Special Joint Meeting of the Committee on Commerce and Committee on Natural Resources, Energy & Water

Summary

Minutes of the Special Joint Meeting of the Arizona House of Representatives Committee on Commerce and Committee on Natural Resources, Energy & Water, held Tuesday, April 2, 2024, in the Fifty-sixth Legislature, Second Regular Session. The meeting convened at 2:06 P.M. and adjourned at 4:04 P.M., chaired by Representative Wilmeth and Representative Griffin, and the minutes list members present and absent. The agenda consisted of three presentations: on the Phoenix AMA Groundwater Model and Assured Water Supply Moratorium by Fennemore, on a proposal to modify 100-year assumptions by Matrix New World, and on water and housing affordability by the Home Builders Association of Central Arizona. Attachments include the agenda, request-to-speak forms, committee attendance records and the presentation slides. The final slides list HB 2008, HB 2017, HB 2062 and HB 2589.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

COMMITTEE ON COMMERCE

AND

COMMITTEE ON NATURAL RESOURCES, ENERGY & WATER

Report of Special Joint Meeting

Tuesday, April 2, 2024 MINUTES RECEIVED
House Hearing Room | -- 2:00 P.M. CHIEF CLERK'S OFFICE

Convened 2:06 P.M.
Adjourned 4:04 P.M.

Members Present

Representative Carter

Representative Gress

Representative Heap

Representative Hendrix
Representative Stahl Hamilton
Representative Carbone, Vice-Chairman
Representative Wilmeth, Chairman
Representative Dunn

Representative Martinez
Representative McGarr
Representative Parker

Representative Travers
Representative Smith, Vice-Chairman
Representative Griffin, Chairman

Agenda
Original Agenda ~ Attachment |

Request to Speak
Report — Attachment 2

Committee Attendance
Report — Attachment 3

U3 1/04

Members Absent
Representative Aguilar
Representative Austin
Representative Lucking
Representative De Los Santos
Representative Mathis
Representative Villegas

Presentations
Name Organization Attachments (Handouts)
Robert Anderson Fennemore 4
Nathan Miller Matrix New World 5,6
Spencer Kamps Home Builders Association of 7

Central Arizona

GL~

Emily Stokich, Committee Secretary
April 3, 2024

(Original attachments on file in the Office of the Chief Clerk; video archives available at http:/Avww.azleg.gov)

COMMITTEE ON COMMERCE
April 2, 2024
ONnVenta: 70b em
acljonr ned : 4:0 pm

REVISED - 4/02/24 REVISED - 4/02/24 REVISED - 4/02/24

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

SPECIAL JOINT MEETING AGENDA

COMMITTEE ON COMMERCE
AND
COMMITTEE ON NATURAL RESOURCES, ENERGY & WATER

DATE Tuesday, April 2, 2024 ROOM HHR 1 TIME 2:00 P.M.

Members of the public may access a livestream of the meeting here:
https:/Avww.azleg.gov/videoplayer/?clientID=6361 162879&eventl D=202404 1008

Members: NATURAL RESOURCES, ENERGY & WATER
Representative De Los Santos Representative McGarr Representative Villegas
Representative Dunn Representative Parker B Representative Smith, Vice-Chairman
Representative Martinez, Representative Travers Representative Griffin, Chairman

Representative Mathis

COMMERCE
Representative Aguilar Representative Heap Representative Ortiz
Representative Austin Repr esentative Hendrix Representative Carbone, Vice-Chairman
Representative Carter Representative bucking Representative Wilmeth, Chairman
Representative Gress \ Hav tor mi tn nN

l. Call to Order
2. Presentations:
e The Phoenix AMA Groundwater Model and Assured Water Supply Moratorium, Robert Anderson, Director,
Fennemore
¢ Phoenix AMA Model Proposal to Modify 100-Year Assumptions, Nathan Miller, VP Groundwater Modeling Services,

Matrix New World
© Water and Housing Affordability, Spencer Kamps, VP of Legislative Affairs, Home Builders Association of Central

Arizona
3. Adjournment

ve
04/04/2024
04/02/2024

People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or
assistance with physical accessibility. If you require accommodations, please contact the Chief Clerk's Office at
(602) 926-3032 or through Arizona Relay Service 7-1-1,

Page 1 of 1

Attachment |.
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 PLRASH COMPLETE THIS FORM FORTHE PUBLIC RECORD

HOUSE OF REPRESENTATIVES

Please PRINT Clearly

Comunittee on N Lew [ CaM Bill Number
Date Uf 2|244 () Support OOppose O Neutral
Name Mi ke, PleVvte, Need to Speak? Yes ONo
Representing [A rv) Yount Den elopment Ate you a registered lobbyist?
Complete Address com paw)

E-mail Address Phone Number

Corments:

## RT VE-MINUTE SPEAKING LIMIT#**

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HOUSE OF REPRESENTATIVES

Please PRINT Clearly

Committee on NLBW [ LOM. Bill Number
Date 4f/2/24f (Support Oppose Neutral

Name David O'CeAllY Need to Speak? Yes No
Representing How rd FE Yalnes Coy . Are you a registered lobbyist?
J ; ——

Complete Address

E-mail Address Phone Number

Comments:

4 FTVE-MINUTE SPEAKING LIMIT***
Attachment. 2>
- ee 8 meee eee — es

PLEASE COMPEETE THIS. FORM:FOR: THE PUBLIC RECORD:

ee

HOUSE OF REPRESENTATIVES

Please PRINT Clearly
Committee on N Lew | ; cow Bill Number
Date | Z| ee [1 Support OOppose Oi Neutral
Name ChvisS Bary Need to Speak? Wes Li No

