MOHAVE COUNTY WATER AUTHORITY

OPERATING PROCEDURE NO. 09-01

PROCEDURE FOR OBTAINING A SUBCONTRACT FROM THE MOHAVE COUNTY WATER AUTHORITY FOR WATER ACQUIRED BY THE AUTHORITY PURSUANT TO A.R.S. § 45-2245 AND AMENDMENT NO. 1 TO MCWA-UNITED STATES CONTRACT NO. W-07-30-W0320 DATED June 22, 2007 (the “Contract”)

(Water Allocation and Approval Process)

ADOPTED OCTOBER 21, 2009

A.Applications

1.All persons other than the City of Lake Havasu City, the City of Bullhead City, Mohave Water Conservation District, the Golden Shores Water Conservation District and Mohave Valley Irrigation & Drainage District (“Potential Subcontractors”), seeking a water service subcontract from the Mohave County Water Authority (“Authority”) must submit a written application to the Authority for use of up to 3,000 acre-feet of fourth priority water from the Contract.

2.The application must be in letter form or on a form provided by the Authority and must state:

a.The purpose for which the requested water is to be used;

b.The proposed duration of the subcontract;

c.The point or points of diversion of the water and the proposed means of diversion;

d.The proposed place of use of the water;

e.The quantity of water requested;

f.The method by which diversions will be metered or measured; and

g.Such other information as the Authority may require.

3.The applicant must post a cash deposit in an amount to be determined by the Authority which the Authority may use to pay all charges assessed on the Authority by the Bureau of Reclamation to review any proposed subcontract between the applicant and the Authority. The Authority may also require the applicant to post a deposit to cover all engineering, accounting, legal or other costs incurred by the Authority in connection with examining and processing the application.

4.Potential Subcontractors and applicants must agree to perform or to pay for all reviews necessary under the National Environmental Policy Act and all other applicable environmental, historical preservation, archaeological or other laws of similar character.

B.M&I Water for Industrial Use

1.The Authority may accept applications for up to 500 acre-feet of fourth priority water for industrial uses for subcontract terms in excess of five years. The price of this water per acre-foot shall be no less than the price set forth in Amendment No. 1 to the Kingman-MCWA Grant Agreement.

2.The application must be in letter form or on a form provided by the Authority and must state:

a.The purpose for which the requested water is to be used;

b.The proposed duration of the subcontract;

c.The point or points of diversion of the water and the proposed means of diversion;

d.The proposed place of use of the water;

e.The quantity of water requested;

f.The method by which diversions will be metered or measured;

g.Documentation showing (a) Applicant’s water conservation plan, (b) the water conservation measures to be used by Applicant, and (c) that the Best Available Demonstrated Technology for water conservation will be used by Applicant.

h.Such other information as the Authority may require.

3.The Authority is not undertaking any obligation to provide public water service or to function as a public service corporation.

4.No applicant may receive water from the Authority without having first entered into a water service subcontract with the Authority.

5.By accepting an application for a water service subcontract, the Authority does not commit to grant a subcontract. Application fees and deposits are non-refundable to the extent expended by the Authority and are only refundable without interest to the extent they are not expended by the Authority in connection with examining and processing the application.

6.These procedures and guidelines are subject to revision by the Authority at any time or times.

7.These procedures and guidelines apply only to the 500 acre-feet of fourth priority water acquired under the Contract which the Authority may make available for industrial uses.

8.If the full 500 acre-feet set aside by the Authority for industrial use is not under permanent subcontract by December 31, 2014any remaining amount shall be offered to the MCWA members listed in Section 1.A on the same terms as the 3,000 acre-feet was offered per Amendment No. 1 to the Kingman-MCWA Grant Agreement.

C.Effective Date

The effective date of these procedures shall be retroactive to July 1, 2009.

THE MOHAVE COUNTY WATER AUTHORITY

c/o LAW OFFICES OF MAUREEN ROSE GEORGE PC

2000 McCulloch Blvd. N., Suite B

Lake Havasu City, AZ 86403

Adopted October 21, 2009