Needles City Council
February 10, 2026

(ACT) ACTION NEEDED
(INF) INFORMATION ONLY
(DIS) DISCRETIONARY

A G E N D A

REGULAR MEETING OF THE CITY COUNCIL

NEEDLES PUBLIC UTILITY AUTHORITY

HOUSING AUTHORITY CITY OF NEEDLES

CITY OF NEEDLES, CALIFORNIA
COUNCIL CHAMBERS, 1111 BAILEY AVENUE.

TUESDAY, FEBRUARY 10, 2026
COUNCIL EXECUTIVE SESSION – 5:00 PM
CITY COUNCIL MEETING – 6:00 PM

THE PUBLIC MAY ATTEND VIA TEAMS AND MAY SUBMIT ANY COMMENTS IN WRITING PRIOR TO NOON ON THE DAY OF THE MEETING BY EMAILING [email protected] TO JOIN THE LIVE TEAMS MEETING: log into the City of Needles website at www.cityofneedles.com to access the agenda and Click here to join the meeting
If asked, enter the following: Meeting ID: 202 746 159# OR listen in and participate by calling Teams: 1-323-488-2227 - Meeting ID: 202 746 159# The meetings are being recorded.

CALL TO ORDER

ROLL CALL

PUBLIC COMMENTS PERTAINING TO THE EXECUTIVE SESSION ITEMS A three-minute time limit per person has been established.

RECESS TO EXECUTIVE SESSION

EXECUTIVE SESSION
a. Conference with Legal Counsel Regarding Potential Initiation of Litigation Pursuant to Government Code Section 54956.9(d)(4) Number of Cases: 1
b. Conference with Legal Counsel Regarding Potential Initiation of Litigation Pursuant to Government Code Section 54956.9(d)(4) Number of Cases: 1

CALL TO ORDER

ROLL CALL
EXECUTIVE SESSION REPORT - by City Attorney

PLEDGE OF ALLEGIANCE

INVOCATION

APPROVAL OF AGENDA

CONFLICT OF INTEREST

CORRESPONDENCE

INTRODUCTIONS
CITY ATTORNEY – Parliamentary Procedures
As a courtesy to those in attendance, we would ask that cell phones be turned off or set in their silent mode.

Thank you
PUBLIC APPEARANCE - Persons wishing to address the NPUA / City Council on subjects other than those scheduled are requested to do so at this time. When called by the Mayor, please announce your name and address for the record. In order to conduct a timely meeting, a three-minute time limit per person has been established by Municipal Code Section 2-18. Amendments to the California Government Code Section 54950 prohibits the City Council from taking action on a specific item until it appears on the agenda.

PUBLIC HEARING

1. Adopt Resolution 2026-1 of the City Council of the City of Needles Approving a Conditional Use Permit Amendment to City Council Resolution 2017-114 for a Medical Marijuana Cultivation Facility Located at 204 Bazoobuth Street (APN 0186-154-13), Including Modification of Perimeter Wall Materials and Relocation of Parking and Trash Enclosure to Adjacent Parcels (APNS 0186-154-05 And 0186-154-01). ITEM CONTINUED TO FEBRUARY 24, 2026.

PRESENTATION
(A ten-minute time limit per presentation has been established per Municipal Code Section 2-18.)

2. Accept and file the FY 23/24 City and NPFA Financial Statements Audits and Single Audit Exemption. (ACT)

REGULAR NPUA / COUNCIL ITEMS

3. Authorize the Mayor to execute the Bureau of Reclamation's Post 2026 Draft EIS Public Comment from the City of Needles dated February 10, 2026 (ACT)

4. Accept the work completed by WEKA, Inc. for the Phase V Water Service Lateral Replacement Project and authorize a Notice of Completion to be recorded with the San Bernardino County Recorder’s office. (ACT) COUNCIL CONSENT CALENDAR All matters listed on the Consent Calendar are considered to be routine and will be enacted by one motion in the form listed. The Mayor or any member of the City Council may pull an item from the Consent Calendar for discussion. Prior to Council action, a member of the public may address the City Council on matters scheduled on the Consent Calendar. A three-minute time limit per person applies. RECOMMENDED ACTION: Approve Items 5 through 6 on the Consent Calendar by affirmative roll call vote. (ACT)

5. Approve the Warrants Register through February 10, 2026

6. Approve the Minutes of January 27, 2026

END OF COUNCIL CONSENT CALENDAR

REGULAR COUNCIL ITEMS

7. Award the Base Bid and Additive Alternate to Rainy Day Roofing, Inc. for the Administration Building Façade Awning Project in the amount of $192,102 plus 10% contingency for a total project cost of $211,312.20 and authorize staff to execute a Public Works Agreement with Rainy Day Roofing, Inc. and move forward with the Notice of Award and Notice to Proceed. (ACT)

8. Ballot measure(s) for the November 3, 2026 General Municipal Election. (DIS)

9. Waive full reading and Adopt Ordinance 679-AC Amending Chapter 12, Entitled Short-Term Residential Rentals, in the Needles Municipal Code. (First Read Introduction) (ACT)

CITY ATTORNEY REPORT

CITY CLERK REPORT

CITY MANAGER REPORT
City Manager's Report for the weeks of January 23 and 30, 2026

COUNCIL REQUESTS
Council Member Ford
Council Member McCorkle
Vice Mayor Campbell
Council Member Pogue
Council Member Belt
Council Member Longbrake
Mayor Jernigan

ADJOURNMENT

INTERNET ACCESS TO CITY COUNCIL AGENDAS AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT: http://www.cityofneedles.com
Posted: February 6, 2026
SB 343-DOCUMENTS RELATED TO OPEN SESSION AGENDAS -- Any public record, relating to an open session agenda item, that is distributed within 72 hours prior to the meeting is available for public inspection at the City Clerk’s Office, 817 Third Street, Needles, CA 92363.

In compliance with the American with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (760) 326-2113 ext 133. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-104 ADA Title II).

I hereby certify, under penalty of perjury under the laws of the State of California that the foregoing Agenda was posted at the front entrance of City Hall not less than 72 hours prior to the meeting.

Dated this 6th day of February 2026
/s/        Candace Clark, CPMC, CMC, City Clerk
City of Needles, California
Request for City Council Action
CITY COUNCIL NPUA Regular Special
Meeting Date: February 10, 2026
Title: Presentation by Vasquez & Company LLP of the City and NPFA audit reports for the fiscal year ended June 30, 2024
Background: The fiscal year 2023/24 City and NPFA audit reports have been completed by Vasquez & Company LLP. The audit reports will be presented via teleconference.

Attached are the 2024 Financial Audit Results Presentation materials, and audit reports for the fiscal year ended June 30, 2024.

Fiscal Impact: None
Environmental Impact: None
Recommended Action: Accept and file the FY 23/24 City and NPFA Financial Statements Audits and Single Audit Exemption
Submitted By: Mark DeMay, Director of Finance and Administrative Services City Manager Approval: Date:

Other Department Approval (when required): Date:
2/5/2026
Agenda Item 2.

CITY OF NEEDLES, CALIFORNIA
Annual Financial Report and
Required Supplemental Information
Fiscal Year Ended June 30, 2024
with Independent Auditor’s Report
Agenda Item 2.

City of Needles, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis (Unaudited) 5
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 18
Statement of Activities 19
Fund Financial Statements
Balance Sheet – Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 21
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 22
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the
Statement of Activities 23
Statement of Net Position – Proprietary Funds 24
Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 25
Statement of Cash Flows – Proprietary Funds 26
Statement of Fiduciary Net Position – Fiduciary Fund 27 Statement of Changes in Fiduciary Net Position – Fiduciary Fund 28 Notes to Basic Financial Statements 29
Required Supplementary Information
Budgetary Comparison Schedule – General Fund 65
Schedule of the City’s Proportionate Share of the Net Pension Liability and Schedule of Plan Contribution – Miscellaneous Plan

66 Schedule of the City’s Proportionate Share of the Net Pension Liability and Schedule of Plan Contribution – Safety Plan 67
Schedule of Changes in the Total OPEB Liability and Related Ratios 68 Supplementary Information
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet – Other Governmental Funds 69
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Other Governmental Funds 74
Combining Statement of Net Position – Other Enterprise Funds 79 Combining Statement of Revenues, Expenses, and Change in Net Position – Other Enterprise Funds 80
Combining Statement of Cash Flows – Other Enterprise Funds 81 Combining Statement of Net Position – Internal Service Funds 82 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds 84
Combining Statement of Cash Flows – Internal Service Funds 86 Agenda Item 2.

FINANCIAL SECTION
Agenda Item 2.
1 Independent Auditor’s Report
The Honorable Mayor and the Members of the City Council City of Needles, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Needles, California (the City), as of and for the year ended June 30, 2024, and the related notes to basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Needles, California, as of June 30, 2024, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of the Housing Authority of the City of Needles, a component unit of the City, which represent 24%, 64%, and 17%, respectively, of the assets, net position, and revenues of the other enterprise funds as of June 30, 2024. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Housing Authority of the City of Needles, is based solely on the report of the other auditors.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards).

Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Agenda Item 2.
2 Emphasis of Matter
Restatements
As discussed in Note 13 to the financial statements, the 2023 financial statements have been restated to reflect changes within the financial reporting entity and to correct misstatements. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

Agenda Item 2.
3  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5 through 17 and the required supplementary information on pages 65 through 68 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund financial statements listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Agenda Item 2.
4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 28, 2026, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance.

That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Glendale, California
January 28, 2026
Agenda Item 2.

This page intentionally left blank.

Agenda Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
5 Within this section of the annual financial report, the City of Needles, California’s management presents this discussion and analysis of the City’s financial performance for the fiscal year ended June 30, 2024. The financial statements and footnotes follow this section and should be read in conjunction with this discussion and analysis.

The discussion below includes the City’s governmental funds (the general fund and other nonmajor governmental funds), as well as the City’s proprietary funds (the Public Utility, other enterprise funds, and internal service funds).

Financial Highlights
 The City’s net position (excess of assets and deferred outflows of resources over liabilities and deferred inflows of resources) increased from $59.6 million, as restated, to $74.4 million for the fiscal year ended June 30, 2024. Governmental activities experienced an increase of $5.2 million, including transfers to business-type activities of $180 thousand. The change in net position resulting from business-type activities for the fiscal year was an increase of $9.6 million.  Total net position comprises the following:

1. Capital assets, net of related debt, of $49.0 million, include capital assets, net of accumulated depreciation and amortization, reduced by outstanding debt related to the acquisition or construction of such capital assets.

2. Net position of $5.7 million that is restricted as to its use by outside factors such as debt covenants, grantors, laws, or regulations.

3. Net position of $19.7 million is not restricted as to its use and is available to fund the City’s operations.
 The City’s governmental funds reflect total fund balances of $19.0 million at June 30, 2024. This represents an increase of $1.4 million from the prior fiscal year.

Overview of the Financial Statements
Management’s Discussion and Analysis serves as an introduction to the City’s basic financial statements. The basic financial statements include government-wide financial statements, fund financial statements, and notes to financial statements. In addition, there is certain supplemental information included with the financial statements and notes thereto.

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
6 Government-wide Financial Statements
The City’s government-wide financial statements include: (1) a Statement of Net Position, and (2) a Statement of Activities.

These financial statements present the City’s current and long-term financial information. At the government-wide level, the financial statements are similar to normal operating financial statements, using the full accrual basis of accounting and eliminating or reclassifying internal activities.

The Statement of Net Position presents all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference presented as net position. The evaluation of whether the City’s financial status is improving or not can be measured by changes in net position over time. Increases in net position generally represent an improvement in financial position.

The Statement of Activities reflects the change in the City’s net position during the current fiscal year.

This statement includes all revenues and expenses for the year, regardless of when the cash is received or paid. The statement shows the costs of the City’s functions and activities, then shows how much of those costs are funded by program revenues or grants, with the remaining amount dependent on the City’s general revenues.

Both of the above statements report on governmental activities of the City that are funded by taxes and intergovernmental grants, and business-type activities that are funded primarily by charges to users. Governmental activities include general government, public safety, public works, parks and recreation, and community development. Business-type activities include power and water, wastewater, refuse collection, public transportation, and a municipal golf course. Financial statements for fiduciary activities are not included in the government-wide financial statements, as the assets of those activities are not available to fund the City’s programs and activities.

The financial reporting entity includes the City’s funds and organizations for which the City is accountable. The City itself is considered the primary government, and the organizations for which the City is accountable are considered component units. The component units are legally separate from the City but are governed by the same individuals who govern the City. There are three such component units: (1) the Needles Public Utility Authority, (2) the Housing Authority of the City of Needles. and (3) the Needles Public Financing Authority. All of these component units are blended into the City’s financial statements. More comprehensive information about the City’s component units can be found in the notes to the financial statements following this discussion and analysis.

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
7 Fund Financial Statements
Fund-level financial statements are intended to present the financial position and activities of individual funds within the City. A fund is a self-balancing set of accounts used to ensure that resources intended to fund specific activities or objectives are, in fact, properly utilized. Fund-level financial statements focus on significant funds, with major funds reported separately, and non-major funds aggregated into a single presentation.

There are three primary types of funds, as follows:

Governmental funds are reported in fund-level financial statements and include the governmental types of activities previously mentioned.

The City’s major governmental fund is the General Fund.

The fund level statements differ significantly from the government-wide financial statements, as the fund level statements focus on current resources, uses of those resources, and resources remaining at the end of the fiscal year.

The government-wide financial statements include the current resources and use of those resources, as well as the long-term financial information for the City. A reconciliation of the fund level balance sheet and statement of revenues, expenditures, and changes in fund balance to the government-wide statements follows the fund level financial statements.

Proprietary funds are also reported in fund-level financial statements and include those activities for which the costs incurred are intended to be recovered through charges to the users of the services provided. Proprietary funds include enterprise funds and internal service funds. The functions of enterprise funds are the same as the business-type activities reported in the government-wide financial statements. Enterprise funds recover costs primarily through charges to external customers. The City’s enterprise funds include the electric, water and wastewater utility, sanitation, public transportation, and the golf course.

Internal service funds provide services to other departments within the City and charge these departments for such services. Internal service funds include water, wastewater, electricity, utility office, admin facility, fleet maintenance, information systems and vehicle replacement. Because the public utility dominates the City’s financial position, the internal service funds are included within the business-type activities in the government-wide financial statements.

Proprietary funds present their financial position and their activities similar to private companies.

Accordingly, the fund-level financial statements utilize the same focus as that used for the governmentwide financial statements. The major difference is that individual proprietary funds are only presented at the fund level. The City’s major proprietary fund includes the Public Utility Fund. The remaining nonmajor proprietary funds are aggregated into a single presentation at the fund level.

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
8 Fund Financial Statements, continued
Fiduciary funds, such as custodial funds, are reported in fiduciary fund financial statements. Such statements are excluded from the government-wide financial statements. Fiduciary fund financial statements report on resources that are unavailable to finance City programs. The focus of fiduciary fund financial statements is similar to that for proprietary funds.

Notes to the Financial Statements
Following the government-wide and fund-level financial statements are various notes to such statements. These notes are critical to a reader’s understanding of the City and its financial position and performance.

Financial Analysis for the City as a Whole
The accumulation of consistently presented financial information allows a reader to understand the City’s financial position and determine whether there is improvement or deterioration.

One measure of continued improvement is the change in net position. The City’s net position increased by about $14.8 million, primarily because of continued positive results from utility revenues and cannabis tax revenues.

The following table shows summarized information regarding the City’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, and the changes therein for the fiscal years ended June 30, 2024 and 2023:

2023 2023 2023 Amount Percent 2024 (As restated) 2024 (As restated) 2024 (As restated) Change Change Assets Current and other assets 23,466,971 $ 20,605,937 $ 14,852,003 $ 13,000,711 $ 38,318,974 $ 33,606,648 $ 4,712,326 $ 14.0% Capital assets, net 23,711,539 20,352,309 34,591,820 28,133,796 58,303,359 48,486,105 9,817,254 20.2% Total assets 47,178,510 40,958,246 49,443,823 41,134,507 96,622,333 82,092,753 14,529,580 17.7% Deferred outflows of resources 1,646,648 1,763,784 1,154,309 1,118,561 2,800,957 2,882,345 (81,388) -2.8% Liabilities Current and other liabilities 2,542,928 1,500,607 4,678,124 5,069,860 7,221,052 6,570,467 650,585 9.9% Long-term liabilities 4,580,400 4,562,477 12,605,339 13,424,398 17,185,739 17,986,875 (801,136) -4.5% Total liabilities 7,123,328 6,063,084 17,283,463 18,494,258 24,406,791 24,557,342 (150,551) -0.6% Deferred inflows of resources 546,016 657,748 62,815 117,264 608,831 775,012 (166,181) -21.4% Net Position Net investment in capital assets 23,661,672 20,277,271 25,309,906 17,608,751 48,971,578 37,886,022 11,085,556 29.3% Restricted 5,680,476 5,396,163 36,425 - 5,716,901 5,396,163 320,738 5.9% Unrestricted 11,813,666 10,327,764 7,905,523 6,032,795 19,719,189 16,360,559 3,358,630 20.5% Total net position 41,155,814 $ 36,001,198 $ 33,251,854 $ 23,641,546 $ 74,407,668 $ 59,642,744 $ 14,764,924 $ 24.8% Governmental Activities Business-Type Activities Totals Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
9 Financial Analysis for the City as a Whole, continued Net position was positive for both governmental activities and business-type activities in 2024 and 2023. Overall, the net governmental activities position increased by about $5.2 million due to the current year’s change in operations. The increase in net position from business-type activity operations was about $9.6 million, primarily due to increases in grants and contributions received to support the City’s operations and capital improvement plans.

Governmental activities' revenues increased by about $1.8 million. Property taxes and transient occupancy taxes continued to play a significant role in the City’s results, totaling about $3.0 million in revenues for fiscal year 2024. However, the most significant governmental activity revenue was cannabis taxes, which reported a total of $4.8 million in 2024. Governmental activities' expenses increased by about $985 thousand due to increases in pension and OPEB expenses allocated to general government functions.

To assist in analyzing the City’s operating results, comparative data is accumulated and presented.

The following table summarizes the City’s changes in net position for the years ended June 30, 2024 and 2023: 2023 2023 2023 Amount Percent 2024 (As restated) 2024 (As restated) 2024 (As restated) Change Change Revenues Program revenues Charges for services 1,138,678 $ 1,175,821 $ 25,133,693 $ 19,349,552 $ 26,272,371 $ 20,525,373 $ 5,746,998 $ 28.0% Operating grants and contributions 6,130,023 5,063,959 6,783,969 3,926,969 12,913,992 8,990,928 3,923,064 43.6% Capital grants and contributions - - 6,778,399 5,816,021 6,778,399 5,816,021 962,378 16.5% General revenues Property taxes 1,931,794 1,921,322 - - 1,931,794 1,921,322 10,472 0.5% Transient occupancy taxes 1,085,367 1,088,807 - - 1,085,367 1,088,807 (3,440) -0.3% Fuel taxes 264,395 238,700 - - 264,395 238,700 25,695 10.8% State sales taxes 796,325 881,494 - - 796,325 881,494 (85,169) -9.7% Franchise taxes 228,126 157,148 - - 228,126 157,148 70,978 45.2% Cannabis taxes 4,792,160 4,115,018 - - 4,792,160 4,115,018 677,142 16.5% Utility users taxes 415,037 343,007 - - 415,037 343,007 72,030 21.0% Use of money and property 268,803 10,790 163,921 68,123 432,724 78,913 353,811 448.4% Miscellaneous 127,163 357,469 - - 127,163 357,469 (230,306) -64.4% Total revenues 17,177,871 15,353,535 38,859,982 29,160,665 56,037,853 44,514,200 11,523,653 25.9% Expenses
General government 1,814,647 1,756,949 - - 1,814,647 1,756,949 57,698 3.3% Public safety 4,201,398 5,003,930 - - 4,201,398 5,003,930 (802,532) -16.0% Public works 2,370,153 2,093,518 - - 2,370,153 2,093,518 276,635 13.2% Parks and recreation 3,269,585 1,600,328 - - 3,269,585 1,600,328 1,669,257 104.3% Community development 544,562 755,023 - - 544,562 755,023 (210,461) -27.9% Interest on long-term debt 2,537 8,360 - - 2,537 8,360 (5,823) -69.7% Public Utility Authority - - 25,014,602 22,527,383 25,014,602 22,527,383 2,487,219 11.0% Sanitation - - 1,474,649 1,366,404 1,474,649 1,366,404 108,245 7.9% Golf Course - - 1,103,759 883,792 1,103,759 883,792 219,967 24.9% Transit - - 632,013 613,577 632,013 613,577 18,436 3.0% Housing - - 845,025 (989,643) 845,025 (989,643) 1,834,668 -185.4% Total expenses 12,202,881 11,218,108 29,070,048 24,401,513 41,272,929 35,619,621 5,653,308 15.9% Increase in net position
before transfers 4,974,990 4,135,427 9,789,934 4,759,152 14,764,924 8,894,579 5,870,345 66.0% Transfers 179,626 142,335 (179,626) (142,335) - - - 100.0% Change in net position 5,154,616 4,277,762 9,610,308 4,616,817 14,764,924 8,894,579 5,870,345 66.0% Net position - beginning 36,001,198 31,723,436 23,641,546 19,024,729 59,642,744 50,748,165 8,894,579 17.5% Ending net position 41,155,814 $ 36,001,198 $ 33,251,854 $ 23,641,546 $ 74,407,668 $ 59,642,744 $ 14,764,924 $ 24.8% Governmental Activities Business-Type Activities Totals Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
10 The following charts show graphic representations of the City’s revenues for the fiscal years ended June 30, 2024 and 2023:

As displayed in the charts above, the revenues from charges for services comprise 45% and 46% of the City’s revenues for 2024 and 2023, respectively. Most of the charges for services are attributed to the Public Utility Fund, which makes up approximately 38% of all revenues in 2024 and 35% of all revenues in 2023.

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
11 The following charts show graphic representations of the City’s governmental functional expenses for the fiscal years ended June 30, 2024 and 2023:

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
12 The City contracts with the County of San Bernardino for public safety services. These expenses are funded primarily through general revenues. Parks and recreation expenses are significant for the City, as it is the City’s responsibility to maintain the marinas, public swimming pool, skate park, and cemetery.

The following chart depicts the revenues and expenses of the City’s business-type activities for the year ended June 30, 2024:

The Public Utility Fund contributed most of the City’s revenues and produced $21.1 million in operating revenues. Interest expense of $433 thousand on the revenue refinancing bonds, non-operating of $5.5 million, and net capital contributions and transfers of about $6.9 million contributed to the Public Utility Fund’s increase in net position of about $8.7 million for the fiscal year.

The City’s business-type activities also include refuse collection, golf course, public transportation and housing authority. All business-type activities are designed to be self-supporting, and costs are expected to be fully recovered by user fees and other revenues. Refuse collection activities are contracted out to a private company. The sanitation fund increased its net position by $110 thousand, the golf course fund increased its net position by $113 thousand, the transit fund increased its net position by $332 thousand, and the housing authority fund increased its net position by $276 thousand.

-
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
25,000,000.00
30,000,000.00
35,000,000.00
40,000,000.00
Public Utility Fund Sanitation Golf Course Transit Housing Business-Type Activities 2024
Revenues Expenses
Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
13 Financial Analysis of the City’s Funds
Governmental funds
Governmental funds focus on the availability of resources on a short-term basis, showing inflows and outflows, and resulting in an ending balance of spendable resources.

City officials compare these available resources to the upcoming financial obligations. The ending fund balance for governmental funds at June 30, 2024, was $19.0 million. Of this total, $6.6 million was unassigned and is available to fund any City requirements. Nonspendable fund balances of $7.7 million represent assets that cannot be converted to cash, such as prepaid items and advances to other funds.

There are restricted fund balances totaling $4.1 million, committed fund balances of $350 thousand, and assigned fund balances of $229 thousand.

Governmental fund balances increased by $1.4 million from the previous year, as restated. Excess of revenues over expenditures of about $1.2 million and a net transfer of approximately $179 thousand contributed to the increase.

Major Governmental Funds
The City’s General Fund is the primary governmental fund in use, and accounts for about 72% of governmental revenues and about 78% of governmental expenditures. The fund balance of General Fund increased by $1.1 million from the previous year. General Fund revenues increased by $1.2 million, and expenditures increased by about $1.5 million from last year.

Other Governmental Funds
All other governmental funds are considered nonmajor funds. Such funds include special revenue funds, debt service fund, and capital projects funds. Together, these funds experienced an increase in fund balances of about $281 thousand. The total ending fund balance for these funds was $2.6 million.

Proprietary funds
Proprietary fund financial statements are similar to those prepared for private companies, with both short-term and long-term information included in the statements. Also, proprietary funds have the same focus as the government-wide financial statements.

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
14 Major Proprietary Funds
The Public Utility Fund is by far the most significant fund for the City, comprising 78% of total assets and about 55% of total revenues. Public Utility Fund provides power, water, and wastewater to the City’s businesses and residents. All fixed assets of the utility are carried on the Public Utility Fund’s books, as well as the revenue bonds issued to finance the acquisition of the utility.

General Fund Budgetary Highlights
The original budget adopted for the General Fund totaled $13,788,989 in resources (inflows) and $15,321,209 in charges to appropriations (outflows). The budget was amended once during the fiscal year, primarily to reflect increases in inflows of $3,308,013 and a net increase in expenditures as follows: general government expenditures of $833,826, public safety expenditures of $112,717, public works of $17,000, parks and recreation expenditures of $(155,665), and transfers to other funds of $2,438,229. The General Fund ended the fiscal year 2024 with $2,602,411 budget surplus.

Capital Assets and Debt Administration
Capital Assets
At June 30, 2024, the City had approximately $58.3 million invested in capital assets, $23.7 million of which was in governmental activities and $34.6 million of which was in business-type activities.

The notes to the financial statements include more details about changes in capital assets, accumulated depreciation, ongoing construction, and commitments outstanding at the end of the fiscal year.

Capital assets, net of accumulated depreciation and amortization, are as follows:

2023 2023 2023 Amount Percent 2024 (As restated) 2024 (As restated) 2024 (As restated) Change Change Non-Depreciable Assets
Land 424,042 $ 340,403 $ 3,394,088 $ 3,211,934 $ 3,818,130 $ 3,552,337 $ 265,793 $ 7.5% Construction in progress 4,040,708 1,896,821 6,349,554 5,481,354 10,390,262 7,378,175 3,012,087 40.8% Total non-depreciable assets 4,464,750 2,237,224 9,743,642 8,693,288 14,208,392 10,930,512 3,277,880 30.0% Depreciable and Amortizable Assets
Structures and improvements 18,668,668 17,477,423 20,599,110 15,525,370 39,267,778 33,002,793 6,264,985 19.0% Equipment and vehicles 527,187 564,195 1,545,951 1,111,429 2,073,138 1,675,624 397,514 23.7% Right-of-use lease asset 35,684 54,057 285,260 352,556 320,944 406,613 (85,669) -21.1% SBITA assets 15,250 19,410 15,085 30,172 30,335 49,582 (19,247) -38.8% Intangible asset - - 2,402,772 2,420,981 2,402,772 2,420,981 (18,209) -0.8% Total depreciable and amortizable assets 19,246,789 18,115,085 24,848,178 19,440,508 44,094,967 37,555,593 6,539,374 17.4% Total 23,711,539 $ 20,352,309 $ 34,591,820 $ 28,133,796 $ 58,303,359 $ 48,486,105 $ 9,817,254 $ 20.2% Governmental Activities Business-Type Activities Totals Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
15 Long-term debt
At the end of the fiscal year, the City’s total long-term debt obligations were $17.2 million. Of this total, $4.6 million is in governmental activities, and the remaining balance is in business-type activities.

The business-type activities debt consists of revenue bonds issued by the Needles Public Utility Authority. These bonds are being repaid from the utility’s operating revenues. There is also a note payable in the sanitation fund resulting from an agreement with San Bernardino County related to a municipal landfill.

The following table depicts the City’s outstanding long-term debt obligations at June 30, 2024 and 2023:

Economic Activity Update – Fiscal Year 2024
City of Needles, California
The City of Needles experienced strong and measurable economic momentum during FY 2024, driven by private investment, rising property values, expanding tourism activity, and disciplined reinvestment of locally generated revenues into infrastructure and community services. Strategic fiscal management, voter-approved economic development policies, and strong state and federal partnerships continued to strengthen the City’s financial position while laying the groundwork for longterm, sustainable growth.

Business & Industry Growth
Cannabis-related industrial development remained the City’s primary economic driver in FY 2024. The sector generated approximately $4.8 million in local cannabis tax revenue, representing roughly 36% of the City’s operating budget, and has generated more than $22.5 million in total revenue since voter approval of Measure S. Cannabis activity has resulted in nearly one million square feet of permitted facilities, with approximately 280,000–300,000 square feet currently in operation, and has created approximately 605 active jobs, including employment opportunities for Needles residents and the greater tri-state region.

Consistent with City policy, 10% of cannabis tax revenues were reinvested into the City’s Economic Development Program to support non-cannabis business growth. This strategy has helped catalyze key projects such as the Hampton Inn & Suites, a 67,000-square-foot boat storage facility, and the redevelopment of underutilized commercial properties, including the Filter Change coffee and auto service center.
2023 2023 2023 Amount Percent 2024 (As restated) 2024 (As restated) 2024 (As restated) Change Change Compensated absences 192,085 $ 236,068 $ 251,212 $ 259,409 $ 443,297 $ 495,477 $ (52,180) -10.5% Estimated claims liability 100,000 100,000 - - 100,000 100,000 - 0.0% Lease liability 37,535 55,628 296,548 360,064 334,083 415,692 (81,609) -19.6% SBITA liability 12,332 15,945 15,994 31,024 28,326 46,969 (18,643) -39.7% Net pension liability 3,550,222 3,418,332 2,533,522 2,196,678 6,083,744 5,615,010 468,734 8.3% NPUA 2016 bonds - - 8,774,103 9,846,660 8,774,103 9,846,660 (1,072,557) -10.9% Notes payable - - 195,269 227,787 195,269 227,787 (32,518) -14.3% Other postemployment benefits liability 710,882 736,504 538,691 502,776 1,249,573 1,239,280 10,293 0.8% Total 4,603,056 $ 4,562,477 $ 12,605,339 $ 13,424,398 $ 17,208,395 $ 17,986,875 $ (778,480) $ -4.3% Governmental Activities Business-Type Activities Totals Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
16 Beyond industrial activity, the City continued to attract and retain small businesses through streamlined permitting, competitive utility rates, and active recruitment efforts. New and expanding businesses during FY 2024 included US Cannabis Labs, 07 Boba Tea, and The Painted Butterfly, further diversifying the local economy and expanding services for residents and visitors.

Property Valuation & Household Income
The City’s assessed property valuation increased to approximately $563 million in 2024, reflecting a $27 million year-over-year increase (5%) and an 81% increase since 2017. This sustained growth reflects strong investor confidence, reinvestment in existing properties, and new development activities throughout the community.

Median household income has increased by approximately 20% since 2017, driven in part by job creation and wage growth in the industrial, hospitality, and service sectors, reinforcing positive economic outcomes for residents.

Tourism, Hospitality & Sales Activity
Tourism remained a critical pillar of the City’s economy in FY 2024. Over the past decade, hotel revenues have increased by approximately 86%, and by 23% since 2017, supported by Route 66 travel, river-based recreation, and regional visitation. While FY 2024 revenues moderated from the prior year’s peak, lodging revenues remain well above pre-pandemic levels. The $12 million Hampton Inn & Suites, which opened in 2023, significantly strengthened the City’s hospitality offerings and visitor capacity.

Jack Smith Park and Boat Launch continued to serve as one of the City’s strongest economic engines, welcoming more than 500,000 visitors annually. Since 2017, park-related activity has generated nearly $2 million in additional General Fund revenue, supporting local lodging, dining, fuel sales, and small businesses.

Retail and visitor activity also drove continued growth in local sales tax revenues. Over the past decade, sales tax receipts increased by approximately 90%, representing a $531,246 increase, supported by Interstate 40 traffic exposure of approximately 8.5 million travelers annually and strong performance by food, fuel, and service-oriented businesses.

Infrastructure & Capital Investment
In FY 2024, the City continued implementation of its 15-year Pavement Management Program, reinvesting locally generated revenues into critical street and water infrastructure. Since 2020, the City has invested more than $8.5 million in roadway and utility improvements, rehabilitating approximately 39% of the City’s roadway network, with an average annual investment of $2 million.

During FY 2024, the City advanced Phase IV-A of the Pavement Management Program, utilizing a sequenced approach that addressed underground utilities prior to roadway paving. Water service replacement work was completed by Phillips Excavating at a cost of $955,147.70, substantially completed in April 2024. Roadway paving followed in October 2024, with Vance Corporation completing paving work totaling $1.33 million and United Paving completing additional paving improvements totaling $972,000, supported in part by federal funding assistance secured through Congressman Obernolte.

Agenda Item 2.

City of Needles, California
Management’s Discussion & Analysis (Unaudited)
June 30, 2024
17 Separately, paving improvements along Flip Mendez Parkway were completed for $174,985, funded through Community Development Block Grant (CDBG) resources.

Beyond streets, the City successfully leveraged approximately $15 million in infrastructure grants to modernize its water system, including major investments in the Well 11 Treatment Plant, booster stations, pump stations, transmission mains, and new water storage facilities—projects completed or underway at no cost to local ratepayers.

Public Services, Housing & Community Stability
Public services remained stable and accessible throughout FY 2024. The Needles Courthouse continued full-time operations, restoring local access to judicial services. The City’s Housing Authority maintained full occupancy and expanded coordination with federal and county partners, supporting public housing units, Section 8 vouchers, and veteran housing programs, while completing longoverdue capital improvements to housing facilities.

The City also expanded access to healthcare and social services through partnerships with Tri-State Community Healthcare, IEHP, Palo Verde College, and workforce development providers, strengthening long-term community stability.

Grants, Planning & Economic Positioning
During FY 2024, the City leveraged more than $4.5 million in general planning and infrastructure grants and more than $7 million in parks and recreation grants, including major investments at Bob Belt’s Beach Park, Duke Watkins Park, Jack Smith Walking Trail, and Rivers Edge Golf Course.

Needles’ Prohousing Designation from the California Department of Housing and Community Development—earned as the first rural jurisdiction in San Bernardino County—positioned the city as a statewide leader in reducing development barriers and promoting housing production. This designation included a nearly $445,000 award and strengthened the City’s competitiveness for future state funding while supporting new residential development, including riverfront housing and infill opportunities.

Conclusion
Together, these efforts reflect the City of Needles’ disciplined, strategic approach to economic development—balancing revenue growth, infrastructure reinvestment, housing expansion, and quality-of-life improvements. FY 2024 marked another year of tangible progress, positioning Needles for continued resilience, diversification, and long-term prosperity.

Closing Statement for the Audit Report
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances, to comply with finance-related laws and regulations, and to demonstrate the City’s commitment to public accountability.

For questions or additional information, please contact the City of Needles Finance Department at 817 Third Street, Needles, California 92363. You may also request the separately issued financial statements of the Needles Public Utility Authority, the Needles Public Financing Authority, and the Housing Authority of the City of Needles.

Agenda Item 2.

BASIC FINANCIAL STATEMENTS
Agenda Item 2.

This page intentionally left blank.

Agenda Item 2.

GOVERNMENT-WIDE FINANCIAL STATEMENTS
Agenda Item 2.

