of the Boulder Canyon Project Act.

3.2 Colorado River System shall have the meaning ascribed to such term in the
Colorado River Compact.

3.3. Exhibit A is a copy of Glendale’s LC Conservation Program proposal received by
Reclamation on April 11, 2023. Exhibit A is attached hereto and part of this SCIA.

3.4 System Conservation Water means Colorado River water that is conserved by
Glendale under the SCTA and left in Lake Mead to benefit the Colorado River System pursuant to
this SCIA,

4. PURPOSE

4.1 The purpose of this SCIA is for Reclamation to compensate Glendale to reduce its
scheduled delivery volume by up to 7,000 acre-feet of Glendale’s CAP water in calendar year

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2023, within 30 days after execution of this SCIA, in calendar year 2024 on or before October 1,
2023, and in calendar year 2025 on or before October 1, 2024, thereby allowing such volume each
year to remain in Lake Mead as System Conservation Water. In the absence of this SCIA, Glendale
attests that it used the CAP water in previous years, and it would have used the water in calendar
years 2023, 2024, and 2025.

5. SYSTEM CONSERVATION IMPLEMENTATION

5.1 Implementation begins upon execution of this SCIA and continues until all of the
terms and conditions are satisfied.

5.2 Within 30 days after execution of this SCIA, the authorized representative of
Glendale shall submit a written water delivery schedule to Reclamation, with a copy to CAWCD,
scheduling the full amount of its CAP water entitlement, together with a written water delivery
schedule modification request to reduce Glendale’s scheduled delivery volume by up to 7,000
acre-feet for calendar year 2023 as that water is intended to remain in Lake Mead pursuant to this
SCIA.

5.3 Except as provided in Section 9.1.3 herein, on or before October 1, 2023, the
authorized representative of Glendale shall submit a written water delivery schedule to
Reclamation, with a copy to CAWCD, scheduling the full amount of its CAP water entitlement,
together with a written water delivery schedule modification request to reduce Glendale’s
scheduled delivery volume by up to 7,000 acre-feet for calendar year 2024, or up to a volume as
agreed to by the Parties, as that water is intended to remain in Lake Mead pursuant to this SCIA.

5.4 Except as provided in Section 9.1.3 herein, on or before October 1, 2024, the
authorized representative of Glendale shall submit a written water delivery schedule to
Reclamation, with a copy to CAWCD, scheduling the full amount of its CAP water entitlement,
together with a written water delivery schedule modification request to reduce Glendale’s
scheduled delivery volume by up to 7,000 acre-feet for calendar year 2025, or up to a volume as
agreed to by the Parties, as that water is intended to remain in Lake Mead pursuant to this SCIA.

5.5 Glendale’s reduction of its scheduled CAP water delivery volume by up to 7,000

acre-feet for calendar year 2023, up to 7,000 for calendar year 2024, and up to 7,000 for calendar
year 2025 is intended to remain in Lake Mead to increase the volume of water stored in Lake Mead.

6. MONITORING

6.1 Reclamation will use its existing water order approval process and other authorities
to ensure that Glendale’s CAP water under this SCIA is not ordered or used by other Colorado
River water entitlement holders during calendar years 2023, 2024, and 2025.

7. IDENTIFICATION AND TRACKING OF COLORADO RIVER SYSTEM WATER

71 To the extent historic use applies in determining the volume of CAP water available
to Glendale in any future year, the Parties agree that the System Conservation Water amount shall
be accounted for by CAWCD and Reclamation as water actually delivered and used.

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7.2 Reclamation will document the amount of System Conservation Water created by
Glendale in the annual Colorado River Accounting and Water Use Report: Arizona, California,
and Nevada.

7.3. The Parties agree that the water left in Lake Mead pursuant to this SCIA shall
accrue to the benefit of the Colorado River System and shall not accrue to the individual benefit
of Glendale or any third party.

8. PAYMENTS

8.1 For calendar years 2023, 2024, and 2025 Reclamation will pay Glendale $400.00
per acre-foot of water reduced in its annual delivery volume, a total payment not to exceed
$2,800,000.00 for calendar year 2023, a total payment not to exceed $2,800,000.00 for calendar
year 2024, and a total payment not to exceed $2,800,000.00 for calendar year 2025.

8.2 The payments for each calendar year will be made by Reclamation to Glendale no
later than 60 days following receipt by Reclamation of the Glendale’s written water delivery
schedule and modification requests as provided in Sections 5.2, 5.3, and 5.4 herein.

8.3 Glendale agrees that payments it receives under Section 8.1 above fully satisfies
the United States’ obligation to Glendale under this SCIA and that no further payment from the
United States will be required.

