1. COLORADO RIVER WATER SUPPLIES AND THE QSA ACWA’S 2011 SPRING CONFERENCE THE NEW REALITIES OF WATER SUPPLY RELIABILITY

2. Geographic Overview

4. Reliability of California’s Apportionment - Legal Basis 1922 Colorado River Compact. –Upper Basin and Lower Basin each allocated annual consumptive use of 7.5 maf from Colorado River System. –Upper Basin obligated “not to cause the flow of the river at Lee Ferry to be depleted below an aggregate of 75,000,000 acre-feet for any ten year period reckoned in continuing progressive series.”

5. Reliability of California’s Apportionment - Legal Basis Arizona v. California: –Decrees to California an apportionment of annual consumptive use of mainstream water in the Lower Basin of 4.4 maf plus 50% of any surplus that may be declared in the Secretary’s discretion –Shortages to be allocated in the Secretary’s discretion after first satisfying present perfected rights

6. Reliability of California’s Apportionment - Legal Basis Colorado River Basin Project Act (1968), § 301(b) protects California’s 4.4 maf apportionment in shortage years against post-1968 contractors in Arizona and Nevada

7. Reliability of California’s Apportionment - Facilities Large dams and reservoirs moderate hydrologic swings. Lakes Mead and Powell have combined storage capacity of 50.2 million acre-feet; 23.876 million acre-feet in storage as of April 21, 2011. California diversion facilities in place for 60-70 years and are capable of diverting all of California’s apportionment.

8. Reliability of California’s Apportionment - Operations Secretary’s operating discretion controlled by guidelines that specify quantities to be released based on reservoir elevation triggers. Interim Surplus Guidelines, 66 Fed. Reg. 4856 (January 25, 2001). Colorado River Interim Guidelines for Lower Basin Shortages and the Coordinated Operations for Lake Powell and Lake Mead, 73 Fed. Reg. 19873 (April 11, 2008).

9. Reliability of California’s Apportionment – ESA Coverage Lower Colorado River MSCP (April 2005) provides 55 year coverage Upper Basin Endangered Fish Recovery Programs. Biological Opinions re Glen Canyon Dam Operations. Environmental groups have been unsuccessful in attempts to change river operations or block projects through ESA and NEPA lawsuits.

10. Division of California’s Apportionment Seven Party Agreement of 1931 Priorities 1-3 (PVID, Yuma Project, IID and CVWD) 3.85 maf Priority 4 (MWD) 550,000 af Priority 5 (MWD) 662,000 af Priority 6 (PVID, IID and CVWD) 300,000 af Priority 7 (Ag agencies)

11. Division of California’s Apportionment QSA and Related Agreements 2003 Quantification of Priorities 3(a) and 6(a) Divides responsibility among IID, CVWD and MWD for satisfying Indian and Miscellaneous Present Perfected Rights and Priorities 1, 2 and 3(b) use above 420,000 af.

12. Division of California’s Apportionment QSA and Related Agreements 2003 Transfers and Acquisitions of Conserved Water –1988 IID-MWD (105,000 af) –IID-SDCWA (200,000 af) –IID-CVWD/MWD (103,000 af) –Canal Lining Projects (93,700 af) Environmental Mitigation and Funding.

13. The QSA Cases Eleven separate cases and a number of related cross-actions filed in various superior courts coordinated before a single judge in the Sacramento Superior Court Honorable Roland Candee assigned as the coordination trial judge

14. The QSA Cases Imperial Irrigation Dist. v. All Persons Interested, Case No. ECU01649, IID Direct Validation action re 13 agreements Power v. IID, Case No. ECU01653, CEQA writ petition by POWER against Transfer Project EIR and County of Imperial complaint in intervention County of Imperial v. IID, Case No. ECU01656, CEQA writ petition by County of Imperial against QSA Program EIR

15. The QSA Cases Morgan v. IID, Case No. ECU01658, CEQA writ petition by Morgan/Holtz parties against Transfer Project EIR Morgan v. IID, Case No. ECU01834, CEQA writ petition by Morgan/Holtz parties against Western Farms purchase Morgan v. IID, Case No. ECU01886, Reverse validation action by Morgan/Holtz parties against Western Farms purchase and 2003/2004 Fallowing Program

16. Cases dismissed before trial Morgan v. IID, Case No. ECU01643, Reverse validation action by Morgan/Holtz parties re QSA agreements Morgan v. IID, Case No. ECU01646, CEQA writ petition by Morgan/Holtz parties against Transfer Project EIR Case No. ECU01649, Cross-complaints by Morgan/Holtz parties and by Cuatro del Mar

17. Cases dismissed before trial County of Imperial v. State Water Resources Control Board, Case No. 03CS00082, Writ petition by County of Imperial challenging SWRCB Order. (Affirmed, County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13.) County of Imperial v. IID, Case No. ECU01650, CEQA writ petition by County of Imperial re Transfer Project EIR (Affirmed, County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13.)