City of Needles, California
Statement of Net Position
June 30, 2024
See accompanying Notes to Basic Financial Statements.
18 Governmental Business-Type
Activities Activities Totals
ASSETS
Cash and investments 7,158,380 $ 15,142,115 $ 22,300,495 $ Restricted cash 2,216,792 - 2,216,792 Accounts receivable, net 650,267 4,099,253 4,749,520 Due from other governments 1,952,596 2,748,814 4,701,410 Internal balances 10,923,028 (10,923,028) -
Inventory - 1,047,832 1,047,832 Prepaid items 163,074 2,568,576 2,731,650 Notes receivable - 168,441 168,441 Lease receivables 402,834 - 402,834 Capital assets, net 23,711,539 34,591,820 58,303,359 TOTAL ASSETS 47,178,510 49,443,823 96,622,333

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources related to pensions 1,610,596 1,126,989 2,737,585 Deferred outflows of resources related to OPEB 36,052 27,320 63,372 TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,646,648 1,154,309 2,800,957 LIABILITIES Accounts payable 1,316,551 1,763,087 3,079,638
Accrued payroll 286,850 45,916 332,766 Deposits payable 295,339 2,719,296 3,014,635 Accrued interest - 141,117 141,117 Unearned revenues 621,532 3,890 625,422 Other liabilities - 4,818 4,818 Long-term liabilities
Due within one year 22,656 1,280,531 1,303,187 Due in more than one year 319,296 8,252,595 8,571,891 Net pension liability 3,550,222 2,533,522 6,083,744
Other postemployment benefits liability 710,882 538,691 1,249,573 TOTAL LIABILITIES 7,123,328 17,283,463 24,406,791 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions 159,879 62,815 222,694 Deferred inflows of resources related to leases 386,137 - 386,137 TOTAL DEFERRED INFLOWS OF RESOURCES 546,016 62,815 608,831

NET POSITION
Net investment in capital assets 23,661,672 25,309,906 48,971,578 Restricted for Community development projects 5,680,476 - 5,680,476 Housing authority - 36,425 36,425 Unrestricted 11,813,666 7,905,523 19,719,189 TOTAL NET POSITION 41,155,814 $ 33,251,854 $ 74,407,668 $ Agenda Item 2.

City of Needles, California
Statement of Activities
Year ended June 30, 2024
See accompanying Notes to Basic Financial Statements.
19 Operating Capital BusinessCharges for Grants and Grants and Governmental Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

PRIMARY GOVERNMENT
Governmental activities
General government 1,814,647 $ 1,091,197 $ 82,786 $ - $ (640,664) $ - $ (640,664) $ Public safety 4,201,398 - 878,511 - (3,322,887) - (3,322,887) Public works 2,370,153 607 1,860,258 - (509,288) - (509,288) Parks and recreation 3,269,585 46,874 2,825,715 - (396,996) - (396,996) Community development 544,562 - 482,753 - (61,809) - (61,809) Interest on long-term debt 2,537 - - - (2,537) - (2,537) Total governmental activities 1,138,678 12,202,881 6,130,023 - (4,934,180) - (4,934,180) Business-type activities Public utility 25,014,602 21,540,299 5,547,624 6,754,487 - 8,827,808 8,827,808 Sanitation 1,474,649 1,776,084 - - - 301,435 301,435 Golf course 1,103,759 650,044 324,685 - - (129,030) (129,030) Transit 632,013 49,620 911,660 23,554 - 352,821 352,821 Housing 845,025 1,117,646 - 358 - 272,979 272,979 Total business-type activities 25,133,693 29,070,048 6,783,969 6,778,399 - 9,626,013 9,626,013 Total primary government 41,272,929 $ 26,272,371 $ 12,913,992 $ 6,778,399 $ (4,934,180) 9,626,013 4,691,833 General revenues:

Taxes:

Property taxes 1,931,794 - 1,931,794 Transient occupancy taxes - 1,085,367 1,085,367 Fuel taxes 264,395 - 264,395 State sales taxes 796,325 - 796,325 Franchise taxes 228,126 - 228,126
Cannabis taxes 4,792,160 - 4,792,160 Utility users taxes 415,037 - 415,037 Use of money and property 268,803 163,921 432,724 Miscellaneous - 127,163 127,163
Transfers 179,626 (179,626) - Total general revenues 10,088,796 (15,705) 10,073,091 Change in net position 5,154,616 9,610,308 14,764,924 Net position - beginning, as previously reported 35,945,023 22,647,895 58,592,918 Restatements (Note 13) 56,175 993,651 1,049,826 Net position - beginning, as restated 36,001,198 23,641,546 59,642,744 Net position - ending 41,155,814 $ 33,251,854 $ 74,407,668 $ Program Revenues
Net (Expense) Revenue and
Changes in Net Position
Agenda Item 2.

This page intentionally left blank.

Agenda Item 2.

FUND FINANCIAL STATEMENTS
Agenda Item 2.

City of Needles, California
Balance Sheet
Governmental Funds
June 30, 2024
See accompanying Notes to Basic Financial Statements.
20 Other Total
General Governmental Governmental
Fund Funds Funds
ASSETS
Cash and investments 3,998,016 $ 3,160,364 $ 7,158,380 $ Restricted cash 1,864,545 352,247 2,216,792 Accounts receivable, net 648,308 1,959 650,267 Due from other funds 3,633,316 - 3,633,316 Due from other governments 1,744,665 207,931 1,952,596 Prepaid items 33,271 129,803 163,074 Lease receivables 402,834 - 402,834 Advances to other funds 7,576,966 - 7,576,966 TOTAL ASSETS 19,901,921 $ 3,852,304 $ 23,754,225 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities
Accounts payable 909,570 $ 406,981 $ 1,316,551 $
Accrued liabilities 281,444 5,406 286,850 Deposits 295,339 - 295,339 Due to other funds - 287,254 287,254
Unearned revenues 48,386 573,146 621,532
Total liabilities 1,534,739 1,272,787 2,807,526 Deferred inflows of resources Unavailable revenues 1,592,175 7,391 1,599,566
Leases 386,137 - 386,137 Total deferred inflows of resources 1,978,312 7,391 1,985,703 Fund balances (deficit) Nonspendable 7,610,237 129,803 7,740,040
Restricted 1,864,545 2,216,365 4,080,910
Committed 350,000 - 350,000 Assigned - 229,102 229,102
Unassigned 6,564,088 (3,144) 6,560,944 Total fund balances 16,388,870 2,572,126 18,960,996 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES $ 19,901,921 $ 3,852,304 $ 23,754,225 Agenda Item 2.

City of Needles, California
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2024
See accompanying Notes to Basic Financial Statements.
21 Fund balances - total governmental funds 18,960,996 $ Amounts reported for governmental activities in the Statement of Net Position are different because:

Revenues reported as unavailable revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 1,599,566 Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds Balance Sheet.

Governmental capital assets 40,194,874 $
Less: Accumulated depreciation (16,534,269) Governmental right-of-use lease assets 84,754 Less: Accumulated amortization (49,070) Governmental SBITA assets 20,796 Less: Accumulated amortization (5,546) 23,711,539 Long-term liabilities applicable to the City governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position. Balances as of June 30,2024 are:

Compensated absences (192,085) Estimated claims liability (100,000) Lease liability (37,535) SBITA liability (12,332) (341,952) Pension and OPEB related debt applicable to the City governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions and OPEB are only reported in the Statement of Net Position as the changes in these amounts effects only the government-wide statements for governmental activities:

Deferred outflows of resources related to OPEB 36,052 Net OPEB Liability (710,882) Deferred outflows of resources related to pension 1,610,596 Deferred inflows of resources related to pension (159,879) Net pension liability (3,550,222) (2,774,335) Net position of governmental activities $ 41,155,814 Agenda Item 2.

City of Needles, California
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
Year ended June 30, 2024
See accompanying Notes to Basic Financial Statements.
22 State Recreation Other Total
General Grants Special Governmental Governmental
Fund Revenue Fund Funds Funds

REVENUES
Taxes 9,020,683 $ $ 211,772 $ 9,232,455 $
Licenses, permits, and fees 547,680 - 547,680
Intergovernmental 726,722 3,479,655 4,206,377 Charges for services 1,013,344 1,052,201 2,065,545 Fines and forfeitures 292,686 - 292,686 Use of money and property 258,569 10,234 268,803 Other revenues 124,138 3,025 127,163
Total revenues 11,983,822 4,756,887 16,740,709 EXPENDITURES Current
General government 2,174,497 - 2,174,497 Public safety 5,005,030 224,074 5,229,104 Public works 1,283,767 1,055,070 2,338,837
Parks and recreation 3,475,221 198,035 3,673,256
Community development 146,852 120,774 267,626 Capital outlay - 1,799,371 1,799,371 Debt service Principal retirement 21,706 - 21,706
Interest and fiscal charges 2,537 - 2,537 Total expenditures 12,109,610 3,397,324 15,506,934 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (125,788) 1,359,563 1,233,775 OTHER FINANCING SOURCES (USES) Transfers in 2,161,565 248,979 2,410,544
Transfers out (903,680) (1,327,237) (2,230,917) Total other financing sources (uses) 1,257,885 (1,078,258) 179,627 CHANGES IN FUND BALANCES 1,132,097 281,305 1,413,402 FUND BALANCES (DEFICITS) Fund balances (deficits) - beginning, as previously reported 15,256,773 (1,038,863) 3,273,509 17,491,419 Restatements (Note 13) - 1,038,863 (982,688) 56,175 Fund balances - beginning, as restated 15,256,773 - 2,290,821 17,547,594 Fund balances - ending $ 16,388,870 $ - $ 2,572,126 $ 18,960,996 Agenda Item 2.

City of Needles, California
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities Year ended June 30, 2024
See accompanying Notes to Basic Financial Statements.
23 Net change in fund balances - total governmental funds 1,413,402 $ Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues reported as unavailable revenues in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activities. 437,161 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation and amortization expense.

Capital outlay 4,641,467 $
Depreciation and amortization expenses, net of deletions of $85,669 (1,262,827) 3,378,640 Long-term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

SBITA adjustment (15,945)
Lease liability repayments 18,093
SBITA liability repayments 3,613
Net change in compensated absences 43,983
OPEB expense reported in the governmental funds includes the insurance premiums paid. In the Statement of Activities, OPEB expense includes the changes in the net OPEB liability, and related changes in OPEB amounts for deferred outflows of resources and deferred inflows of resources. 15,786 Pension expense reported in the governmental funds includes the annual required contributions. In the Statement of Activities, pension expense includes the changes in the net pension liability, and related changes in pension amounts for deferred outflows of resources and deferred inflows of resources. (140,117) Change in net position of governmental activities 5,154,616 $ Agenda Item 2.

City of Needles, California
Statement of Net Position
Proprietary Funds
June 30, 2024
See accompanying Notes to Basic Financial Statements.
24 Other Total Internal
Public Utility Enterprise Enterprise Service
Fund Funds Funds Funds
ASSETS
Current assets
Cash and investments 7,312,421 $ 2,146,215 $ 9,458,636 $ 5,683,479 $ Accounts receivable, net 3,806,926 289,137 4,096,063 3,190 Notes receivable 168,441 - 168,441 - Due from other funds 5,044,547 - 5,044,547 30,246 Due from other governments 2,203,274 545,540 2,748,814 - Inventory 1,039,089 8,743 1,047,832 - Prepaid items - 13,722 13,722 2,554,854 Total current assets 19,574,698 3,003,357 22,578,055 8,271,769 Non-current assets
Right of use assets, net 114,417 - 114,417 - SBITA assets, net - 15,085 15,085 - Capital assets, net 31,269,952 2,401,830 33,671,782 790,536 Total non-current assets 31,384,369 2,416,915 33,801,284 790,536 TOTAL ASSETS 50,959,067 5,420,272 56,379,339 9,062,305 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources related to pensions 1,102,416 24,573 1,126,989 - Deferred outflows of resources related to OPEB 26,724 596 27,320 - TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,129,140 25,169 1,154,309 - LIABILITIES
Current liabilities
Accounts payable 1,179,035 390,038 1,569,073 194,014 Accrued payroll - 5,146 5,146 40,770 Deposits 2,709,596 9,700 2,719,296 - Due to other funds 953,185 2,653,816 3,607,001 4,813,854 Unearned revenues - 3,890 3,890 - Accrued interest 141,117 - 141,117 - Compensated absences - current - 1,851 1,851 - Advance payable - current 157,719 - 157,719 - Lease liability - current 51,101 46,198 97,299 16,508 SBITA liability - current - 15,994 15,994 - Bonds/note payable - current 1,114,355 34,524 1,148,879 - Other liabilities - 4,818 4,818 - Total current liabilities 6,306,108 3,165,975 9,472,083 5,065,146 Noncurrent liabilities Net pension liability 2,478,280 55,242 2,533,522 - Other postemployment benefits liability 526,945 11,746 538,691 - Compensated absences - noncurrent 230,122 7,405 237,527 11,834 Advance payable - noncurrent 7,419,247 - 7,419,247 - Lease liability - noncurrent 68,966 79,874 148,840 33,901 Bonds/note payable - noncurrent 7,659,749 160,744 7,820,493 - Total noncurrent liabilities 18,383,309 315,011 18,698,320 45,735 TOTAL LIABILITIES 24,689,417 3,480,986 28,170,403 5,110,881 DEFERRED INFLOW OF RESOURCES Deferred inflows of resources related to pensions 61,445 1,370 62,815 - TOTAL DEFERRED INFLOW OF RESOURCES 61,445 1,370 62,815 - NET POSITION
Net investment in capital assets 22,490,198 2,079,581 24,569,779 740,127 Restricted - 36,425 36,425 - Unrestricted (deficit) 4,847,147 (152,921) 4,694,226 3,211,297 TOTAL NET POSITION 27,337,345 $ 1,963,085 $ 29,300,430 3,951,424 $ Internal service fund allocated to enterprise funds 3,951,424 Net Position, Business-Type Activities 33,251,854 $ Agenda Item 2.

City of Needles, California
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Year ended June 30, 2024
See accompanying Notes to Basic Financial Statements.
25 Other Total Internal
Public Utility Enterprise Enterprise Service
Fund Sanitation Funds Funds Funds

OPERATING REVENUES
Charges for services 19,946,047 $ - $ 2,417,618 $ 22,363,665 $ 14,583,483 $ Operating grants and subsidies - 870,448 870,448 - Other fees and sales - - 286,318 286,318 - Other revenues 1,129,464 - 19,010 1,148,474 1,999 Total operating revenues 21,075,511 3,593,394 24,668,905 14,585,482 OPERATING EXPENSES Personnel costs - - 322,102 322,102 3,016,987 Contractual services - - 1,771,896 1,771,896 488,924 Power and utilities - - 289,662 289,662 6,819,493 Maintenance and operations 23,041,681 - 1,037,171 24,078,852 2,938,440 Administrative and management - - 357,538 357,538 512,400 Insurance - - 22,965 22,965 155,131 Depreciation and amortization 1,539,937 - 230,682 1,770,619 185,868 Total operating expenses 24,581,618 4,032,016 28,613,634 14,117,243 Operating income (loss) (3,506,107) (438,622) (3,944,729) 468,239 NON-OPERATING REVENUES (EXPENSES) Interest revenue 142,214 - 5,135 147,349 16,572 Government grants 5,547,624 - 1,236,345 6,783,969 - Loss on sale of asset - - (1,610) (1,610) - Interest expense and fiscal charges (432,984) - (21,820) (454,804) (3,451) Total non-operating revenues (expenses) 5,256,854 - 1,218,050 6,474,904 13,121 Income (loss) before capital contributions
and transfers 1,750,747 - 779,428 2,530,175 481,360 Capital contributions - AB 2766 - - 15,000 15,000 - Capital contributions - State of good repair - - 8,554 8,554 - Capital contributions 6,748,792 - 358 6,749,150 5,695 Transfers in 198,054 - 241,481 439,535 417,240 Transfers out - - (214,598) (214,598) (821,803) Net capital contributions and transfers 6,946,846 - 50,795 6,997,641 (398,868) Changes in net position 8,697,593 - 830,223 9,527,816 82,492 Net position (deficit) - beginning, as previously reported 18,639,752 (1,118,334) 1,262,410 18,783,828 3,864,067 Restatements (Note 13) - 1,118,334 (129,548) 988,786 4,865 Net position - beginning, as restated 18,639,752 - 1,132,862 19,772,614 3,868,932 Net position - ending 27,337,345 $ - $ 1,963,085 $ 29,300,430 $ 3,951,424 $ Change in net position of internal service fund
allocated to enterprise funds 82,492 $
Change in net position of enteprise funds 9,527,816 Change in net position of business-type activities 9,610,308 $ Agenda Item 2.

City of Needles, California
Statement of Cash Flows
Proprietary Funds
Year ended June 30, 2024
See accompanying Notes to Basic Financial Statements.
26 Other Total Internal
Public Utility Enterprise Enterprise Service
Fund Funds Funds Funds
Cash Flows from Operating Activities
Cash collected from customers 19,538,822 $ 3,234,299 $ 22,773,121 $ 15,343,056 $ Cash payments to suppliers for goods and services (23,846,195) (3,585,224) (27,431,419) (11,008,850) Cash payments to employees for services 276,084 (363,325) (87,241) (3,016,987) Net cash provided by (used in) operating activities (714,250) (4,031,289) (4,745,539) 1,317,219 Cash Flows From Noncapital Financing Activities Operating grants received 5,547,624 1,236,345 6,783,969 - Increase in due from other funds (927,790) - (927,790) (10,789) Increase (decrease) in due to other funds/advances 785,934 (440,114) 345,820 936,859 Operating transfers in 198,054 241,481 439,535 1,369,416 Operating transfers out - (214,598) (214,598) (1,773,979) Net cash provided by noncapital financing activities 823,114 5,603,822 6,426,936 521,507 Cash Flows from Capital and Financing Activities Acquisition and construction of capital assets (6,874,624) (1,217,997) (8,092,621) (353,672) Principal paid on bonds/note payable (1,072,556) (32,519) (1,105,075) - Capital grants received 6,748,792 23,912 6,772,704 5,695 Payments of leases (48,925) (44,946) (93,871) 30,355 Payments of subscriptions - 15,140 15,140 - Interest paid (450,234) (21,820) (472,054) (3,451) Net cash used in capital and related financing activities (1,278,230) (1,697,547) (2,975,777) (321,073) Cash Flows from Investing Activities Collection of notes receivable 340,175 (1,911) 338,264 - Interest on investments 142,214 5,135 147,349 16,572 Net cash provided by investing activities 3,224 482,389 485,613 16,572 Net increase (decrease) in cash and investments (1,166,142) 357,375 (808,767) 1,534,225 Cash and investments, beginning of year 6,955,046 3,312,357 10,267,403 4,149,254 Cash and cash investments, end of year 7,312,421 $ 2,146,215 $ 9,458,636 $ 5,683,479 $ Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss) (3,506,107) $ (438,622) $ (3,944,729) $ 468,239 $ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities
Depreciation and amortization 1,539,937 230,682 1,770,619 185,868 Changes in assets and liabilities Decrease (increase) in:

Accounts receivable (1,536,689) (52,061) (1,588,750) (3,190) Due from other governments (303,893) (460,858) (764,751) - Inventory (209,539) 784 (208,755) -
Prepaid expenses - 7,864 7,864 760,764
Deferred outflows (40,356) 4,608 (35,748) -
Increase (decrease) in:

Accounts payable (252,820) 100,081 (152,739) (95,460)
Accrued liabilities - - - 700
Deposits payable (38,262) (1,500) (39,762) -
Unearned revenues - (105,717) (105,717) -
Net pension liability 340,079 (3,235) 336,844 -
OPEB liability 37,553 (1,638) 35,915 -
Deferred inflows (52,697) (1,752) (54,449) -
Compensated absences payable (8,495) 7,114 (1,381) 298 Net cash provided by (used in) operating activities $ (714,250) (4,031,289) $ (4,745,539) $ 1,317,219 $ Agenda Item 2.

City of Needles, California
Statement of Fiduciary Net Position
Fiduciary Fund
June 30, 2024
See accompanying Notes to Basic Financial Statements.
27 Custodial Fund
Water Quality
Maintenance Fund
ASSETS
Cash and investments 10,673,202 $
Total assets 10,673,202 FIDUCIARY NET POSITION
Restricted for other organizations 10,673,202 $
Agenda Item 2.

City of Needles, California
Statement of Changes in Fiduciary Net Position
Fiduciary Fund
Year ended June 30, 2024
See accompanying Notes to Basic Financial Statements.
28 Custodial Fund
Water Quality
Maintenance Fund

ADDITIONS
Deposits 1,358,194 $
Investment earnings 487,290 Total revenues 1,845,484 DEDUCTIONS Distributions 521,664 Total expenses 521,664
CHANGE IN FIDUCIARY NET POSITION 1,323,820
Fiduciary net position - beginning, as previously reported - Restatement (Note 13) 9,349,382 Fiduciary net position - beginning, as restated 9,349,382 FIDUCIARY NET POSITION - END OF YEAR $ 10,673,202
Agenda Item 2.

NOTES TO BASIC FINANCIAL STATEMENTS
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. INTRODUCTION
The accounting and reporting framework and the more significant accounting principles and practices of the City of Needles, California (City) are discussed in subsequent sections of this Note. The remaining Notes are organized to provide explanations, including required disclosures, of the City’s financial activities for the fiscal year ended June 30, 2024.

B. FINANCIAL REPORTING ENTITY – BASIS OF PRESENTATION
Description of the Reporting Entity
The City was incorporated on October 30, 1913, as a General Law City. The City became a Charter City on January 28, 1959, and operates under a Council-Manager form of government. The City Council consists of seven members elected by the citizens of the City. The City provides the following services to its citizens: public safety (police and fire), highways and streets, electricity, water, wastewater, sanitation, public transportation, health and social services, cemetery, culture-recreation, public improvements, community development (planning, building, zoning), and general administrative services.

The accompanying financial statements present the City’s primary government and component units over which the City exercises significant influence. Significant influence or accountability is based primarily on operational or financial relationships with the City, as distinct from legal relationships. Blended component units, although legally separate entities, are in substance part of the City’s operations and so data from these units are combined with data of the primary government.

Each blended component unit has a June 30, 2024 fiscal year-end and issues separate audited financial statements. The City has no discretely presented component units.

Management has determined that the following component units should be blended:

Needles Public Financing Authority, Housing Authority of the City of Needles, and Needles Public Utility Authority. Additional detailed financial information for each of these entities can be obtained from the City of Needles Finance Department at 817 Third Street, Needles, California, 92363.

Needles Public Financing Authority
The Needles Public Financing Authority (NPFA) was formed on March 7, 1992, for the sole purpose of providing financing for various City capital projects. The Financing Authority is governed by a seven-member board, which consists of members of the City Council.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. FINANCIAL REPORTING ENTITY – BASIS OF PRESENTATION (CONTINUED) Housing Authority of the City of Needles
The Housing Authority of the City of Needles (Housing Authority) was established in 1942, under the U.S. Housing Act of 1937 and the State of California Housing Authority Law of 1938. The Housing Authority is a nonprofit government agency that is chartered by the State of California to administer the development, rehabilitation or financing of affordable housing programs. During the fiscal year 2024, the City assumed administrative and operational responsibility for the Housing Authority. Accordingly, the Housing Authority is reported as a blended component unit within the City’s financial statements.

Needles Public Utility Authority
The Needles Public Utility Authority (NPUA) was formed on January 6, 1997, for the purpose of owning, operating, and maintaining the Utility Enterprise. The Utility Enterprise consists of the Water, Sewer, and Electric Enterprise Funds serving the City and the surrounding area. A seven-member Board that consists of members of the City Council governs the Utility Authority.

Other Governmental Agencies
Other governmental agencies providing various levels of service to the City include the State of California, the County of San Bernardino (County), as well as various special districts and school districts. Each of the above agencies has an independent elected governing board or is dependent on an independently elected governing board other than the City Council. Accordingly, financial data and transactions of these agencies are not included within the scope of this financial report.

Government-Wide and Fund Financial Statements
Government-Wide Financial Statements
The government-wide financial statements include the Statement of Net Position and the Statement of Activities. These statements report on financial information for the City as a whole, excluding fiduciary activities such as employee pension plans.

Individual funds are not displayed, but the statements distinguish governmental activities, which are generally supported by taxes and City general revenues, from business-type activities, generally financed as a whole or in part by fees charged to external customers.

The Statement of Activities reports the expenses of a given function, offset by program revenues directly connected with the functional program. A function is an assembly of similar activities and may include portions of a fund or summarize more than one fund to capture the expenses and program revenues associated with a distinct functional activity.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. FINANCIAL REPORTING ENTITY – BASIS OF PRESENTATION (CONTINUED) Government-Wide Financial Statements (Continued)
Program revenues include: (1) charges for services which report fees, fines and forfeitures, and other charges to users of the City’s services; (2) operating grants and contributions which finance annual operating activities including restricted investment income; and (3) capital grants and contributions which fund the acquisition, construction, or rehabilitation of capital assets and include fees to developers. These revenues are subject to externally imposed restrictions on the specified program purposes. Taxes and other revenue sources not properly included with program revenues are reported as general revenues.

Fund Financial Statements
Fund financial statements are provided for governmental, proprietary, and fiduciary funds. Major individual governmental and enterprise funds are reported in separate columns, with composite columns for nonmajor funds.

C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL

STATEMENT PRESENTATION
The government-wide statements report using the economic resources measurement focus and the accrual basis of accounting, generally including the reclassification or elimination of internal activity (between or within funds). However, internal eliminations do not include utility services provided to City departments. Proprietary and fiduciary fund financial statements and financial statements of City component units also report using this same focus and basis of accounting. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property tax revenues are recognized in the year for which they are levied, while grants are recognized when grantor eligibility requirements are met.

Governmental fund financial statements report using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City considers revenues to be available if they are collected within 60 days after the end of the fiscal year.

Expenditures are recorded when the related fund liability is incurred, except for general obligation bond principal and interest, which are reported as expenditures in the year due.

Major revenue sources subject to accrual include cannabis taxes, property taxes, sales taxes, transient occupancy taxes, franchise taxes, intergovernmental revenues, and use of money and property.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL

STATEMENT PRESENTATION (CONTINUED)
Operating income reported in proprietary fund financial statements includes revenues and expenses related to the primary continuing operations of the fund. Principal operating revenues for proprietary funds are charges to customers for sales or services. Principal operating expenses are the costs of providing goods or services and include administrative expenses and depreciation of capital assets. Other revenues and expenses are classified as non-operating in the financial statements.

When both restricted and unrestricted resources are available for use, the City’s policy is to use restricted resources first, then unrestricted resources as necessary.

Restricted assets and liabilities payable from restricted assets that are considered current are reported as current assets and liabilities in the financial statements.

Assets that are restricted for the acquisition or construction of noncurrent assets, or are restricted for the liquidation of long-term debt, are considered noncurrent.

D. FUND TYPES AND MAJOR FUNDS
Governmental Funds
The City reports the following major governmental fund:

General Fund – The General Fund is the general operating fund of the City. It is used to account for all financial resources not reported in other funds.

Proprietary Funds
The City reports the following major enterprise fund:

Public Utility Fund – This fund accounts for the operating activities of the City’s public utility operations. NPUA transactions roll up to this fund.

Other Fund Types
The City also reports the following fund types:

Internal Service Funds – These funds are used to account for the financing of goods or services provided by one department to other departments within the City on a cost-reimbursement basis. These include fleet maintenance, business office, and information technology. These are proprietary funds reported with business-type activities in the government-wide statements, as the majority of the activities are charged to other proprietary funds.

Fiduciary Fund – Custodial Fund – This fund accounts for the restricted trust fund for Water Quality Maintenance of the All-American Canal. The trust funds for canal capital maintenance and improvements are held by the Trustee, Zions Bank. The City is responsible for the annual operation of the canal under the contract with the Bureau of Reclamation (BOR) and the Metropolitan Water District of Southern California (MWD).

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. ASSETS, LIABILITIES, AND FUND BALANCES/NET POSITION
Cash and Investments
The City maintains and controls one major cash and investment pool. Each fund’s portion of the pool is displayed on its respective balance sheet as “cash and investments”.

In addition, non-pooled cash and investments are separately held and reflected in respective funds or component units as “cash with fiscal agents” or “restricted cash”.

For purposes of the accompanying statement of cash flows, the City considers highly liquid investments (including restricted assets) with an original maturity of three months or less when purchased to be cash equivalents.

Investments are reported at fair value. The State Treasurer’s Investment Pool operates in accordance with appropriate state laws and regulations. The fair value of the State Treasurer’s Investment Pool is based on the stated fair value represented by the Pool.

Cash deposits are reported at the carrying amount, which reasonably approximates fair value.

Inventory of Supplies
Inventories in governmental funds consist of expendable supplies held for consumption stated on an average cost basis. They are reported at cost, which is recorded as an expenditure at the time the inventory items are used. Proprietary fund inventories and similar component unit inventories are recorded at the lower of cost or market value on an average cost basis. Inventories are reported similarly in the fund financial statements and the government-wide financial statements.

Prepaid Items
Prepaid items represent payments made to vendors that benefit future reporting periods and are reported on a consumption basis. Prepaid items are reported similarly in the fund financial statements and the government-wide financial statements.

Capital Assets, Depreciation, and Amortization
The City’s property, plant, equipment, and infrastructure with useful lives of more than one year are stated at historical cost and reported in the government-wide financial statements.

Proprietary and component unit capital assets are also reported in their respective funds and component unit financial statements. Donated assets are stated at fair value on the date donated. The City generally capitalizes assets with a cost of $5,000 or more. The cost of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets, including those of component units, are depreciated using the straight-line method.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. ASSETS, LIABILITIES, AND FUND BALANCES/NET POSITION (CONTINUED) Capital Assets, Depreciation, and Amortization (Continued) When capital assets are disposed, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations.

Estimated useful lives for depreciable assets are as follows:

Buildings 20 – 30 years
Improvements, other than buildings 5 – 15 years
Mobile equipment 5 – 7 years
Furniture, machinery, and equipment 5 – 7 years
Long-term Debt and Bond Discounts/Premiums
In the government-wide financial statements, outstanding debt is reported as a liability.

Bond issuance costs, bond discounts and premiums, and the difference between the reacquisition price and the net carrying value of refunded debt are capitalized and amortized over the terms of the respective bonds using a method that approximates the effective interest method.

Governmental fund financial statements recognize debt proceeds and premiums as other financing sources of the current fiscal period. Issuance costs are reported as expenditures of the current fiscal period.

Unavailable Revenues
Under the modified accrual basis of accounting, it is not enough that revenue has been earned if it is to be recognized in the current period. Revenue must also be available to finance expenditures of the current period. Governmental funds report revenues in connection with receivables for revenues not considered available to liquidate as deferred inflows of resources in the current period. Unavailable revenues in the current year represent revenues not collected within the availability period of 60 days.

Compensated Absences
Full-time, permanent employees are granted vacation benefits in varying amounts to specified maximums depending on tenure with the City. Sick leave accrues to fulltime, permanent employees up to specified maximums. The estimated liabilities include required salary-related payments. Compensated absences are reported as accrued in the government-wide, proprietary, and component unit financial statements.

Governmental funds report only matured compensated absences payable to currently terminating employees.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
35 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. ASSETS, LIABILITIES, AND FUND BALANCES/NET POSITION (CONTINUED) Fund Balances
In accordance with Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental fund types report fund equity in one of five categories, as follows:

Nonspendable – Fund balances that cannot be spent because they are either:
 Not in Spendable Form – generally, amounts that are not expected to be converted to cash, such as inventories or prepaid amounts. This classification also includes some long-term amounts, such as property acquired for resale or the long-term portion of loans receivable.
 Legally or Contractually Required to be Maintained Intact – amounts that are required to be maintained intact, such as the principal of a permanent fund.

Restricted – This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation.

Committed – This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the City Council. These amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements.

Assigned – This classification includes amounts that are constrained by the City’s intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the City Council or through the City Council delegating this responsibility to the City manager through the budgetary process. This classification also includes the remaining positive fund balance for all governmental funds except for the General Fund.

Unassigned – This is the residual classification for the general fund (i.e., everything that is not in another classification or another fund).

When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the City Council has provided otherwise in its commitment or assignment actions.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
36 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. ASSETS, LIABILITIES, AND FUND BALANCES/NET POSITION (CONTINUED) Net Position
The net position represents the residual interest in the City’s assets and deferred outflows of resources after liabilities and deferred inflows of resources are deducted.

In accordance with GASB Statement No. 63, the fund equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:

Net investment in capital assets – The amount consists of capital assets, including infrastructure, net of accumulated depreciation and amortization and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.

Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature.

Unrestricted – Amount consists of all net position that do not meet the definition of “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.

F. REVENUES, EXPENDITURES, AND EXPENSES
Utility Billings
The Public Utility Fund bills individuals and businesses for electric, water, and sewer services monthly. The billings are considered delinquent when they are not paid by the due date indicated on the billing, which is generally 20 days after the billing date. The City reserves an amount as uncollectible based on historical collection rates. The amount of the estimated uncollectible billings as of June 30, 2024 was $396,547.

Use of Estimates
The financial statements and related disclosures are prepared in conformity with accounting principles generally accepted in the United States. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the period reported. These estimates include assessing the collectability of accounts receivable, the use and recoverability of inventory, and the useful lives and impairment of tangible and intangible assets, among others. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Actual results could differ from the estimates.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
37 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. REVENUES, EXPENDITURES, AND EXPENSES (CONTINUED)
Property Tax Revenues
All property taxes are collected and allocated by the County to the various taxing entities. Property taxes are determined annually as of March 1 and attach as an enforceable lien on real property as of July 1. Taxes are due November 30 and February 1 and are delinquent if not paid by December 10 and April 10, respectively.

The County bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when available and measurable. The City considers property tax as available if it is received within 60 days after the year-end.

Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pension and pension expense, information about the fiduciary net position of the California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

G. IMPLEMENTATION OF NEW ACCOUNTING PRONOUNCEMENTS
Released GASB Statements to be implemented in future financial statements are as follows:
 GASB Statement No. 101 - Compensated Absences. The requirements of this statement are effective for reporting periods beginning after December 15, 2023.  GASB Statement No. 102 - Certain Risk Disclosures. The requirements of this statement are effective for reporting periods beginning after June 15, 2024.  GASB Statement No. 103 - Financial Reporting Model Improvements. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.
 GASB Statement No. 104 - Disclosure of Certain Capital Assets. The requirements of this statement are effective for reporting periods beginning after June 15, 2025.

NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
The County is permitted by State Law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the market value no more than 2% per year. The City receives a share of this basic levy proportionate to what it received in the 1976 and 1978 periods. Property tax rates for bond debt service are determined by the City, with collections and allocations made by the County.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
38 NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (CONTINUED) Deficit Fund Balance/Net Position – Primary Government
Deficit fund balances/net position as of June 30, 2024 are as follows:

Budgets and Budgetary Accounting
The City prepared and adopted annual operating budgets for the General Fund, all Special Revenue funds, and all Capital Projects funds. The City follows these procedures in establishing the budgetary data reflected in the financial statements:

1. The City Manager submits to the City Council a proposed budget for the fiscal year commencing on the following July 1. The budget includes proposed expenditures and the means of financing them.

2. The City Council reviews the proposed budget at a specially scheduled session, which is open to the public. The Council also conducts a public hearing on the proposed budget to obtain comments from interested persons.

3. The budget is legally adopted through passage of a resolution.

4. The City Manager is authorized to transfer funds within departmental budgets between major object classifications and between capital projects in the same fund. The City Council must authorize transfers between funds, between departments, and from the fund balances reserved for specific purposes.

5. Annual budgets presented are legally adopted and amended as required for the General, Special Revenue, and Capital Projects funds. All budgets presented are prepared on a basis consistent with GAAP.

6. Budgeted amounts are reflected after all applicable amendments and revisions.

7. For each legally adopted operating budget, expenditures may not exceed budgeted appropriations at the department level. The legal level of budgetary control is at the level called “department”. A “department” for legal appropriation purposes may be a single organization (i.e., City Attorney), or an entire department having multiple organizations (i.e., Parks and Recreation), or an entire fund (i.e., Special Fund for Capital Outlay). All departments and funds should complete the year within legally authorized expenditures.