9. ADDITIONAL COLORADO RIVER WATER DELIVERY REDUCTIONS

9.1 The Parties agree that changes to Lake Mead operations in calendar years 2023,
2024, and potentially 2025, due to implementation of shortage conditions under the 2007 Colorado
River Interim Guidelines for Lower Basin Shortages and Coordinated Operations for Lake Powell
and Lake Mead (2007 Interim Guidelines) and the 2019 LBDCP and/or the outcome of the SEIS
process, may result in additional Colorado River water delivery reductions during those years in
the Lower Basin. Such additional Colorado River water delivery reductions would require
Reclamation to reduce approved water orders which would impact the amount of System
Conservation Water that can be created by Glendale, paid for by Reclamation, and accounted for
under this SCIA as provided below.

9.1.1 Mid-Year Reductions: If Reclamation reduces the available amount of CAP
water for delivery to Glendale mid-year and Glendale already reduced its scheduled water delivery
volume by up to 7,000 acre-feet pursuant to Sections 5.2, 5.3 or 5.4 herein, the Parties agree that:
(1) the amount of System Conservation Water created will be accounted towards the additional
Colorado River water reduction by Reclamation and (2) Glendale will retain the payment made by
Reclamation as provided in Section 8 herein for the amount of System Conservation Water created
by Glendale as provided by Glendale’s written water delivery schedule modification request as
required in Sections 5.2, 5.3 or 5.4 herein, and Glendale will not be required to reimburse
Reclamation as required in Section 10 herein.

9.1.2 For Calendar Years 2024 and 2025: If, prior to the applicable calendar year,
Reclamation reduces the available amount of CAP water for delivery to Glendale in calendar years
2024 or 2025, the Parties agree (1) that only water available after such additional Colorado River

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water delivery reduction in calendar year 2024 or 2025 can be used by Glendale to create System
Conservation Water under this SCIA (see Section 9.1.3 herein), and (2) that Glendale’s written
water delivery schedule modification request as required in Sections 5.3 or 5.4 herein will be
further amended by Glendale accordingly.

9.1.3. Water Available After The Additional Colorado River Water Delivery
Reduction: If Glendale has water available in calendar year 2024 or 2025 to create System
Conservation Water after the required additional Colorado River water delivery reductions are
made by Reclamation in those years, the Parties agree that, in accordance with Section 5 herein:
(1) Glendale may create System Conservation Water under this SCIA for an acre-foot amount
available after the required Colorado River water delivery reduction, or (2) Glendale has the option
to not create System Conservation Water under this SCIA in which case Glendale’s written water
delivery schedule modification request as required in Sections 5.3 or 5.4 herein would show 0
acre-feet for the creation of System Conservation Water; therefore, no compensation would be
paid to Glendale by Reclamation. Glendale agrees that its written water delivery schedule
modification request as required in Sections 5.3 or 5.4 herein will reflect the outcome of either (1)
or (2) above, and its written water delivery schedule modification request as required in Sections
5.3 or 5.4 herein will be further amended by Glendale accordingly.

9.1.4 Water Not Available After The Additional Colorado River Water Delivery
Reduction: If Glendale does not have water available in calendar year 2024 or 2025 to create
System Conservation Water after the required additional Colorado River water delivery reductions
are made by Reclamation in those years, the Parties agree that, in accordance with Section 5 herein,
Glendale is not required to create System Conservation Water under this SCIA; therefore, Glendale
will not receive compensation from Reclamation in that year under this SCIA. For example,
Glendale’s written water delivery schedule modification request for calendar year 2024 and/or
2025, as required in Sections 5.3 or 5.4 herein, would show 0 acre-feet for the creation of System
Conservation Water; therefore, no compensation would be paid by Reclamation to Glendale.

10. REIMBURSEMENT FOR OVERPAYMENT

10.1 Unless otherwise provided in this SCIA, in the unanticipated and unforeseen event
the total amount of water under this SCIA is not added to Lake Mead as System Conservation
Water as was paid for by Reclamation, due to Glendale taking an action that interferes with the
foregoing objective, Glendale agrees to reimburse for the overpayment for the water that was not
added to Lake Mead within 30 days of receipt of a bill for collection from Reclamation.

11. ENVIRONMENTAL COMPLIANCE

11.1 Because implementation of this SCIA may result in reduced flows in the Colorado
River, Glendale agrees to consult with Reclamation on measures to fulfill any of its environmental
obligations resulting from reduction in river flows.

12, GENERAL TERMS

12.1 Reclamation shall be responsible to obtain any consents or forbearances required
to ensure that the water left in Lake Mead by Glendale remains in the Colorado River System and
does not inure to the benefit of any individual entitlement holder.

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12.11 The expenditure or advance of any money or the performance of any obligation by
the United States under this SCIA shall be contingent upon the appropriation or allotment of funds.
No monetary liability shall accrue to the United States in case funds are not appropriated or
allocated.