18. Cases dismissed before trial South Coat Air Quality Management District v. State Water Resources Control Board, Case No. 03CS00083, Writ Petition by SCAQMD and ICAPCD challenging SWRCB Order (Appeal pending, Case No. C059264)

19. Pretrial Decisions Transferees are necessary parties to challenges to SWRCB transfer approval decisions San Luis Rey Indian Tribes and the United States are not indispensable parties to challenges to Allocation Agreement Court has jurisdiction to review federal agency compliance with NEPA and Clean Air Act

20. Pretrial Decisions CEQA challenges can be raised in defense to validation action Wheeling Statutes do not apply to IID- SDCWA Transfer (no role for County) QSA-JPA Agreement does not obligate the State to undertake restoration of the Salton Sea

21. Four Phase Trial Phase 1A: Issues re validity of agreements (except issues re CEQA, NEPA and Clean Air Act) Phase 1B: Issues re QSA Program EIR Phase 1C: Issues re Transfer Project EIR, NEPA and Clean Air Act Phase 2: Issues re Western Farms purchase and 2003/2004 Fallowing Program

22. Phase 1A Trial Colorado River Water Delivery Agreement Allocation Agreement Conservation Agreement IID-SDCWA Transfer Agreement Quantification Settlement Agreement

23. Phase 1A Trial IID-MWD Acquisition Agreement IID-CVWD Acquisition Agreement Groundwater Storage Agreement QSA-JPA Agreement Environmental Cost Sharing Agreement

24. Phase 1A Trial Amendment to 1988 IID-MWD Agreement Amendment to 1989 Approval Agreement Salton Sea Flooding Settlement Agreement

25. QSA-JPA Agreement Authorized by statute in 2003 IID, CVWD, SDCWA and DFG create joint powers agency to pay for costs of mitigating environmental impacts caused by transfers IID, CVWD and SDCWA pay $133 million in 2003 dollars for mitigation costs DFG pays for excess mitigation costs

26. QSA-JPA Agreement Requires vote of three commissioners, including DFG commissioner, to adopt annual budget and define excess mitigation costs “The State obligation is an unconditional contractual obligation of the State of California, and such obligation is not conditioned upon an appropriation by the Legislature, nor shall the event of non-appropriation be a defense”

27. QSA-JPA Agreement IID, CVWD and SDCWA pay $30 million to Salton Sea Restoration Fund and have no further obligation to pay for Salton Sea restoration State to indemnify IID, CVWD and SDCWA for any additional restoration obligation imposed on them

28. Trial Court Decision Twelve of the agreements were the proper subject of a validation action, but not the Flooding Settlement Agreement Other QSA related agreements that were not involved in the case have been validated by operation of law IID had authority to enter into the agreements and did not violate trust obligations

29. Trial Court Decision There was no violation of conflict of interest laws by IID negotiators IID was not required to allocate water to landowners in order to proceed with QSA Declined to rule on whether IID complied with Open Meeting law requirements

30. Trial Court Decision Statute authorizing QSA-JPA Agreement is constitutional State commissioner voting requirement does not make QSA-JPA Agreement an illusory contract

31. Trial Court Decision Statute authorizing QSA-JPA Agreement is constitutional State commissioner voting requirement does not make QSA-JPA Agreement an illusory contract

32. Trial Court Decision QSA-JPA Agreement is invalid because third sentence of section 9.2 violates California Constitution, article 16, section 7 (appropriation requirement) Declines to rule on whether QSA-JPA Agreement also violates California Constitution, article 16, section 1 (debt limitation)

33. Trial Court Decision Other agreements are invalid because the parties would not have entered into those agreements without a valid QSA-JPA Agreement Court has jurisdiction to invalidate the three agreements with the federal government

34. Trial Court Decision Dismisses environmental challenges as moot On February 11, 2010, Court entered Final Judgment in Cases 1649, 1653, 1656 and 1658 By separate order, the Court remanded Cases 1834 and 1886 to Imperial County Superior Court

35. Appellate Proceedings IID, SDCWA, CVWD, MWD, Vista Irrigation District, City of Escondido and State of California appealed. County of Imperial, ICAPCD and POWER cross-appealed. Court of Appeal issued temporary stay on March 9, 2010, and issued writ of supersedeas on May 7, 2010. Court of Appeal on its own motion set expedited briefing schedule; briefing closed on April 1, 2011.

36. Appellate Proceedings Key Issues: –Constitutionality of QSA-JPA Agreement –Invalidation of other agreements –Jurisdiction over federal agreements –Dismissal of CEQA petitions –Application of Wheeling Statutes

37. QSA Implementation 1988 MWD-IID Water Conservation Program (105,000 af) All-American Canal Lining Project (67,700 af) Coachella Canal Lining Project (26,000 af) East Highline Canal Recovery Well Field (40,000 af) Environmental Mitigation work