State Recreation Grants Special Revenue Fund $ (227) Safe Routes to School Special Revenue Fund (2,479) Hazard Mitigation Special Revenue Fund (438) Sanitation Enterprise Fund (1,008,073) Sewer Internal Service Fund (87,715) Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
39 NOTE 3 CASH AND INVESTMENTS
Cash and Investments
As of June 30, 2024, cash and investments were reported in the accompanying financial statements as follows:

Cash and investments held by the City at June 30, 2024 consisted of the following:

The City maintains a cash and investment pool that is available for use for all funds.

Each fund type’s position in the pool is reported on the financial statements as cash and investments. The City has adopted an investment policy, which authorizes it to invest in various investments.

Disclosures Relating to Custodial Risk
Custodial credit risk for deposits with financial institutions is the risk that, in the event of a failure of the financial institution, the City’s deposits will not be returned or the City will not be able to obtain collateral securities pledged by the financial institutions.

Custodial credit risk is not covered by bond indentures, although the indentures usually require the issuer to maintain reserve accounts with the trustee bank named in the indenture.

The City’s policy, in accordance with the State of California Government Code, is to require financial institutions to collateralize the City’s deposits at 110% of the deposit amount with U.S. government securities in the City’s name.

California law allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total deposit. The City, at management’s discretion, may waive the 110% collateral requirements for deposits that are federally insured up to $100,000. Federal insurance provides up to $250,000 of coverage for each depositor.

At June 30, 2024, the book balance of the City’s deposits was $35.2 million, and the bank balance was $37.3 million, which is insured and collaterized under California law.

The difference of $2.1 million represents outstanding checks and other reconciling items. The City’s deposits were covered by FDIC insurance or collaterized as required by California law.

Unrestricted Restricted Total
Governmental Activities $ 7,158,380 $ 2,216,792 $ 9,375,172 Business-Type Activities 15,142,115 - 15,142,115 Fiduciary Fund - 10,673,202 10,673,202 Total Cash and Investments $ 22,300,495 $ 12,889,994 $ 35,190,489 Petty cash and cash drawers $ 4,717 Cash in banks 22,969,502 Investments 12,216,270
Total Cash and Investments $ 35,190,489
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
40 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. The City manages its exposure to declines in fair values by limiting the maximum maturity length of investments to five years.

As of June 30, 2024, the City had the following investments:

Disclosures Relating to Credit Risk
Credit risk is the risk that an issuer of security or a counterparty to the investment will not be able to fulfill its obligations with respect to the investment. The City does not have a formal policy with respect to credit risk.

Instead, the City follows State of California law, which authorizes the City to invest in obligations of U.S. Government agencies and U.S. Government securities, certificates of deposit, municipal securities, and the Local Agency Investment Fund (LAIF) of the State of California. As of June 30, 2024, the City’s investments in external investment pools are unrated, and money market mutual funds are rated AAA.

Disclosures Relating to Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributable to a concentration of funds in a single issue or issuer. With respect to concentration risk, as of June 30, 2024, the City has not invested more than 5% of its total investments in any one issuer.

Investments guaranteed by the U.S. government and investments in money market mutual funds and external investment pools are excluded from this requirement.

Fair Value Measurement
The City categorizes its fair value measurement within the fair value hierarchy established by U.S. GAAP. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements), inputs are quoted prices of similar assets in active markets (Level 2 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The City’s investments in LAIF are not subject to the fair value hierarchy. The City’s investments in money market mutual funds are actively traded and therefore, measured using level 1 inputs.

Remaining Maturity
(in Years)
Investment Type Less Than 1 Year
LAIF $ 1,543,068 Cash with Fiscal Agents:

Money Market Mutual Funds 10,673,202 Total Investments $ 12,216,270 Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
41 NOTE 4 CAPITAL ASSETS
A summary of the changes in capital assets is as follows:

Balance
July 1, 2023,
as restated Additions Deletions
Balance
June 30, 2024
Governmental Activities
Capital assets, not being depreciated
Land $ 340,403 $ 83,639 $ - $ 424,042 Construction in progress 1,896,821 3,675,439 (1,531,552) 4,040,708 Total capital assets, not being depreciated 2,237,224 3,759,078 (1,531,552) 4,464,750 Capital assets being depreciated and amortized
Structures and improvements 31,953,807 2,254,139 - 34,207,946 Equipment 1,381,787 226,060 (85,669) 1,522,178 Right-of-use lease assets 84,754 - - 84,754 SBITA assets 20,796 - - 20,796 Total capital assets being depreciated and amortized 33,441,144 2,480,199 (85,669) 35,835,674 Less accumulated depreciation and amortization for Structures and improvements (14,476,384) (1,062,894) - (15,539,278) Equipment (817,592) (263,068) 85,669 (994,991) Right-of-use lease assets (30,697) (18,373) - (49,070) SBITA assets (1,386) (4,160) - (5,546) Total accumulated depreciation and amortization (15,326,059) (1,348,495) 85,669 (16,588,885) Total capital assets being depreciated and amortized, net 18,115,085 1,131,704 - 19,246,789 Capital assets, net $ 20,352,309 $ 4,890,782 $ (1,531,552) $ 23,711,539 Business-Type Activities
Capital assets not being depreciated
Land $ 3,211,934 $ 182,154 $ - $ 3,394,088 Construction in progress 5,481,354 4,949,813 (4,081,613) 6,349,554 Total capital assets, not being depreciated 8,693,288 5,131,967 (4,081,613) 9,743,642 Capital assets being depreciated and amortized
Structures and improvements 46,525,557 6,656,968 (86,536) 53,095,989 Equipment 3,279,289 663,393 (143,201) 3,799,481 Right-of-use lease assets 499,987 45,406 - 545,393 SBITA assets 45,255 - - 45,255 Water rights 2,662,807 - - 2,662,807 Canal construction cost sharing 728,366 - - 728,366 Total capital assets being depreciated and amortized 53,741,261 7,365,767 (229,737) 60,877,291 Less accumulated depreciation and amortization for Structures and improvements (31,000,187) (1,581,618) 84,926 (32,496,879) Equipment (2,167,860) (228,871) 143,201 (2,253,530) Right-of-use lease assets (147,431) (112,702) - (260,133) SBITA assets (15,083) (15,087) - (30,170) Water rights (490,687) - - (490,687) Canal construction cost sharing (479,505) (18,209) - (497,714) Total accumulated depreciation and amortization (34,300,753) (1,956,487) 228,127 (36,029,113) Total capital assets being depreciated and amortized, net 19,440,508 5,409,280 (1,610) 24,848,178 Capital assets, net $ 28,133,796 $ 10,541,247 $ (4,083,223) $ 34,591,820 Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
42 NOTE 4 CAPITAL ASSETS (CONTINUED)
Depreciation Expense
Depreciation expense was charged to functions of the primary government as follows:

NOTE 5 LEASE RECEIVABLES

The City leases its property to other agencies in the course of making services available to the community. The material leases that fall under the scope of GASB 87 include the City subleasing Bureau of Land Management land to the County to operate the Marina, RV park, and other recreational services. It also leases the Needles Chamber of Commerce building to the Needles Area Chamber of Commerce nonprofit corporation for operating the Chamber of Commerce and Visitor’s Center. The lease with the County first commenced in 1960 and has since been amended to extend through June 2048, while the lease with the Needles Area Chamber of Commerce expires in April 2026.

The City also entered into different lease agreements as follows:
 Commencing on April 23, 2020, the City entered into a 10-year lease agreement with Electrify America, LLC to lease the parking space owned by the City to build an electric vehicle charging station for monthly rent payments of $400.
 Commencing on March 1, 2021, the City entered into a 5-year lease agreement with Inventory 19th Hole Bar & Grill to use a certain portion of the City-owned municipal golf course known as the Rivers Edge Golf Course for monthly rent payments of $550.
 Commencing on October 25, 2022, the City entered into a 3-year lease agreement with the County to use a certain portion of the City-owned building known as Building C for monthly rent payments of $4,052.  Commencing on June 1, 2023, the City entered into a 3-year lease agreement with Parking Concepts, Inc. to lease the office space and garage space for monthly rent payments of $728.

Governmental Activities Business-Type Activities
Public safety $ 76,757 Public Utility Fund $ 1,539,937 Public works 522,104 Golf course 105,250 Parks and recreation 403,953 Transit 79,460 Community development 345,681 Housing 45,972 $ 1,348,495 Internal service funds 185,868 $ 1,956,487
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
43 NOTE 5 LEASE RECEIVABLES (CONTINUED)

At June 30, 2024, the total operating lease receivables and deferred inflows of resources for the above leases were $402,834 and $386,137, respectively. Discount rates ranging from 0.712% to 3.378% were used to calculate the net present values of the leases. There were no significant variable payments received during the fiscal year ended June 30, 2024. The future minimum operating lease receivable payments as of June 30, 2024, were as follows:

NOTE 6 BALANCES AND TRANSFERS/PAYMENTS WITHIN THE REPORTING ENTITY In general, outstanding balances between funds are presented in the financial statements as either “Due to/from other funds” (i.e., the current portion of interfund loans) or “Advances to/from other funds” (i.e., the non-current portion of interfund loans).

These balances include outstanding charges by one fund to another fund for goods or services or for other miscellaneous receivables/payables between funds. Balances between governmental funds and business-type funds are reflected in the government-wide financial statements as “internal balances”.

Year Ending June 30 Amount
2025 $ 78,236
2026 36,688
2027 14,986
2028 13,030
2029 14,709
2030-2034 60,223
2035-2039 60,720
2040-2044 66,504
2045-2047 57,738
Total $ 402,834
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
44 NOTE 6 BALANCES AND TRANSFERS/PAYMENTS WITHIN THE REPORTING ENTITY (CONTINUED)
Due To/From Other Funds
The composition of due to/from other funds as of June 30, 2024 is as follows:

Advances To/From Other Funds
The City entered into a Purchase Obligation with the NPUA in which the NPUA agreed to pay the City $685,300 each February 1st, including interest imputed at 6.714% through February 2012. Starting February 2013, the annual payment was reduced to $673,036 as a result of the $400,000 prepayments made in 2012. The annual payment was further reduced to $666,983 in fiscal year 2016 as a result of the additional prepayment made in 2013, amounting to $350,000. The balance of the obligation as of June 30, 2024 was $7,576,966.

Annual maturities of the Purchase Obligation are presented below:

Receivable Fund Payable Fund Amount Purpose
Major Funds
General Fund Public Utility Fund $ 922,939 Temporary cash borrowing Other Governmental Funds
Department of Housing and
Community Development
Grant 17,544 Temporary cash borrowing
Safe Routes to School Grant 2,479 Temporary cash borrowing Hazard Mitigation 438 Temporary cash borrowing
Jack Smith Park Marina 36,100 Temporary cash borrowing
Other Enterprise Fund
Sanitation 2,476,278 Temporary cash borrowing
Golf Course 177,538 Temporary cash borrowing
Public Utility Fund Internal Service Funds 4,813,854 Reimbursement of expenses Other Governmental Fund
All American Canal 230,693 Reimbursement of expenses
Internal Service Funds Public Utility Fund 30,246 Reimbursement of expenses $ 8,708,109 Year Ending June 30: Principal Interest Total 2025 $ 157,719 $ 508,717 $ 666,436 2026 37,293 498,128 535,421 2027 39,797 495,624 535,421
2028 42,469 492,952 535,421
2029 45,320 490,101 535,421
2030 - 2034 276,538 2,400,567 2,677,105 2035 - 2039 382,703 2,294,402 2,677,105 2040 - 2044 529,625 2,147,480 2,677,105
2045 - 2049 732,952 1,944,153 2,677,105
2050 - 2054 1,014,338 1,662,767 2,677,105
2055 - 2059 1,403,750 1,273,355 2,677,105
2060 - 2064 1,942,660 734,445 2,677,105
2065 - 2066 971,802 98,925 1,070,727
$ 7,576,966 $ 15,041,616 $ 22,618,582
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
45 NOTE 6 BALANCES AND TRANSFERS/PAYMENTS WITHIN THE REPORTING ENTITY (CONTINUED)
Transfers
Transfers and payments within the reporting entity are primarily to provide cash to meet operating and debt service needs or to fund the construction or purchase of capital assets. The government-wide statement of activities eliminates transfers reported within the segregated governmental and business-type activities columns.

Only transfers between the two columns appear in this statement.

The following schedule reports transfers and payments within the reporting entity:

Transfer To Transfer From Amount Purpose
Major Funds
General Fund
Other Governmental Fund
Gas Tax $ Gas tax 139,164
Caltrans Grant 986,000 Grant reimbursement
Other Enterprise Fund
Sanitation 191,174 Fund operations
Transit 23,424 Fund operations
Internal Service Funds 821,803 Fair share allocation
Public Utility Fund General Fund 15,901 General fund reserves Other Governmental Fund
Redevelopment Agency 182,153 Fund operations
Nonmajor Funds
Other Governmental Funds
Cemetery General Fund 127,752 Cemetery Fund from General Fund Boating and Waterways Grant General Fund 24,637 Fund operations Redevelopment Agency General Fund 96,589 Transfer of RDA debt payment Other Enterprise Funds
Golf General Fund 241,481 Fund operations
Transit Other Governmental Fund
Measure I Transit 1 Fund operations
Internal Service Funds General Fund 397,320 Transfer of capital assets Other Governmental Fund
All American Canal 19,920 Fund operations
$ 3,267,319
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
46 NOTE 7 LONG-TERM LIABILITIES
The following is a summary of long-term liabilities transactions of the City for the year ended June 30, 2024:

Bonds and Direct Borrowings
2016 Revenue Refunding Bonds (NPUA 2016 Bonds)
In December 2016, the Utility Authority issued $15,488,000 in revenue bonds bearing interest at 3.86%. Principal payments in various amounts are due annually through February 2031. $ 8,774,103 Debt service requirements for NPUA 2016 Bonds are as follows:

Description and Purpose
Balance
July 1, 2023,
as restated Additions Deletions
Balance
June 30, 2024
Due Within One
Year
Governmental Activities:

Bonds and Direct Borrowings:

Lease liability $ 55,628 $ - $ (18,093) $ 37,535 $ 18,801 SBITA liability 15,945 - (3,613) 12,332 3,855
Subtotal 71,573 - (21,706) 49,867 22,656
Other Long-term Liabilities
Compensated absences, net 236,068 - (43,983) 192,085 -
Estimated claims liability 100,000 - - 100,000 -
Total Governmental Activities 407,641 - (65,689) 341,952 22,656 Business-Type Activities:

Bonds and Direct Borrowings:

NPUA 2016 bonds 9,846,660 - (1,072,557) 8,774,103 1,114,355 Notes Payable 227,787 - (32,518) 195,269 34,524
Lease liability 360,064 45,406 (108,922) 296,548 113,807 SBITA liability 31,024 - (15,030) 15,994 15,994
Subtotal 10,465,535 45,406 (1,229,027) 9,281,914 1,278,680 Other Long-term Liabilities
Compensated absences 259,409 - (8,197) 251,212 1,851
Total Business-Type Activities 10,724,944 45,406 (1,237,224) 9,533,126 1,280,531 Total Primary Government $ 11,132,585 $ 45,406 $ (1,302,913) $ 9,875,078 $ 1,303,187 Year Ending June 30: Principal Interest Total
2025 $ 1,114,355 $ 328,030 $ 1,442,385 2026 1,157,784 284,600 1,442,384 2027 1,202,907 239,478 1,442,385
2028 1,249,787 192,598 1,442,385
2029 1,298,494 143,891 1,442,385
2030-2031 2,750,776 133,993 2,884,769
$ 8,774,103 $ 1,322,590 $ 10,096,693
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
47 NOTE 7 LONG TERM LIABILITIES (CONTINUED)
Obligation under agreement with the County of San Bernardino (Notes Payable) The note payable in the Sanitation Enterprise Fund resulted from an agreement the City made with the County on January 30, 1996. The County agreed to accept the landfill into the County landfill system and to serve as the lead agency for the cleanup, closure, and post-closure activities for the landfill.

The City agreed to reimburse the County $665,195 for its share of the cleanup, closure, and post-closure costs, to provide in-kind services for post-closure activities, to assist the County in obtaining approval from regulatory agencies for a “monolithic soil cover”, and in seeking recovery from other parties who may be responsible for the costs of cleanup, closure, and post-closure.

Per the agreement, interest shall accrue on the unpaid balance at 6% per annum compounded annually commencing on January 1 of the year following the year in which the landfill is deemed closed.

The landfill ceased accepting waste in 1994 and was closed in 2002. The Closure Agreement calls for annual principal payments of $50,000 over 15 years.

The City settled this obligation with the County by agreeing to pay a principal amount of $447,361 beginning on July 1, 2014. Payments are $3,775 per month for 180 months ending on June 1, 2029. This debt bears interest at 6% per annum.

Future payments under this debt are as follows:

Lease Liability
The City maintains several equipment operating leases that commenced during or before the fiscal year ended June 30, 2024. The City leases 7 vehicles serving the Code Enforcement, Public Works, Utility Office, Water, Wastewater, and Electric departments, which commenced in 2021 and will expire in the fiscal year ending June 30, 2028. Upon expiration, there is a $400 processing fee for each vehicle, which has been included in the total lease obligation being amortized. There is also an ongoing lease for 60 golf carts utilized by the Golf Course, which began in August 2021 and will expire in August 2026. The City leased a copy machine in July 2021 for the administrative offices, which expires in July 2026 and automated mailroom machines in August 2023, which expires in July 2028. None of the lease agreements carries any residual value guarantees or includes any variable payments. The discount rates used to calculate the lease liability range from 2.62% to 7.65%.

Year Ending June 30: Principal Interest Total
2025 $ 34,524 $ 10,778 $ 45,302 2026 36,654 8,647 45,301 2027 38,914 6,387 45,301
2028 41,314 3,987 45,301
2029 43,863 1,439 45,302
$ 195,269 $ 31,238 $ 226,507
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
48 NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Lease Liability (Continued)
The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2024, were as follows:

Other Long-term Liabilities
SBITA Liability
The City has entered into IT software subscription agreements with various SBITA vendors with subscription terms ranging from 3 – 5 years. Subscription payable is measured at the present value of the subscription payments expected to be made during the subscription term. These SBITAs qualify as capital assets for accounting purposes and have been recorded at the present values of their future subscription payments as of their commencement dates using a discount of 3.16%. As a result of these SBITAs, the City has recorded these SBITA assets with a net book value of $30,335 as of June 30, 2024.

Compensated Absences
The City’s policies relating to compensated absences are described in Note 1 of the notes to financial statements. The outstanding balance at June 30, 2024, was $443,297.

Estimated Claims Payable
See Note 10 regarding the City’s risk management. The claims payable is normally liquidated by the General Fund. The outstanding balance at June 30, 2024, was $100,000.

Governmental Activities
Year Ending June 30: Principal Interest
Total
Payments
2025 $ 18,801 $ 1,350 $ 20,151 2026 11,932 671 12,603
2027 6,802 204 7,006 Total $ 37,535 $ 2,225 $ 39,760 Business-Type Activities Year Ending June 30: Principal Interest
Total
Payments
2025 $ 113,807 $ 10,699 $ 124,506 2026 94,857 6,761 101,618 2027 70,537 2,986 73,523 2028 16,439 655 17,094
2029 908 6 914 Total $ 296,548 $ 21,107 $ 317,655
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
49 NOTE 8 UTILITY ENTERPRISE
As disclosed in Note 1, the Needles Public Utility Authority (NPUA) was formed on January 6, 1997, to own, operate, and maintain the Utility Enterprise. On March 6, 1997, NPUA purchased the Utility Enterprise (consisting of the Water, Sewer, and Electric Funds) from the City for $65,000,000.

To fund the acquisition, NPUA issued 1997 revenue bonds totaling $21,145,000, of which $17,941,092 was used as an initial down payment for the acquisition. These bonds were fully paid during the year ended June 30, 2017, with the proceeds of 2016 revenue refunding bonds issued by the NPUA. The 2016 Revenue Refunding bonds were issued in the face amount of $15,488,000 and are more fully described in Note 7.

The balance of $47,058,908 was financed by the City and evidenced by an advance from the City to the NPUA. This is being repaid with an annual purchase payment of $685,300 through the year 2065. As a component unit, the NPUA is included as part of the City’s reporting entity (see Note 1). Accordingly, the Utility Enterprise assets and liabilities acquired by NPUA are included in the financial statements at net book value rather than fair market value (acquisition price) and the note, which approximates the step-up to the fair market value, is shown as an interfund advance from the general fund to the NPUA (see Note 6).

The City and NPUA entered into a separate agreement wherein the City has agreed to continue to manage and administer the utility operations. As a result, the City performs the customer billing and collection function and pays the expenses related to the utility operations. NPUA reimburses the City monthly for expenses incurred.

Section 1202 of the Needles Municipal Code states, “Each utility shall be operated as a separate unit and all accounting respecting such utility shall be on that basis. All personal services of officers or employees and all costs incurred for the joint benefit of any such utility and any other office, department or agency of the city shall be prorated between them. Charges shall be made by the utility for all service, property or other things of value supplied or rendered by it to any other office, department or agency of the City.”
The City acts as the manager and operator of NPUA’s Enterprises under a Management Agreement. The City receives a management fee equal to its actual costs and direct overhead incurred in connection with the management and operation of the Enterprises. Such costs include, but are not limited to, salaries, insurance, and retirement benefits of City employees providing services to Enterprises. Each July 1, the Management Agreement is extended for one year, unless either party notifies the other that it does not intend to extend the term of the Agreement. Total payments made to the City for operating the Enterprises for the year ended June 30, 2024 amounted to $16,139,611. This amount includes payment of Fair Share Allocation (FSA) and purchase of electric power and capital assets.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
50 NOTE 8 UTILITY ENTERPRISE (CONTINUED)
In exchange for the City providing rights of way and rights of access to all real property owned by the City and necessary for NPUA to operate the Enterprises, the City collected an annual franchise fee from NPUA. The amount of the franchise fee was determined by the City, the payment of which is subordinate to NPUA’s annual debt service. In August 2010, NPUA’s Board approved the increase in franchise fee from 5% of gross revenues to 7.5% of gross revenues for two years, and then 5% thereafter.

In November 2012, the voters of the City of Needles approved Measure T, eliminating

2.5% of the franchise fee that the City of Needles charges NPUA and establishing a utility user tax of up to 2.5% to be applied to electric, water, and sewer charges. In fiscal year 2017, the City underwent a study to determine the utilities’ actual usage of rights of way and rights of access to all real property owned by the City. After the study, the City eliminated the franchise fee and created the Fair Share Allocation (FSA). The FSA and utility user taxes amounted to $1,209,644 for the year ended June 30, 2024.

NOTE 9 RESTRICTED FUND BALANCES AND NET POSITION
The fund balances of the governmental funds have been classified into the five categories of fund balance specified in GASB Statement No. 54. The City’s fund balances at June 30, 2024 are as follows:

General Fund
Other
Governmental
Funds Total
Nonspendable
Prepaid items $ 33,271 $ 129,803 $ 163,074 Advances to other funds 7,576,966 - 7,576,966 Subtotal 7,610,237 129,803 7,740,040 Restricted
Debt service 1,864,545 - 1,864,545
Public safety - 310,791 310,791 Public works - 1,463,385 1,463,385 Parks and recreation - 274,675 274,675 Community development - 167,514 167,514 Subtotal 1,864,545 2,216,365 4,080,910 Committed
General government 350,000 - 350,000 Subtotal 350,000 - 350,000 Assigned
Capital projects - 229,102 229,102
Subtotal - 229,102 229,102
Unassigned 6,564,088 (3,144) 6,560,944 Total $ 16,388,870 $ 2,572,126 $ 18,960,996 Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
51 NOTE 10 LIABILITY, WORKERS’ COMPENSATION, AND PURCHASED INSURANCE A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 126 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

B. Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period.

The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.

Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.

The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website:
https://cjpia.org/coverage/ risk-sharing-pools/.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
52 NOTE 10 LIABILITY, WORKERS’ COMPENSATION, AND PURCHASED INSURANCE (CONTINUED)
B. Primary Self-Insurance Programs of the Authority (Continued) Workers’ Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.

For Fiscal Year 2023-24, the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.

C. Purchased Insurance
Pollution Legal Liability Insurance
The City participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.

Property Insurance
The City participates in the all-risk property protection program of the Authority.

This insurance protection is underwritten by several insurance companies. The City property is currently insured according to a schedule of covered property submitted by the City to the Authority. The City property currently has all-risk property insurance protection in the amount of $59,870,184. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
53 NOTE 10 LIABILITY, WORKERS’ COMPENSATION, AND PURCHASED INSURANCE (CONTINUED)
C. Purchased Insurance (Continued)
Earthquake and Flood Insurance
The City purchases earthquake and flood insurance on a portion of its property.

The earthquake insurance is part of the property protection insurance program of the Authority. City property currently has earthquake protection in the amount of $37,854,370. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.

Crime Insurance
The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage.

There were also no significant reductions in pooled or insured liability coverage in 2023-24.

NOTE 11 DEFINED BENEFIT PENSION PLANS
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Employee Pension Plan, a cost-sharing multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State Statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website. The plan in existence for employees hired before January 1, 2013, (“Classic” plan) is closed to new entrants.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of fulltime employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit.

The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
54 NOTE 11 DEFINED BENEFIT PENSION PLAN (CONTINUED)
The Plans’ provisions and benefits in effect at June 30, 2024 reporting year, are summarized as follows:

Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2024, the contributions recognized as part of pension expense for each Plan were $821,311.

Net Pension Liability
As of June 30, 2024, the City reported a net pension liability of $5,876,877 for its proportionate share of the net pension liability of the Miscellaneous Plan and $206,867 for its proportionate share of the net pension liability of the Safety Plan.

Hire date
Prior to
January 1, 2013
On or After
January 1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 55 62
Benefits as a % of annual salary 2.00% 2.00%
Required employee contribution rates 7.00% 7.75%
Required employer contribution rates 11.84% 7.68%
Safety Plan
Hire date
Prior to
January 1, 2013
Benefit formula 3% @ 50
Benefit vesting schedule 5 years of service
Benefit payments monthly for life
Retirement age 50
Benefits as a % of annual salary 3.00%
Required employee contribution rates 0.00%
Required employer contribution rates 0.00%
Miscellaneous Plan
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
55 NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
Net Pension Liability (Continued)
The City’s net pension liability for the Miscellaneous Plan and the Safety Plan (the Plans) is measured as the proportionate share of the net pension liability. The net pension liability of the Plans is measured as of June 30, 2023, and the total pension liability for the Plans used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022, rolled forward to June 30, 2023, using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plans as of June 30, 2024 and 2023 was as follows:

Actuarial Assumptions
The total pension liabilities on June 30, 2022 actuarial valuations was determined using the following actuarial assumptions:

Miscellaneous Plan Safety Plan Total
Proportion June 30, 2024 0.11753% 0.00277% 0.12030%
Proportion June 30, 2023 0.11571% 0.00292% 0.11863%
Change 0.00182% -0.00015% 0.00167%
Miscellaneous
Plan Safety Plan
Valuation date June 30, 2022 June 30, 2022
Measurement date June 30, 2023 June 30, 2023
Actuarial cost method
Actuarial Assumptions:

Discount rate 6.90% 6.90%
Inflation 2.30% 2.30%
Projected salary increase
Mortality1
Post retirement benefit increase
1 The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. data for all funds
The lesser of contract COLA or 2.30%
until Purchasing Power Protection
Allowance floor on purchasing power
applies, 2.30% thereafter
Entry-Age Normal Cost Method
Derived using CalPERS' membership
Varies by entry age and service
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
56 NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
Net Pension Liability (Continued)
Long-term expected rate of return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term return expectations. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

The expected real rates of return by asset class are as follows:

Discount Rate
The discount rate used to measure the total pension liability was 6.90% for each plan.

The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Assumed
Asset
Asset Class1 Allocation Real Return1,2
Global Equity - Cap-weighted 30.00 % 4.54 %
Global Equity - Non Cap-weighted 12.00 3.84
Private Equity 13.00 7.28
Treasury 5.00 0.27
Mortgage-backed securities 5.00 0.5
Investment Grade Corporates 10.00 1.56
High Yield 5.00 2.27
Emerging Market Debt 5.00 2.48
Private Debt 5.00 3.57
Real Assets 15.00 3.21
Leverage -5.00 -0.59
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
57 NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan as of the reporting year June 30, 2024 are as follows:

Total Pension
Liability
Fiduciary Net
Position
Pension
Liability/ (Asset)
Miscellaneous Plan
Balance at June 30, 2023 $ 21,945,392 $ 16,530,852 $ 5,414,540 Changes in the Year:

Service cost 540,524 - 540,524
Interest on the total pension liability 1,525,998 - 1,525,998 Changes in benefit terms 177 - 177 Difference between expected and actual experience 312,218 - 312,218 Change in proportion 3,445,448 3,351,772 93,676 Net plan to plan resource movement - 20 (20) Contributions - employer - 726,919 (726,919) Contributions - employee - 227,483 (227,483) Net investment income - 1,023,974 (1,023,974) Benefits payments, including refunds of employee contributions (1,098,821) (1,054,847) (43,974) Administrative expense - (12,114) 12,114 Net Changes 4,725,544 4,263,207 462,337 Balance at June 30, 2024 $ 26,670,936 $ 20,794,059 $ 5,876,877 Total Pension
Liability
Fiduciary Net
Position
Pension
Liability/ (Asset)
Safety Plan
Balance at June 30, 2023 $ 1,148,313 $ 947,843 $ 200,470 Changes in the Year:

Service cost 22,108 - 22,108
Interest on the total pension liability 75,443 - 75,443 Changes in benefit terms 5 - 5 Difference between expected and actual experience 24,385 - 24,385 Change in proportion (61,769) (48,772) (12,997) Net plan to plan resource movement - 5,808 (5,808) Contributions - employer - 37,634 (37,634) Contributions - employee - 9,642 (9,642) Net investment income - 55,590 (55,590) Benefits payments, including refunds of employee contributions (57,212) (62,682) 5,470 Administrative expense - (657) 657 Net Changes 2,960 (3,437) 6,397 Balance at June 30, 2024 $ 1,151,273 $ 944,406 $ 206,867 Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
58 NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
Changes in the Net Pension Liability (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability for the Miscellaneous and Safety Plans, calculated using the discount rate for the Plans, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions
Annual Pension Cost
For 2024, the City recognized net pension expense of $1,204,070. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Discount Rate
Minus 1%
Current
Discount Rate
Discount Rate
Plus 1%
Employer's Net Pension Liability/(Asset)
Miscellaneous Plan $ 9,036,591 $ 5,876,877 $ 3,276,160 Safety Plan 364,801 206,867 77,745 Total $ 9,401,392 $ 6,083,744 $ 3,353,905 Deferred Outflows of
Resources
Deferred
Inflows of
Resources
Changes in assumptions $ 366,887 $ - Differences between expected and actual experience 315,411 47,872 Differences between projected and actual earnings on plan investments 979,829 - Differences between the employer's contributions and the employer's proportionate share of
contributions 46,726 167,440 Change in employer's proportion 207,421 7,382 Pension contributions subsequent to the measurement date 821,311 - Total $ 2,737,585 $ 222,694
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
59 NOTE 11 DEFINED BENEFIT PENSION PLANS (CONTINUED)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Annual Pension Cost (Continued)
The $821,311 deferred outflow of resources related to pension contributions made subsequent to the measurement date will be recognized as a reduction of net pension liability in the year ending June 30, 2025. Other amounts reported as deferred outflows and deferred inflows will be recognized as pension expense as follows:

NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY
General Information about the OPEB Plan
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. The City has elected to use the GASB 75 “lookback” method, where assets and liabilities are measured as of the prior fiscal year-end, but applied to the current fiscal year. For this report, the following timeframes are used:

Valuation Date June 30, 2023
Measurement Date June 30, 2023
Plan Description
In addition to providing pension benefits, the City provides certain health care benefits for retired employees. Classified employees retiring after 20 or more years of service and after having reached age 58 or older are provided medical insurance coverage until the retiree becomes eligible for Medicare. Unclassified employees retiring at age 55 or later with 20 or more years of service are paid $300 per month for medical insurance coverage until the retiree becomes eligible for Medicare.

Contributions
The contribution requirements of the City are established and may be amended by the City Council. While GASB Statement 75 requires that the liability for all postemployment benefits be measured, it does not require that an agency “pre-fund” the accrued liability. The City will pay for the post-employment healthcare cost on a “pay-as-you-go” basis. The provisions of GASB Statement 75 determine the amount that must be presented as an annual expense and accrued liability on the City’s financial statements. The contributions made on behalf of the plan members for the year ended June 30, 2024 were $63,372.

Fiscal Year Ending June 30 Miscellaneous Safety Total
2024 $ 533,243 $ 1,402 $ 534,645 2025 370,803 975 371,778 2026 746,316 12,748 759,064
2027 27,303 790 28,093 $ 1,677,665 $ 15,915 $ 1,693,580 Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
60 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY (CONTINUED) General Information about the OPEB Plan (Continued)
Employees Covered
Participants eligible for OPEB were as follows:

Total OPEB Liability
Actuarial Assumptions
Significant assumptions are as follows:

Discount rate 3.86%
Expected return on plan assets N/A
Inflation rate 2.50%
Mortality Based on assumptions for Public Agency
Miscellaneous members published in the 2021
CalPERS Experience Study. These tables include
generational mortality improvement using 80% of
scale MP-2020
Health care cost trend rate 7.60% for fiscal year 2024, gradually decreasing over several decades to an ultimate rate of 3.90%
in fiscal year 2076 and later years.

Discount
The discount rate used to measure the total OPEB liability is the 20-year municipal bond rate of 3.86%. This discount rate approach is necessary as the City funds the OPEB benefit on a pay-as-you-go basis. The municipal bond rate is the assumed rate of return on general funds, and the assumption is that the City will use general funds to pay benefits.

Valuation
Date
6/30/2023
Active employees electing coverage 44 Active employees waiving coverage 7 Retirees electing coverage 3 Total 54
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
61 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY (CONTINUED) Changes in the Total OPEB Liability
The table below shows the changes in the total OPEB liability, the Plan Fiduciary Net Position, and the net OPEB liability during the measurement period ended on June 30, 2023, for the City’s reporting date of June 30, 2024:

Sensitivity of the City’s Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability, as well as what the total OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current discount rate:

Sensitivity of the City’s Total OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the total OPEB liability, as well as what the total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage point lower or 1-percentage point higher than the current healthcare cost trend rates:

Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability
(Asset)
(c) = (a) - (b)
Balance at June 30, 2023 $ 1,239,280 $ - $ 1,239,280 Changes recognized for the measurement period:

Service cost 69,124 - 69,124
Interest 46,838 - 46,838
Differences between expected and
actual experience (49,674) - (49,674) Change of assumptions 22,174 - 22,174 Benefit payments (78,169) - (78,169) Net changes 10,293 - 10,293 Balance at June 30, 2024 $ 1,249,573 $ - $ 1,249,573 1% Decrease

2.86%
Discount Rate

3.86%
1% Increase

4.86%
Total OPEB liability $ 1,342,378 $ 1,249,573 $ 1,162,252 1% Decrease Current Trend
Rate 1% Increase
Total OPEB liability $ 1,130,112 $ 1,249,573 $ 1,388,777 Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
62 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITY (CONTINUED) Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At June 30, 2024, the City’s deferred outflows of resources and deferred inflows of resources related to OPEB were from the following sources:

Deferred outflows from contributions between measurement date and reporting date will be recognized as OPEB expense in the year ended June 30, 2025.

OPEB Expense
For the year ended June 30, 2024, the City’s OPEB expense was $88,462. Details of the expense are shown below:

NOTE 13 ADJUSTMENTS AND RESTATEMETNS OF BEGINNING BALANCES Changes to or Within the Financial Reporting Entity
The State Recreation Grants Special Revenue Fund and the Sanitation Fund were reported as major funds in the City’s 2023 Annual Financial Report. For the current year, changes in size criteria altered the presentation of these funds. In addition, the City established a new fund, the Hazard Mitigation Special Revenue Fund, and introduced a new component unit, the Housing Authority of the City of Needles.