Representing OVOLE4 2 Taytesso LLG Are you a registered lobbyist?
: Vv
Complete Address

E-mail Address Phone Number

Comments:

#*RTVE-MINOTE SPEAKING LIMIT***

HOUSE OF REPRESENTATIVES
Please PRINT Clearly

Committee on N Lew / CaM Bill Number
Dae 4/2 [ 24 (1 Support OOppose O Neutral
Name 6VLZ9 Abrams Z Need to Speak? Wives No
Representing " pulte Glowp Are youa registered lobbyist?
Complete Address
Banal Address Phone Number
Comments:

*RT VE-MINUTE SPEAKING LIMIT***
ARIZONA STATE LEGISLATURE
Fifty-sixth Legislature - Second Regular Session

COMMITTEE ATTENDANCE RECORD

COMMITTEE ON COMMERCE
CHAIRMAN: Justin Wilmeth VICE-CHAIRMAN: _ Michael Carbone
DATE 04/02/24 124 124 124 124
CONVENED Ub ym m m m m
RECESSED
RECONVENED
ADJOURNED 4:04 vm
MEMBERS
Aguilar —-
Austin —
Carter f
Gress J
Heap J
Hendrix J
Ortiz —
Stahl Hamilton J
Carbone, Vice-Chairman f
Wilmeth, Chairman J

V Present --- Absent exc Excused

Attachme nt 3
ARIZONA STATE LEGISLATURE
Fifty-sixth Legislature - Second Regular Session

COMMITTEE ATTENDANCE RECORD

COMMITTEE ON NATURAL RESOURCES, ENERGY & WATER
CHAIRMAN: Gail Griffin VICE-CHAIRMAN: _ Austin Smith
DATE 04/02/24 124 124 124 124
CONVENED o0y em m m m m
RECESSED
RECONVENED
ADJOURNED uk AN
MEMBERS |
De Los Santos —
Dunn J
Martinez nT
Mathis —_—
McGarr J
Parker B J
Travers f
Villegas —
Smith, Vice-Chairman J
Griffin, Chairman J

Vv Present --- Absent exc Excused

Attachment
Attachment +

FENNEMORE

April 2, 2024

The Phoenix AMA Groundwater
Model and Assured Water Supply

Moratorium

Robert Anderson

Robert Anderson

Water, Environmental and
Natural Resources Attorney

Practicing since 1987

Working on Groundwater
Management Act issues for
over 35 years

Represents developers, home
builders and the Home Builders
Association of Central Arizona
on water and environmental
issues, including assured water

supply

FENNEMORE

Lower Hassayampa Subbasin Owners Group

Belmont, Festival Ranch, North Star Ranch, Sun Valley, Tartesso and
Teravalis

Convened to address Lower Hassayampa Subbasin (LHSB) Model (1/23);
then the Phoenix AMA Groundwater Model (6/23)

Projects had Analyses of Assured Water Supply issued by ADWR

Analysis: groundwater allocation made in advance of development, a
first step in securing a certificate

Tartesso and Festival Ranch under develooment for decades, with
thousands of residents

Festival Ranch, North Star and Tartesso pending applications susoended

Others are at the start of develooment, with substantial investments
made and development occurring.

Assured Water Supply Moratorium

Applies to new certificates, even if an Analysis has been issued

Singles out the one sector — owner-occupied housing — that can use
groundwater but is legally obligated to replenish it

A moratorium today is going to be felt down the road, as the pipeline of
new projects is essentially halted.

This will directly impact housing affordability

Assured Water Supply (AWS)

“Sufficient groundwater, surface water or effluent of
adequate quality will be continuously available to
satisty the water needs of the proposed use for at
least one hundred years.” A.R.S. 8 45-576.L. 1

Required for subdivision develooment

Originally consumer protection; now a water mgmt.
regulatory program

Designation vs. Certificate vs. Analysis
Physical Availability

Physical Availability

Demonstrate that there is a sufficient supply of
groundwoater to serve the proposed use for 100 years

Applicant must use a hydrology study approved by
ADWR that incorporates existing uses and approved

AWS uses as demands in the model

Then determine if depth to water at the wells used to
supply the groundwater stays above 1000 feet bgs

Regional groundwater models

“If the proposed source is groundwater, the applicant
shall submit a hydrologic study, using a method of
analysis approved by the Director, that accurately
describes the hydrology of the affected area.”

ADWR has shifted to using regional groundwater
models as the basis for approved studies — ‘affected

area” is now entire and even multipole groundwater
basins

If municipal/AWS wells go dry anywhere in the model
domain, ADWR assumes there is “Unmet demand”:
and stops issuing certificates

Phoenix AMA Groundwater Model

The base model - released June 2023; incorporates LHSB
Model; moratorium announced

Projects less than 2% shortfall over 100 years in the
municipal and future assured water supply sectors

You will see that the shortfall is entirely eliminated if well
locations are addressed.

