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IID Looks to Pay Off Joint Powers Agreement Membership


The Imperial Irrigation District Board of Directors heard a presentation about options on how to pay off their membership with the Joint Powers Agreement that oversees the Quantification Settlement Agreement, the landmark agreement that was signed two decades ago.

The QSA JPA was established by the Quantification Settlement Agreement Joint Powers Authority Creation and Funding Agreement on Oct. 10, 2003, with the execution of the QSA and its related agreements. As per the JPA Agreement, it “is necessary to allocate among the State, the Coachella Valley Water District, the IIID and the San Diego Water Authority Environmental  Mitigation Cost; make certain and limit the financial liability of the CVWD, the IID and the SDCWA for Salton Sea restoration costs; and allocate the remaining financial and other risks associated with the Environmental Mitigation Requirements and the Salton Sea restoration costs, and allocate the remaining financial and other risks associated with the Environmental Mitigation Requirements and Salton Sea restoration costs to the State.” 

The QSA JPA consists of representatives from the IID, Coachella Valley Water District, San Diego County Water Authority, and the California Department of Fish and Wildlife, with the sole purpose of managing environmental mitigation contributions through the collection, holding, investing, and disbursement of funds to implementing agencies for all environmental mitigation requirement costs.

The three water agency funding commitments are capped at $133 million (in 2003 dollars), and mitigation expenses over this amount are, by contract and legislation, the responsibility of the state of California Each agency’s annual contributions are outlined in the Environmental Cost Sharing, Funding, and Habitat Conservation Plan Development Agreement that is also part of the QSA Agreements; the annual scheduled contributions collectively results in total maximum contributions of $44.1 million from IID, $36.7 million from the CVWD, and the $52.2. Million from SDCWA.

On two prior occasions (2007 and 2015), the water agencies made advance payments to ensure adequate funding was available to meet anticipated mitigation expenses and to avoid debt financing, and the recent expenditure planning forecast anticipates another potential QSA JPA funding shortfall as soon as the Fiscal Year 2026. As per the terms of the JPA Agreement, advanced funding contributions are discounted to 2003 dollars using a six percent interest rate, compounded annually, discounted factor. IID has reviewed its remaining payment schedule balance of $71,121,693 and considered its water transfer budget and reserve account, to identify early pay-off scenarios that will address both the projected shortfall and provide financial cost savings to IID. Staff will provide an overview of its recommendation for a proposed 2022 payoff and the associated cost savings.

Through FY 2022, the three funding water agencies have contributed a total of $202,274,401, with IID’s contributions totaling $55,599,923. The water agencies have $93,295,320 of remaining scheduled payments, with IID’s remaining payment balance of $71,121,693 broken into an annual payment schedule through 2035, including a $3,309,240 payment in 2022.

For any early pay-off scenario, IID’s $44.1 million present-value funding commitment to the QSA JPA remains capped. With a 2022 payoff of $50,626,018, IID’s 2022 annual contribution will increase by $47,316,778 however there will be an appropriate $24 million total cost savings in future payments due to the six percent, compounded annually, discount factor.  

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