Starting in Fiscal Year 2024, the City Council of the City of Needles served as the governing board of the Housing Authority. The Housing Authority is included among the other enterprise funds blended into the City’s Annual Financial Report.

Deferred
Outflows of
Resources(1)
Deferred
Inflows of
Resources
$ 63,372 $ - (1) Includes estimated implicit rate subsidy of $33,979.

Contributions between measurement date
and reporting date
Service cost $ 69,124
Interest cost 46,838
Differences between expected and
actual experience (49,674) Changes of assumptions 22,174 OPEB Expense $ 88,462
Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
63 NOTE 13 ADJUSTMENTS AND RESTATEMENTS OF BEGINNING BALANCES (CONTINUED)
Correction of Errors in Previously Issued Financial Statements During the fiscal year 2024, the City determined:
a. that the payment of $13,125 made by the Measure I Transit Fund to the vendor was not applied to reduce its liability, and the City did not recognize the Cemetery Endowment revenue of $43,050 for the Cemetery Fund.

Collectively, these omissions resulted in an understatement of both the Other Governmental Fund Balances and Governmental Activities’ Net Position by $56,175.
b. that the City has failed to recognize a SBITA in the prior year for the TransTrack of the Transit Fund. This resulted in an understatement of both the Other Enterprise Funds and Business-Type Activities’ Net Position by $854. c. that the City did not reduce the 1997 Bonds Payable balance. This resulted in an understatement of both Internal Service Funds and Business-Type Activities’ net position by $4,865.
d. that the City did not report the Water Quality Maintenance Fund as a custodial fund in the prior year, even though it met the criteria for fiduciary reporting. This resulted in an understatement of the Fiduciary Net Position by $9,349,382.

The effects of the above changes within the financial reporting entity and correcting the above errors are shown in the table below.

Adjustment - Adjustment -
Juner 30, 2023, Adjustment - Housing Authority State Recreation Adjustment - As Previously Hazard Mitigation SRF of the City of Needles Grants SRF Sanitation Fund Error June 30, 2023, Reported as new fund as new component unit as nonmajor fund as nonmajor fund Corrections (B) As Restated Government-wide Government Activities $ 35,945,023 $ - $ - $ - $ - $ 56,175 $ 36,001,198 Business-Type Activities 22,647,895 - 989,640 - - 4,011 23,641,546 Total Primary Government $ 58,592,918 $ - $ 989,640 $ - $ - $ 60,186 $ 59,642,744 Governmental Funds Major Funds General Fund $ 15,256,773 $ - $ - $ - $ - $ - $ 15,256,773 State Recreation Grants Special Revenue Fund (1,038,863) - - 1,038,863 - - - Nonmajor Funds Other Governmental Funds 3,273,509 - - (1,038,863) - 56,175 2,290,821 Total Governmental Funds $ 17,491,419 $ - $ - $ - $ - $ 56,175 $ 17,547,594 Proprietary Funds Major Funds
Public Utility Authority $ 18,639,752 $ - $ - $ - $ - $ - $ 18,639,752 Sanitation Fund (1,118,334) - - - 1,118,334 - - Nonmajor Funds Other Enterprise Funds 1,262,410 - 989,640 - (1,118,334) (854) 1,132,862 Internal Service Funds 3,864,067 - - - - 4,865 3,868,932 Total Proprietary Funds $ 22,647,895 $ - $ 989,640 $ - $ - $ 4,011 $ 23,641,546 Fiduciary Fund $ - $ - $ - $ - $ - $ 9,349,382 $ 9,349,382 Changes to or within the Financial Reporting Entity (A) Agenda Item 2.

City of Needles, California
Notes to Basic Financial Statements
Year ended June 30, 2024
64 NOTE 14 CONTINGENCIES AND COMMITMENTS
As a result of the normal course of operations, the City is involved in a number of legal matters. The accompanying financial statements reflect management’s reasonable estimate of the potential liability associated with these matters, although the actual liability may be more or less than the estimate.

NOTE 15 SUBSEQUENT EVENTS
In preparing these financial statements, the City has evaluated events and transactions for potential recognition or disclosure through January 28, 2026 the date the financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or additional disclosure in the financial statements.

Agenda Item 2.

This page intentionally left blank.

Agenda Item 2.

REQUIRED SUPPLEMENTARY INFORMATION
Agenda Item 2.

City of Needles, California
Budgetary Comparison Schedule
General Fund
Year ended June 30, 2024
65 Actual
Amounts
Budgeted Amounts Budgetary Variance with
Original Final Basis Final Budget
Budgetary fund balance July 1, 2023 15,256,773 $ 15,256,773 $ 15,256,773 $ - $ Resources (inflows):

Taxes 8,447,884 8,244,884 9,020,683 775,799 Licenses, permits, and fees 536,616 541,400 547,680 6,280 Intergovernmental 2,181,581 2,239,080 726,722 (1,512,358) Charges for services 1,071,482 1,071,662 1,013,344 (58,318) Fines and forfeitures 272,000 282,250 292,686 10,436 Use of money and property 164,438 219,238 258,569 39,331 Transfers from other funds 1,104,388 4,482,388 2,161,565 (2,320,823) Other revenues 10,600 16,100 124,138 108,038 Amounts available for appropriation 29,045,762 32,353,775 29,402,160 (2,951,615) Charges to appropriations (outflows):

General government:

City attorney 80,000 180,000 82,315 97,685 City manager 200,572 223,712 209,117 14,595 Finance and administration 922,557 1,597,823 1,178,088 419,735 City clerk 300,509 312,509 269,733 42,776 Planning and zoning 367,266 371,851 132,017 239,834 Engineer 402,783 406,383 303,227 103,156 Community development 103,945 106,045 79,022 27,023 Senior center 62,202 75,337 67,830 7,507 Parks and recreation:

Aquatics 246,913 261,913 223,721 38,192 Parks 2,902,214 2,916,706 2,734,241 182,465 Jack Smith Park Marina 115,646 115,646 96,068 19,578 Recreation 386,397 469,622 421,191 48,431 Public safety:

Police 3,759,034 3,777,034 3,753,813 23,221 Animal control 257,830 317,901 331,542 (13,641) Building and safety 484,342 473,271 293,308 179,963 Code enforcement 794,178 744,178 626,367 117,811 Public works:

Streets 3,145,063 2,989,398 1,217,375 1,772,023 Sanitation 68,907 68,907 66,392 2,515 Nondepartmental:

Principal retirement - - 21,706 (21,706)
Interest and fiscal charges - - 2,537 (2,537) Transfers to other funds 720,851 3,159,080 903,680 2,255,400 Total charges to appropriations 15,321,209 18,567,316 13,013,290 5,554,026 Budgetary fund balance June 30, 2024 13,724,553 $ 13,786,459 $ 16,388,870 $ 2,602,411 $ Agenda Item 2.

City of Needles, California
Schedule of the City’s Proportionate Share of the Net Pension Liability and Schedule of Plan Contribution
Miscellaneous Plan
Last Ten Fiscal Years
66 Measurement Date 2014 2015 2016 2017 2018
City’s proportion of the net pension liability 0.03% 0.08% 0.10% 0.10% 0.10% City’s proportionate share of the net pension
liability $ 2,054,707 $ 2,283,923 $ 3,417,806 $ 3,947,484 $ 3,782,261 City’s covered payroll $ 2,347,411 $ 2,129,947 $ 2,150,169 $ 2,183,340 $ 2,366,448 City’s proportionate share of the net pension liability as a percentage of its covered payroll 87.53% 107.23% 158.96% 180.80% 159.83% City’s proportionate share of the fiduciary net position as a percentage of the total pension liability 87.06% 85.73% 79.32% 78.17% 79.63% Measurement Date 2019 2020 2021 2022 2023
City’s proportion of the net pension liability 0.10% 0.11% 0.10% 0.10% 0.10% City’s proportionate share of the net pension
liability $ 4,139,617 $ 4,520,208 $ 2,311,158 $ 5,414,540 $ 5,876,877 City’s covered payroll $ 2,366,583 $ 2,566,584 $ 2,921,443 $ 3,726,896 $ 3,849,699 City’s proportionate share of the net pension liability as a percentage of its covered payroll 174.92% 176.12% 79.11% 145.28% 152.66% City’s proportionate share of the fiduciary net
position as a percentage of the total pension
liability 78.47% 77.34% 77.34% 75.33% 74.85%
CalPERS - Schedule of City's contributions:

Fiscal Year End 2015 2016 2017 2018 2019
Actuarially determined contribution $ 174,760 $ 357,824 $ 363,108 $ 386,723 $ 448,179 Contributions in relation to the actuarially determined contribution 357,824 174,760 363,108 386,723 448,179 Contribution deficiency (excess) $ - $ - $ - $ - $ - City’s covered payroll $ 2,129,947 $ 2,150,169 $ 2,183,340 $ 2,366,448 $ 2,366,583 Contributions as a percentage of covered payroll 7.44% 16.80% 16.89% 17.71% 18.94%
Fiscal Year End 2020 2021 2022 2023 2024
Actuarially determined contribution $ 500,300 $ 583,707 $ 690,883 $ 790,332 $ 790,843 Contributions in relation to the actuarially determined contribution 583,707 500,300 690,883 790,332 790,843 Contribution deficiency (excess) $ - $ - $ - $ - $ - City’s covered payroll $ 2,566,584 $ 2,921,443 $ 3,214,748 $ 3,726,896 $ 4,084,885 Contributions as a percentage of covered payroll 21.14% 22.74% 22.78% 21.21% 20.54%
June 30
June 30
June 30
June 30
Agenda Item 2.

City of Needles, California
Schedule of the City’s Proportionate Share of the Net Pension Liability and Schedule of Plan Contribution
Safety Plan
Last Ten Fiscal Years
67 Measurement Date 2014 2015 2016 2017 2018
City’s proportion of the net pension liability 0.00% 0.00% 0.00% 0.00% 0.00% City’s proportionate share of the net pension
liability $ - $ 10,757 $ 99,001 $ 130,042 $ 131,962 City’s covered payroll $ - $ - $ - $ - $ - City’s proportionate share of the net pension liability as a percentage of its covered payroll N/A N/A N/A N/A N/A Plan Fiduciary net position as a percentage of
the total pension liability N/A 99.23% 92.89% 91.21% 90.91% Measurement Date 2019 2020 2021 2022 2023
City’s proportion of the net pension liability 0.00% 0.00% 0.00% 0.00% 0.00% City’s proportionate share of the net pension
liability $ 153,418 $ 173,792 $ 21,535 $ 200,470 $ 206,867 City’s covered payroll $ - $ - $ - $ - $ - City’s proportionate share of the net pension liability as a percentage of its covered payroll N/A N/A N/A N/A N/A Plan Fiduciary net position as a percentage of
the total pension liability 86.96% 85.17% 98.15% 82.54% 82.03% CalPERS - Schedule of City's contributions:

Fiscal Year End 2015 2016 2017 2018 2019
Actuarially determined contribution $ - $ - $ - $ - $ - Contributions in relation to the actuarially determined contribution - - - - - Contribution deficiency (excess) $ - $ - $ - $ - $ - City’s covered payroll $ - $ - $ - $ - $ - Contributions as a percentage of covered payroll N/A N/A N/A N/A N/A
Fiscal Year End 2020 2021 2022 2023 2024
Actuarially determined contribution $ - $ - $ - $ - $ - Contributions in relation to the actuarially determined contribution - - - - 30,468 Contribution deficiency (excess) $ - $ - $ - $ - $ (30,468) City’s covered payroll $ - $ - $ - $ - $ - Contributions as a percentage of covered payroll N/A N/A N/A N/A N/A
June 30
June 30
June 30
June 30
Agenda Item 2.

City of Needles, California
Schedule of Changes in the Total OPEB Liability and Related Ratios Last Ten Fiscal Years*
68 Fiscal Year End 2018 2019 2020 2021 2022
Total OPEB liability
Service cost $ 45,161 $ 42,518 $ 44,458 $ 50,497 $ 60,909 Interest 37,348 44,070 45,273 35,320 29,150 Differences between expected and actual experience - - 127,243 - 196,696 Change in assumptions (59,030) (5,315) (266,725) 54,488 21,133 Benefit payments (53,510) (70,393) (70,629) (92,163) (80,726) Total change in Net OPEB liability (30,031) 10,880 (120,380) 48,142 227,162 Total OPEB liability - beginning 1,260,633 1,230,602 1,241,482 1,121,102 1,169,244 Total OPEB liability - ending $ 1,230,602 $ 1,241,482 $ 1,121,102 $ 1,169,244 $ 1,396,406 Covered-employee payroll $ 2,433,924 $ 2,767,083 $ 2,713,144 $ 2,767,083 $ 2,921,443 Total OPEB liability (asset) as a percentage of covered-employee payroll 50.60% 44.90% 41.30% 42.30% 47.80% Plan fiduciary net position as a % of the total
OPEB liability 0.00% 0.00% 0.00% 0.00% 0.00%
Fiscal Year End 2023 2024
Total OPEB liability
Service cost $ 92,786 $ 69,124
Interest 27,713 46,838
Differences between expected and actual
experience 2,121 (49,674) Change in assumptions (188,098) 22,174 Benefit payments (91,648) (78,169) Total change in Net OPEB liability (157,126) 10,293 Total OPEB liability - beginning 1,396,406 1,239,280 Total OPEB liability - ending $ 1,239,280 $ 1,249,573 Covered-employee payroll $ 3,737,513 $ 4,308,476
Total OPEB liability (asset) as a percentage of
covered-employee payroll 33.20% 29.00%
Plan fiduciary net position as a % of the total
OPEB liability 0.00% 0.00%
*Fiscal year ended June 30, 2018 was the first year of implementation. **The City's OPEB Plan is not funded, thus, Schedule of Contribution to Plan is not presented.

June 30
June 30,
Agenda Item 2.

This page intentionally left blank.

Agenda Item 2.

SUPPLEMENTARY INFORMATION
Agenda Item 2.

City of Needles, California
Combining Balance Sheet
Other Governmental Funds
June 30, 2024
69 Housing &
Caltrans grant Special CD
CDBG Cemetery (bridge project) Gas Tax Grant
ASSETS
Cash and investments 4,846 $ 126,452 $ 50,332 $ 301,041 $ - $ Restricted cash - 261,957 - - - Accounts receivable, net - 1,563 - - - Due from other funds - - - - - Due from other governments - - 49,835 22,281 52,544 Prepaid items - 2,019 127,682 - - TOTAL ASSETS 4,846 $ 391,991 $ 227,849 $ 323,322 $ 52,544 $

LIABILITIES, DEFERRED INFLOW OF

RESOURCES, AND FUND BALANCES
Liabilities
Accounts payable - $ 1,479 $ 49,835 $ - $ - $
Accrued liabilities - 3,681 - - - Due to other funds - - - - 17,544 Unearned revenues - 45,425 - - - Total liabilities - 50,585 49,835 - 17,544 DEFERRED INFLOW OF RESOURCES Unavailable revenues - - - - 6,953 Total deferred inflow of resources - - - - 6,953 FUND BALANCES (DEFICITS) Nonspendable - 2,019 127,682 - - Restricted 4,846 339,387 50,332 323,322 28,047 Assigned - - - - - Unassigned - - - - - Total fund balances (deficits) 4,846 341,406 178,014 323,322 28,047 TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES, AND FUND BALANCES 4,846 $ 391,991 $ 227,849 $ 323,322 $ 52,544 $ (Continued)
Special Revenue
Agenda Item 2.

City of Needles, California
Combining Balance Sheet
Other Governmental Funds (Continued)
June 30, 2024
70 New COPS - I/S Commerce
Sanbag Measure I AB 3229 I40/J Street
Meas. I Transit Supplemental Project
ASSETS
Cash and investments 708,973 $ 10,718 $ 261,966 $ 2,140 $ Restricted cash - - - - Accounts receivable, net - - 396 - Due from other funds - - - - Due from other governments 46,610 - - - Prepaid items - - - - TOTAL ASSETS 755,583 $ 10,718 $ 262,362 $ 2,140 $

LIABILITIES, DEFERRED INFLOW OF

RESOURCES, AND FUND BALANCES
Liabilities
Accounts payable - $ - $ 71,259 $ - $
Accrued liabilities - - - - Due to other funds - - - - Unearned revenues - - - - Total liabilities - - 71,259 - DEFERRED INFLOW OF RESOURCES Unavailable revenues - - - - Total deferred inflow of resources - - - - FUND BALANCES Nonspendable - - - - Restricted 755,583 10,718 191,103 2,140 Assigned - - - - Unassigned - - - - Total fund balances 755,583 10,718 191,103 2,140 TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES, AND FUND BALANCES 755,583 $ 10,718 $ 262,362 $ 2,140 $ (Continued)
Special Revenue
Agenda Item 2.

City of Needles, California
Combining Balance Sheet
Other Governmental Funds (Continued)
June 30, 2024
71 State Ca. Conserv. Safe Routes All
Recreation Recycle to Redevelopment American
Grants Grant School Agency Canal
ASSETS
Cash and investments 810,845 $ 15,117 $ - $ 113,203 $ 614,964 $ Restricted cash - - - - - Accounts receivable, net - - - - - Due from other funds - - - - - Due from other governments - - - - - Prepaid items - - - - 102 TOTAL ASSETS 810,845 $ 15,117 $ - $ 113,203 $ 615,066 $

LIABILITIES, DEFERRED INFLOW OF

RESOURCES, AND FUND BALANCES
Liabilities
Accounts payable 283,351 $ - $ - $ - $ 704 $
Accrued liabilities - - - - 1,725 Due to other funds - - 2,479 - 230,693 Unearned revenues 527,721 - - - - Total liabilities 811,072 - 2,479 - 233,122 DEFERRED INFLOW OF RESOURCES Unavailable revenues - - - - - Total deferred inflow of resources - - - - - FUND BALANCES Nonspendable - - - - 102 Restricted - 15,117 - 113,203 381,842 Assigned - - - - - Unassigned (227) - (2,479) - - Total fund balances (227) 15,117 (2,479) 113,203 381,944 TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES, AND FUND BALANCES 810,845 $ 15,117 $ - $ 113,203 $ 615,066 $ (Continued)
Special Revenue
Agenda Item 2.

City of Needles, California
Combining Balance Sheet
Other Governmental Funds (Continued)
June 30, 2024
72 Active
Transportation Hazard Redevelopment North South
Program Mitigation Agency Needles Needles
ASSETS
Cash and investments 725 $ - $ - $ 45,996 $ 93,046 $
Restricted cash - - - - - Accounts receivable, net - - - - - Due from other funds - - - - - Due from other governments - 438 - - - Prepaid items - - - - - TOTAL ASSETS 725 $ 438 $ - $ 45,996 $ 93,046 $

LIABILITIES, DEFERRED INFLOW OF

RESOURCES, AND FUND BALANCES
Liabilities
Accounts payable - $ - $ - $ 273 $ - $
Accrued liabilities - - - - - Due to other funds - 438 - - - Unearned revenues - - - - - Total liabilities - 438 - 273 - DEFERRED INFLOW OF RESOURCES Unavailable revenues - 438 - - - Total deferred inflow of resources - 438 - - - FUND BALANCES Nonspendable - - - - - Restricted 725 - - - - Assigned - - - 45,723 93,046 Unassigned - (438) - - - Total fund balances 725 (438) - 45,723 93,046 TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES, AND FUND BALANCES 725 $ 438 $ - $ 45,996 $ 93,046 $ (Continued)
Special Revenue Capital Projects
Agenda Item 2.

City of Needles, California
Combining Balance Sheet
Other Governmental Funds (Continued)
June 30, 2024
73 Capital
Projects
Boating and Total
Waterways Nonmajor
Grant Funds
ASSETS
Cash and investments - $ 3,160,364 $
Restricted cash 90,290 352,247 Accounts receivable, net - 1,959 Due from other funds - - Due from other governments 36,223 207,931 Prepaid items - 129,803 TOTAL ASSETS 126,513 $ 3,852,304 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities
Accounts payable 80 $ 406,981 $
Accrued liabilities - 5,406 Due to other funds 36,100 287,254 Unearned revenues - 573,146 Total liabilities 36,180 1,272,787 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - 7,391 Total deferred inflow of resources - 7,391

FUND BALANCES
Nonspendable - 129,803 Restricted - 2,216,365 Assigned 90,333 229,102 Unassigned - (3,144) Total fund balances 90,333 2,572,126 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES 126,513 $ 3,852,304 $
(Concluded)
Agenda Item 2.

This page intentionally left blank.

Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds
Year ended June 30, 2024
74 Housing &
Caltrans grant Special CD
CDBG Cemetery (bridge project) Gas Tax Grant

REVENUES
Taxes - $ - $ - $ - $ - $
Intergovernmental 7,900 - 100,115 264,395 45,592 Charges for services - 35,131 - - - Use of money and property - 8,163 - - - Other revenues - 3,025 - - - Total revenues 7,900 46,319 100,115 264,395 45,592 EXPENDITURES Current
Public safety - - - - - Public works 7,996 - 49,925 - - Parks and recreation - 198,035 - - - Community development - - - - 34,780 Capital outlay - - 23,330 - - Total expenditures 7,996 198,035 73,255 - 34,780 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (96) (151,716) 26,860 264,395 10,812 OTHER FINANCING SOURCES (USES) Transfers in - 127,753 - - - Transfers out - - (986,000) (139,164) - Total other financing sources (uses) - 127,753 (986,000) (139,164) - CHANGES IN FUND BALANCES (96) (23,963) (959,140) 125,231 10,812 FUND BALANCES (DEFICITS) Fund balances (deficits) - beginning as
previously reported 4,942 322,319 1,137,154 198,091 17,235 Restatements (Note 13) - 43,050 - - - Fund balances - beginning, as restated 4,942 365,369 1,137,154 198,091 17,235 Fund balances (deificts) - ending 4,846 $ 341,406 $ 178,014 $ 323,322 $ 28,047 $ (Continued)
Special Revenue
Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds (Continued)
Year ended June 30, 2024
75 New COPS - I/S Commerce
Sanbag Measure I AB 3229 I40/J Street
Meas. I Transit Supplemental Project

REVENUES
Taxes 211,772 $ - $ - $ - $
Intergovernmental - - 231,177 91 Charges for services - - - - Use of money and property - - 2,071 - Other revenues - - - - Total revenues 211,772 - 233,248 91 EXPENDITURES Current
Public safety - - 224,074 - Public works - - - - Parks and recreation - - - - Community development - - - - Capital outlay - - - - Total expenditures - - 224,074 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 211,772 - 9,174 91 OTHER FINANCING SOURCES (USES) Transfers in - - - - Transfers out - - - - Total other financing sources (uses) - - - - CHANGES IN FUND BALANCES 211,772 - 9,174 91 FUND BALANCES Fund balances - beginning as
previously reported 530,686 10,718 181,929 2,049 Restatements (Note 13) 13,125 - - - Fund balances - beginning, as restated 543,811 10,718 181,929 2,049 Fund balances - ending 755,583 $ 10,718 $ 191,103 $ 2,140 $ (Continued)
Special Revenue
Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds (Continued)
Year ended June 30, 2024
76 State Ca. Conserv. Safe Routes All
Recreation Recycle to Redevelopment American
Grants Grant School Agency Canal

REVENUES
Taxes - $ - $ - $ - $ - $
Intergovernmental 2,644,599 - - - - Charges for services - - - - 1,017,070 Use of money and property - - - - - Other revenues - - - - - Total revenues 2,644,599 - - - 1,017,070 EXPENDITURES Current
Public safety - - - - - Public works - - - - 997,149 Parks and recreation - - - - - Community development - 17,915 - 32,089 - Capital outlay 1,605,963 - - - - Total expenditures 1,605,963 17,915 - 32,089 997,149 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,038,636 (17,915) - (32,089) 19,921 OTHER FINANCING SOURCES (USES) Transfers in - - - - - Transfers out - - - - (19,920) Total other financing sources (uses) - - - - (19,920) CHANGES IN FUND BALANCES 1,038,636 (17,915) - (32,089) 1 FUND BALANCES Fund balances - beginning as
previously reported - 33,032 (2,479) 145,292 381,943 Restatements (Note 13) (1,038,863) - - - - Fund balances - beginning, as restated (1,038,863) 33,032 (2,479) 145,292 381,943 Fund balances - ending (227) $ 15,117 $ (2,479) $ 113,203 $ 381,944 $ (Continued)
Special Revenue
Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds (Continued)
Year ended June 30, 2024
77 Active
Transportation Hazard Redevelopment North South
Program Mitigation Agency Needles Needles

REVENUES
Taxes - $ - $ - $ - $ - $
Intergovernmental - 4,670 - - - Charges for services - - - - - Use of money and property - - - - - Other revenues - - - - - Total revenues - 4,670 - - - EXPENDITURES Current
Public safety - - - - - Public works - - - - - Parks and recreation - - - - - Community development - 5,108 3,398 26,056 1,428 Capital outlay - - - - - Total expenditures - 5,108 3,398 26,056 1,428 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES - (438) (3,398) (26,056) (1,428) OTHER FINANCING SOURCES (USES) Transfers in - - 96,589 - - Transfers out - - (182,153) - - Total other financing sources (uses) - - (85,564) - - CHANGES IN FUND BALANCES - (438) (88,962) (26,056) (1,428) FUND BALANCES Fund balances - beginning as
previously reported 725 - 88,962 71,779 94,474 Restatements (Note 13) - - - - - Fund balances - beginning, as restated 725 - 88,962 71,779 94,474 Fund balances - ending 725 $ (438) $ - $ 45,723 $ 93,046 $ (Continued)
Special Revenue Capital Projects
Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds (Continued)
Year ended June 30, 2024
78 Capital
Projects
Boating and Total
Waterways Nonmajor
Grant Funds

REVENUES
Taxes - $ 211,772 $
Intergovernmental 181,116 3,479,655 Charges for services - 1,052,201 Use of money and property - 10,234 Other revenues - 3,025 Total revenues 181,116 4,756,887 EXPENDITURES Current
Public safety - 224,074 Public works - 1,055,070 Parks and recreation - 198,035 Community development - 120,774 Capital outlay 170,078 1,799,371 Total expenditures 170,078 3,397,324

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 11,038 1,359,563

OTHER FINANCING SOURCES (USES)
Transfers in 24,637 248,979 Transfers out - (1,327,237) Total other financing sources (uses) 24,637 (1,078,258) CHANGES IN FUND BALANCES 35,675 281,305 FUND BALANCES
Fund balances - beginning as
previously reported 54,658 3,273,509 Restatements (Note 13) - (982,688) Fund balances - beginning, as restated 54,658 2,290,821 Fund balances - ending 90,333 $ 2,572,126 $ (Concluded)
Agenda Item 2.

City of Needles, California
Combining Statement of Net Position
Other Enterprise Funds
June 30, 2024
79 Total
Other
Golf Enterprise
Sanitation Course Transit Housing Funds
ASSETS
Current assets
Cash and investments 1,488,036 $ - $ 71,274 $ 586,905 $ 2,146,215 $ Accounts receivable, net 274,875 - 343 13,919 289,137 Due from other governments - 322,214 223,326 - 545,540 Inventory - 8,743 - - 8,743 Prepaid items 7,550 1,064 - 5,108 13,722 Total current assets 1,770,461 332,021 294,943 605,932 3,003,357 Non-current assets SBITA assets, net - - 15,085 - 15,085 Capital assets, net - 1,027,195 668,565 706,070 2,401,830 Total non-current assets - 1,027,195 683,650 706,070 2,416,915 TOTAL ASSETS 1,770,461 1,359,216 978,593 1,312,002 5,420,272 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources related to pensions - 24,573 - - 24,573 Deferred outflows of resources related to OPEB - 596 - - 596 TOTAL DEFERRED OUTFLOWS OF RESOURCES - 25,169 - - 25,169 LIABILITIES
Current liabilities
Accounts payable 106,988 220,160 44,405 18,485 390,038 Accrued payroll - - - 5,146 5,146 Compensated absences - current - - - 1,851 1,851 Deposits - - - 9,700 9,700 Due to other funds 2,476,278 177,538 - - 2,653,816 Deferred revenue - - - 3,890 3,890 Bonds/note payable - current 34,524 - - - 34,524 Lease liability - current - 46,198 - - 46,198 SBITA liability - current - - 15,994 - 15,994 Other liabilities - 4,818 - - 4,818 Total current liabilities 2,617,790 448,714 60,399 39,072 3,165,975 Noncurrent liabilities Net pension liability - 55,242 - - 55,242 Other postemployment benefits liability - 11,746 - - 11,746 Compensated absences - noncurrent - - - 7,405 7,405 Lease liability - noncurrent - 79,874 - - 79,874 Bonds/note payable - noncurrent 160,744 - - - 160,744 Total noncurrent liabilities 160,744 146,862 - 7,405 315,011 TOTAL LIABILITIES 2,778,534 595,576 60,399 46,477 3,480,986 DEFERRED INFLOW OF RESOURCES Deferred inflows of resources related to pensions - 1,370 - - 1,370 TOTAL DEFERRED INFLOW OF RESOURCES - 1,370 - - 1,370 NET POSITION
Net investment in capital assets (195,268) 901,123 667,656 706,070 2,079,581 Restricted - - - 36,425 36,425 Unrestricted (812,805) (113,684) 250,538 523,030 (152,921) TOTAL NET POSITION (1,008,073) $ 787,439 $ 918,194 $ 1,265,525 $ 1,963,085 $ Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenses, and Changes in Net Position Other Enterprise Funds
Year ended June 30, 2024
80 Total
Other
Golf Enterprise
Sanitation Course Transit Housing Funds

OPERATING REVENUES
Charges for services 1,776,084 $ 599,414 $ 42,120 $ - $ 2,417,618 $ Operating grants and subsidies - - - 870,448 870,448 Other fees and sales - 48,507 - 237,811 286,318 Other revenues - 2,123 7,500 9,387 19,010 Total operating revenues 1,776,084 650,044 49,620 1,117,646 3,593,394 OPERATING EXPENSES Personnel costs - 17,648 - 304,454 322,102 Contractual services 1,258,779 513,117 - - 1,771,896 Power and utilities - 181,266 - 108,396 289,662 Maintenance and operations 191,173 201,008 549,093 95,897 1,037,171 Administrative and management 11,902 63,466 1,729 280,441 357,538 Insurance 12 13,501 1,197 8,255 22,965 Depreciation and amortization - 105,250 79,460 45,972 230,682 Total operating expenses 1,461,866 1,095,256 631,479 843,415 4,032,016 Operating income (loss) 314,218 (445,212) (581,859) 274,231 (438,622) NONOPERATING REVENUES (EXPENSES) Interest revenue - - 2,229 2,906 5,135 Government grants - 324,685 911,660 - 1,236,345 Loss on sale of asset - - - (1,610) (1,610) Interest expense and fiscal charges (12,783) (8,503) (534) - (21,820) Total nonoperating revenues (expenses) (12,783) 316,182 913,355 1,296 1,218,050 Income (Loss) before capital contributions
and transfers 301,435 (129,030) 331,496 275,527 779,428 Capital contributions - AB 2766 - - 15,000 - 15,000 Capital contributions - State of good repair - - 8,554 - 8,554 Capital contributions - - - 358 358 Transfers in - 241,481 - - 241,481 Transfers out (191,174) - (23,424) - (214,598) Net capital contributions and transfers (191,174) 241,481 130 358 50,795 Changes in net position 110,261 112,451 331,626 275,885 830,223 Net position - beginning as previously reported - 674,988 587,422 - 1,262,410 Restatements (Note 13) (1,118,334) - (854) 989,640 (129,548) Net position - beginning, as restated (1,118,334) 674,988 586,568 989,640 1,132,862 Net position - ending (1,008,073) $ 787,439 $ 918,194 $ 1,265,525 $ 1,963,085 $ Agenda Item 2.

City of Needles, California
Combining Statement of Cash Flows
Other Enterprise Funds
Year ended June 30, 2024
81 Total
Other
Golf Enterprise
Sanitation Course Transit Housing Funds
Cash Flows from Operating Activities
Cash collected from customers 1,722,838 $ 344,199 $ 49,277 $ 1,117,985 $ 3,234,299 $ Cash payments to suppliers for goods and services (1,559,251) (793,737) (811,917) (420,319) (3,585,224) Cash payments to employees for services - (19,665) - (343,660) (363,325) Net cash provided by (used in) operating activities (469,203) 163,587 (762,640) 354,006 (714,250) Cash Flows From Noncapital Financing Activities Operating grants received - 324,685 911,660 - 1,236,345 Increase (decrease) in due to other funds/advances (617,652) 177,538 - - (440,114) Operating transfers in - 241,481 - - 241,481 Operating transfers out (191,174) - (23,424) - (214,598) Net cash provided by (used in) noncapital financing activities 743,704 (808,826) 888,236 - 823,114 Cash Flows from Capital and Financing Activities Acquisition and construction of capital assets - (427,080) (325,414) (465,503) (1,217,997) Principal paid on bonds/note payable (32,519) - - - (32,519) Capital grants received - - 23,554 358 23,912 Payments of leases - (44,946) - - (44,946) Payments of subscriptions - - 15,140 - 15,140 Interest paid (12,783) (8,503) (534) - (21,820) Adjustment to subscriptions Net cash used in noncapital
related financing activities (480,529) (45,302) (287,254) (465,145) (1,278,230) Cash Flows from Investing Activity:

Purchase of certificates of deposit - - - (1,911) (1,911) Interest on investments - - 2,229 2,906 5,135 Net cash provided by investing activity - - 2,229 995 3,224 Net decrease in cash and investments (206,028) (690,541) (159,429) (110,144) (1,166,142) Cash and investments, beginning of year 2,178,577 206,028 230,703 697,049 3,312,357 Cash and cash investments, end of year 1,488,036 $ - $ 71,274 $ 586,905 $ 2,146,215 $ Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss) 314,218 $ (445,212) $ (581,859) $ 274,231 $ (438,622) $ Adjustments to reconcile operating income (loss) to
net cash used in operating activities
Depreciation and amortization - 105,250 79,460 45,972 230,682 Changes in assets and liabilities Decrease (increase) in:

Accounts receivable (53,246) - (343) 1,528 (52,061)
Due from other governments - (306,488) (154,370) - (460,858) Inventory - 784 - - 784
Prepaid expenses - (141) - 8,005 7,864
Deferred outflows - 4,608 - - 4,608
Increase (decrease) in:

Accounts payable (97,385) 178,658 500 18,308 100,081
Deposits payable - - - (1,500) (1,500)
Unearned revenues - - (106,028) 311 (105,717)
Net pension liability - (3,235) - - (3,235)
OPEB liability - (1,638) - - (1,638)
Deferred inflows - (1,752) - - (1,752)
Compensated absences payable - (37) - 7,151 7,114 Net cash provided by (used in) operating activities $ (469,203) 163,587 $ (762,640) $ 354,006 $ (714,250) $ Agenda Item 2.

City of Needles, California
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
82 Utility Admin
Water Sewer Electric Office Facility
ASSETS
Current assets
Cash and investments 401,794 $ 251,500 $ 3,298,558 $ 351,468 $ 131,687 $ Accounts receivable, net 682 599 1,909 - -
Due from other funds - - 30,246 - -
Prepaid items 5,683 2,446 2,541,678 3,665 - Total current assets 408,159 254,545 5,872,391 355,133 131,687 Noncurrent assets Capital assets, net - - - 96,863 274,598 Total noncurrent assets - - - 96,863 274,598 TOTAL ASSETS 408,159 254,545 5,872,391 451,996 406,285 LIABILITIES Accounts payable 27,152 5,549 140,925 1,131 4,045
Accrued payroll 11,580 3,229 18,655 5,048 -
Compensated absences - - - 6,647 -
Due to other funds 341,828 333,482 4,138,544 - -
Lease liability, current portion - - - 5,586 10,922
Lease liability, noncurrent portion - - - 945 32,956 TOTAL LIABILITIES 380,560 342,260 4,298,124 19,357 47,923 NET POSITION Net investment in capital assets - - - 90,332 230,720
Unrestricted 27,599 (87,715) 1,574,267 342,307 127,642 TOTAL NET POSITION 27,599 $ (87,715) $ 1,574,267 $ 432,639 $ 358,362 $ (Continued)
Agenda Item 2.