Much if not all of the 2% shortfall

ADWR practice is fo release models and then individual
AWS applicants use and update the model to reflect site-
specific Conditions

ADWR has welcomed owner input on well location

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“ay Piste § Designated water providers
M 4 . ° ~
“Medes te “ee ee A : =m §@6in the Phoenix AMA

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et \ fountains i L We ‘ys :
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uns . mid Mine ois S. = 6 From the Arizona Water
ckey ead ee ta

oar . a , Blueprint, Kyl Center at
; nvo™ Valley ‘ } i

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| x, “se | y https://azwaterblueprint.asu.
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VALLEY U

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MARICOPA-STANFIELD = QF From ADWR
feserarbon PI “ Phoenix AMA
Model Figures
== Major Highway
Groundwater Flow Model of the —— River (June 2023)
: : Figure 2-1
Phoenix Active Management Area oo Phoenix AMA Active Model
. Domain
Gro — p> —) Phoenix Active Management
undwater Model Area -—- Area
DD) Bedrock
ADWR 2023 [J Sub-basins

Basemap: Esri, CGIAR, USGS, City of Phoenix, Esri, HERE, Garmin, SafeGraph, FAO, METI/NASA, USGS, Bureau of Land Management, EPA. NPS
Simulated Depth to Water after 100 Years

Gil 751 - 1000
Wi > 1000

melen

ar a

Depth to Water Key

estimated currentl

3

y in storage above 1,

Depth to Water (ft bgs)
w 0 te . Santen
M101 - 250
Wm 251 - 500 ttonde SACATON MOUNTAINS
Gy 501 - 750 Aquifer storage loss projected to be 39 MAF out of 128 MAF

000 ft (30%)

From ADWR
Model

Presentation
(June 2, 2023)
Unmet Demand

© LTSCs
Existing

B Analyses

@ Certificates
i Designations

a
Glendale
Geldteta oe
Mountans
eal LT—_"-= Pinal.
% N “Bune rsiten
sa - Apane Not
auc » Tempe” Mesa __ function wt >
Gilbert 8 a
fam ' a
. Chandler } 5a,
SY : i Fr
é Queen ro
Creek .
gh - . boa a
re \ ma
o o Santon a.
SB - MARIOOrA woutlaas sy
(TAINS b . va
see SACATON MOUNTAINS
Va \ oo
~ Pa
1o0er ain at
ic 6/2/2023
s es ”

Yt ayes - ee
Maed MAZATZAL MOON TAINS
wicuntieud , sf sas - t
MOUNTAINS a “Ss  §. ae; , y
2 o
flew g
Tae >
WEROGL YPMIC .
to
SOU TAINS bawn

sums Peoria

fe tw

Sources. Esti, USGS, NOAA, Sources: Exrt, Garmin, USGS, NPS

From ADWR
Model
Presentation
(June 2, 2023)

Well Placement in
Approved AWS

Compared to
ADWR Model

Wells placed in areas with
little to no saturated
aquifer

MATRIXNEWORLD—

Engincering Progress

T.4N.

t
Sun Valley Parkway——

me in

EXPLANATION

C7) Phoenix AMA Active Model
LD Active Model Cell

CB Hassayamps Sub-basin
ADWR Simulated Well

4 No Unmet Demand

$ Simulates Unmet Demand

Well Locations in Original Hydrology
Studies

@ Belmont aaws Weil

© Douglas Ranch 1-5 AAWS Well

@ Festival Ranch. Phase 1 AAWS Well
@ Spurlock AAWS Well

© Thilium CAWS Well

@ Taresso AAW'S Well
Client-Controlled Lands

~ | A Belmont aaws

QP Douglas Ranch Phases 1-5 AAWS
Qf Festival Ranch Phase 1 AAWS
QP Spurlock Property AAWS
Sun Valley Community (Expired AAWS

GF covering land now owned by BA Pacific Sun
Valley, LLC)

QP Trillium-Phase | CAWS
Gf Trillium-Phase li CAWS

@@ Taresso Properties, AAWS and CAWS.

Key points about the ADWR Base Model

The model is not a prediction of what will happen in the future, and

when it will happen, due to the regulatory assumptions made in running
the model.

In particular, the model substantially overestimates groundwater
demand and underestimates groundwater availability due to these
regulatory assumptions.

Assigned Pumping in Projection

4,000,000

@ Assigned Historical Demand (1900 to 2021)
@ Assigned Agricultural Demand (2022 to 2121)
3,500,000 @ Assigned Agricultural/Municipal Demand (2022 to 2121)
@ Assigned Drainage Demand (2022 to 2121)
@ Assigned Industrial Demand (2022 to 2121)

3,000,000 @ Assigned Municipal Demand (2022 to 2121)
= & Assigned Designation Demand (2022 to 2121)
2. B Assigned Certificate Demand (2022 to 2121) From ADWR
Py 2,500,000 @ Assigned Analysis Demand (2022 to 2121) Model
ra » Assigned Water Report Demand (2022 to 2121) :
= 3 @ Assigned LTSC Demand (2022 to 2121) Presentation
3 sa nine B Assigned Other Demand (2022 to 2121) (June 2; 2023)
= 1,500,000 Total Assigned Pumping = 1,350,000 AFY
o
a :
Agriculture = 345,000 AFY
1,000,000
500,000 Designations = 295,000 AFY
Certificates = 195,000 AFY
Analyses = 735,000 AFY
0 a ° = oxeye

“9

1900
1910
1920
1930
1940
1950
L960
1970
2000
2010
2020
2030
2040
2050
2060
2070
2080
2090 G
2100
2110
2120
Projection Results tame " Note: Slide is from the Lower

Hassayampa Subbasin-Viodel

(Jan-2023)
. . 350,000
This graph shows the assigned demand dAdsigned fisting Demand
ein the historical and projection periods dadsignesaws (alysis penut
eand helps explain why analyses & 300,000 at aera
certificates are not fully satisfied from ot
w Assigned Long-Term Storage Credit Demand
*Day 1
=> 250,000
os
S
e Existing demand in the historical @ sannoe
“period ranges from 50,000 AFY to s
™250,000 AFY B
&, 150,000
no)
e Demand in the projection period =
eexceeds historical demand by at & 100,000
*least 40,000 AFY and as much as
°200,000 AFY
50,000

e Recharge is about 100,000 AFY

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nyo wvr Mmnoeoenre © BO co Fe NH ST HO KR OA Se
nD Awa DFA Dn Bn Ss ce ce ocesgcecoesoeco. OoO:UhMhlUF
=“ lel Sl SUC OOmMNr CNC UNRCUCUCU NCCU NCIC NTCUCUN CUNO NCUNCUWNN

Year
Overestimating demand

Buildout: Model assumes full buildout of all aoproved
AWS demands on day one of the Model. That cannot
happen.