12.12 No member of or Delegate to Congress, Resident Commissioner, or official of
Glendale shall benefit from this SCIA other than as a water user or landowner in the same manner
as other water users or landowners.

12.13. Nothing in this SCIA diminishes or abrogates the authority of the Secretary under
applicable Federal law, regulations, or the Consolidated Decree of the Supreme Court of the United
States in the case of Arizona v. California, et al., entered March 27, 2006, (547 U.S. 150 (2006)),
or as it may be further modified.

12.14 In the event that any dispute arises regarding this SCIA, the Parties agree to meet
and attempt to resolve the dispute before secking any remedy.

12.15 This SCIA may be executed in counterparts, each of which will be considered an
original and all of which together constitute only one agreement.

12.16 The Parties to this SCIA are hereby notified of Arizona Revised Statutes § 38-511.
13. EFFECTIVE DATE

13.1 This SCIA shall become effective upon the date of its execution by all Parties. Once
effective, this SCIA will remain in effect until all of the terms and conditions are satisfied.

13.2 The Parties hereto have executed this SCIA on the day and year first written above.

Signatures next page.

SCIA No. 23-XX-30-W0778

CITY OF GLENDALE

City Manager

Signatures continued next page.

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SCIA No. 23-XX-30-W0778

CITY OF GLENDALE

City Manager

Signatures continued next page.

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SCIA No. 23-XX-30-W0778

CITY OF GLENDALE

By:

City Manager

Signatures continued next page.

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Signatures continued next page.

SCIA No, 23-XX-30-W0778

THE UNITED STATES OF AMERICA

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Jacklynn L. Gould, P.E.

Regional Director

Interior Region 8: Lower Colorado
Basin

Bureau of Reclamation

Approved as to form:

By:

Jay M. Johnson
General Counsel

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SCIA No. 23-XX-30-W0778

CENTRAL ARIZONA WATER
CONSERVATION DISTRICT

By:

Brenda Burman
General Manager

SCIA No. 23-XX-30-W0778

Exhibit A

A copy of Glendale’s proposal is attached.

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DiDonato, Nancy

a a a a a a ee Ss
From: Swieczkowski, Drew <DSwieczkowski@GLENDALEAZ.COM>
Sent: Tuesday, April 11, 2023 2:34 PM
To: Bunk, Daniel A
Ce: Smith, Alexander B; Figuers, Morgan L; Figuers, Morgan L; DiDonato, Nancy
Subject: RE: [EXTERNAL] LC Conservation Program

Hi Dan,
Thanks for your response. We are looking at up to 7,000 AF in all three years.
| appreciate the drafting of the agreement for our consideration.

Best,
Drew

Drew Swieczkowski

om, Water Resource Manager
| Water Services Department

Pens 000 e110 | C6022ane
P 623.930.4113 | C 602.228.0483
Gi en dale 7070s West Northern Ave.

my We Re oe Glendale, AZ 85303

We improve the lives of the people we serve every day.
Community « Integrity « Excellence + Innovation + Learning

From: Bunk, Daniel A <DBunk@usbr.gov>

Sent: Tuesday, April 11, 2023 2:17 PM

To: Swieczkowski, Drew <DSwieczkowski@GLENDALEAZ.COM>

Cc: Smith, Alexander B <alexandersmith@usbr.gov>; Figuers, Morgan L <morgan.figuers@sol.doi.gov>; Figuers, Morgan
L <morgan.figuers@sol.doi.gov>; DiDonato, Nancy <NDiDonato@usbr.gov>

Subject: RE: [EXTERNAL] LC Conservation Program

Hi Drew,

Thanks for your email and your interest in the LC Conservation Program. We can put together a draft agreement for your
consideration. Do you have an estimate of “up to” conservation amounts for 2023, 2024, and 2025 that we could
incorporate into the draft?

Thanks,
Dan

From: Swieczkowski, Drew <DSwieczkowski@GLENDALEAZ.COM>
Sent: Monday, April 10, 2023 9:29 AM

To: Bunk, Daniel A <DBunk@usbr.gov>

Subject: [EXTERNAL] LC Conservation Program

Hi Dan,

The City of Glendale has excess water for calendar years 2023 to 2025 that we would like to conserve in Lake Mead. We
did not think that this would be possible due to the discussion of having mid-year cuts to our CAP water order in 2023
and the pending conditions on the Colorado River system.

Is it still possible to be considered for the LC Conservation Program? The amount would be between 4,000 AF to 9,000
AF/year. If not, do you have any other suggestions for conserving this water in Lake Mead.

Thanks,
Drew

4 ee Water Resource Manager
| Water Services Department

dswieczkowski@glendaleaz.com

Glendale P 623.930.4113 | C 602.228.0483

7070s West Northern Ave.
Glendale, AZ 85303

We improve the lives of the peaple we serve every day.
Community « Integrity « Excellence + Inriovation » Learning