City of Needles, California
Combining Statement of Net Position
Internal Service Funds (Continued)
June 30, 2024
83 Total
Fleet Information Vehicle Internal Service
Maintenance Systems Replacement Fund
ASSETS
Current assets
Cash and investments 638,355 $ 148,276 $ 461,841 $ 5,683,479 $ Accounts receivable, net - - - 3,190
Due from other funds - - - 30,246
Prepaid items 1,382 - - 2,554,854 Total current assets 639,737 148,276 461,841 8,271,769 Noncurrent assets
Capital assets, net 5,356 30,314 383,405 790,536 Total noncurrent assets 5,356 30,314 383,405 790,536 TOTAL ASSETS 645,093 178,590 845,246 9,062,305 LIABILITIES Accounts payable 3,821 4,545 6,846 194,014
Accrued payroll 2,258 - - 40,770
Compensated absences 5,187 - - 11,834
Due to other funds - - - 4,813,854
Lease liability, current portion - - - 16,508
Lease liability, noncurrent portion - - - 33,901
TOTAL LIABILITIES 11,266 4,545 6,846 5,110,881 NET POSITION Net investment in capital assets 5,356 30,314 383,405 740,127 Unrestricted 628,471 143,731 454,995 3,211,297 TOTAL NET POSITION 633,827 $ 174,045 $ 838,400 $ 3,951,424 (Concluded)
Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenses, and Change in Net Position Internal Service Funds
Year ended June 30, 2024
84 502 503 580 508 510
Utility Admin
Water Sewer Electric Office Facility

OPERATING REVENUES
Charges for services 1,829,976 $ 1,209,678 $ 11,523,825 $ - $ - $ Other revenues - - - - -
Total operating revenues 1,829,976 1,209,678 11,523,825 - - OPERATING EXPENSES Personnel 876,752 265,002 1,375,631 343,047 -
Contractual services - 342,011 318 2,734 -
Power and utilities 83,589 105,788 6,583,236 - 46,880
Maintenance and operations 189,676 59,661 2,416,185 3,994 56,610 Administrative and management 181,722 145,431 31,930 30,011 70,478 Insurance 37,326 46,365 66,261 5,179 -
Depreciation and amortization - - - 14,286 31,533 Total operating expenses 1,369,065 964,258 10,473,561 399,251 205,501 Operating income (loss) 460,911 245,420 1,050,264 (399,251) (205,501)

NONOPERATING REVENUES (EXPENSES)
Interest revenue 3,456 2,796 9,976 - -
Interest expense and fiscal charges - - - (260) (3,191) Total nonoperating revenues (expenses) 3,456 2,796 9,976 (260) (3,191) Income (loss) before capital contributions, and transfers 248,216 464,367 1,060,240 (399,511) (208,692) Capital contributions - - - 5,695 -
Transfers in - - - 496,836 244,392
Transfers out (460,912) (245,421) (1,050,150) (17,496) - Net capital contributions and transfers (460,912) (245,421) (1,050,150) 485,035 244,392 Changes in net position 3,455 2,795 10,090 85,524 35,700 Net position - beginning 24,144 (91,188) 1,559,990 347,115 322,662 Restatements (Note 13) - 678 4,187 - - Net position - beginning, as restated 24,144 (90,510) 1,564,177 347,115 322,662 Net position - ending 27,599 $ (87,715) $ 1,574,267 $ 432,639 $ 358,362 $ (Continued)
Agenda Item 2.

City of Needles, California
Combining Statement of Revenues, Expenses, and Change in Net Position Internal Service Funds (Continued)
Year ended June 30, 2024
85 511 509 512 Total
Fleet Information Vehicle Internal Service
Maintenance Systems Replacement Eliminations Fund

OPERATING REVENUES
Charges for services - $ - $ 20,004 $ - $ 14,583,483 $
Other revenues 1,999 - - - 1,999
Total operating revenues 1,999 - 20,004 - 14,585,482

OPERATING EXPENSES
Personnel 156,555 - - - 3,016,987
Contractual services - 123,711 20,150 - 488,924
Power and utilities - - - - 6,819,493
Maintenance and operations 74,375 75,921 62,018 - 2,938,440 Administrative and management - 52,828 - - 512,400
Insurance - - - - 155,131
Depreciation and amortization 670 17,908 121,471 - 185,868 Total operating expenses 231,600 270,368 203,639 - 14,117,243 Operating income (loss) (229,601) (270,368) (183,635) - 468,239

NONOPERATING REVENUES (EXPENSES)
Interest revenue - - 344 - 16,572
Interest expense and fiscal charges - - - - (3,451)
Total nonoperating revenues (expenses) - - 344 - 13,121 Income (loss) before capital contributions, and
transfers (270,368) (229,601) (183,291) - 481,360
Capital contributions - - - - 5,695
Transfers in 278,484 273,096 76,608 (952,176) 417,240
Transfers out - - - 952,176 (821,803)
Net capital contributions and transfers 278,484 273,096 76,608 - (398,868) Changes in net position 48,883 2,728 (106,683) - 82,492 Net position - beginning 584,944 171,317 945,083 - 3,864,067 Restatements (Note 13) - - - - 4,865
Net position - beginning, as restated 584,944 171,317 945,083 - 3,868,932 Net position - ending 633,827 $ 174,045 $ 838,400 $ - $ 3,951,424 $ (Concluded)
Agenda Item 2.

City of Needles, California
Combining Statement of Cash Flows
Internal Service Funds
Year ended June 30, 2024
86 502 503 580 508 510
Utility Admin
Water Sewer Electric Office Facility
Cash Flows from Operating Activities
Cash collected from customers 1,828,080 $ 1,209,624 $ 12,283,408 $ 69 $ - $ Cash payments to suppliers for goods and services (490,932) (720,515) (9,110,921) (43,597) (236,407) Cash payments to employees for services (876,752) (265,002) (1,375,631) (343,047) - Net cash provided by (used in) operating activities 224,107 460,396 1,796,856 (386,575) (236,407) Cash Flow From Noncapital Financing Activities Operating transfers in - - - 496,836 244,392
Operating transfers out (460,912) (245,421) (1,050,150) (17,496) - Increase in due from other funds - - (10,789) - -
Increase in due to other funds/advances 106,024 73,386 757,449 - - Net cash provided by (used in) noncapital
financing activities (172,035) (354,888) (303,490) 479,340 244,392 Cash Flows From Capital and Related Financing Activities Acquisition and construction of capital assets - - - - (86,893) Capital contribution - - - 5,695 -
Payments of leases - - - (5,435) 35,790
Interest paid - - - (260) (3,191)
Net cash used in capital and
related financing activities - - - - (54,294) Cash Flow From Investing Activities Interest on investments 3,456 2,796 9,976 - -
Net cash provided by investing activities 2,796 3,456 9,976 - - Net increase (decrease) in cash and investments 54,868 108,964 1,503,342 92,765 (46,309) Cash and investments, beginning of year 292,830 196,632 1,795,216 258,703 177,996 Cash and cash investments, end of year 401,794 $ 251,500 $ 3,298,558 $ 351,468 $ 131,687 $ Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss) 460,911 $ 245,420 $ 1,050,264 $ (399,251) $ (205,501) $ Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation and amortization - - - 14,286 31,533
Changes in assets and liabilities:

Decrease (increase) in:

Accounts receivable (682) (599) (1,909) - -
Prepaid expenses (1,214) 545 761,492 69 -
Increase (decrease) in:

Accounts payable 1,263 (20,648) (13,584) (938) (62,439) Accrued liabilities 118 (611) 593 265 -
Compensated absences - - - (1,006) -
Net cash provided by (used in) operating activities $ 224,107 460,396 $ 1,796,856 $ (386,575) $ (236,407) $ (Continued)
Agenda Item 2.

City of Needles, California
Combining Statement of Cash Flows
Internal Service Funds (Continued)
Year ended June 30, 2024
87 511 509 512 Total
Fleet Information Vehicle Internal Service
Maintenance Systems Replacement Fund
Cash Flows from Operating Activities
Cash collected from customers 1,871 $ - $ 20,004 $ 15,343,056 $ Cash payments to suppliers for goods and services (72,882) (258,274) (75,322) (11,008,850) Cash payments to employees for services (156,555) - - (3,016,987) Net cash provided by (used in) operating activities (258,274) (227,566) (55,318) 1,317,219 Cash Flow From Noncapital Financing Activities Operating transfers in 278,484 273,096 76,608 1,369,416 Operating transfers out - - - (1,773,979)
Increase in due from other funds - - - (10,789)
Increase in due to other funds/advances - - - 936,859
Net cash provided by (used in) noncapital
financing activities 273,096 278,484 76,608 521,507 Cash Flows From Capital and Related Financing Activities Acquisition and construction of capital assets - - (266,779) (353,672) Capital contribution - - - 5,695
Payments of leases - - - 30,355
Interest paid - - - (3,451)
Net cash used in capital and
related financing activities - - (266,779) (321,073) Cash Flow From Investing Activities Interest on investments - - 344 16,572
Net cash provided by investing activities - - 344 16,572 Net increase (decrease) in cash and investments 14,822 50,918 (245,145) 1,534,225 Cash and investments, beginning of year 587,437 133,454 706,986 4,149,254 Cash and cash investments, end of year 638,355 $ 148,276 $ 461,841 $ 5,683,479 $ Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities
Operating income (loss) (229,601) $ (270,368) $ (183,635) $ 468,239 $ Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation and amortization 670 17,908 121,471 185,868 Changes in assets and liabilities:

Decrease (increase) in:

Accounts receivable - - - (3,190)
Prepaid expenses (128) - - 760,764
Increase (decrease) in:

Accounts payable (146) (5,814) 6,846 (95,460)
Accrued liabilities 335 - - 700
Compensated absences 1,304 - - 298
Net cash provided by (used in) operating activities $ (258,274) (227,566) $ (55,318) $ 1,317,219 $ (Concluded)
Agenda Item 2.
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 Agenda Item 2.

Needles Public Financing Authority
Annual Financial Report with Required Supplementary Information As of and for the Year Ended June 30, 2024
with Independent Auditor’s Report
Agenda Item 2.

Needles Public Financing Authority
Table of Contents
PAGE
INDEPENDENT AUDITOR’S REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) 4

BASIC FINANCIAL STATEMENTS
Statement of Net Position 7
Statement of Activities 8
Statement of Cash Flows 9
Notes to Basic Financial Statements 10
Agenda Item 2.
1 Independent Auditor’s Report
The Board of Directors
Needles Public Financing Authority
Needles, California
Opinion
We have audited the financial statements of Needles Public Financing Authority (the Authority), a component unit of the City of Needles, California (the City), as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of June 30, 2024, and the changes in financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matters
Relationship to the City’s Financial Statements
As discussed in Note 1, the financial statements present only the Authority and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2024, and the changes in financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Agenda Item 2.
2 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.

Agenda Item 2.
3 We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 6 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Glendale, California
January 28, 2026
Agenda Item 2.

Needles Public Financing Authority
Management’s Discussion and Analysis (Unaudited)
June 30, 2024
4 Within this section of the financial statements, the Authority’s management presents this discussion and analysis of the Authority’s financial performance for the fiscal year ended June 30, 2024. The financial statements and footnotes follow this section and should be read in conjunction with this discussion and analysis.

Financial Highlights
• The Authority’s net position (excess of assets over liabilities) remained at $0 in FY 2023-24. • The Authority’s total liabilities decreased from $10,216,490 in FY 2022-23 to $9,102,134 in FY 2023-24.
• During the year, the Authority’s change in net position was $0, compared to the FY 2022-23 change in net position of $(11,777).

Overview of the Financial Statements
Management’s Discussion and Analysis serves as an introduction to the Authority’s basic financial statements. The basic financial statements include the financial statements and notes to the basic financial statements. The Authority is a self-supporting entity and follows the enterprise fund reporting.

Accordingly, the basic financial statements are presented using the accrual basis of accounting.

The Authority’s reporting package includes the following three financial statements:
(1) The Statement of Net Position presents all of the Authority’s assets and liabilities, with the difference presented as net position. The evaluation of whether the Authority’s financial status is improving or not improving can be measured by changes in net position over time. Increases in net position represent an improvement in the financial position. (2) The Statement of Activities reflects the change in the Authority’s net position during the current fiscal year. This statement includes all revenues and expenses for the year, regardless of when the cash is received or paid.
(3) The Statement of Cash Flows provides insight into the Authority’s cash inflows and outflows during the fiscal year. This statement helps assess the Authority’s ability to generate cash, meet financial obligations, and fund future projects. It complements the Statement of Net Position and Statement of Activities by providing a detailed view of liquidity and financial sustainability.

The Authority itself is considered a component unit of the City of Needles, California (the City). The Authority is legally separate from the City but is governed by the same individuals who govern the City.

Other component units of the City include: (1) the Needles Public Utility Authority, (2) Needles Redevelopment Agency, and (3) Housing Authority of the City of Needles. All of these component units are blended into the City’s financial statements.

Agenda Item 2.

Needles Public Financing Authority
Management’s Discussion and Analysis (Unaudited)
June 30, 2024
5 Financial Analysis of the Authority
One of the most important questions asked about the Authority’s finances is, “Is the Authority as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities will help answer this question. Net position remained at $0 because the Authority’s revenues equaled the expenses.

The following table shows summarized information of the Authority’s Statements of Net Position as of the fiscal years ended June 30, 2024 and 2023, and the related changes:

To assist in analyzing the Authority’s operating results, comparative data is accumulated and presented. The following table summarizes the Authority’s Statements of Activities for the years ended June 30, 2024 and 2023, and the respective changes:

Accrued interest receivable $ 328,030 $ 369,830 $ (41,800) 100% Installment contract receivable 8,774,104 (1,072,556) 9,846,660 -11% Total Assets 9,102,134 (1,114,356) 10,216,490 -11%
Current liabilities
Interest payable 328,030 (41,800) 369,830 100%
Long-term liabilities
Due within one year 1,114,355 41,799 1,072,556 4%
Due in more than one year 7,659,749 (1,114,355) 8,774,104 -13% Total Liabilities 9,102,134 (1,114,356) 10,216,490 -11% Total Net Position $ - $ - $ - 0%
Fiscal Year
2024
Dollar
Change
Percent
Change
Fiscal Year
2023
Nonoperating Revenues
Installment contract payments $ 369,830 $ 410,062 $ (40,232) -10% Use of money and property - (332) 332 -100%
Total program revenues 369,830 (40,564) 410,394 -10%
Nonoperating Expenses
Interest expenses 369,830 (45,857) 415,687 -11%
Transfers to the Needles Redevelopment Agency - (6,484) 6,484 100% Total expenses 369,830 (52,341) 422,171 -12%
Change in net position - 11,777 (11,777) -100%
Net position, beginning of year - (11,777) 11,777 -100% Net position, end of year $ - $ - $ - 0%
Fiscal Year
2024
Dollar
Change
Percent
Change
Fiscal Year
2023
Agenda Item 2.

Needles Public Financing Authority
Management’s Discussion and Analysis (Unaudited)
June 30, 2024
6 Capital Asset and Debt Administration
Capital assets
At June 30, 2024, the Authority had no capital assets.

Long-term debt
At the end of the fiscal year, the Authority’s total long-term debt obligations were $8,774,104. The following table summarizes the outstanding long-term obligations of the Authority as of June 30, 2024 and 2023, and the related changes:

Economic Conditions and Budgeting
The City of Needles is one of the oldest cities in San Bernardino County, founded in 1883 with the coming of the Railroad. Needles is a city with a rich and colorful history, providing a satisfying, less hurried way of life and a supportive business climate.

The City’s population has been about the same (roughly 5,000) for many years. The relatively low cost of real property in Needles is attractive to people who are looking to retire and move to a smaller community, and to people looking for a vacation home with vast recreational facilities in the area.

The low cost of water and power within the City has attracted new businesses in the cultivation industry. As a result, the City faces promising growth by the addition of these businesses and the people employed to support them.

Contacting the Authority’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the Authority’s finances, comply with finance-related laws and regulations, and demonstrate the Authority’s commitment to public accountability. If you have questions about this report or would like to request additional information, contact the City’s Finance Department at 817 Third Street, Needles, California 92363.

You may also contact the City’s Finance Department for the separately issued financial statements of the City of Needles.

Dollar Percent
Description Change Change
2016 Enterprise Revenue Bonds $ 8,774,104 $ 9,846,660 $ 1,072,556 11% Fiscal Year
2024
Fiscal Year
2023
Agenda Item 2.

Needles Public Financing Authority
Statement of Net Position
June 30, 2024
See notes to basic financial statements.
7 ASSETS
Accrued interest receivable $ 328,030
Installment contract receivable 8,774,104 Total assets 9,102,134

LIABILITIES
Current liabilities
Interest payable 328,030 Long-term liabilities
Due within one year 1,114,355
Due in more than one year 7,659,749
Total liabilities 9,102,134

NET POSITION
Restricted for loan payments - Total net position $ -
Agenda Item 2.

Needles Public Financing Authority
Statement of Activities
Year Ended June 30, 2024
See notes to basic financial statements.
8 NONOPERATING REVENUES
Installment contract payments $ 369,830 Total revenues 369,830

NONOPERATING EXPENSES
Interest expenses 369,830 Total expenses 369,830
CHANGE IN NET POSITION - Net position - beginning of year - Net position - end of year $ -
Agenda Item 2.

Needles Public Financing Authority
Statement of Cash Flows
Year Ended June 30, 2024
See notes to basic financial statements.
9 CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from installment contract $ 1,072,556
Interest received on installment contract receivable 41,800 Cash provided by operating activities 1,114,356

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on bonds payable (1,072,556)
Interest paid on bonds payable (41,800) Cash used in capital and related financing activities (1,114,356) CHANGE IN CASH WITH FISCAL AGENTS - Cash with fiscal agents - Beginning of Year - CASH WITH FISCAL AGENTS - END OF YEAR $ -

RECONCILIATION OF OPERATING INCOME TO CASH

PROVIDED BY OPERATING ACTIVITIES
Operating income $ - Adjustments to reconcile operating income to cash provided by operating activities:

Changes in operating assets and liabilities:

Decrease in accrued interest receivable 41,800
Decrease in installment contract receivable 1,072,556 Cash provided by operating activities $ 1,114,356 Agenda Item 2.

Needles Public Financing Authority
Notes to Basic Financial Statements
Year Ended June 30, 2024
10 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Reporting Entity
The City of Needles (the “City”), pursuant to Resolution No. 3-16-92 adopted on March 16, 1992, and the City of Needles Redevelopment Agency (the “Agency”), pursuant to Resolution No. 92-2 adopted on March 16, 1992, formed the Needles Public Financing Authority (the “Authority”) by the execution of a joint exercise of powers agreement (the “Joint Powers Agreement”) dated March 17, 1992. Pursuant to the Joint Powers Agreement, the Authority is authorized to issue revenue bonds to provide funds to acquire public obligations and to make loans to public entities.

A seven-member Board of Directors, of which all are also members of the City Council, governs the Authority. The Authority is a blended component unit of the City, and its financial statements are included in the financial statements of the City.

Financial Statements
The financial statements include the Statement of Net Position, the Statement of Activities and the Statement of Cash Flows. These statements report on financial information for the Authority as a whole, excluding fiduciary activities such as employee pension plans. Individual funds are not displayed, but the statements distinguish governmental activities.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The Authority’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). The Authority’s reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements.

The financial statements report using the economic resources measurement focus and the accrual basis of accounting, which generally report all (both current and noncurrent) economic resources and obligations under the Statement of Net Position.

Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

Use of Estimates
The presentation of financial statements, in conformity with US GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Agenda Item 2.

Needles Public Financing Authority
Notes to Basic Financial Statements
Year Ended June 30, 2024
11 NOTE 2 LOANS TO OTHER GOVERNMENTAL ENTITIES
Needles Public Utility Authority (NPUA)
NPUA issued 2016 Enterprise bonds to purchase the 1997 Revenue Bonds. The Authority entered into an Installment Agreement with the NPUA on December 1, 2016.

The bonds were issued to provide money to purchase the 1997 NPUA bonds. The bonds are secured by an Indenture of Trust dated December 1, 2016, between the Authority and U.S. Bank National Association, the Trustee.

Under the Installment Agreement, NPUA is to make payments to the Authority sufficient to meet the debt service requirements of the 2016 Enterprise Bonds. The installment agreement calls for semi-annual payments of $721,193, including interest at 3.86% per annum, beginning August 1, 2017, and ending on February 1, 2031. The principal balance of the bonds payable as of June 30, 2024, is $8,774,104.

The following is a summary of the changes in long-term debt for the fiscal year ended June 30, 2024:

The date of issue, maturity, interest rates, and original amounts authorized for the longterm debt are as follows:

Debt service requirements are summarized as follows:

Balance Balance Current
Description July 1, 2023 Additions Deletions June 30, 2024 Portion 2016 Enterprise
Revenue Bonds $ 9,846,660 $ - $ (1,072,556) $ 8,774,104 $ 1,114,355 Date of Years of Rate of Amount Description Issue Maturity Interest Amortized
2016 Enterprise
Revenue Bonds 12/29/2016 2017 - 2031 3.86% 15,488,000 $ Year Ending
June 30 Principal Interest
2025 $ 1,114,355 $ 328,030 2026 1,157,784 284,600
2027 1,202,907 239,479
2028 1,249,787 192,598
2029 1,298,494 143,891 2030-2031 2,750,777 133,993
Total $ 8,774,104 $ 1,322,591
Agenda Item 2.

Needles Public Financing Authority
Notes to Basic Financial Statements
Year Ended June 30, 2024
12 NOTE 3 SUBSEQUENT EVENTS
The Authority has evaluated events or transactions subsequent to June 30, 2024, to assess the need for potential recognition or disclosure in the financial statements.

Such events were evaluated through January 28, 2026 the date the financial statements were available to be issued, and determined that no subsequent events required recognition or disclosure in the accompanying financial statements.

Agenda Item 2.
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 Agenda Item 2.

City of Needles
817 Third Street, Needles, California 92363
(760) 326-2113  FAX (760) 326-6765
www.cityofneedles.com
Mayor, Janet Jernigan
Vice Mayor Ellen Campbell
Councilmember Tona Belt
Councilmember Jamie McCorkle
Councilmember JoAnne Pogue
Councilmember Henry Longbrake
Councilmember Larry Ford
City Manager Patrick Martinez
January 29, 2026
Local Government Reporting Section – City
California State Controller’s Office
3301 C. Street, Suite 700
Sacramento, CA 95816
RE: Single Audit Report (SAR) Package Exemption Letter – Fiscal Year 2023-2024 The City of Needles, California, has reviewed its financial activity for the fiscal year ended June 30, 2024. Based on this review, the City did not expend $750,000 or more on federal awards during the fiscal year. Accordingly, the City does not meet the threshold requirement under 2 CFR Part 200, Subpart F (Uniform Guidance) for a Single Audit and is therefore exempt from this reporting requirement for the referenced period.

We further note that the Housing Authority of the City of Needles, a component unit of the City, has independently prepared and submitted its Single Audit report to the Federal Audit Clearinghouse (FAC) in compliance with applicable federal requirements.

This letter is issued to formally notify the State Controller’s Office of the City’s exempt status for the fiscal year ended June 30, 2024. Please retain this correspondence as part of the City’s official records.

Respectfully,
Director of Finance and Administrative Services
City of Needles
Agenda Item 2.

REPORT TO THE

CITY COUNCIL
February 10, 2026
Agenda Item 2.
1 / Introduction
To the Honorable Members of the City Council
We are pleased to present this report related to our audit of the financial statements of the City of Needles (the City) as of and for the year ended June 30, 2024. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City’s financial reporting process, as well as other matters that we believe may be of interest to you. Our audit of the financial statements does not relieve management or those charged with governance of their responsibilities.

This report is intended solely for the information and use of the City Council and Management, and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have regarding this report. We appreciate the opportunity to be of service to the City.

Agenda Item 2.
2 Engagement Team 3
Independence 4
Scope of Services 5
Summary of Audit Results 6
Auditor’s Required Communications to Those Charged
with Governance 11
New Accounting Pronouncements – GASB Implementation 15
Questions 16
Contact Information 17
/ Table of Contents
Agenda Item 2.
3 Information Technology
Rhoda Dollaga
Audit Manager
Jason Tagasa
IT Audit Manager
Audit
Linda Narciso
Quality Control Partner
Cristy Canieda
Engagement Partner
Roger Martinez
Relationship Partner
/ Leadership Team Serving CITY OF NEEDLES
Agenda Item 2.
4 / Independence
There are no relationships between any of our representatives and the City that in our professional judgment may reasonably be thought to bear on independence.

Vasquez & Company LLP meets the independence requirements of the AICPA and the Government Auditing Standards as it relates to the City.

Agenda Item 2.
5 The Financial Statement Audit
• City’s basic financial statements
• City’s Public Financing Authority (PFA)
Consultation
• Audit of Major Federal
Grant Programs in
accordance with the
Uniform Guidance
The Single Audit
• Year-Round
Consultation on
Financial and
Accounting Matters
/ Scope of Services
Agenda Item 2.
6 / Summary of Audit Results
Agenda Item 2.
7 Unmodified (Clean) Opinions on the Basic Financial Statements  The basic financial statements present fairly, in all material respects, the City’s and the PFA’s financial position as of June 30, 2024, the changes in net position, and cash flows for the year ended.
 The supplemental combining and individual financial statements, in all material respects, in relation to the basic financial statements as a whole.

Internal Control over Financial Reporting
 Material weaknesses and significant deficiencies on internal control over financial reporting were noted.
/ Financial Statement Audit
Agenda Item 2.
8 Significant Delay in Completing the Audit (Repeat Finding) - The 2023 audit began in December 2023 but was not completed until July 2025, a 20-month turnaround driven by the turnover in the City’s finance management, which delayed the preparation of required financial information.

Audit progress depended on management’s ability to provide accurate and timely documentation.
- During the 2023 audit, the auditors identified and corrected significant financial reporting errors, resulting in more accurate financial statements and placing the City in a stronger financial reporting position going into 2024. - The same audit team performed the 2024 audit, demonstrating consistent capacity, expertise, and responsiveness.
- The 2024 audit began in September 2025 and was completed by January 2026, a 5-month turnaround.
- The contrast between the two years highlights that audit efficiency is directly tied to management stability and audit readiness.

Material Weakness
/ Material Weakness and Significant Deficiencies on
Internal Control Over Financial Reporting
Agenda Item 2.
9 1. Non-compliance with the CA Government Code Section 53646 – Annual Adoption of Investments policy and quarterly submission of Treasurer’s report (Repeat Finding)

2. Unreported Custodial Fund Activity – The City failed to report $9,349,382 restricted trust resources related to the Water Quality Maintenance of the All-American Canal in the prior years.

Significant Deficiencies
/ Material Weakness and Significant Deficiencies on
Internal Control Over Financial Reporting, Continued
Agenda Item 2.
10 The City’s federal expenditures, excluding the Housing Authority’s federal expenditures audited by other auditors, did not exceed $750,000. As a result, the City was not required to undergo a Single Audit and has submitted an exemption letter to the State.
/ Single Audit
Agenda Item 2.
11 / Auditor’s Required
Communication To Those
Charged With Governance
Agenda Item 2.
12 Our responsibilities Our responsibilities have been described in our engagement letter dated September 16, 2025.

Planned scope and
timing of the audit
We have issued a separate communication regarding the planned scope and timing of our audit and identified significant risks.

Adoption of, or change
in, accounting policies
Management has the primary responsibility for the appropriateness of the accounting policies used by the City. The City did not adopt any significant new accounting policies, nor have there been any changes in existing significant accounting policies during the fiscal year 2024.

Significant accounting
policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant unusual
transactions We did not identify any significant unusual transactions. / Required Communication to Those Charged
with Governance
Agenda Item 2.
13 / Required Communication to Those Charged
with Governance, continued
Audit adjustments
Audit adjustments, other than those that are clearly trivial, proposed by us and recorded by the City. We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.

Disagreements with
management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the financial statements.

Consultations with other
accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.

Significant issues discussed
with management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.

Significant difficulties
encountered in performing the
audit
We did not encounter any significant difficulties in dealing with management during the audit.

Agenda Item 2.
14 / Required Communication to Those Charged
with Governance, continued
Significant matters that
required consultation
We did not encounter any difficult or contentious matters that required consultation outside the engagement team and that are, in our professional judgment, significant and relevant to your responsibility to oversee the financial reporting process.

Shared responsibilities for
independence
Independence is a joint responsibility and is managed most effectively when management, City Council, and audit firms work together in considering compliance with American Institute of Certified Public Accountants (AICPA) and Government Accountability Office (GAO) independence rules. AICPA and GAO rules require independence both in mind and in appearance when providing audit and other attestation services. Vasquez ensures that the AICPA and GAO’s General Requirements for performing non-attest services are adhered to and included in all letters of engagement. Vasquez maintains a system of quality control over compliance with independence rules and firm policies.

Internal controls and
compliance matters
We have separately communicated on internal control and compliance over financial reporting identified during our audit of the financial statements as required by Government Auditing Standards. This communication describes the material weakness and significant deficiencies identified during the financial statement audit.

Significant written
communications between
management and our firm
The most significant written communications between management and our firm were the Letter of Comments to Management and the Management Representation Letters.

Agenda Item 2.
15 The Governmental Accounting Standards Board (GASB) has issued several pronouncements that have effective dates that may impact future financial presentations. / New Accounting Pronouncements – Effective in
Future Years
To be
implemented in
FY 2025
• GASB 101 – Compensated Absences
• GASB 102 – Certain Risk Disclosures
To be
implemented in
FY 2026
• GASB 103 – Financial Reporting Model
• GASB 104 – Disclosure of Certain Capital Assets
To be
implemented in
FY 2027
• GASB 105 – Subsequent Events
Agenda Item 2.
16 QUESTIONS
Agenda Item 2.

Vasquez + Company LLP has over 55 years of
experience in performing audit, accounting, and
consulting services for all types of private
companies, nonprofit organizations, and
governmental entities.

Vasquez + Company LLP is proud to be part of
Aprio Alliance—a national association created by
accounting professionals to help collaborative,
growth-minded CPA firms thrive. This affiliation
gives us access to leading expertise, resources, and
best practices, while preserving what matters most:
the personalized service and local insight you
expect from an independent firm. Aprio Alliance
member firms are separate and independent
businesses and legal entities that are responsible for
their own acts and omissions, and each are
separate and independent from Aprio. “Aprio” is the
brand name under which Aprio, LLP and Aprio
Advisory Group, LLC (and its subsidiaries) provide
professional services.
/ Contact Information
17 Roger A. Martinez, CPA
O: +1.213.873.1703
[email protected]
Cristy Canieda, CPA, CGMA
O: +1.213.873.1720
[email protected]
Rhoda Dollaga, CPA
O: +1.213.873.1746
[email protected]
www.vasquez.cpa
Agenda Item 2.
18 Thank you for your
time and attention!
Agenda Item 2.

Independent Auditor’s Report on Internal Control over
Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
City of Needles, California
Year Ended June 30, 2024
Agenda Item 2.
1 The Honorable Mayor and the Members of the City Council City of Needles, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Needles, California (the City), as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated January 28, 2026.

Our report includes a reference to other auditors who audited the financial statements of the Housing Authority of the City of Needles, a component unit of the City, as described in our report on the City’s basic financial statements. This report does not include the results of the other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described below, we identified certain deficiencies in internal control that we consider to be a material weakness and significant deficiencies.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.

Agenda Item 2.
2 We consider the following deficiency to be a material weakness.

Significant Delay in Completing the Audit
Observation
California Government Code Section 6505 requires that municipalities conduct an annual audit of their accounts and records, either internally or through an independent certified public accountant.

The audit must adhere to generally accepted auditing standards and be filed as a public record within 12 months of the fiscal year's end.

The City failed to complete its required annual audit for Fiscal Year 2024 within the mandated 12-month deadline. As of June 30, 2025, no audit report has been issued or filed, resulting in noncompliance with California Government Code Section 6505.

Cause and Effect
The City's audit delays stem from management turnover in key financial leadership positions. The transition among multiple interim finance officials and auditors disrupted record collection, transaction verification, and report finalization.

Noncompliance may trigger funding restrictions, stricter oversight, and increased regulatory scrutiny, potentially leading to corrective actions or financial penalties. Additionally, the delayed audit has increased costs, requiring extended engagements, additional staff hours, and expedited review fees to meet compliance requirements.

Recommendation
To support the timely completion of future audits and ensure continued compliance with California Government Code Section 6505, the City should focus on strengthening the stability and structure of its financial management and reporting processes. Establishing permanent leadership in key finance roles will provide the continuity necessary to maintain accurate records and prepare audit materials throughout the fiscal year. Developing a formal audit timeline, with defined milestones for year-end close, documentation preparation, and auditor coordination, will help keep the process organized and predictable. Enhancing internal controls related to record retention and transaction review will further reduce delays by ensuring that information is complete and readily accessible. Consistent communication with the external audit team will also allow potential issues to be identified and resolved early. Together, these steps will help the City improve audit readiness, reduce unnecessary costs, and maintain compliance with state requirements.

Management response
The City acknowledges the delay in completing the Fiscal Year 2024 audit and recognizes the importance of timely financial reporting. To address this issue, the City has implemented structural and procedural improvements to strengthen audit readiness and ensure compliance moving forward. Documented finance procedures, task schedules, and closing checklists have been developed to guide staff through year-end processes and audit preparation. A formal annual audit timeline has been established with defined milestones for reconciliations, financial statement preparation, and coordination with external auditors. Key balance sheet accounts are now reconciled on a monthly basis, and management-level review procedures have been formalized for journal entries and year-end adjustments.

Agenda Item 2.
3 Finance staff continue to participate in governmental accounting training, and cross-training within the department has been implemented to ensure continuity of critical reporting functions during staffing transitions. These measures establish a structured internal control framework designed to ensure future audits are completed within statutory deadlines and that financial reporting processes remain consistent and reliable.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the following deficiencies to be significant deficiencies.

1. Submission of Investment Reports
Observation
Under California Government Code section 53646, local agency treasurers must submit quarterly investment reports within 45 days of the end of each quarter. These reports must include details on investment types, issuers, maturity dates, amounts, compliance with the agency’s investment policy, and an assessment of the agency’s ability to meet financial obligations for the next six months. Additionally, the City’s investment policy requires the annual submission of the Statement of Investment Policy and mandates monthly reporting of all investments held in the City’s portfolio to the City Council within 60 days after the end of the monthly reporting period.

The City failed to submit the Statement of Investment Policy to the City Council annually as required, with the most recent policy dated January 2000. Additionally, investment reports for Fiscal Year 2024 were not submitted to the City Council.

Cause and Effect
The failure to submit the Statement of Investment Policy and monthly investment reports for the fiscal year 2024 appears to be primarily due to management turnover, which disrupted established reporting processes.

Recommendation
To strengthen compliance with state requirements and the City’s investment policy, the City should reestablish a structured and reliable investment reporting process supported by consistent financial leadership. Updating and formally presenting the Statement of Investment Policy on an annual basis should be incorporated into the City’s regular governance cycle, with clear internal deadlines and assigned responsibilities. Designating a specific finance staff member to oversee investment reporting, supported by cross-training to ensure continuity during staffing transitions, will help maintain the timely preparation of monthly and quarterly reports. Implementing a standardized reporting calendar and internal review procedures will further support accuracy, transparency, and timely submission to the City Council. These steps will help the City restore compliance, improve oversight, and reduce the risk of future reporting lapses.