Outdated demand calculator: Designation,

Certificate and Analyses demands use ADWR
“demand calculator” when issued, and do not reflect
efficiency of new homes.

Effluent/CAP use: Certificate and Analysis applicants
typically do not control effluent or CAP water held by
the non-designated provider and so water demands
met by these supplies are covered by groundwater.

Underestimating groundwater availability

Well placement: Single biggest factor. Unmet demand is driven by wells
on the edge of the model domain.

Where did the effluent go? Effluent is not included as a supply, but is
also excluded from available groundwater, despite
discharge/recharge.

Replenishment: New development is required to replenish groundwater
through Central Arizona Groundwater Replenishment District (CAGRD).
Model includes current replenishment, but assumes that most of the
future groundwater use will not be replenished.

Continued growth on groundwater without replenishment. The Model
does not include long term replenishment (see above) but assumes that
groundwater based growth will continue, without replenishment. Under
current law that cannot happen.

Unmet Demand

MEROGL POC

© LTSCs

B Analyses Yale
M Certificates rouarar
H Designations ee “i

we Peoria

Glendale

6/2/2023

Vous ot Se
Maricuny MAZATZAL MOUNTAINS
o “Hew Miver besa Aw
Tanto
tasn
Teumtain %
Mile c
late 4
=
— ———— Vie ea

et Chandler 7

“Tempe” Mena

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a= 05"

SACATON MOUNTAINS

4
cig

te ye

Sources. Esri, USGS, NOAA, Sources: Esri, Garmin, USGS. NPS

From ADWR
Model
Presentation
(June 2, 2023)

Reviewing the Phoenix AMA Groundwater Model

Matrix was retained by Owners Group to review the model

scope included “deep dive” on well location, but also an
evaluation of impact on available supplies of current water
management practices, i.e., lower water demand per home,
recharge of effluent generated by future develooment, and
full replenishment consistent with current law

Results: Well location movement can address and eliminate
unmet demand. Current water management practcies like
water use efficiency, replenishment, and effluent
reuse/recharge make the picture even better

Where things stand.....

Updated model submitted to ADWR in January for an advance preview,
then formally submitted by Tartesso as part of its pending applications

We have had limited input from ADWR as yet.
We have received assurances that ADWR will review the Updated
Model

In the meantime,

Continuation of the moratorium is blocking substantial investments in
new projects and new housing. These projects take years of investment
and construction to reach the point where houses can be sold.

Festival Ranch application has been delayed more than 2 years;
Tartesso and North Star are over a year delayed.

This will have a ripple effect on housing affordability in the future.

Phoenix AMA Model Proposal to
Modify 100-Year Assumptions

April 2, 2024

MATRIXNEWORLD

Engineering Progress

Attachment 2
Matrix Team

> Nathan Miller — Vice President, Groundwater Modeling

> 24 years conducting hydrogeologic studies and developing/calibrating groundwater models

> Elizabeth Mora — Senior Hydrogeologist / Modeling Supervisor

> 20 years in AZ modeling, hydrogeologic studies, oversight of well drilling and
testing, and geophysics

> Brianna McClure — Senior Hydrologist / Groundwater Modeler (Not Present)

> 8 years in AZ modeling and hydrogeologic studies

RICE
Katee
cui,

Lf

£
az

MATRIXNEWORLD
Engineering Progress

Key Points

> Under the revised model, all unmet demand in Assured Water Supply (AWS),
Municipal, Long-Term Storage Credit (LTSC) sectors in the entire model domain is
resolved with well movement and depth modifications for the duration of the 100-
year projection period

> Model tests in LHSB indicate more aligned with current water management practices
show that the outlook of future aquifer conditions are significantly better than the
regulatory model predicts

MATRIXNEWORLD
Engineering Progress
June 2023 ADWR SENG a ha ae ss pe

fone . ~ i Rind de Pr ee 7) Phoenix AMAActive Model
itrrey ees A Net 1 bes aE te Protected Sectors with Unmet Demands
cd <5 * | « Analysis with Unmet Demands
Base Model See |
a al 4 Designation with Unmet Demand
U Ct D d Biter 1° + Municipal with Unmet Demand
Nn mM eC e mM a Nn . Conatiee "| x LTSC with Unmet Demand

100-Yr Dopth to Water (ft bls)
<400

lm 401 - 500

I 501 - 600

I 601 - 700

a BB 701 - 800
oR Pi" | Ip 801 - 900

eo | I 901- 1.000

HH 1.001 - 1.158

in AWS Sectors

Unmet Demand (in MAF)
> All Sectors = 4.86
> AWS Sectors = 2.10
> Municipal = 0.01
> AWS = 2.08
> LTSC = 0.01

Enginecring Progress rs ak

MATRIXNEWORLD Net ” oe [

Well Placement in [°°
Approved Analyses
of AWS Compared |:

to June 2023 SrA ON
Base Model ce caaamea

ADWR Simulated Well
4 No Unmet Demand
@ Simulates Unmet Demand

Well Locations in Original Hydrology
Studies

. @ Belmont AAWS Well

> ADWR wells placed in By Velesiteeh MMA
areas with little to no @ Festival Ranch, Phase 1 AAWS Well
saturated aquifer, Serer wer

. @ Trillium CAWS Well
causing unmet @ Tartesso AWS Well

demands Client-Controlled Lands
BelmontAAWS

Douglas Ranch Phases 1-5 AAWS
Festival Ranch Phase 1 AAWS
Spurlock Property AAWS

Sun Valley Community (Expired AAWS
covering land now owned by BA Pacific Sun} ~
Valley, LLC) we

Trillium-Phase | CAWS
Trillium-Phase Il CAWS
Tartesso Properties, AAWS and CAWS

a

MATRIXNEWORLD
Engineering Progress

SS &© 249

Well Redistribution: Client-Controlled Lands

> Initially, demands simulated in
locations from approved
Analyses of AWS

>Unmet demands redistributed
amongst approved well locations

> Festival Ranch Phase 1
AAWS

>Belmont AAWS

MATRIXNEWORLD

Engineering Progress

EXPLANATION

Original Hydrology Study Location
Simulates AWS Pumping

@ Belmont

© Douglas Ranch

@ Festival Ranch Phase 1

@ Spurlock

@ Trillium

@ Various Tartesso Area

Does not Simulate AWS Pumping
Belmont

® Festival Ranch Phase 1
Client-Controlled Lands

cA Belmont AAWS

«@ Douglas Ranch Phases 1-5 AAWS
@@ Festival Ranch Phase 1 AAWS
&f Spurlock Property AAWS

Sun Valley Community (Expired
af AAWS, Not Simulated in ADWR
Model)

@@ Trillium-Phase | CAWS
a Trillium-Phase Il CAWS

an Tartesso Properties, AAWS and
CAWS

(DJ Active Model Cell

MASSAVAMPA PLAIN

Well Redistribution: Non-Client Controlled

EXPLANATION
X Initial Well Location
Unmet Demand in LHSB, East SRV, and West SRV @ Final Well Location
was redistributed for: (Active Model Cell
C3 Sub-basin Outline
> AWS, Municipal, and LTSC unmet demands
redistributed
> Wells redistributed within: nie
> Property Boundary sate 2
> Adjacent AWS Properties E a ah eect ess FT RIVERAMLLEY suber zea) fe L rg tte esr: sats ; .
> Service Area
> Planning Area
MATRIXNEWORLD ”
Engincering Progress vale i

Primary Conclusions - Revised Model

> Under this model, all demand in the AWS, Municipal, and LTSC sectors
can be fully met for the duration of the 100-year projection period

> Client-Controlled Lands: Approved Analyses of AWS well locations
successfully simulate full AWS demands

Vv

Non-Client-Controlled Lands: AWS, municipal, and LTSC demands
redistributed

> Demand was met by deepening or redistributing pumping wells

MATRIXNEWORLD
Engineering Progress

The AWS model is a regulatory tool,
does not predict the future

MATRIXNEWORLD
Engineering Progress

Test #1:
Modernizing
Demand Calculations

> AAWS demands in LHSB
revised using current
ADWR demand
Calculator

> Results in 12%
demand reduction

> Actual water demand
is likely to be less

MATRIXNEWORLD

Engineering Progress

CLG WORN MOUNTAI

N
EXPLANATION
(7 Phoenix AMAActive Model
[J Active Model Cell

(3 Hassayampa Sub-basin
Analyses with 12% Demand Reduction
wp Belmont

“Douglas Ranch Phases 12345

7 Festival Ranch

cj Festival Ranch Phase 1

fl Four-Eleven Estates

a Sierra Negra Ranch

4 Spurlock Property

gf Tartesso Master-Planned Community
WF Tartesso North

WP Tartesso and Tartesso West

op
Place

WHIFS TANK MOUNTAING)
de

Test #1:
Modernizing

Demand Calculations
100-Yr Depth to Water

> AAWS demands in LHSB
reduced by 12% per the
revised demand
calculator

> Water level up to 77 ft
higher

MATRIXNEWORLD
Engineering Progress

ROW. R8W. RBW. paw
z
wo
=
r= ‘5
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=
oS MORN MOUNTAIR£
<
KE L-

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» pm <
BPULMONT ‘eg ify, -
; COUNT
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Bs |

T.2N.

-

EXPLANATION
7] Phoenix AMA Active Model Outline
C3 Hassayampa Sub-basin
GB Analyses with 12% Demand Reduction
Difference in Depth to Water (ft)
(Model Test - Matrix Revised)
i -77 - -60
i -59- 40
[ -39 - -20
fy -19--5
4-0

AUCKEYE Hit
ugKe thes

Test #2:
Effluent Recharge

> 30% Effluent Recharge Added
for AWS Lands

> 34,466 afa

> Existing Buckeye-Tartesso
USF

> Assumed Locations for all
other Lands

> Stars Represent Model Cells
with Added Recharge

MATRIXNEWORLD

Enginecring Progress

T.5N.

T4N- TAN.