Agenda Item 2.
4 Management response
The City has updated its Investment Policy and obtained City Council approval to ensure alignment with current legal and reporting requirements. In addition, the City has addressed prior delays in monthly and quarterly reporting by establishing a formal reporting schedule and clearly assigning preparation and review responsibilities within the Finance Department. Written procedures now guide the timely completion and internal review of all required investment reports before submission to the City Council. These improvements strengthen oversight, promote consistency, and ensure ongoing compliance with statutory and policy requirements, supported by experienced financial leadership and structured internal processes.

2. Fiduciary Fund Reporting
Observation
During the audit, it was noted that the City did not report the Water Quality Maintenance Fund as a custodial fund in the prior year, even though the activity met the criteria for fiduciary reporting under Governmental Accounting Standards Board (GASB) standards. The fund accounts for restricted trust resources dedicated to the Water Quality Maintenance of the All-American Canal.

These trust assets, totaling $9,349,382, are held by the Trustee, Zions Bank, for canal capital maintenance and improvements. The City is responsible for the annual operation of the canal under its contract with the Bureau of Reclamation and the Metropolitan Water District of Southern California.

Cause and Effect
The omission occurred because the City did not have adequate controls in place to identify and evaluate activities that met the criteria for fiduciary reporting. As a result, the Water Quality Maintenance Fund was not reported as a custodial fund in the prior year, leading to a misstatement of the fiduciary financial statements and an understatement of the City’s Fiduciary Net Position by $9,349,382.

Recommendation
The City should strengthen its internal controls over fund classification and fiduciary reporting by implementing a formal process to review all trust-related and custodial activities each year to ensure they are evaluated in accordance with GASB requirements. Staff involved in financial reporting should receive periodic training on fiduciary fund criteria, and communication between Finance and external trustees, such as Zions Bank, should be improved to ensure all fiduciary activities are identified and assessed in a timely manner. Enhancing these procedures will help ensure that fiduciary resources are properly recognized and reported in future financial statements.

Management response
The City has corrected this inadvertent reporting error and has implemented formal review procedures to prevent recurrence. An annual evaluation of fund classifications and related activities has been incorporated into the year-end closing process to ensure compliance with GASB reporting requirements. Documented financial reporting checklists and management-level review of fiduciary and custodial accounts have been established to strengthen oversight and accuracy. In addition, Finance staff have received updated training on fund classification and fiduciary reporting standards to reinforce proper application of accounting guidance. These procedural and training improvements create a structured internal control framework to ensure similar issues do not occur in the future.

Agenda Item 2.
5 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

City’s Response to the Findings
Government Auditing Standards require the auditor to perform limited procedures on the City’s responses to the findings identified in our audit and described previously. The City’s responses were not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the responses.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
January 28, 2026
Agenda Item 2.
www.vasquez.cpa
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • +1.213.873.1700 Agenda Item 2.

City of Needles, California
Request for City Council Action
CITY COUNCIL NPUA Regular Special
Meeting Date: February 10, 2026
Title:Authorize the Mayor to execute the Bureau of Reclamation’s Post-2026 Draft Environmental Impact Statement Public Comment from the City of Needles dated February 10, 2026 Background: Since 1885, the City has had Present Perfected Rights (“PPR”) under Contract No. 05-XX-30-W0445, allowing 1,500 acre-feet (“AF”) of diversion from the Colorado River (“River”), which provides 950 AF of consumptive use under PPR #43. The Contract is listed in the Consolidated Degree of the Supreme Court of the United States in the case of Arizona v. California et al.

The highest priority rights to River water are “perfected rights” that are based on historical use of river water prior to the construction of the large Federal projects to dam and divert the river water. It is sometimes stated as “First in use, first in right.” The use must be for beneficial purposes.

In 1995, the City purchased additional PPR from the Santa Fe Railway Company for 1,260 AF of diversion and 273 AF of consumption, PPR #44. Added together, these PPR allow the City to divert up to 2,760 AF of water (1,500 AF allowed the City via its 1885 PPR diversion and 1,260 AF via the City’s acquisition of Santa Fe Railway Company’s 1896 PPR diversion) and consume 1,223 AF.

The City of Needles is also allocated 527 acre-feet per year through management of the Lower Colorado Water Supply Project.

The City completed a Phase 1 SCIA pilot project for turf removal at the River’s Edge Golf Course on April 15, 2016, which reduces the annual diversion by 232 acre-feet for ten years, expiring in 2026. In total, the City of Needles is allocated 2,261 AF of annual diversions.

Looking ahead, a number of reservoir and water management decisional documents and agreements that govern the operation of Colorado River facilities and the management of Colorado River water are currently scheduled to expire at the end of 2026. The Secretary, acting through Reclamation, proposes the adoption of new guidelines and coordinated management strategies to address Lake Powell and Lake Mead through their full operating range, to be implemented upon the expiration of the existing guidelines and agreements.

The Draft EIS analyzes a broad range of reasonable alternatives for the operational elements identified in the proposed federal action. These alternatives were developed through extensive engagement with a wide range of partners and stakeholders, as well as the general public, over a timeframe of more than three years.

Despite this extensive engagement, this Draft EIS does not identify a Preferred Alternative due to the current absence of a consensus-based approach to post-2026 reservoir operations among Basin entities.

Reclamation anticipates identifying a Preferred Alternative after publication of this Draft EIS that incorporates elements or variations of the Draft EIS alternatives, which would then be fully analyzed in the Final EIS.

Enclosed is the Bureau of Reclamation Draft Environmental Impact Statement evaluating a range of operational alternatives for managing Colorado River reservoirs after 2026, when current interim guidelines expire.

The Draft EIS will be published in the Federal Register on January 16, 2026, initiating a 45-day comment period that will end on March 2, 2026. Comments may be submitted via the following methods. Reclamation held two virtual public meetings to provide information on the Draft EIS. Staff and the Board of Public Utilities Chairman participated.

Fiscal Impact: To be determined
Environmental Impact: To be determined
Recommended Action: Authorize the Mayor to execute the Bureau of Reclamation's Post-2026 Draft EIS Public Comment from the City of Needles dated February 10, 2026 Submitted By: Rainie Torrance, Utility Manager
City Manager Approval: Date:

Other Department Approval (when required): Date:
2/5/2026
Agenda Item 3.

City of Needles
817 Third Street, Needles, California 92363
(760) 326-2113  FAX (760) 326-6765
www.cityofneedles.com
Mayor Janet Jernigan
Vice Mayor Ellen Campbell
Councilmember Tona Belt
Councilmember Jamie McCorkle
Councilmember JoAnne Pogue
Councilmember Henry Longbrake
Councilmember Larry Ford
City Manager Patrick Martinez
February 10, 2026
Bureau of Reclamation
Attn: BCOO-1000
P.O. Box 61470
Boulder City, NV 89006
Email: [email protected]
RE: Bureau of Reclamation's Post-2026 Draft EIS Public Comment from the City of Needles To Whom It May Concern:

On behalf of the City of Needles, we respectfully submit these comments in response to the Bureau of Reclamation’s Post-2026 Draft EIS published in the Federal Register on January 16, 2026.

The City of Needles is located in eastern San Bernardino County, California, along the Colorado River.

The City holds miscellaneous present perfected rights (“PPRs”) with a priority date of 1885 under Contract No. 05-XX-30-W0445 for 1,500 acre-feet of annual diversions, limited to 950 acre-feet on a consumptive use basis. The City also acquired from the Atchison, Topeka and Santa Fe Railway Company certain perfected water rights held by the Santa Fe Railway, with a priority date of 1896, for 1,260 acre-feet of annual diversions, limited to 273 acre-feet on a consumptive use basis. In addition, there are eight (8) other PPR entitlement holders within the City of Needles.

The City’s PPR contracts are recognized in the Consolidated Decree of the Supreme Court of the United States in Arizona v. California. Under that decree, present perfected rights are treated as the most senior and highest-priority water rights. Protection of these senior rights must remain a foundational principle of any future operating framework.

The Draft EIS analyzes a broad range of reasonable alternatives for the operational elements identified in the proposed federal action post-2026. The City of Needles strongly supports the Maximum Operational Flexibility Alternative, particularly where shortages are distributed in a manner that fully recognizes and protects present perfected rights. In addition, the City recommends continuing current strategies based on existing agreements among the Lower Basin states. We further urge that comparable conservation and shortage management measures be implemented by Upper Basin states to ensure a more equitable, basin-wide approach. The City of Needles has actively participated in existing agreements and has made water conservation a high local priority, despite its relatively small size and limited resources.

Thank you for the opportunity to comment on this important matter. If you have any questions, please contact Rainie Torrance, Utility Manager, at [email protected] or (760) 326-5700 ext. 140.

Janet Jernigan
Mayor, City of Needles
Agenda Item 3.

January 2026
U.S. Department of the Interior
Bureau of Reclamation
Upper and Lower Colorado Basins
Interior Regions 7 and 8
Draft
Environmental Impact
Statement
Post-2026 Operational
Guidelines and
Strategies for Lake
Powell and Lake Mead
Executive Summary
Agenda Item 3.

Mission Statements
The Department of the Interior protects and manages the Nation’s natural resources and cultural heritage; provides scientific and other information about those resources; and honors its trust responsibilities or special commitments to American Indians, Alaska Natives, and affiliated island communities.

The mission of the Bureau of Reclamation is to manage, develop, and protect water and related resources in an environmentally and economically sound manner in the interest of the American public.

Photo by Reclamation, unknown date
Agenda Item 3.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-1 Executive Summary
ES.1 Background
Prudent management of the Colorado River Basin (Basin) is crucial because the Colorado River is the foundation for diverse resources across a large geographic region and faces exceptional challenges from prolonged drought and future uncertainty. States, tribes, and Mexico rely on the Colorado River to support essential municipal, agricultural, environmental, cultural and hydropower needs. These resources are now at significant risk: since the onset of the current drought in 2000, the Basin’s primary reservoirs, Lake Powell and Lake Mead, have fallen to historically low elevations.

Several of the major reservoir- and water-management documents and agreements developed to guide Colorado River operations through the persistently dry conditions expire in 2026, including the 2007 Colorado River Interim Guidelines for Lower Basin Shortages and Coordinated Operations for Lake Powell and Lake Mead (2007 Interim Guidelines; Reclamation 2007), the 2019 Colorado River Drought Contingency Plans (Reclamation 2019), and key international agreements between the United States and Mexico. Despite the significance of these agreements, actions taken over the past two decades have not been sufficiently robust to prevent continued decline of the reservoirs.

The Secretary (Secretary) of the Department of the Interior (Department), acting through the Bureau of Reclamation (Reclamation), proposes adoption of new guidelines and coordinated management strategies to address Lake Powell and Lake Mead through their full operating range to take effect when the current agreements expire in 2026. Management strategies will primarily focus on the operation of Glen Canyon Dam and Hoover Dam but may include actions upstream and downstream of these facilities to protect critical reservoir elevations such as releases from the Colorado River Storage Project (CRSP) Upper Initial Units and approaches to enhance opportunities for Lower Basin water users to reduce water use (see Map ES-1). This Draft EIS has been prepared to inform the Secretary’s timely adoption of a new set of guidelines that would be sufficiently robust and provide improved predictability to all water users and managers in the Basin.

Developing new guidelines is difficult in this complex Basin, where critically low storage in Lake Powell and Lake Mead, significant hydrologic variability, and the anticipation of drier future conditions amplify the central tradeoff: balancing the potentially profound impacts of water-delivery reductions with the need to maintain reservoir storage. The alternatives in this Draft EIS capture a broad range of management strategies to address this tradeoff, and they demonstrate that there are multiple ways to find a balance if conditions improve. If conditions do not improve, achieving a balance is more difficult, and, under critically dry futures, even large and unprecedented reductions may not be enough to stabilize storage.

Agenda Item 3.

Agenda Item 3.

Executive Summary (Background)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-3 Given the magnitude of the tradeoffs and the considerable hydrologic uncertainty, and recognizing the important operating experience gained during the current interim period, the Secretary proposes that these new guidelines also be interim in duration to gain additional operating experience. To provide stability and predictability to Basin water users, the Secretary intends that the interim period extend approximately 20 years; however, given the ongoing efforts toward achieving consensus among various Basin entities regarding appropriate post-2026 operations, the Secretary remains open to a shorter duration or phased implementation as part of a longer-term framework.

Reclamation, as the agency that is designated to act on the Secretary’s behalf with respect to operation of Glen Canyon Dam and Hoover Dam and managing the mainstream waters of the lower Colorado River pursuant to federal law, is the lead federal agency for the purposes of compliance pursuant to the National Environmental Policy Act of 1969 (NEPA), as amended, for the development and implementation of the proposed interim guidelines. Five federal agencies are cooperating for purposes of assisting with environmental analysis and preparation of this Environmental Impact Statement (EIS). The cooperating agencies are the Bureau of Indian Affairs, United States Fish and Wildlife Service, National Park Service (NPS), Western Area Power Administration, and the United States Section of the International Boundary and Water Commission. The EIS is organized into three volumes:

Volume I – EIS with the following chapters:

Chapter 1: Purpose and Need. Provides the background of Colorado River operations and describes why federal action is needed.

Chapter 2: Description of Alternatives. Describes Reclamation’s engagement with stakeholders, how alternatives were developed and considered, and a detailed overview of all alternatives evaluated in the EIS.

Chapter 3: Affected Environment and Environmental Consequences. Describes the existing environmental conditions and evaluates potential impacts that could result from implementation of the alternatives.

Chapter 4: Consultation and Coordination. Describes public and stakeholder involvement process during the preparation of this Draft EIS.

Volume II – Supporting appendices, primarily focused on modelling information, including modeling assumptions, analytical methods, and supporting calculations.

Volume III – Technical appendices for each of the environmental resources discussed in Chapter 3.

These appendices provide supporting and more detailed information.

ES.1.1 Purpose and Need for Action
The proposed federal action is needed for the following reasons:
• The Secretary is legally required to coordinate operations of Colorado River reservoirs: The Colorado River Basin Project Act of 1968 directs the Secretary to adopt criteria for the coordinated Agenda Item 3.

Executive Summary (Background)
ES-4 Post-2026 Colorado River Reservoir Operations DEIS January 2026 long-range operation of Colorado River reservoirs. In compliance with this obligation, the Criteria for Coordinated Long-Range Operation of Colorado River Reservoirs (LROC) were developed and adopted by the Secretary in 1970. The LROC provides general narrative guidance regarding Lake Powell and Lake Mead operations but does not contain specific, objective criteria to guide annual operations. To address this inadequacy, the 2007 Interim Guidelines were developed to provide objective criteria used by the Department to implement the LROC. The 2007 Interim Guidelines have provided the predictability needed by the entities that receive Colorado River water to better plan for and manage available water supplies from the Colorado River and other sources. • The 2007 Interim Guidelines are expiring: Current operational guidelines expire during the 2026 operating year. The Department has determined that specific, objective operational guidelines are important to provide improved predictability and should be established for another interim period beyond 2026. Most of the federal and non-federal agreements associated with implementing provisions of the 2007 Interim Guidelines also expire after the 2026 operating year.
• The 2007 Interim Guidelines have not sufficiently reduced risk: Based on operational experience since 2007, the current guidelines are not robust enough to manage the system in a way that is sufficiently protective of the resources dependent on the Colorado River. Despite nearcontinuous drought-response actions in recent years, low-reservoir conditions have persisted, and new infrastructure risks at Glen Canyon Dam have arisen. More robust and adaptive guidelines are needed for the efficient and sustainable management of the major mainstream Colorado River reservoirs and system resources. • Imbalance between water supply and demand will be exacerbated by increasingly likely low-runoff conditions:

The Basin is experiencing increased aridity due to climate variability, and long-term drought and low-runoff conditions are expected in the future. These conditions will exacerbate the now widely recognized imbalance between water supply and demand in the Basin. Robust and flexible guidelines are needed to manage the Colorado River system and its resources under a broad range of potential future hydrologic conditions. • Expanded and innovative use of conservation is needed: Recognizing the anticipated future lowrunoff conditions in the Basin, the Department has also determined a need for guidelines that provide Colorado River water users, including Basin Tribes, expanded opportunities to conserve, store, and take subsequent delivery of water in and from Lake Mead and/or Lake Powell. The guidelines should also support and integrate future efficiency improvements and opportunities for augmentation.
• Addressing tribal concerns regarding Basin management is needed: Basin Tribes have expressed concern that the current approach to Colorado River water management is insufficient to address the range of interests, needs, and fundamental rights of the Basin Tribes. The Department has determined a need for guidelines that provide flexibility and predictability for Basin Tribes to remain able to benefit from their water rights and have opportunities to participate in voluntary conservation programs.

Agenda Item 3.

Executive Summary (Background)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-5 The purpose for the proposed federal action is to:
• Update and expand management guidelines for Colorado River reservoirs, particularly for the coordinated operation of Lake Powell and Lake Mead
• Provide Colorado River water users a greater degree of predictability with respect to annual water availability in future years under anticipated increasing variability, low runoff, and lowreservoir conditions • Provide additional mechanisms for the conservation, storage, and delivery of water supplies in Colorado River reservoirs
• Provide new or enhanced opportunities for Basin Tribes to benefit from their water rights • Provide flexibility to build resilience and accommodate future needs and growth that are supported by Colorado River water supplies, including the integration of unquantified tribal water rights once they are resolved
ES.1.2 Proposed Federal Action
Reclamation, acting on behalf of the Secretary, proposes to adopt specific guidelines and coordinated reservoir management strategies to address operations of Lake Powell and Lake Mead through their full operating ranges. This action would improve predictability to all water users and managers in the Basin by developing and adopting objective guidelines for the operation of Glen Canyon Dam and Hoover Dam to take effect when the current operating guidelines expire in 2026.

This action is designed to provide for the sustainable management of the Colorado River system and its resources under a wide range of potential future system conditions.

The proposed federal action considers the following operational elements that are collectively designed to address the purpose and need for the proposed federal action:
1) Identification of circumstances under which the Secretary would allocate the annual amount of water available for consumptive use from Lake Mead to the Lower Division states (Arizona, California, and Nevada) at, below, or above 7.5 million acre-feet (maf), pursuant to the Supreme Court Decree in Arizona v. California, 376 U.S. 340 (1964) (Final Decree entered in 2006).
2) Coordinated operations of Lake Powell and Lake Mead, particularly under low reservoir conditions.
3) Storage and delivery of conserved water in Lake Mead and/or Lake Powell to increase the flexibility to meet water use needs from both reservoirs, including the storage and delivery of non-system water; exchanges; and water conserved through extraordinary measures by or for tribal, agricultural, or municipal entities.

Agenda Item 3.

Executive Summary (Background)
ES-6 Post-2026 Colorado River Reservoir Operations DEIS January 2026 The proposed federal action allows for development of robust operating guidelines for Lake Powell and Lake Mead without precluding upstream or downstream actions needed to protect critical reservoir elevations at Lake Powell and Lake Mead, such as the following:
• Approaches that consider total system storage in all major Colorado River reservoirs and/or actual inflows to determine coordinated operations of Lake Powell and Lake Mead. • Approaches that include opportunities for conservation, augmentation, demand management, or other water management strategies.
• Emergency response operations at upstream CRSP reservoirs to protect critical infrastructure at Glen Canyon Dam.

The Secretary intends that the guidelines be interim in nature and extend for the same duration as the 2007 Interim Guidelines (approximately 20 years). Adoption of new guidelines for an interim (or limited) period provides the opportunity to gain additional experience for operating the reservoirs, thereby informing future operational and water management decisions. Given the ongoing efforts toward achieving consensus among various Basin entities regarding appropriate post-2026 operations, the Secretary remains open to a shorter duration or phased implementation as part of a longer-term framework.

Recognizing additional authorities may be developed, the Department intends to adopt and implement the guidelines in a manner consistent with the Law of the River. The Department also intends that the guidelines be used to implement the LROC through the issuance of the Annual Operating Plan for Colorado River Reservoirs.

ES.1.3 Geographic Scope
Consistent with the geographic scope analyzed in the 2007 Interim Guidelines FEIS, the geographic scope that would be affected by the proposed federal action begins at full pool of Lake Powell at Gypsum Canyon and extends downstream along the mainstream Colorado River floodplain to the Southerly International Boundary (SIB) with Mexico. This proposed federal action would also potentially affect interests of water users in the Lower Division States in service areas that extend beyond the Colorado River floodplain.

Although the proposed federal action is focused on Lake Powell and Lake Mead operations, management strategies that include activities upstream of Lake Powell are being analyzed in this Draft EIS. These activities include Upper Basin conservation and, if warranted to protect critical reservoir elevations, operations at the CRSP Upper Initial Units. Operations at the CRSP Upper Initial Units specifically contemplated in the Draft EIS alternatives are intended to remain within the scope of the existing Records of Decision (RODs). 1 Accordingly, the Draft EIS does not expand the geographic scope of analysis upstream of Lake Powell. With respect to Upper Basin 1 While the Secretary will consider and prioritize operations at these facilities that are consistent with existing RODs, the Secretary retains the authority to operate outside those RODs if necessary. The modeling assumptions regarding operation of the CRSP Upper Initial Units presented in this Draft EIS are not intended to, and do not, limit the Secretary’s ability to operate these facilities as necessary to respond to hydrologic conditions in accordance with applicable federal law, including operations for the authorized purposes as stated in the 1956 Colorado River Storage Project Act.

Agenda Item 3.

Executive Summary (Alternatives)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-7 conservation, the nexus to the proposed federal action is the storage and delivery of that conserved water in Lake Powell. The effects of this storage in and delivery from Lake Powell are within the scope of the EIS, while specific activities that may be undertaken in the Upper Basin to generate the conserved water are not within the scope of this EIS. Any such activities are unknown at this time and will not necessarily require federal decision making. Any federal decisions associated with these conservation activities will be assessed outside of this EIS.

ES.2 Alternatives
ES.2.1 Alternative Development
The process of developing the range of alternatives was informed by solicitation of input and extensive collaborative engagement with stakeholders, including the Basin States, 2 Basin Tribes,
conservation organizations, other federal agencies, and members of the public. Reclamation solicited input on considerations for alternatives during pre-scoping and scoping periods in 2022 and 2023 and worked collaboratively with Basin stakeholders to identify a range of alternatives throughout 2024 and 2025.

During the public involvement periods and the subsequent alternatives development process, Reclamation received considerable input from the Basin States, many Basin Tribes,3 conservation organizations, other federal agencies, other stakeholders, and members of the public. Input submitted ranged from detailed proposed alternatives to operational concepts and principles.

Throughout the alternatives development phase, Reclamation conducted over 100 meetings with states, tribes, and other partners to review and discuss their input. For those proposals containing sufficient detail to be considered as a full alternative or a major component of an alternative, Reclamation worked extensively with these entities to not only understand and gather additional information, but also to model and perform preliminary analyses of their proposals to facilitate refinements. Additionally, Reclamation developed and hosted an online platform, the Post-2026 Operations Exploration Web Tool, allowing stakeholders, interested parties, and the public to independently or collaboratively design operational strategies to inform their input to the NEPA process.

Despite this extensive engagement, a consensus-based approach to Basin reservoir operations has not yet been achieved and therefore, Reclamation has not identified a Preferred Alternative in this Draft EIS. Since 1970, the Basin States have supported operations and reached agreements among themselves and with the Secretary on various aspects of Colorado River reservoir operations. It is beyond question that achieving a consensus-based approach to Basin reservoir operations has 2 Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming 3 There are 30 federally recognized Native American Tribes in the Colorado River Basin: Ak-Chin Indian Community, Chemehuevi Indian Tribe, Cocopah Indian Tribe, Colorado River Indian Tribes, Fort McDowell Yavapai Nation, Fort Mojave Indian Tribe, Fort Yuma-Quechan Tribe, Gila River Indian Community, Havasupai Tribe, Hopi Tribe, Hualapai Tribe, Jicarilla Apache Nation, Kaibab Band of Paiute Indians, Las Vegas Paiute Tribe, Moapa Band of Paiute Indians, Navajo Nation, Pascua Yaqui Tribe, Pueblo of Zuni, Salt River Pima-Maricopa Indian Community, San Carlos Apache Tribe, San Juan Southern Paiute, Shivwits Band of Paiutes, Southern Ute Indian Tribe, Tohono O'odham Nation, Tonto Apache Tribe, Ute Indian Tribe of the Uintah and Ouray Reservation, Ute Mountain Ute Tribe, White Mountain Apache Tribe, Yavapai-Apache Nation, and Yavapai-Prescott Indian Tribe.

Agenda Item 3.

Executive Summary (Alternatives)
ES-8 Post-2026 Colorado River Reservoir Operations DEIS January 2026 proved critical to the long-term operating success of the Basin. Given the importance of a consensus-based approach to operations in terms of the stability of the system, the Department will continue to pursue an agreement among various Basin entities. Should a consensus emerge following the publication of this Draft EIS, Reclamation anticipates that such an agreement will incorporate elements or variations of these Draft EIS alternatives and will be fully analyzed in the Final EIS.

ES.2.2 Alternatives
This Draft EIS includes the following five alternatives that capture an appropriately board range of operational elements and potential environmental impacts:
• No Action Alternative
• Basic Coordination Alternative
• Enhanced Coordination Alternative
• Maximum Operational Flexibility Alternative
• Supply Driven Alternative
Three of the alternatives directly reflect proposals and concepts received from, and refined through, stakeholder engagement. Specifically, a group of Basin Tribes and other federal agencies informed Reclamation’s development of the Enhanced Coordination Alternative and the Maximum Operational Flexibility Alternative is based on a proposal from a consortium of conservation organizations. The Supply Driven Alternative incorporates concepts from the separate proposals submitted by the Upper Division and Lower Division States, as well as ideas emerging from discussions with the Basin States during spring 2025. Reclamation developed the Basic Coordination Alternative to provide a compliance option for a set of operations that could be implemented in 2027 if no new agreements among Basin water users are adopted.

The Secretary has the vested authority and responsibility to operate the System through coordinated operations, including the ability to respond to exigent and emergency conditions, pursuant to applicable federal law, the Decree, contractual obligations, and other elements of the Law of the River. The full extent of Reclamation’s operational authority has not been tested to date—either operationally or through legislative or judicial review. The primary reason for this is that management of the river has been based on agreements among Basin water users. In most cases, Reclamation’s authority to fully implement the agreements has not been in question; however, specific operational mechanisms negotiated as part of the 2019 Drought Contingency Plan required congressional legislation4 to fully implement.

The alternatives in this Draft EIS are designed to cover a wide range of potential outcomes with respect to post-2026 operations; accordingly, they incorporate components that are within existing authorities along with components that would require new authorities and/or new agreements among Basin water users to fully implement.
4 The Colorado River Drought Contingency Authorization Act was passed on April 16, 2019, directing the Secretary to implement the 2019 DCP.

Agenda Item 3.

Executive Summary (Alternatives)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-9 Each alternative is comprised of four operational elements reflective of the proposed federal action:
(1) Guidelines to Reduce or Increase Deliveries from Lake Mead, (2) Coordinated Reservoir Operations (Lake Powell and Lake Mead), (3) Storage and Delivery of Conserved System and NonSystem Water, and (4) Additional Activities Above Lake Powell. Each element is varied across the alternatives providing a reasonable and broad range of Colorado River operations that capture an appropriate range of potential environmental impacts. Based on the analysis in and public review of this Draft EIS, Reclamation may refine these Draft EIS alternatives or develop additional alternatives for the Final EIS.

Summary descriptions of the No Action Alternative and the four action alternatives considered and evaluated in the Draft EIS are provided in Table ES-1.

Agenda Item 3.

Executive Summary (Alternatives)
ES-10 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Table ES-1
Summary Comparison of Alternatives
No Action Alternative The No Action Alternative is included as a requirement of NEPA. Operations would revert to annual determinations announced through the Annual Operating Plan. Pursuant to the LROC, the objective is to maintain a minimum release of water from Lake Powell of 8.23 maf, therefore Lake Powell releases are assumed to be 8.23 maf1 unless a higher release is required for equalization or a lower release occurs due to Glen Canyon Dam infrastructure limitations.2 Shortages to the Lower Basin would be based on priority and reach a maximum of 600 thousand acre-feet (kaf). This would not represent a continuation of current operations but is generally based on the operating guidance that was in place before the adoption of the 2007 Interim Guidelines. While the authority to use CRSP Upper Initial Units to respond to exigent and emergency conditions was recognized at that time, no specific framework for such activities had been developed, so no defined activities are included in this alternative. Existing Intentionally Created Surplus (ICS) would be delivered in accordance with existing agreements, but there would be no new storage and delivery mechanisms.

Shortage Guidelines to
Reduce Deliveries from Lake
Mead3
Coordinated Reservoir
Operations (Lake Powell
and Lake Mead)
Storage and Delivery of
Conserved System and
Non-system Water3
Surplus Guidelines to
Increase Deliveries/
Releases from Lake Mead3
Additional Activities
Above Lake Powell
• Shortages determined
based on Lake Mead
elevation
• Shortage volume of 400,
500, and 600 kaf at
elevations 1,075, 1,050,
and 1,025 feet,
respectively
• Shortages distributed
based on priority
• Lake Powell release
of 8.23 maf unless
more is required for
equalization releases
• Releases less than

8.23 maf below
elevation 3,490 feet
due to Glen Canyon
Dam infrastructure
limitations
• No new storage and
delivery mechanism
to replace ICS
• Delivery of existing
ICS in accordance
with existing
agreements
• Surplus determinations
limited to 70R (spill
avoidance strategy) and
Flood Control
conditions
• No specific
additional
activities above
Lake Powell
defined
1 Article II(2) of the LROC states the “objective shall be to maintain a minimum release of water from Lake Powell of 8.23 [maf].” Reclamation recognizes that entities in the Basin have different legal positions regarding how this LROC statement incorporates other Law of the River elements to determine annual releases. Reclamation also recognizes that variation in releases of water above and below the minimum objective release of 8.23 maf can, in appropriate circumstances, be adopted. 2 Releases from Glen Canyon Dam may be unable to achieve the specified annual release volume when Lake Powell is below elevation 3,490 feet due to infrastructure constraints.

Modeling assumptions for all alternatives reflect this constraint (see Appendix A). 3 These operational elements contain modeling assumptions for water deliveries to Mexico. Shortage volumes include assumptions related to reductions in water deliveries to Mexico. Lake Mead storage volumes for the Storage and Delivery of Conserved System and Non-system Water include assumptions related to storage available to Mexico. Surplus Guidelines include assumptions related to increased deliveries to Mexico. Appendix A provides additional detail. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico.

The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Agenda Item 3.

Executive Summary (Alternatives)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-11 Basic
Coordination
Alternative
This alternative is designed to be implementable absent new agreements among Basin water users. Lake Powell releases would primarily be 8.23 maf, with some releases above and below 8.23 maf, and minimum releases of 7.0 maf. Lake Powell elevations could be increased by releases from CRSP Upper Initial Units within their respective RODs to protect infrastructure at Glen Canyon Dam. Reclamation would identify triggers for when additional Upper Basin actions are needed to protect critical infrastructure. Lower Basin shortages up to 1.48 maf would be triggered based on Lake Mead elevation and distributed consistent with priority system. Existing ICS would be delivered in accordance with existing agreements, but there would be no new delivery and storage mechanisms.

Shortage Guidelines to
Reduce Deliveries from
Lake Mead3
Coordinated Reservoir
Operations (Lake Powell
and Lake Mead)
Storage and Delivery of
Conserved System and
Non-system Water3
Surplus Guidelines to
Increase Deliveries/
Releases from Lake
Mead3
Additional Activities
Above Lake Powell
• Shortages based on Lake
Mead elevation up to

1.48 maf
• Shortages distributed
based on priority
• Identify conditions when
additional reductions may
be needed to avoid
reaching critically low
elevations
• Lake Powell releases are
determined based on
Lake Powell elevation
unless equalization
releases are required
• Releases range from 9.5
to 7.0 maf, unless more
is required for
equalization releases
• Identify conditions
when additional action
may be needed for
infrastructure
protection
• No new storage and
delivery mechanism to
replace ICS
• Delivery of existing ICS
in accordance with
existing agreements
• Surplus determinations
limited to 70R (spill
avoidance strategy) and
Flood Control
conditions
• Releases from CRSP
Upper Initial Units
within their respective
RODs and contingent
on hydrologic
conditions to protect
infrastructure at Glen
Canyon Dam
• Identify conditions
when additional Upper
Basin actions may be
needed for
infrastructure
protection
3 These operational elements contain modeling assumptions for water deliveries to Mexico. Shortage volumes include assumptions related to reductions in water deliveries to Mexico. Lake Mead storage volumes for the Storage and Delivery of Conserved System and Non-system Water include assumptions related to storage available to Mexico. Surplus Guidelines include assumptions related to increased deliveries to Mexico. Appendix A provides additional detail. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico.

The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Agenda Item 3.

Executive Summary (Alternatives)
ES-12 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Enhanced
Coordination
Alternative
This alternative is based on concepts from Basin Tribes, federal agencies, and other stakeholders to achieve protection of critical infrastructure while benefitting key resources (e.g., natural, hydropower and recreation) through an approach to distributing storage between Lake Powell and Lake Mead. Lake Powell releases would be determined based on a combination of Lake Powell and Lake Mead elevations, 10-year running-average hydrology, and Lower Basin deliveries. This alternative would include storage and delivery mechanisms for Lake Powell and Lake Mead and extensive flexibilities for all users. The operations incorporate Basin-wide shared contributions to the system, including Upper Basin conservation that would be stored in Lake Powell and Lower Basin shortages starting at 1.3 maf, approximately the average annual evaporative and system losses at and below Lake Mead, and reaching a maximum of 3.0 maf. Shortages would be triggered based on combined storage in Lake Powell and Lake Mead and distributed pro rata.

Shortage Guidelines
to Reduce Deliveries
from Lake Mead3
Coordinated Reservoir
Operations (Lake
Powell and Lake Mead)
Storage and Delivery of
Conserved System and Nonsystem Water3
Surplus Guidelines to
Increase Deliveries/
Releases from Lake Mead3
Additional Activities
Above Lake Powell
• Shortages
determined based
on combined
storage in Lake
Powell and Lake
Mead
• Shortages begin at
60% full at a
volume of 1.3 maf,
then increase
linearly, reaching a
maximum of 3.0
maf at 30% full
and below
• Shortages
distributed pro
rata
• Lake Powell releases
determined based
on a combination of
Lake Powell and
Lake Mead
elevations, 10-year
running-average
hydrology, and
Lower Basin
deliveries
• Releases range from

10.8 to 4.7 maf
• Storage up to 5.0 maf in Lake
Mead with additional 2.0 maf
Protection Pool; included for
purposes of determining Lake
Powell releases and shortages
• Storage up to 2.0 maf in Lake
Powell; included for purposes of
determining Lake Powell
releases but excluded from
shortage determinations
• Existing ICS converted to new
mechanism immediately
• Extensive flexibilities for all
users: intra- and interstate
transactions within each basin
• Tribal water (both conserved
consumptive use and unused)
including in Lake Powell
conservation pool and Lake
Mead Protection Pool
• Surplus determinations
limited to 70R (spill
avoidance strategy) and
Flood Control
conditions
• Upper Basin
conservation
contributed to the
Lake Powell
conservation pool
based on hydrologic
conditions: up to 200
kaf per year for first 5
years, up to 275 kaf
per year for second 5
years, up to 350 kaf
starting in year 11
3 These operational elements contain modeling assumptions for water deliveries to Mexico. Shortage volumes include assumptions related to reductions in water deliveries to Mexico. Lake Mead storage volumes for the Storage and Delivery of Conserved System and Non-system Water include assumptions related to storage available to Mexico. Surplus Guidelines include assumptions related to increased deliveries to Mexico. Appendix A provides additional detail. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico.