EXPLANATION

7 Phoenix AMA Active Model

[Active Model Cell

C3 Hassayampa Sub-basin

Model Cell with Effluent Recharge

(Total Effluent Recharge Added (ac-ft/yr))

*
Ranch

sx Assumed Festival WRF

sik Assumed at Lowest Elevation, Trillium
yk Assumed Anthem Sun Valley South WRF
tk Assumed at Lowest Elevation, Belmont
te Existing Buckeye-Tartesso USF

tk Assumed Sierra Negra Ranch WRF

AWS Lands Associated with Effluent
Recharge

op
Lowest Elevation

af Recharged at Assumed Festival WRF
7 Recharged at Trillium Lowest Elevation

south WRF

i Recharged at Belmont Lowest Elevation
@P Recharged at Buckeye Tartesso USF

we
WRF

Test #2:

Effluent Recharge
100-Yr Depth to Water

> 30% of AWS Demands
(34,466 afa) recharged
at assumed points

> Water level up to 188
ft higher

MATRIXNEWORLD

Engineering Progress

ROW. R8W. REBW.

TEN.

MORN MOUNTAIDE

"TAN

Be
Whomtares
Waste ye a

=
°

wali.

EXPLANATION
cl Phoenix AMA Active Model
3 Hassayampa Sub-basin

Ques Lands Associated with Effluent
Recharge

Difference in Depth to Water (ft)
(Model Test - Matrix Revised)
 -188 - -150

BB -149 --100

 -99- -50

@ +9--5

4-0

Model Cell with Effluent Recharge

+r Assumed Festival WRF

ke Existing Buckoyo-Tartesso USF

$k Assumed Sierra Negra Ranch WRF

a 4

* Assumed at Lowest Elevation, Douglas
Ranch

x Assumed at Lowest Elevation, Trillium
te Assumed Anthem Sun Valley South WRF
tk Assumed at Lowest Elevation, Belmont

—

R7W.

J
weLaronr MD Fyre a
v4
ONe

mere EY
“,

7

pasaradobtne probit, oe

BUCKEYE AILié
Gatiess 4es8.

Test #3:
96% CAGRD Recharge

> Assumed Current Water
Management Policies are
still in place

> 96% of total demand is
replenished

> 34,466 afa of Effluent

Recharge in LHSB
(30% of AWS Demand)

> 75,826 afa of CAGRD

recharge
(66% of AWS Demand)

MATRIXNEWORLD

Engineering Progress

EXPLANATION

7D Phoenix AMAActive Model

£3 Hassayampa Sub-basin

[Active Model Cell

[2] Model Colls with CAGRD Replenshment
Model Cell with Effluent Recharge

(Total Effluent Recharge Added (ac-ft/yr))

*
Ranch

* Assumed Festival WRF

x Assumed at Lowest Elevation, Trillium
sty Assumed Anthem Sun Valley South WRF
tx Assumed at Lowest Elevation. Belmont
he Existing Buckeyo-Tartesso USF

tir Assumed Sierra Negra Ranch WRF

AWS Lands Associated with Simulated
Recharge

Fe
Lowest Elevation

af Recharged at Assumed Festival WRF
a Recharged at Trillium Lowest Elevation

Recharged at Assumed Anthem Sun Valley
FP South WRF

@@ Recharged at Belmont Lowest Elevation
iP Recharged at Buckeye Tart USF
r Recharged at Sierra Negra Ranch Assumed

WRF

Whee ‘Lane
Mountas
Reywnat Mark

Test #3:
96% CAGRD Recharge

100-Yr DTW

> 96% of total demand is
replenished

> Water level up to 421 ft
higher

MATRIXNEWORLD

Enginecring Progress

ci Phoenix AMAActive Model
(3 Hassayampa Sub-basin
CBAWS Lands Associated with Recharge
A Model Cells with CAGRD Replenshment
Model Cell with Effluent Recharge

ye
Ranch

kx Assumed Festival WRF
tx Assumed at Lowest Elevation, Trillium
$e Assumed Anthem Sun Valley South WRF
KA d at Lowest Elevation, Bel
* Existing Buckeye-Tartesso USF
tk Assumed Sierra Negra Ranch WRF
Difference in Depth to Water (ft)
(Model Test - Matrix Revised)
am ~121 - -300
[iy -299 - -200
ly -199 - -100
Wm -99- 5

4-0

—— nn

fe Tank MOuNTAINS|

White Tank

Change In Storage

Matrix Phoenix AMA Model- LHSB Only

ADWR Historical Period

0 a -

-6

Cumulative Storage Change (millions of acre-feet)
b

|
|
|
|
|
|
|

1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 2100 2120

Year
MATRIXNEWORLD
Engineering Progress

Change In Storage

Matrix Phoenix AMA Model- LHSB Only

Million Acre-Feet

Current Water Management Practices

Cumulative Modeled Storage Change in Phoenix AMA

Historical period Projection period

1920 1940 1960 1980 2000 2020 2040 2060 2080 2100 2120

6/2/2023
Year

0 _ a -
ADWR Historical Period re
@ -20 — =
3
= -40
3 |
ov
© -60
2
E -80 |
-100 , _ ,
1900 1920 1940 1960 1980 2000 2020 2040 2060
Y
MATRIXNEWORLD “

Engineering Progress

ADWR Phoenix AMA Mod

(Presentation June 2)

Summary

Vv

Client-Controlled Lands: Approved Analysis of AWS well locations successfully
simulate full AWS demands

Vv

Non-Client-Controlled Lands: successfully simulates full AWS, Municipal, and
LTSC demands by redistributing or deepening wells

W

The model is a regulatory tool and does not predict the future

> Model Tests

>» Show the effectiveness of current water management practices

~

> Are helpful to evaluate new policies under consideration

MATRIXNEWORLD
Engineering Progress

AWS, Municipal, LTSC demands shown as black
points indicate insufficient groundwater at that
location.