The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Agenda Item 3.

Executive Summary (Alternatives)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-13 Maximum Operational
Flexibility Alternative
This alternative is informed by a proposal submitted by a consortium of conservation organizations and incorporates proactive responses, targeted reservoir management strategies, and innovative and flexible tools to address an increasingly variable set of future hydrologic conditions. Lake Powell releases would range from 11.0 maf to 5.0 maf and would be determined by total CRSP system storage and recent hydrology. Releases would switch to “run-of-river” when Lake Powell is at 3,510 feet or lower. The operations incorporate Basin-wide shared contributions, including up to 4.0 maf of shortages in the Lower Basin triggered by combined sevenreservoir storage (CRSP Units, Lake Mead, Lake Mohave, and Lake Havasu) and recent hydrology and voluntary water contributions from both basins.

Shortage Guidelines to
Reduce Deliveries from
Lake Mead3
Coordinated Reservoir
Operations (Lake Powell
and Lake Mead) 3
Storage and Delivery of
Conserved System and
Non-system Water
Surplus Guidelines to
Increase Deliveries/
Releases from Lake
Mead3
Additional Activities
Above Lake Powell
• Shortages determined
based on combined
seven-reservoir
storage and recent
hydrology
• Shortages start at 80%
full and increase
linearly, subject to
upward adjustment
based on hydrology,
reaching a maximum
of 4.0 maf
• Shortages distributed
based on priority, as
described in Approach
1 of the Supply Driven
Alternative
• Lake Powell releases
determined based on
total Upper Basin
system storage and
recent hydrology
• Releases subject to
downward adjustment
based on hydrology
and range from 11.0 to

5.0 maf
• Releases switch to
“run-of-river” when
Lake Powell is at
elevation 3,510 feet or
lower
• Storage up to 8.0 maf
in either Lake Powell or
Lake Mead; excluded
for purposes of
determining Lake
Powell releases and
shortages
• Existing ICS converted
to new mechanism
over 5 years
• Extensive flexibilities for
all users: transactions
within and across
basins, including
interstate and interbasin
• Surplus
determinations limited
to Flood Control
conditions
• Average of 200 kaf of
Upper Basin annual
conservation based on
hydrologic conditions
contributed to the
Lake Powell
conservation pool
3 These operational elements contain modeling assumptions for water deliveries to Mexico. Shortage volumes include assumptions related to reductions in water deliveries to Mexico. Lake Mead storage volumes for the Storage and Delivery of Conserved System and Non-system Water include assumptions related to storage available to Mexico. Surplus Guidelines include assumptions related to increased deliveries to Mexico. Appendix A provides additional detail. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico.

The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Agenda Item 3.

Executive Summary (Alternatives)
ES-14 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Supply Driven
Alternative
Annual Lake Powell releases are determined based on a 65 percent of 3-year-average natural flow at Lees Ferry. Lake Powell elevations could be increased by releases from CRSP Upper Initial Units within their respective RODs to protect infrastructure at Glen Canyon Dam.

This alternative would include new delivery and storage mechanisms for Lake Powell and Lake Mead. Lower Basin shortages up to 2.1 maf would be triggered based on Lake Mead elevation. This alternative analyzes two approaches to shortage distribution: state-based combined with Lower Basin-wide priority and state-based combined with Lower Basin-wide pro rata.

Shortage Guidelines
to Reduce Deliveries
from Lake Mead3
Coordinated
Reservoir Operations
(Lake Powell and Lake
Mead)
Storage and Delivery of
Conserved System and
Non-system Water3
Surplus Guidelines
to Increase
Deliveries/Releases
from Lake Mead3
Additional Activities Above Lake
Powell
• Shortages
determined based
on Lake Mead
elevation
• Shortages start at
1,145 feet and
reach a maximum
of 2.1 maf at 1,000
feet and below
• Lake Powell releases
determined
primarily based on
65% of 3-year
natural flows at Lees
Ferry
• Releases range from

12.0 to 4.7 maf
• Storage up to 8.0 maf
in Lake Mead; excluded
for purposes of
determining shortages
• Storage up to 3.0 maf
at Lake Powell; included
for purposes of
determining Lake
Powell releases
• Existing ICS converted
to new mechanism over
10 years
• Expanded flexibilities:
interstate exchanges
within each basin
• Surplus
determinations
based on Lake
Mead elevation at
or above 1,165
feet, 70R (spill
avoidance
strategy) or Flood
Control conditions
• Increased releases from CRSP
Upper Initial Units by up to 500
kaf per year within their
respective RODs and contingent
on hydrologic conditions to
protect infrastructure at Glen
Canyon Dam
• Up to 200 kaf of Upper Basin
annual conservation based on
hydrologic conditions
contributed to the Lake Powell
conservation pool
• In years when Lake Powell
cannot meet its required water
year release because of low
elevation, additional “gap water”
is introduced into the system
and tracked to be released in
subsequent years
3 These operational elements contain modeling assumptions for water deliveries to Mexico. Shortage volumes include assumptions related to reductions in water deliveries to Mexico. Lake Mead storage volumes for the Storage and Delivery of Conserved System and Non-system Water include assumptions related to storage available to Mexico. Surplus Guidelines include assumptions related to increased deliveries to Mexico. Appendix A provides additional detail. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico.

The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Agenda Item 3.

Executive Summary (Alternatives)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-15 ES.2.3 Range of Alternatives
The Draft EIS incorporates a reasonable and broad range of alternatives in accordance with NEPA.

It is important that the range is sufficient to cover reasonable permutations of operations and provide flexibility to incorporate public input between the Draft and Final EIS. The figures below demonstrate the broad range of operational approaches incorporated into the alternatives by summarizing them across the following categories: Lower Basin Shortage Guidelines, Coordinated Reservoir Operations, Lake Mead Storage and Delivery of Conserved Water, and Activities above Lake Powell. For each figure below, the individual lines connect each alternative with the approach(es) that Reclamation has analyzed within that alternative.

Lower Basin Shortage Guidelines
Figure ES-1, Lower Basin Shortage Guidelines, shows the range of approaches considered for factors that would trigger Lower Basin shortage, the level at which shortages would start, the maximum Lower Basin shortage amount, and the method(s) by which shortages would be distributed among Lower Basin water users.

Figure ES-1
Lower Basin Shortage Guidelines
Notes: Additional restrictions in water deliveries will occur when Lake Mead is near dead pool, resulting in large reductions (referred to as “dead-pool related reductions”). These are not considered an operational element of the alternatives.

Shortage volumes include modeling assumptions for reductions in water deliveries to Mexico. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico. The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Agenda Item 3.

Executive Summary (Alternatives)
ES-16 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Coordinated Reservoir Operations
Figure ES-2, Coordinated Reservoir Operations, shows the range of approaches considered for the factors that would determine Lake Powell water year release volumes, additional information about the structure of operations, the range of water year release volumes that could occur based on those factors, and the approach to coordination of operations between Lake Powell and Lake Mead (that is, how dependent operations of Lake Powell would be on conditions at Lake Mead).

Figure ES-2
Coordinated Reservoir Operations
Agenda Item 3.

Executive Summary (Alternatives)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-17 Lake Mead Storage and Delivery of Conserved Water
Figure ES-3, Lake Mead Storage and Delivery of Conserved System Water, shows the range of approaches considered to incorporate this mechanism, including how Intentionally Created Surplus created prior to 2027 is converted into a new mechanism, the maximum amount of conserved water that could be stored in Lake Mead, whether stored conserved water is excluded from determinations of Lake Powell releases and shortage volumes (“operational neutrality”), and the level of flexibilities for transactions of stored conserved water between users. .

Figure ES-3
Lake Mead Storage and Delivery of Conserved System Water Note: Accumulation limits include modeling assumptions for storage available to Mexico. Reclamation’s modeling assumptions are not intended to constitute an interpretation or application of the 1944 Water Treaty or to represent current United States policy or a determination of future United States policy regarding deliveries to Mexico. The United States will conduct all necessary and appropriate discussions regarding the proposed federal action and implementation of the 1944 Water Treaty with Mexico through the IBWC in consultation with the Department of State.

Activities Above Lake Powell
Figure ES-4, Activities Above Lake Powell, shows the range of approaches to releases from CRSP Upper Initial Units to protect Glen Canyon Dam infrastructure, 5 the maximum amount of
conserved water that could be stored, assumptions about the amount of annual Upper Basin conservation, and rules for when Upper Basin conserved water would be converted to system water. 5 CRSP Upper Initial Units include Flaming Gorge, Blue Mesa (a component of the Aspinall Unit), and Navajo reservoirs. Current RODs governing operations of these units were signed in 2006, 2012, and 2006, respectively.

Agenda Item 3.

Executive Summary (Potential Environmental Effects)
ES-18 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Figure ES-4
Activities Above Lake Powell
ES.3 Potential Environmental Effects
ES.3.1 Analysis Methods
The analysis for this Draft EIS uses a Decision Making under Deep Uncertainty (DMDU) approach, drawn from a well-established branch of decision science, that is designed to account for uncertainty in future Basin conditions. The most impactful and largest source of uncertainty is future hydrology.

Since 2000, hydrologic conditions drier than those in the previously observed record have continued to occur, confounding ongoing efforts to manage system risk. Reclamation began significant investments in research to improve hydrologic predictions and understanding of long-term supply outlooks in 2004, but there have been only limited improvements in prediction skill and long-term hydrologic projections continue to show a wide range of possibilities around the overall likelihood of a drier future. Therefore, long-term planning in the Basin must account for conditions of deep uncertainty, which occur when it is not possible to confidently assign probabilities to specific future conditions. Population growth and water use in the Basin also contribute to the challenge of planning for a deeply uncertain future.

Alongside research into understanding hydrologic uncertainty, Reclamation has also invested in decision science research through the development of DMDU methods that allow for reliable analysis despite the uncertainty. Development of DMDU applications in the Basin stems from a collaboration with the RAND Corporation during the 2012 Colorado River Basin Water Supply and Demand Study, when the methods were introduced into Reclamation’s long-term planning. The DMDU framework used here enhances the ability to evaluate the robustness of the alternatives – that is, their ability to meet important performance objectives in a wide range of futures. It also supports the identification of future conditions that could cause vulnerability to critical system conditions. A focus on robustness and vulnerability prevent overreliance on the types of probabilistic risk projections that, in previous planning efforts, did not convey the actual risks facing the system and contributed to insufficient protection against the ongoing drought.

Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-19 The hydrologic modeling performed for this analysis employs DMDU by testing the system in 1,200 potential futures that cover a wide range of hydrologic conditions and incorporate multiple sets of initial reservoir conditions that account for uncertainty about where the system will be in January 2027 when the new guidelines would take effect. This hydrologic modeling generated projections of future Colorado River system conditions (such as reservoir elevations, reservoir releases, and river flows) for the alternatives. These system projections serve as the basis for analyzing potential effects on other environmental resources (e.g., recreation, biological resources, and energy) and any associated resource specific models. For each resource, the analysis describes robustness across this wide range, identifies specific conditions that could cause vulnerability, and provides important context for interpreting those findings without overconfidently predicting system outcomes. This aligns with the guidance provided in Executive Order “Restoring Gold Standard Science” from May 2025, and provides a sound basis for comparing the alternatives’ ability to meet key performance thresholds for resources throughout the Basin.

ES.3.2 Summary of Environmental Consequences
The analysis focuses on specific issues identified during internal and public scoping for all affected environmental resources (e.g., hydrologic, biologic, and socioeconomic). Resources considered but determined to not be significantly impacted by the action include transportation, noise, light, and minerals.

A summary of environmental consequences is provided in Table ES-8, Summary of Potential Effects of the Alternatives, located at the end of this Executive Summary. Performance indicators were developed to address the specific issues raised during scoping. Throughout, a higher percentage reflects better performance. Where quantitative or DMDU results are not possible, a qualitative description of potential impacts is provided. The affected environment and environmental consequences are discussed in detail in Chapter 3 and the associated resource appendices.

ES.4 Key Tradeoffs and Conclusions
The action alternatives together capture a wide range of concepts across the operational elements that make up an alternative; this operational variety produces a wide range of potential system outcomes. The following sections provide an overview of performance and vulnerability for longterm and near-term outlooks.

ES.4.1 Overview of Long-term Performance in Key Metrics Figure ES-5 summarizes how the alternatives and the Continued Current Strategies Comparative Baseline6 (labeled Cont. Current in the following figures and tables) perform over the next 20 years in five metrics that are represented by vertical axes. The metrics are described in Table ES-2. While there are many important metrics across Basin resources, these summarize the high-level system impacts that propagate through all resources. As described in Table ES-2, these elevations have 6 This scenario represents no changes from current operations and relies on strategies and agreements that expire in 2026. It is provided as a comparative baseline to inform an understanding of how the alternatives perform relative to current operations.

Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
ES-20 Post-2026 Colorado River Reservoir Operations DEIS January 2026 particular operational relevance, and comparing alternative performance relative to these elevations provides meaningful insight. In practice, operational implementation would include identifying elevations above critical thresholds (i.e., 3,490 feet and 950 feet) at which additional responsive actions could be taken in advance to avoid reaching those critical elevations. The “buffer” elevations shown in Table ES-2 (i.e., 3,500 feet and 975 feet) do not represent an operational decision for actual implementation; rather, they are used solely for analytical purposes in this Draft EIS.

Table ES-2
High Level Performance Metrics Included in Figure ES-5
Metric Name Description
Percent of months in which
Lake Powell stays above
elevation 3,500 feet
Elevation 3,500 feet provides a buffer above 3,490 feet, below which infrastructure may be critically impacted and hydropower cannot be produced at Glen Canyon Dam
Percent of months in which
Lake Mead stays above
elevation 975 feet
Elevation 975 feet provides a buffer above 950 feet, below which infrastructure may be critically impacted and hydropower cannot be produced at Hoover Dam
Percent of years in which Lake
Mead dead pool-related
reductions7 are avoided
Delivery reductions due to Lake Mead being near dead pool (elevation 895 feet) resulting in large magnitudes of reductions to Lower Basin water users
Average annual shortage The average annual shortage that occurs under each alternative provides important summary information for Lower Basin water users and context for reservoir-based performance
Average water year releases
from Glen Canyon Dam
The average water year release from Glen Canyon Dam that occurs under each alternative provides important context for reservoir-based performance
In Figure ES-5, the performance of each alternative is captured by a colored, segmented line that crosses the axes at different vertical positions, where the height denotes performance. Crossing lines are a visual cue that there is a tradeoff between different performance metrics. The five-metric performance summary is divided into three categories of long-term future hydrology, 8 summarized
in Table ES-3. Results are divided into these categories to demonstrate how the alternatives respond under different assumptions about long-term hydrologic conditions and to explore the impacts of hydrology on performance tradeoffs.
7 Dead pool and Hoover Dam infrastructure can start to impact Lake Mead’s ability to make deliveries to the Lower Basin at elevation 950 feet. Restrictions in water deliveries will occur when Lake Mead is near dead pool, resulting in large reductions (referred to as “dead-pool related reductions”). Although not considered an operational element of the alternatives, accounting for such reductions is an important performance metric. 8 Wetter futures were also tested and are included in the impact analysis; however, for this analysis the hydrologic categories shown are most informative.

Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
Figure ES-5
Key Performance Tradeoffs in Different Hydrologic Conditions January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-21 Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
ES-22 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Table ES-3
Hydrologic Categories Included in Figure ES-5
Long-Term Hydrologic
Category
Average Annual Simulated Lees
Ferry Flow, 2027-2046 (maf)
Average9 12-14
Dry 10-12
Critically Dry <10
A key performance tradeoff demonstrated by Figure ES-5 is the tradeoff between percent of years in which critical reservoir elevations and dead pool-related reductions are avoided (first three axes from left) and average shortage (fourth axis from left). In the Average hydrologic category, this stands out as a difference between the No Action Alternative and the other alternatives, but in the Dry and Critically Dry hydrologic categories, the performance differences between the action alternatives becomes clearer and the tradeoffs (indicated by the crossing lines) become steeper: the Maximum Operational Flexibility and Enhanced Coordination alternatives incorporate large shortages and better protect the reservoirs, Supply Driven and Basic Coordination have lower volumes of shortage and lower reservoir protection, and No Action provides minimal protection and results in a high frequency of dead pool-related reductions while imposing minimal shortage.

Differences in performance between Supply Driven (Lower Basin [LB] Priority approach) and the Supply Driven (LB Pro Rata approach) are primarily due to differing assumptions regarding the use of the storage and delivery mechanism for conserved water.

In Dry hydrologic futures, Maximum Operational Flexibility and Enhanced Coordination show that lower water year releases from Glen Canyon Dam provide more protection to keep Lake Powell above 3,500 feet, while the higher water year releases in Basic Coordination and Supply Driven result in significantly higher frequencies of Lake Powell falling below 3,500 feet. In the Critically Dry hydrologic category, water year releases are low across all alternatives, but, for Basic Coordination and Supply Driven, this is driven largely by critically low Lake Powell elevations and thus constrained release volumes in over 60 percent of months.

The effectiveness of large shortages at preventing dead pool-related delivery reductions is clearest in the Critically Dry hydrologic category, where Maximum Operational Flexibility and Enhanced Coordination rely on large average shortages to significantly outperform the other alternatives in avoiding dead pool-related reductions. However, even these two more protective alternatives would experience Lake Mead elevations below 975 feet in over 50 percent of months if future conditions are similar to those in the Critically Dry hydrologic category. 9 The 20-year average Lees Ferry natural flow is 12.7 maf in 2025. Since 2004, the 20-year running average has been in the Average hydrologic category in 21 out of 22 years, with one year slightly above 14 maf. Since 2018, the 20-year averages have been predominantly between 12 and 13 maf.

Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-23 The analysis related to Figure ES-5 examines tradeoffs and the influence of different long-term hydrologic scenarios on the alternatives’ performance in important metrics. Table ES-4 and Table ES-5, below, provide insight into what specific long-term hydrology is likely to cause the system to be vulnerable to critical conditions under different alternatives and whether those conditions are similar to anything from the observed record. This context is helpful in understanding whether the conditions leading to vulnerability could be reasonably expected based on history. 10 Based on
analysis of 1,200 modeled futures (which include system projections resulting from three sets of 2027 initial reservoir elevations), an average-flow threshold was identified for each alternative that skillfully predicted the occurrence of a critical system condition at least once within 20 years of implementation (between 2027 and 2046).

Table ES-4
Vulnerability to Lake Powell Falling Below Elevation 3,500 Feet at Least Once in the First 20 Years and Comparison to Historical Conditions
Alternative
Water Year 2027-2046
Average Natural Flow
that Could Cause
Vulnerability (maf/yr)
Number of Years
Below Threshold
2000-2024
(Historical Data)
Number of Years
Below Threshold
1906-2024
(Historical Data)
Cont. Current ≤13.1 8 12
No Action ≤18.6 25 100
Basic Coordination ≤13.1 8 12
Enhanced Coordination ≤9.7 0 0
Max Flexibility ≤9.0 0 0
Supply Driven (LB Priority) ≤13.9 18 40
Supply Driven (LB Pro Rata) ≤13.9 18 40
Table ES-5
Vulnerability to Lake Mead Falling Below Elevation 975 Feet at Least Once in the First 20 Years and Comparison to Historical Conditions
Alternative
Water Year 2027-2046
Average Natural Flow
that Could Cause
Vulnerability (maf/yr)
Number of Years
Below Threshold
2000-2024
(Historical Data)
Number of Years
Below Threshold
1906-2024
(Historical Data)
Cont. Current ≤12.5 1 1
No Action ≤15.8 24 81
Basic Coordination ≤12.0 0 0
Enhanced Coordination ≤10.9 0 0
Max Flexibility ≤10.2 0 0
Supply Driven (LB Priority) ≤11.3 0 0
Supply Driven (LB Pro Rata) ≤10.5 0 0
10 Information about how the vulnerability thresholds compare to projections of future conditions, which include the potential for a drier future, can be found in Technical Appendix 3 – Hydrologic Resources.

Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
ES-24 Post-2026 Colorado River Reservoir Operations DEIS January 2026 With respect to Lake Powell falling below elevation 3,500 feet at least once in the next 20 years, the Supply Driven Alternative is most vulnerable action alternative: under these operations, Lake Powell would likely fall to critical elevations if the 20-year average natural flow at Lees Ferry is 13.9 maf or lower. Hydrologic conditions this dry or drier occurred in 18 years since 2000. With respect to Lake Mead falling below elevation 975 feet at least once in the next 20 years, the flow thresholds indicating vulnerability are drier for all of the action alternatives than any observed historical conditions.

ES.4.2 Near-term Vulnerability
The guidelines adopted through the post-2026 process are likely to face an early test as they begin 2027 operations with low elevations at Lake Powell and Lake Mead. It is useful to understand what hydrology could cause the same critical system conditions examined above to occur under each alternative within the first five years of operations. Table ES-6 and Table ES-7 compare the vulnerability thresholds between alternatives in the context of historical conditions. These results only include system projections resulting from the low 2027 initial reservoir elevations. For context, the 5-year average Lees Ferry natural flow is 11.1 maf in 2025.

With respect to Lake Powell falling below elevation 3,500 feet at least once in the next five years, the Supply Driven and Basic Coordination alternatives are equally vulnerable: under these operations, Lake Powell would likely fall to critical elevations if the average natural flow at Lees Ferry from 2027 to 2031 is 11.3 maf or lower. Hydrologic conditions this dry or drier occurred in six years since 2000. With respect to Lake Mead falling below elevation 975 feet at least once in the next five years, the Basic Coordination Alternative is the most vulnerable; Lake Mead would likely fall to critical elevations if the average flow from 2027 to 2031 is 10.2 maf or drier. These conditions have occurred in one year since 2000.

Table ES-6
Vulnerability to Lake Powell Falling Below Elevation 3,500 Feet at Least Once in the First Five Years and Comparison to Historical Conditions Alternative
Water Year 2027-2031
Average Natural Flow
that Could Cause
Vulnerability (maf/yr)
Number of Years
Below Threshold
2000-2024
(Historical Data)
Number of Years
Below Threshold
1906-2024
(Historical Data)
Cont. Current ≤10.9 4 5
No Action ≤12.9 13 29
Basic Coordination ≤11.3 6 7
Enhanced Coordination ≤8.6 0 0
Max Flexibility ≤8.2 0 0
Supply Driven (LB Priority) ≤11.3 6 7
Supply Driven (LB Pro Rata) ≤11.3 6 7
Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-25 Table ES-7
Vulnerability to Lake Mead Falling Below Elevation 975 Feet at Least Once in the First Five Years and Comparison to Historical Conditions
Alternative
Water Year 2027-2031
Average Natural Flow
that Could Cause
Vulnerability (maf/yr)
Number of Years
Below Threshold
2000-2024
(Historical Data)
Number of Years
Below Threshold
1906-2024
(Historical Data)
Cont. Current Strategies ≤10.9 3 5
No Action ≤12.5 11 25
Basic Coordination ≤10.2 1 1
Enhanced Coordination ≤9.2 0 0
Max Flexibility ≤9.1 0 0
Supply Driven (LB Priority) ≤10.0 1 1
Supply Driven (LB Pro Rata) ≤8.7 0 0
ES.4.3 Conclusions
A number of reservoir and water management decisional documents and agreements that govern operation of Colorado River facilities and management of Colorado River water are currently scheduled to expire at the end of 2026. The Secretary, acting through Reclamation, proposes adoption of new guidelines and coordinated management strategies to address Lake Powell and Lake Mead through their full operating range, to be implemented upon the expiration of the existing guidelines and agreements. Management strategies will primarily focus on the operation of Glen Canyon Dam and Hoover Dam but may include actions upstream and downstream of these facilities to protect critical reservoir elevations.

Since the adoption of the current guidelines in 2007, unprecedented drought has changed the Basin’s understanding of hydrology. Hydrologic conditions drier than those in the previously observed record have continued to occur, confounding ongoing efforts to manage system risk. This reality poses both near and long-term challenges in managing the Colorado River system to continue to provide predictability and certainty to Basin water users as well as operating flexibility to conserve and enhance water storage in Colorado River system reservoirs.

This Draft EIS analyzes a broad range of reasonable alternatives for the operational elements identified in the proposed federal action. These alternatives were developed through extensive engagement with a wide range of partners and stakeholders as well as the general public during a timeframe of over three years. Despite this extensive engagement, this Draft EIS does not identify a Preferred Alternative due to the current absence of a consensus-based approach to post-2026 reservoir operations among Basin entities. Reclamation anticipates identifying a Preferred Alternative after publication of this Draft EIS that incorporates elements or variations of the Draft EIS alternatives, which would then be fully analyzed in the Final EIS.

Agenda Item 3.

Executive Summary (Key Tradeoffs and Conclusions)
ES-26 Post-2026 Colorado River Reservoir Operations DEIS January 2026 This page intentionally left blank.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-27 ES.5 Summary of Potential Effects
Table ES-8
Summary of Potential Effects of the Alternatives
Hydrology
Impact Category Performance Indicator1
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Reservoir Elevations Lake Powell end-of-water-year
(EOWY) elevations in the critically
dry flow category
Lowest elevations in the critcally dry
flow category
Second lowest elevations in the
critcally dry flow category
Highest elevations in the critcally
dry flow category
Second highest elevations in
the critcally dry flow category
Tied in the middle
performing for elevations
in the critcally dry flow
category
Tied in the middle
performing for
elevations in the critcally
dry flow category
Percent of modeled futures in which
Lake Powell elevation stays above
3,500 feet 100% of the time. The
higher the percentage, the more
likely Lake Powell will remain above
the minimum power pool (3,490
feet) under most future hydrologic
scenarios.
20% of modeled futures meet the
preferred minimum performance.
25% of modeled futures meet the
preferred minimum performance.
82% of modeled futures meet the
preferred minimum performance.
87% of modeled futures meet
the preferred minimum
performance.
24% of modeled futures
meet the preferred
minimum performance.
24% of modeled futures
meet the preferred
minimum performance.

Lake Mead end-of-calendar-year
(EOCY) elevations in all flow
categories
Lowest elevations in all flow
categories
Second lowest elevations in all
flow categories
Third lowest elevations in all flow
categories
Third highest elevations in all
flow categories
Second highest
elevations in all flow
categories
Highest elevations in all
flow categories
Percent of futures in which Lake
Mead elevation stays above 975 feet
100% of the time. The higher the
percentage, the more likely Lake
Mead will remain above the
minimum power pool (950 feet)
under most future hydrologic
scenarios.
25% of modeled futures meet the
preferred minimum performance.
58% of modeled futures meet the
preferred minimum performance.
75% of modeled futures meet the
preferred minimum performance.
79% of modeled futures meet
the preferred minimum
performance.
71% of modeled futures
meet the preferred
minimum performance.
80% of modeled futures
meet the preferred
minimum performance.

Lake Mohave and Lake Havasu end
of year elevations.

No impact; the existing rule curves continue to determine elevations.

System Storage Lake Powell + Lake Mead combined
storage capacity (median values
across all flow categories)
Lowest combined storage in all flow
categories
Second lowest combined storage
in all flow categories
Second highest combined
storage in all flow categories
Highest combined storage in all
flow categories
Third lowest combined
storage in all flow
categories
Third highest
combined storage in all
flow categories
CRSP Reservoir (Flaming Gorge,
Navajo, Blue Mesa, and Powell)
combined storage capacity (median
values across all flow categories)
Highest combined storage in the
two wettest flow categories.

Third highest combined storage in
the average and two driest flow
categories.

Second lowest combined storage
in all flow categories except the dry
and critically dry flow categories,
where it is the lowest.

Third highest storage in the two
wettest flow categories
Highest combined storage in the
average and two driest flow
categories.

Second highest combined
storage in all flow categories
Lowest combined
storage in wet,
moderately wet, and
average flow categories
(same as Supply Driven
Alternative [LB Pro Rata
approach])
Lowest combined
storage in wet,
moderately wet,
average, and critically
dry flow categories
(same as Supply Driven
Alternative [LB Priority
approach])
Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-28 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator1
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
System Storage
(continued)
Seven-Reservoir (Flaming Gorge,
Navajo, Blue Mesa, Powell, Mead,
Mohave, and Havasu) combined
storage capacity (median values
across all flow categories)
Lowest combined storage in all flow
categories
Second lowest combined storage
in all flow categories
Second highest combined
storage in all flow categories
Highest combined storage in all
flow categories
Third lowest combined
storage in all flow
categories
Third highest
combined storage in all
flow categories
Reservoir Releases Annual Glen Canyon Dam EOWY
releases under average and
critically dry hydrology conditions
(median values)
Releases of 8.23 maf in the average
flow category.

Releases of 6.26 maf the critically dry
flow category.

Releases of 8.23 maf in the average
flow category.

Releases of 6.82 maf in the critically
dry flow category.

Releases of 7.87 maf in the
average flow category.

Releases of 5.11 maf in the
critically dry flow category.

Releases of 8.17 maf in the
average flow category.

Releases of 5.68 maf in the
critically dry flow category.

Releases of 8.39 maf in
the average flow
category.

Releases of 5.96 maf in
the critically dry flow
category.

Releases of 8.39 maf in
the average flow
category.

Releases of 5.96 maf in
the critically dry flow
category.
10-year Glen Canyon Dam releases
under average and critically dry
hydrology conditions (median
values)
Releases of 82.2 maf in the average
flow category.

Releases of 74.5 maf Releases in the
critically dry flow category.

Releases of 81.5 maf in the average
flow category.

Releases of 74.7 maf in the critically
dry flow category.

Releases of 79.8 maf in the
average flow category.

Releases of 69.0 maf in the
critically dry flow category.

Releases of 80.9 maf in the
average flow category.

Releases of 70.8 maf in the
critically dry flow category.

Releases of 83.0 maf in
the average flow
category.

Releases of 73.4 maf in
the critically dry flow
category.

Releases of 83.0 maf in
the average flow
category.

Releases of 73.4 maf in
the critically dry flow
category
10-year Lee Ferry Compact Point
flow volumes under average and
critically dry hydrology conditions
(median values)
Flows of 83.6 maf in the average flow
category.

Flows of 76.0 maf in the critically dry
flow category.

Flows of 83.0 maf in the average
flow category.

Flows of 76.2 maf in the critically
dry flow category.

Flows of 81.3 maf in the average
flow category.

Flows of 70.4 maf in the critically
dry flow category.

Flows of 82.3 maf in the average
flow category.

Flows of 72.4 maf in the critically
dry flow category.

Flows of 84.6 maf in the
average flow category.

Flows of 74.9 maf in the
critically dry flow
category.

Flows of 84.6 maf in the
average flow category.

Flows of 74.9 maf in the
critically dry flow
category.

Annual EOCY Hoover Dam releases
under critically dry hydrology
conditions (median values)
Releases of 8.7 maf in the average
flow category.

Flows of 7.1 maf in the critically dry
flow category.

Releases of 8.1 maf in the average
flow category.

Flows of 7.7 maf in the critically dry
flow category.

Releases of 7.7 maf in the average
flow category.

Flows of 6.6 maf in the critically
dry flow category.

Releases of 7.8 maf in the
average flow category.

Flows of 6.6 maf in the critically
dry flow category.

Releases of 7.8 maf in the
average flow category.

Flows of 7.3 maf in the
critically dry flow
category.

Releases of 7.7 maf in
the average flow
category.

Flows of 7.2 maf in the
critically dry flow
category.

Annual EOCY Davis Dam releases
under average and critically dry
hydrology conditions (median
values)
Releases of 8.6 maf in the average
flow category.

Releases of 7.0 maf in the critically
dry flow category.

Releases of 8.0 maf in the average
flow category.

Releases of 7.6 maf in the critically
dry flow category.

Releases of 7.5 maf in the average
flow category.

Releases of 6.5 maf in the critically
dry flow category.

Releases of 7.7 maf in the
average flow category.

Releases of 6.5 maf in the
critically dry flow category.

Releases of 7.7 maf in the
average flow category.

Releases of 7.2 maf in the
critically dry flow
category.

Releases of 7.6 maf in
the average flow
category.

Releases of 7.1 maf in
the critically dry flow
category.

Annual EOCY Parker Dam releases
under average and critically dry
hydrology conditions (median
values)
Releases of 6.6 maf in the average
flow category.

Releases of 5.9 maf in the critically
dry flow category.

Releases of 6.5 maf in the average
flow category.

Releases of 6.3 maf in the critically
dry flow category.

Releases of 5.5 maf in the average
flow category.

Releases of 4.7 maf in the critically
dry flow category.

Releases of 6.3 maf in the
average flow category.

Releases of 5.8 maf in the
critically dry flow category.

Releases of 6.3 maf in the
average flow category.

Releases of 6.1 maf in the
critically dry flow
category.

Releases of 5.8 maf in
the average flow
category.

Releases of 5.5 maf in
the critically dry flow
category.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-29 Impact Category Performance Indicator1
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
River Flows River flows in Reach 1 (Glen Canyon
Dam to Lake Mead).

Second highest river flows in the
critically dry flow category.

Mirrors trends for releases from Glen
Canyon Dam. River flows decrease as
flow categories get drier.

Highest river flows in the critically
dry flow category.

Mirrors trends for releases from
Glen Canyon Dam. River flows
decrease as flow categories get
drier.

Lowest river flows in the critically
dry flow category.

Mirrors trends for releases from
Glen Canyon Dam. River flows
decrease as flow categories get
drier.

Second lowest river flows in the
critically dry flow category.

Mirrors trends for releases from
Glen Canyon Dam. River flows
decrease as flow categories get
drier.

Third lowest river flows
in the critically dry flow
category (same as Supply
Driven Alternative [LB Pro
Rata approach])
Mirrors trends for
releases from Glen
Canyon Dam. River flows
decrease as flow
categories get drier.

Third lowest river flows
in the critically dry flow
category (same as
Supply Driven
Alternative [LB Priority
approach])
Mirrors trends for
releases from Glen
Canyon Dam. River
flows decrease as flow
categories get drier.

River flows in Reach 2 (Hoover Dam
to Lake Mohave)
Second lowest river flows in the
critically dry flow category.

Mirrors trends for releases from
Hoover Dam. River flows decrease as
flow categories get drier.

Highest river flows in the dry flow
category.

Mirrors trends for releases from
Hoover Dam. River flows decrease
as flow categories get drier.

Tied lowest river flows in the dry
flow category (same as Maximum
Flexibility).

Mirrors trends for releases from
Hoover Dam. River flows decrease
as flow categories get drier.

Tied lowest river flows in the
dry flow category (same as
Enhanced Coordination).

Mirrors trends for releases from
Hoover Dam. River flows
decrease as flow categories get
drier.

Second highest river
flows in the dry flow
category.

Mirrors trends for
releases from Hoover
Dam. River flows
decrease as flow
categories get drier.

Third highest river
flows in the dry flow
category.

Mirrors trends for
releases from Hoover
Dam. River flows
decrease as flow
categories get drier.

River flows in Reach 3 (Davis Dam
to Lake Havasu)
Second lowest river flows in the dry
flow category.

Mirrors trends for releases from
Davis Dam. River flows decrease as
flow categories get drier.

Highest river flows in the dry flow
category.

Mirrors trends for releases from
Davis Dam. River flows decrease as
flow categories get drier.

Tied lowest river flows in the dry
flow category (same as Maximum
Flexibility).

Mirrors trends for releases from
Davis Dam. River flows decrease as
flow categories get drier.

Tied lowest river flows in the
dry flow category (same as
Enhanced Coordination).

Mirrors trends for releases from
Davis Dam. River flows decrease
as flow categories get drier.

Second highest river
flows in the dry flow
category.

Mirrors trends for
releases from Davis Dam.

River flows decrease as
flow categories get drier.

Third highest river
flows in the dry flow
category.

Mirrors trends for
releases from Davis
Dam. River flows
decrease as flow
categories get drier.

River flows in Reach 4 (Parker Dam
to Cibola Gage)
Third highest river flows in the dry
flow category.

Mirrors trends for releases from
Parker Dam. River flows decrease as
flow categories get drier.