2024 Matrix Revised Phoenix AMA
Mode! Client Group:

HHC Douglas Ranch Member, LLC
Buckeye Tartesso, LLC

Festival Ranch North LLC

Pulte Home Company, LLC

BA Pacific Sun Valey, LLC
Belmont Infraco, LLC

MATRIXNEWORLD

Engineering Progress

2024 Matrix Revised
Phoenix AMA Model

The Matrix revised model eliminates the ADWR projected 2.1 MAF
shortfall in the AWS, Municipal, and LTSC sectors in the Phoenix
AMA. The model shows that all these demands can be met
throughout the entire model domain by deepening or redistributing
simulated withdrawals at well locations within existing AWS
property boundaries or water provider service areas. This is
consistent with the fact that water providers will deepen existing
wells and install future wells in locations where sufficient
groundwater resources are available.

MARCH 2024 REVISIONS TO THE MODEL WELL
DISTRIBITION SHOWS THAT ALL AWS, MUNICIPAL, AND
LTSC DEMANDS ARE MET FOR 100 YEARS

Matrix’s first model run included simulated well locations based
on previous work optimizing available groundwater. In March
2024, Matrix revised the model to use previously approved
Analysis of AWS well locations for the Lower Hassayampa Sub-
basin (LHSB). With some demand redistributions these
approved Analysis of AWS well locations were able to support
full demands over the duration of the projection period. For
example, if groundwater was not sufficient within an AWS
property, demands were redistributed to adjacent AWS
properties.

EXPLANATION
Cilent-Controted Demands (from
AVIS Application}
Simulates AWS Pumping
© Betmnat
© Dougiss Ranch
@ Festival Ranch Phase 4
@ Sputick
@ Tin
@ Various Tariesso
7—| Does not Simulate AWS Pumping
‘ % Belmont

X Festival Ranch Phase 1
Non-Cilent-Controlied Demand

+ +4] Rediaibution

“*] XX InWial Well Location

mi Final Weil Locaton

sen i,| Cllent-Cortrolied AWS

P Belmont AAWS

\\ “| @ Douglas Ranch Phases 1-5 AAWS

}:<| 2p Festival Ranch Phase 1 AAWS

? =! @@ Spurlock Property AAWS

a Sun Valey Community (Expred

>| @P AAWS, Not Smuisted in ADWR

, Model)

_ | 48 Trifum-Phase | CAWS

@ Triltum-Phase fl CAWS
Tartesso Properties, AAWS and

* cays

|_| Non-Client-Controtied AWS with

T py] Demand Red stitution

* 1B AWS Boundary

Attachment /o
WEST AND EAST SALT RIVER VALLEY DEMAND REDISTRIBUTIONS

There are a few wells that show a shortfall of groundwater outside the LHSB. These well location demands in AWS,
Municipal, and LTSC sectors were resolved through redistributions encompassing the entire Phoenix AMA model
domain, including in the West and East Salt River Valley Sub-basins.

West Salt River Valley
Demand redistributions occurred within water
provider service areas for:

City of Buckeye
EPCOR-Agua Fria
EPCOR-Sun City
Sunrise Water Company
City of Peoria

Adobe Mountain School

Demand for Warrick Property (north of the White
Tank Mountains) was redistributed to the nearest
model cell with sufficient groundwater within the City
of Surprise planning area.

East Salt River Valley
Demand redistributions occurred within water provider
service areas for:

e EPCOR San Tan-Phoenix
e Water Utilities Community Facilities District

Demands for Arizona Water Company were redistributed
to approved Physical Availability Determination (PAD)
locations.

Demands for Superstition Mountains Community
Facilities District (LTSCs) were redistributed to adjacent
model cells.

kan

wea
Verpst

EXPLANATION
% Initial Well Location | «
@ Final Well Location

DActive Model Cell

3 Sub basin Outine

oO

o

¢

oO

A on

Oo

oO

ec
Ee

S<

a=

Oo ==

2

ow

=)

—

ps

S)

Attachment |

WATER-
ARIZONA’S ECONOMY

AND HOUSING

SPENCER KAMPS

VP of Legislative Affairs
Home Builders Association of Central Arizona

Housing - Highest Standard of Care for

Groundwater

¢ Must comply with the Assured Water Supply Program — 100 years

If using groundwater — must replenish that groundwater both
inside and outside designated providers

Only land use to do this outside designated providers
Home building has been held to this standard since 1995

How does for sale housing accomplish this?
¢ Joining the Central Arizona Groundwater Replenishment District (CAGRD)
CAGRD - Largest Groundwater

Replenishment District in the Country

¢ Critical to proving assured water supply
e No assured water supply — no subdivision

e Serves Phoenix, Pinal, and Tucson Active Management Areas
e Allows continued and stable growth
e Spreads full benefit of CAP canal
e Reduces pressure on AWS program
e Provides tax equity

¢ Provides a regional water solution, available to multiple entities
Impacts of Development Facilitated by the

CAGRD

¢ “Historical Economic and Fiscal Impacts of Development
Facilitated by the Central Arizona Groundwater Replenishment
District on the State of Arizona”

¢ Elliot D. Pollack & Company

¢ January 2024
Impacts of Development Facilitated by the CAGRD

e Since 2001, all new subdivisions in West Valley (outside of
Phoenix, Peoria, Glendale) joined the CAGRD

e Since 1998, every new home built in Pima County was a
member of the CAGRD

e Serves approximately 1.2 million residents and serves over
460,000 homes

e In many areas, CAGRD is the only option for builders to meet
the GMA

e Allows non designated providers to grow a tax base to
become a designate provider
Economics of CAGRD

¢ Construction activity has generated $135.7 billion in economic
impact for the State

e Last 28 years, new residents of the CAGRD have spent $182 billion
in the local economy and created $253 billion in economic activity

¢ 2022 supports 178,000 jobs and $24.9 billion in economic impact

¢ 2022 CAGRD regions generated $1.2 billion in state taxes and fees
and $670.5 million in city taxes and fees

¢ Possible job loss is 26,000 jobs over the next ten years
Economics of CAGRD

¢ From an economic perspective, the sudden and drastic loss of the
issuance of CAWS created uncertainty and risk hurting future
investment

¢ Hard to measure what investments we are losing

e What is known, it is hard to “un-ring” the bell that Arizona is out of
water

¢ Many of the affected areas are key housing areas and some of the
last remaining locations for new homes under $400,000
One Thought

¢Water experts are not economic or housing
experts

e Arizona’s water policy conflicts with our
housing affordability and supply crisis

Phoenix AMA Groundwater Model — what

does this mean?

¢ No new Certificates of Assured Water Supply (CAWS)

¢ This impacts areas that are NOT designated providers — Buckeye,
Queen Creek and Maricopa County

¢ Effectively, growth boundaries until the problem is solved
¢ Housing affordability and supply are a major concern

¢ The CAGRD will no longer serve new projects since home building
Cannot grow on groundwater

— cep gT a ERS
c IIS

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Si re aie - a yi , I,
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fh Meare Taat ) sgt Mountains Se
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Y ' ‘ \ rome, Minions ox

Hassaysmpa
Plain

J
ae

\
od

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- a
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ein Desert & "he ~ ae , |
ie) , * . \ as

wea \ Mins) \ “y iy Vat
hop ed . — -_ a _ ey
ae elt, ‘ © a ¥ the Mey
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titlan et ,

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> an n> 4
80,000 Lots with a CAWS?

Approximately 39% (31,000)have been approved in the last 15 years
50,240 lots were approved over 15 years ago

Smart Growth infrastructure planning has been turned upside down
Infrastructure costs will likely be borne by industrial and commercial
These markets are AZ’s only affordable markets in the urban areas.

2-3 years' worth of housing outside designated providers before
significant economic impacts and housing supply impacts
Growth in Designated Providers

¢ For sale housing can grow in designated providers

¢ Avondale, Chandler, El Mirage, Gilbert, Glendale, Goodyear, Mesa,
Peoria, Phoenix, Surprise, Tempe, Chaparral City Water Company,
EPCOR San Tan, Apache Junction Water Company

¢ Only major areas to grow for production builders are Surprise, Goodyear,
AJ, and East Mesa

¢ All available residential zoned land is under control of builders — 4 years
from raw land to first sale

¢ No significant pieces of land available for residential to feed the pipeline
Perspective

¢ Approximately 460,000 homes are members of the CAGRD — 30 years
of for sale housing in the three-county service area (Maricopa, Pima,
and Pinal).

Annual replenishment obligation hovers around 35,000-acre feet a year

Phoenix AMA — approximately 200,000 homes — 20,000-acre feet of
annual replenishment

Since 1995, every for-sale housing project in the three major AMAs has
met safe yield.

Less than the 49,000-acre feet of unmet demand identified in the
Phoenix AMA

TSMC plant — 40,000-acre feet of water according to AZ Republic
Distorted Markets

¢ Projects with CAWS have significantly increased in price
¢ Lands in designated providers have significantly increased in price

¢ Water supplies have significantly increased in price due to
increase in demand

¢ 30-40 builder/developers are now “on the water market”.

¢ Agriculture lands outside designated providers have lost
development value.

¢ Residential is first —- industrial, commercial, manufacturing follow
Any affordability is at serious risk

e Average new home Sale is approximately $450,000

e Due to interest rates, few resales are on the market-— new homes
are their only market

¢ West Valley is the only market for homes under $400,000
Buckeye is 26% of the market under $400K

At current interest rates, need to make 100K to qualify for $400 K
home

Buckeye is the only market to attain affordability in the Phoenix
area

Need approximately 50,000 units
Meanwhile

¢ AZ Big media reports that Phoenix is the 2"? largest data center
market in the country

e AZ Republic called us a global leader in data centers
e Mesa just approved a Water Park
e New data center in West Valley — 4,000-acre feet of water

e State keeps offering incentives to manufactures — which can
access groundwater outside designated providers

e Avg salary is 7OK- 75K
e Where are we going to house all these workers
How to solve the problem

e There are no other available water supplies in the near term

¢ The home building industry and development community was not
aware that this groundwater model was coming.

¢ Need to overturn the narrative that AZ is out of water

e We need a short-term solution to allow these projects to move
forward on groundwater with the certainty to allow continued
investment in infrastructure.

¢ Collaborative Process to move wells with ADWR in a timely
manner
Legislation

HB 2008

¢ Requires DWR to review and adopt new efficiencies and conservation on
commercial and industrial

HB 2017

¢ Allows ADWR to require new developments to bring more than 100% of their
water — residential is held to only 100%

HB 2062

¢ Allows CAWS applications submitted to ADWR prior to June 1, 2023 to be
reviewed and process under the groundwater model that existed at the time the
application was submitted

HB 2589

¢ Allows CAWS to be issued in an approved Analysis in return the for landowner
forfeiting 15% of their groundwater approved in the Analysis.
Questions

Spencer Kamps

Home Builders Association of Central Arizona
kampss@hbaca.org

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