Highest river flows in the dry flow
category.

Mirrors trends for releases from
Parker Dam. River flows decrease as
flow categories get drier.

Lowest river flows in the dry flow
category.

Mirrors trends for releases from
Parker Dam. River flows decrease
as flow categories get drier.

Third lowest river flows in the
dry flow category.

Mirrors trends for releases from
Parker Dam. River flows
decrease as flow categories get
drier.

Second highest river
flows in the dry flow
category.

Mirrors trends for
releases from Parker
Dam. River flows
decrease as flow
categories get drier.

Second lowest river
flows in the dry flow
category.

Mirrors trends for
releases from Parker
Dam. River flows
decrease as flow
categories get drier.

River flows in Reach 5 (Cibola Gage
to Imperial Dam)
Third highest river flows in the dry
flow category.

Mirrors trends for river flows in
Reach 4. River flows decrease as flow
categories get drier.

Highest river flows in the dry flow
category.

Mirrors trends for river flows in
Reach 4. River flows decrease as
flow categories get drier.

Lowest river flows in the dry flow
category.

Mirrors trends for river flows in
Reach 4. River flows decrease as
flow categories get drier.

Third lowest river flows in the
dry flow category.

Mirrors trends for river flows in
Reach 4. River flows decrease as
flow categories get drier.

Second highest river
flows in the dry flow
category.

Mirrors trends for river
flows in Reach 4. River
flows decrease as flow
categories get drier.

Second lowest river
flows in the dry flow
category.

Mirrors trends for river
flows in Reach 4. River
flows decrease as flow
categories get drier.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-30 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator1
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
River Flows
(continued)
River flows in Reach 6 (Imperial
Dam to Northerly International
Boundary [NIB])
Among the middle performing.

Releases of 1.1 maf in the middle
flow category.

Among the middle performing
Releases of 1.0 maf in the middle
flow category.

Among the middle performing
Releases of 1.0 maf in the middle
flow category.

Lowest river flows in all flow
categories.

Releases of 0.9 maf in the
middle flow category.

Among the middle
performing.

Releases of 1.0 maf in the
middle flow category.

Highest river flows in all
flow categories.

Releases of 1.1 maf in
the middle flow
category.

River flows in Reach 7 (NIB to SIB) Flows below Morelos Dam are infrequent under all flow categories.

Least likely for infrequent flows to
occur in the wetter flow categories.

Flows below Morelos Dam are
infrequent under all flow categories.

Among the middle performing for
infrequent flows to occur in the
wetter flow categories.

Flows below Morelos Dam are
infrequent under all flow
categories.

Among the middle performing for
infrequent flows to occur in the
wetter flow categories.

Flows below Morelos Dam are
infrequent under all flow
categories.

Among the middle performing
for infrequent flows to occur in
the wetter flow categories.

Flows below Morelos
Dam are infrequent
under all flow categories.

Most likely for
infrequent flows to occur
in the wet flow category.

Flows below Morelos
Dam are infrequent
under all flow
categories.

Most likely for
infrequent flows to
occur in the wet flow
category.

Groundwater Groundwater in Reach 1 (Glen
Canyon Dam to Lake Mead).

Least robust at keeping elevations
above 3,500 feet, changes to
groundwater levels adjacent to Lake
Powell may be affected by changes
in reservoir elevations.

Groundwater elevations through
Grand Canyon are not anticipated to
be affected.

Second least robust at keeping
elevations above 3,500 feet,
changes to groundwater levels
adjacent to Lake Powell may be
affected by changes in reservoir
elevations.

Groundwater elevations through
Grand Canyon are not anticipated
to be affected.

Second most robust at keeping
elevations above 3,500 feet,
changes to groundwater levels
adjacent to Lake Powell may be
affected by changes in reservoir
elevations.

Groundwater elevations through
Grand Canyon are not anticipated
to be affected.

Most robust at keeping
elevations above 3,500 feet,
changes to groundwater levels
adjacent to Lake Powell may be
affected by changes in reservoir
elevations.

Groundwater elevations through
Grand Canyon are not
anticipated to be affected.

Tied third least robust at
keeping elevations above
3,500 feet, changes to
groundwater levels
adjacent to Lake Powell
may be affected by
changes in reservoir
elevations.

Groundwater elevations
through Grand Canyon
are not anticipated to be
affected.

Tied third least robust
at keeping elevations
above 3,500 feet,
changes to groundwater
levels adjacent to Lake
Powell may be affected
by changes in reservoir
elevations.

Groundwater elevations
through Grand Canyon
are not anticipated to
be affected.

Groundwater in Reach 2 (Hoover
Dam to Lake Mohave)
Groundwater elevations through this
reach are not anticipated to be
affected.

Groundwater elevations through
this reach are not anticipated to be
affected.

Groundwater elevations through
this reach are not anticipated to
be affected.

Groundwater elevations through
this reach are not anticipated to
be affected.

Groundwater elevations
through this reach are
not anticipated to be
affected.

Groundwater elevations
through this reach are
not anticipated to be
affected.

Groundwater in Reach 3 (Davis Dam
to Lake Havasu)
Second lowest river flows in reach;
changes to groundwater levels
adjacent to the river may be affected
by changes in river stage.

Groundwater elevations adjacent to
Lake Havasu are not anticipated to
be affected.

Highest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river stage.

Groundwater elevations adjacent to
Lake Havasu are not anticipated to
be affected.

Tied lowest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river stage.

Groundwater elevations adjacent
to Lake Havasu are not anticipated
to be affected.

Tied lowest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river
stage.

Groundwater elevations
adjacent to Lake Havasu are not
anticipated to be affected.

Second highest river
flows in reach; changes to
groundwater levels
adjacent to the river may
be affected by changes in
river stage.

Groundwater elevations
adjacent to Lake Havasu
are not anticipated to be
affected.

Third highest river
flows in reach; changes
to groundwater levels
adjacent to the river
may be affected by
changes in river stage.

Groundwater elevations
adjacent to Lake Havasu
are not anticipated to
be affected.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-31 Impact Category Performance Indicator1
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Groundwater
(continued)
Groundwater in Reach 4 (Parker
Dam to Cibola Gage)
Third highest river flows in reach;
changes to groundwater levels
adjacent to the river may be affected
by changes in river stage.

Highest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river stage.

Lowest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river stage.

Third lowest river flows in
reach; changes to groundwater
levels adjacent to the river may
be affected by changes in river
stage.

Second highest river
flows in reach; changes to
groundwater levels
adjacent to the river may
be affected by changes in
river stage.

Second lowest river
flows in reach; changes
to groundwater levels
adjacent to the river
may be affected by
changes in river stage.

Groundwater in Reach 5 (Cibola
Gage to Imperial Dam)
Third highest river flows in reach;
changes to groundwater levels
adjacent to the river may be affected
by changes in river stage.

Highest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river stage.

Lowest river flows in reach;
changes to groundwater levels
adjacent to the river may be
affected by changes in river stage.

Third lowest river flows in
reach; changes to groundwater
levels adjacent to the river may
be affected by changes in river
stage.

Second highest river
flows in reach; changes to
groundwater levels
adjacent to the river may
be affected by changes in
river stage.

Second lowest river
flows in reach; changes
to groundwater levels
adjacent to the river
may be affected by
changes in river stage.

Groundwater in Reach 6 (Imperial
Dam to NIB)
Most of the river channel is bypassed
with a series of canals and
sluiceways. Groundwater elevations
through this reach are not
anticipated to be affected.

Most of the river channel is
bypassed with a series of canals and
sluiceways. Groundwater elevations
through this reach are not
anticipated to be affected.

Most of the river channel is
bypassed with a series of canals
and sluiceways. Groundwater
elevations through this reach are
not anticipated to be affected.

Most of the river channel is
bypassed with a series of canals
and sluiceways. Groundwater
elevations through this reach
are not anticipated to be
affected.

Most of the river channel
is bypassed with a series
of canals and sluiceways.

Groundwater elevations
through this reach are
not anticipated to be
affected.

Most of the river
channel is bypassed
with a series of canals
and sluiceways.

Groundwater elevations
through this reach are
not anticipated to be
affected.

Groundwater in Reach 7 (NIB to SIB) Least likely for infrequent flows to occur in this reach. Groundwater in
the southern reach of the limitrophe
may be affected by decreased flows.

Among the middle performing for
infrequent flows to occur in this
reach. Groundwater in the southern
reach of the limitrophe may be
affected by decreased flows.

Among the middle performing for
infrequent flows to occur in this
reach. Groundwater in the
southern reach of the limitrophe
may be affected by decreased
flows.

Among the middle performing
for infrequent flows to occur in
this reach. Groundwater in the
southern reach of the limitrophe
may be affected by decreased
flows.

Most likely for
infrequent flows to occur
in this reach.

Groundwater in the
southern reach of the
limitrophe may be
affected by decreased
flows.

Most likely for
infrequent flows to
occur in this reach.

Groundwater in the
southern reach of the
limitrophe may be
affected by decreased
flows.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-32 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Water Deliveries
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Apportionments Upper Division States No impact No impact No impact No impact No impact No impact Lower Division States Shortages are distributed based on priority.

Shortages are distributed based on
priority.

Shortages are distributed pro rata. Shortages are distributed based on priority.

Shortages are distributed
based on priority.

Shortages are
distributed pro rata.

Lower Division States
Water Supply
Determinations and
Total Water Deliveries
Percent of modeled futures in which
dead pool-related reductions are
avoided in 100% of years. The higher
the percentage, the more likely dead
pool-related reductions are avoided.
30% of modeled futures meet the
preferred minimum performance.
62% of modeled futures meet the
preferred minimum performance.
84% of modeled futures meet the
preferred minimum performance.
91% of modeled futures meet
the preferred minimum
performance.
76% of modeled futures
meet the preferred
minimum performance.
85% of modeled futures
meet the preferred
minimum performance.

Effects of modeling assumptions for
Upper and Lower Basin conservation
activity (comparison of shortage and
depletion results when turning
conservation activity on and off).

Median reductions remain similar
with conservation on or off.11
Median reductions remain similar
with conservation on or off.1
Median reductions slightly higher
with conservation on compared
to conservation off in wetter flow
categories. Median reductions
slightly higher with
conservation off compared to
conservation on in drier flow
categories.

Median reductions slightly
higher with conservation on
compared to conservation off in
wetter flow categories. Median
reductions slightly higher with
conservation off compared to
conservation on in drier flow
categories.

Median reductions
slightly higher with
conservation on
compared to
conservation off
Median reductions
slightly higher with
conservation on
compared to
conservation off
Maximum shortage (maf) where
shortage is any modeled reduction to
the ability of an entitlement holder to
exercise an entitlement as described
in the assumptions of the model
Total Lower Basin: 0.60
Arizona: 0.47
California: 0.00
Nevada: 0.03
Total Lower Basin: 1.48
Arizona: 1.15
California: 0.00
Nevada: 0.08
Total Lower Basin: 3.00
Arizona: 0.93
California: 1.47
Nevada: 0.10
Total Lower Basin: 4.00
Arizona: 1.93
California: 1.28
Nevada: 0.20
Total Lower Basin: 2.10
Arizona: 1.22
California: 0.44
Nevada: 0.09
Total Lower Basin: 2.10
Arizona: 0.92
California: 0.76
Nevada: 0.07
Annual volume of Lower Basin
shortage and dead pool-related
reductions under critically dry
hydrologic conditions (median
values). Volumes are expressed as a
total volume of reductions to the
Lower Basin, including Mexico.

Median reductions increase as flow
categories become drier.

Shortage: 0.6 maf
Lowest
Dead pool-related reductions: 1.7
maf
Highest
Median reductions increase as flow
categories become drier.

Shortage: 1.48 maf
Second lowest
Dead pool-related reductions: 0
maf
Tied lowest
Median reductions increase as
flow categories become drier.

Shortage: 2.93 maf
Second highest
Dead pool-related reductions: 0
maf
Tied lowest
Median reductions increase as
flow categories become drier.

Shortage: 2.98 maf
Highest
Dead pool-related reductions: 0
maf
Tied lowest
Median reductions
increase as flow
categories become drier.

Shortage: 1.95 maf
Third highest
Dead pool-related
reductions: 0 maf
Tied lowest
Median reductions
increase as flow
categories become
drier.

Shortage: 1.94 maf
Third lowest
Dead pool-related
reductions: 0 maf
Tied lowest
11 While the No Action and Basic Coordination alternatives do not include mechanisms to conserve and store water in Lake Powell or Lake Mead, the model does include assumptions for the delivery of existing ICS that was conserved prior to 2027. In the conservation-off results, activity related to pre-2027 conservation is turned off for all the alternatives and the CCS Comparative Baseline. Refer to TA 4, Water Deliveries, for more details.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-33 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Lower Division States
Water Supply
Determinations and
Total Water Deliveries
(continued)
Annual shortage by state under
critically dry hydrology conditions
(median values). Values are reported
as percent of apportionment.

Arizona: 16.7%
Lowest
California: 0%
Lowest
Nevada: 11%
Lowest
Arizona: 41.1%
Second highest
California: 0%
Lowest
Nevada: 27.2%
Third highest
Arizona: 32.6%
Third lowest
California: 32.6%
Highest
Nevada: 32.6%
Second highest
Arizona: 57.8%
Highest
California: 16.4%
Second highest
Nevada: 45.9%
Highest
Arizona: 39.7%
Third highest
California: 10%
Second lowest
Nevada: 25.5%
Third lowest
Arizona: 31.4%
Second lowest
California: 15.3%
Third lowest
Nevada: 21.5%
Second lowest
Annual depletions (reported as
percent of apportionment) by state
under critically dry hydrology
conditions (median values). Depletion
is defined as total consumptive use
(such as the amount of water diverted
from the river) minus the return flow.

Arizona: 54.6%
Second Lowest
California: 89.0%
Second highest
Nevada: 64.2%
Lowest
Arizona: 58.9%
Third highest
California: 100%
Highest
Nevada: 83.3%
Third Lowest
Arizona: 71.3%
Highest
California: 66.6%
Lowest
Nevada: 89.2%
Third highest
Arizona: 42.5%
Lowest
California: 82.0%
Second Lowest
Nevada: 72.1%
Second Lowest
Arizona: 57.4%
Third Lowest
California 87.0%
Third highest
Nevada: 89.7%
Second highest
Arizona: 63.0%
Second highest
California: 84.0%
Third Lowest
Nevada: 96.4%
Highest
Deliveries to Mexico Annual delivery reduction under
critically dry hydrology (median
values). Values are reported as
percent of allotment.

6.7%
Lowest

16.4%
Second Lowest

32.6%
Second highest

33.1%
Highest

21.7%
Third highest

21.5%
Third Lowest
Annual depletions under critically dry
hydrology (median values). Values are
reported as percent of allotment.

75.0%
Third Lowest

83.6%
Highest

68.1%
Second Lowest

66.1%
Lowest

83.3%
Second highest

83.3%
Second highest
Lower Division States
Combined Shortages
Shortage Allocation Model (SAM) and
Alternative Distribution Model (ADM)
estimated shortage impacts by water
user type (Tribal, Domestic, and NonTribal Irrigation) under shortage conditions over a specified range of
shortage volumes
Tribal:
241 kaf
Domestic:
277 kaf
Non-Tribal Irrigation:
6 kaf
Tribal:
241-489 kaf
Domestic:
277-752 kaf
Non-Tribal Irrigation:
6-34 kaf
Tribal:
76-378 kaf
Domestic:
109-546 kaf
Non-Tribal Irrigation:
316-1,578 kaf
Tribal:
209-582 kaf
Domestic:
313-1,501 kaf
Non-Tribal Irrigation:
2-1,211 kaf
Tribal:
209-510 kaf
Domestic:
313-1,179 kaf
Non-Tribal Irrigation:
2-88 kaf
Tribal:
139-357 kaf
Domestic:
155-449 kaf
Non-Tribal Irrigation:
206-944 kaf
Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-34 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Geomorphology and Sediment
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Water Availability Percent of modeled futures in which
Lake Powell exceeds 3,500 feet in
November or April (or both) in 100
percent of years.
25% of modeled futures meet the
preferred minimum performance.
37% of modeled futures meet the
preferred minimum performance.
87% of modeled futures meet the
preferred minimum performance.
91% of modeled futures meet
the preferred minimum
performance.
30% of modeled futures meet the preferred
minimum performance.

Sand Mass Percent of modeled futures in which
the monthly Glen Canyon Dam
releases are less than 900,000 acrefeet (approximately 15,000 cfs) in at least 90 percent of months. In other
words, Glen Canyon Dam release rates
are non-erosive in at least 90 percent
of the simulation period.
10% of modeled futures meet the
preferred minimum performance.
28% of modeled futures meet the
preferred minimum performance.
59% of modeled futures meet the
preferred minimum performance.
20% of modeled futures meet
the preferred minimum
performance.
8% of modeled futures meet the preferred minimum
performance.

Percent of modeled futures in which
the sand mass in Marble Canyon
exceeds 294,000 metric tons, the
average transport capacity for a 60-
hour duration HFE, in November or
April at least once every four years.
43% of modeled futures meet the
preferred minimum performance.
47% of modeled futures meet the
preferred minimum performance.
47% of modeled futures meet the
preferred minimum performance.
44% of modeled futures meet
the preferred minimum
performance.
43% of modeled futures meet the preferred
minimum performance.

High Flow Experiment
(HFE) Frequency and
Duration
Percent of modeled futures in which a
spring or fall HFE of at least 60 hours
occurs at least once every four years.
10% of modeled futures meet the
preferred minimum performance.
20% of modeled futures meet the
preferred minimum performance.
23% of modeled futures meet the
preferred minimum performance.
25% of modeled futures meet
the preferred minimum
performance.
17% of modeled futures meet the preferred
minimum performance.

Sandbar Volume Percent of modeled futures in which
the maximum sediment year sandbar
volume is greater than the sandbar
volume at the start of the simulation
period in at least 60% of years. In
other words, net sandbar growth is
positive for at least 60 percent of the
years.
82% of modeled futures meet the
preferred minimum performance.
90% of modeled futures meet the
preferred minimum performance.
92% of modeled futures meet the
preferred minimum performance.
93% of modeled futures meet
the preferred minimum
performance.
93% of modeled futures meet the preferred
minimum performance.

Sand Transport Percent of modeled futures in which
the fraction of sand mass transported
by sandbar-forming flow rates (above
37,000 cfs) is at least 0.4 (40 percent of
the sand transport).
49% of modeled futures meet the
preferred minimum performance.
74% of modeled futures meet the
preferred minimum performance.
82% of modeled futures meet the
preferred minimum performance.
82% of modeled futures meet
the preferred minimum
performance.
77% of modeled futures meet the preferred
minimum performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-35 Water Quality
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination
Alternative
Enhanced Coordination
Alternative
Maximum Operational
Flexibility Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven
Alternative (LB Pro
Rata)
How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
projected salinity?
Percent of modeled futures in which the
salinity concentration below Hoover Dam is
less than 723 mg/L in 100% of years.
77% of modeled futures
meet the preferred minimum
performance.
83% of modeled futures
meet the preferred
minimum performance.
80% of modeled futures meet
the preferred minimum
performance.
86% of modeled futures
meet the preferred minimum
performance.
91% of modeled futures meet the
preferred minimum performance.
92% of modeled futures
meet the preferred
minimum performance.

Percent of modeled futures in which the
salinity concentration below Parker Dam is
less than 747 mg/L in 100% of years.
77% of modeled futures
meet the preferred minimum
performance.
85% of modeled futures
meet the preferred
minimum performance.
84% of modeled futures meet
the preferred minimum
performance.
89% of modeled futures
meet the preferred minimum
performance.
92% of modeled futures meet the
preferred minimum performance.
93% of modeled futures
meet the preferred
minimum performance.

Percent of modeled futures in which the
salinity concentration at Imperial is less than
879 mg/L in 100% of years.
88% of modeled futures
meet the preferred minimum
performance.
93% of modeled futures
meet the preferred
minimum performance.
94% of modeled futures meet
the preferred minimum
performance.
96% of modeled futures
meet the preferred minimum
performance.
98% of modeled futures meet the
preferred minimum performance.
98% of modeled futures
meet the preferred
minimum performance.

How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
projected temperature?
Annual average daily temperature of the
Colorado River at Lees Ferry under critically
dry hydrology conditions (median values)

13.6 °C (56.5 °F) 13.8 °C (56.8 °F) 12.3 °C (54.1 °F) 13.2 °C (55.8 °F) 13.6 °C (56.5 °F) 13.6 °C (56.5 °F) How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
projected temperature?
Annual maximum daily temperature of the
Colorado River at Lees Ferry under critically
dry hydrology conditions (median values)

19.5 °C (67.1 °F) 19.7 °C (67.5 °F) 16.3 °C (61.3 °F) 17.7 °C (63.9 °F) 18.9 °C (66 °F) 18.9 °C (66 °F) How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
projected temperature?
Annual average daily temperature of the
Colorado River at Pearce Ferry under
critically dry hydrology conditions (median
values)

16.8 °C (62.2 °F) 16.7 °C (62 °F) 16.1 °C (61 °F) 16.6 °C (61.9 °F) 16.8 °C (62.2 °F) 16.8 °C (62.2 °F) How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
projected temperature?
Annual maximum daily temperature of the
Colorado River at Pearce Ferry under
critically dry hydrology conditions (median
values)

23.3 °C (73.9 °F) 23.5 °C (74.3 °F) 22.4 °C (72.3 °F) 23.3 °C (73.9 °F) 23.6 °C (74.5 °F) 23.6 °C (74.5 °F) How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
projected dissolved
oxygen?
Percent of modeled futures in which Lake
Powell reservoir elevations stay above 3,490
feet and minimum dissolved oxygen
concentration is greater than 2mg/L from
Glen Canyon Dam releases in at least 90% of
years.
40% of modeled futures
meet the preferred minimum
performance.
40% of modeled futures
meet the preferred
minimum performance.
89% of modeled futures meet
the preferred minimum
performance.
87% of modeled futures
meet the preferred minimum
performance.
35% of modeled futures meet the
preferred minimum performance.
35% of modeled futures
meet the preferred
minimum performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-36 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination
Alternative
Enhanced Coordination
Alternative
Maximum Operational
Flexibility Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven
Alternative (LB Pro
Rata)
How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
harmful algal blooms and
nutrients?
Qualitative comparison of water year
minimum Lake Powell reservoir elevations
under critically dry hydrology conditions
(median values)
Water year minimum Lake
Powell elevation median is
the lowest, which would
pose the highest increased
risk for cyanobacterial
blooms.

Water year minimum Lake
Powell elevation median is
the second lowest, which
would pose increased risk
for cyanobacterial blooms.

Water year minimum Lake
Powell elevation median is
highest, which would pose a
decreased risk for
cyanobacterial blooms.

Water year minimum Lake
Powell elevation median is
the second highest, which
would pose a decreased risk
for cyanobacterial blooms.

Water year minimum Lake Powell elevation median is third lowest compared with the other alternatives, which would pose an increased risk for cyanobacterial blooms compared with the Enhanced Coordination and Maximum Operational Flexibility alternatives, but a decreased risk compared with the No Action and Basic Coordination alternatives.

How would reservoir
storage, reservoir releases,
and corresponding changes
in river flows downstream
of the reservoirs affect
dilution capacity?
Qualitative comparison of water year
minimum Lake Powell reservoir elevations
under critically dry hydrology conditions
(median values)
Water year minimum Lake
Powell elevation median is
the lowest, which would pose
the greatest increased risk
of greater concentrations of
pollutants of concern but it is
unlikely for any alternative to
significantly reduce the
dilution capacity.

Water year minimum Lake
Powell elevation median is
the lowest, which would
pose an increased risk of
greater concentrations of
pollutants of concern but it
is unlikely for any alternative
to significantly reduce the
dilution capacity.

Water yea minimum Lake
Powell elevation median is the
highest, which would pose a
decreased risk of greater
concentrations of pollutants
of concern but it is unlikely
for any alternative to
significantly reduce the
dilution capacity.

Water year minimum Lake
Powell elevation median is
the highest, which would
pose a decreased risk of
greater concentrations of
pollutants of concern but it
is unlikely for any alternative
to significantly reduce the
dilution capacity.

Water year minimum Lake Powell elevation median is third lowest compared with the other alternatives, which would pose an increased risk of greater concentrations of pollutants of concern compared with the Enhanced Coordination and Maximum
Operational Flexibility alternatives, but a decreased risk compared with the No Action and Basic Coordination
alternatives. However, it is unlikely for any alternative to significantly reduce the dilution capacity.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-37 Air Quality
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative Maximum Operational Flexibility Alternative
Supply Driven
Alternative (LB
Priority)
Supply Driven
Alternative (LB
Pro Rata)
Shoreline Area Percent of modeled futures in which
Lake Mead shoreline exposure area
stays below 500 square kilometers in
every month.
40% of modeled futures meet the
preferred minimum performance.
67% of modeled futures meet the
preferred minimum performance.
84% of modeled futures meet the
preferred minimum performance.
89% of modeled futures meet
the preferred minimum
performance.
79% of modeled futures meet the
preferred minimum performance.

Percent of modeled futures in which
Lake Powell shoreline exposure area
stays below 500 square kilometers in
every month.
24% of modeled futures meet the
preferred minimum performance.
33% of modeled futures meet the
preferred minimum performance.
86% of modeled futures meet the
preferred minimum performance.
95% of modeled futures meet
the preferred minimum
performance.
28% of modeled futures meet the
preferred minimum performance.

Shoreline Dust
Emissions
Percent of modeled futures in which
Lake Mead shoreline dust emissions
stay below 500 kilograms in every
month.
27% of modeled futures meet the
preferred minimum performance.
59% of modeled futures meet the
preferred minimum performance.
78% of modeled futures meet the
preferred minimum performance.
82% of modeled futures meet
the preferred minimum
performance.
74% of modeled futures meet the
preferred minimum performance.

Percent of modeled futures in which
Lake Powell shoreline dust emissions
stay below 450 kilograms in every
month.
22% of modeled futures meet the
preferred minimum performance.
29% of modeled futures meet the
preferred minimum performance.
85% of modeled futures meet the
preferred minimum performance.
92% of modeled futures meet
the preferred minimum
performance.
27% of modeled futures meet the
preferred minimum performance.

How would lake
reservoir elevations and
releases impact power
generation and carbon
dioxide equivalent
(CO2e) emissions?
Change in CO2e emissions due to a
loss of hydropower generation at Glen
Canyon Dam under average hydrology
conditions.

Hydropower generation would be highly
affected resulting in the tied most CO2e
emissions under this alternative. This is
due to the inverse correlation between
CO2e emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would be
slightly less affected than under the No
Action Alternative, resulting in the
second most CO2e emissions under
this alternative. This is due to the inverse
correlation between CO2e emissions
from alternative energy sources and
generation from reservoir elevations
and releases.

Hydropower generation would be least
affected, resulting in the tied lowest
CO2e emissions under this alternative.

This is due to the inverse correlation
between CO2e emissions from
alternative energy sources and
generation from reservoir elevations
and releases.

Hydropower generation would
be similar to that under the
Enhanced Coordination
Alternative, resulting in the tied
lowest CO2e emissions under
this alternative. This is due to
the inverse correlation between
CO2e emissions from alternative
energy sources and generation
from reservoir elevations and
releases.

Hydropower generation would be
the same as under the No Action
Alternative, resulting in the tied
most CO2e emissions under this
alternative. This is due to the
inverse correlation between CO2e
emissions from alternative energy
sources and generation from
reservoir elevations and releases.

Change in CO2e emissions due to a
loss of hydropower generation at
Hoover Dam under average hydrology
conditions.

Hydropower generation would be most
affected resulting in the most CO2e
emissions, with potential decrease in
CO2e emissions. This is due to the inverse
correlation between CO2e emissions from
alternative energy sources and
generation from reservoir elevations and
releases.

Hydropower generation would be
slightly less affected than under the No
Action Alternative, resulting in the
second lowest CO2e emissions under
this alternative. This is due to the inverse
correlation between CO2e emissions
from alternative energy sources and
generation from reservoir elevations
and releases.

Hydropower generation would be
slightly less affected than under the
Basic Coordination Alternative, resulting
in the third lowest CO2e emissions
under this alternative. This is due to the
inverse correlation between CO2e
emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would
be similar to that under the
Enhanced Coordination
Alternative.

Hydropower generation would be
least affected, resulting in the
lowest CO2e emissions. This is
due to the inverse correlation
between CO2e emissions from
alternative energy sources and
generation from reservoir
elevations and releases.

Hydropower generation would be
the same between the two Supply
Driven Alternatives.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-38 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative Maximum Operational Flexibility Alternative
Supply Driven
Alternative (LB
Priority)
Supply Driven
Alternative (LB
Pro Rata)
How would lake
reservoir elevations and
releases impact power
generation and carbon
dioxide equivalent
(CO2e) emissions?
(continued)
Change in CO2e emissions due to a
loss of hydropower generation at
Davis Dam under average hydrology
conditions.

Hydropower generation would be the
least affected, resulting in the lowest
CO2e emissions. This is due to the
inverse correlation between CO2e
emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would be
slightly less affected than under the No
Action Alternative, resulting in the
second lowest CO2e emissions. This is
due to the inverse correlation between
CO2e emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would be highly
affected, resulting in the tied most
CO2e emissions. This is due to the
inverse correlation between CO2e
emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would
be similar to that under the
Enhanced Coordination
Alternative, resulting in the tied
most CO2e emissions. This is
due to the inverse correlation
between CO2e emissions from
alternative energy sources and
generation from reservoir
elevations and releases.

Hydropower generation would be
similar to that under the Enhanced
Coordination Alternative.

Hydropower generation would be
similar between the two Supply
Driven Alternatives.

Change in CO2e emissions due to a
loss of hydropower generation at
Parker Dam under average hydrology
conditions.

Hydropower generation would be the
least affected, resulting in the tied least
CO2e emissions. This is due to the
inverse correlation between CO2e
emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would be
similar to that under the No Action
Alternative, resulting in the tied least
CO2e emissions. This is due to the
inverse correlation between CO2e
emissions from alternative energy
sources and generation from reservoir
elevations and releases.

Hydropower generation would be highly
affected, resulting in the most CO2e
emissions. This is due to the inverse
correlation between CO2e emissions
from alternative energy sources and
generation from reservoir elevations
and releases.

Hydropower generation would
be slightly more affected than
under the No Action Alternative,
resulting in the second least
CO2e emissions. This is due to
the inverse correlation between
CO2e emissions from alternative
energy sources and generation
from reservoir elevations and
releases.

Under the Supply Driven
Alternative (LB Priority approach),
hydropower generation would be
similar to that under the Maximum
Flexibility Alternative.

Under the Supply Driven
Alternative (LB Pro Rata approach),
hydropower generation would be
highly affected, resulting in the
second most CO2e emissions.

This is due to the inverse
correlation between CO2e
emissions from alternative energy
sources and generation from
reservoir elevations and releases.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-39 Aquatic Resources
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Lake Powell elevations Percent of modeled futures in which Lake Powell elevation is below 3,598
feet at least 60% of months, meaning
critical habitat of Colorado
Pikeminnow and Razorback Sucker is
not inundated in the Colorado River
Inflow.
43% of modeled futures meet the
preferred minimum performance.
49% of modeled futures meet the
preferred minimum performance.
17% of modeled futures meet
the preferred minimum
performance.
20% of modeled futures meet the
preferred minimum performance.
58% of modeled futures
meet the preferred
minimum performance.
58% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Powell elevation is below 3,600
feet at least 60% of months, meaning
critical habitat of Colorado
Pikeminnow and Razorback Sucker is
not inundated in the San Juan River
Inflow.
44% of modeled futures meet the
preferred minimum performance.
50% of modeled futures meet the
preferred minimum performance.
18% of modeled futures meet
the preferred minimum
performance.
21% of modeled futures meet the
preferred minimum performance.
59% of modeled futures
meet the preferred
minimum performance.
59% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Powell elevation is below 3,666.5
feet in 100% of months, meaning the
Paiute Farms Waterfall remains a
barrier to upstream fish passage.
29% of modeled futures meet the
preferred minimum performance.
29% of modeled futures meet the
preferred minimum performance.
18% of modeled futures meet
the preferred minimum
performance.
17% of modeled futures meet the
preferred minimum performance.
43% of modeled futures
meet the preferred
minimum performance.
43% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
October 1st Lake Powell elevation is
above 3,570 feet at least 80% of years,
meaning the risk of smallmouth bass
entrainment is reduced.
34% of modeled futures meet the
preferred minimum performance.
30% of modeled futures meet the
preferred minimum performance.
73% of modeled futures meet
the preferred minimum
performance.
61% of modeled futures meet the
preferred minimum performance.
28% of modeled futures
meet the preferred
minimum performance.
28% of modeled
futures meet the
preferred minimum
performance.

Water Temperature Percent of modeled futures in which
water temperature at Lees Ferry (river
mile [RM] 0) never exceeds 20°C.
22% of modeled futures meet the
preferred minimum performance.
24% of modeled futures meet the
preferred minimum performance.
71% of modeled futures meet
the preferred minimum
performance.
59% of modeled futures meet the
preferred minimum performance.
21% of modeled futures
meet the preferred
minimum performance.
21% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
water temperature at the Little
Colorado River Confluence (RM 62)
exceeds 12°C ≥200 days every year.
1% of modeled futures meet the
preferred minimum performance.
1% of modeled futures meet the
preferred minimum performance.
0% of modeled futures meet the
preferred minimum performance.
1% of modeled futures meet the
preferred minimum performance.
0% of modeled futures
meet the preferred
minimum performance.
0% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
water temperature at the Little
Colorado River Confluence (RM 62)
exceeds 16°C ≤170 days every year.
35% of modeled futures meet the
preferred minimum performance.
34% of modeled futures meet the
preferred minimum performance.
78% of modeled futures meet
the preferred minimum
performance.
70% of modeled futures meet the
preferred minimum performance.
29% of modeled futures
meet the preferred
minimum performance.
29% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
water temperature at the Havasu Creek
Confluence (RM 157.2) exceeds 12°C
≥200 days every year.
21% of modeled futures meet the
preferred minimum performance.
20% of modeled futures meet the
preferred minimum performance.
9% of modeled futures meet the
preferred minimum performance.
8% of modeled futures meet the
preferred minimum performance.
29% of modeled futures
meet the preferred
minimum performance.
29% of modeled
futures meet the
preferred minimum
performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-40 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Water Temperature
(continued)
Percent of modeled futures in which
water temperature at the Havasu Creek
Confluence (RM 157.2) exceeds 16°C
≤190 days every year.
35% of modeled futures meet the
preferred minimum performance.
42% of modeled futures meet the
preferred minimum performance.
80% of modeled futures meet
the preferred minimum
performance.
78% of modeled futures meet the
preferred minimum performance.
35% of modeled futures
meet the preferred
minimum performance.
35% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
water temperature at Pearce Ferry (RM
281) exceeds 12°C ≥200 days every
year.
63% of modeled futures meet the
preferred minimum performance.
70% of modeled futures meet the
preferred minimum performance.
67% of modeled futures meet
the preferred minimum
performance.
63% of modeled futures meet the
preferred minimum performance.
78% of modeled futures
meet the preferred
minimum performance.
78% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
water temperature at Pearce Ferry (RM
281) exceeds 16°C ≤190 days every
year.
19% of modeled futures meet the
preferred minimum performance.
19% of modeled futures meet the
preferred minimum performance.
49% of modeled futures meet
the preferred minimum
performance.
40% of modeled futures meet the
preferred minimum performance.
16% of modeled futures
meet the preferred
minimum performance.
16% of modeled
futures meet the
preferred minimum
performance.

Smallmouth
population growth
Percent of modeled futures in which
the 5-year Smallmouth Bass growth
rate (lambda) at Lees Ferry is always
less than 1.
22% of modeled futures meet the
preferred minimum performance.
25% of modeled futures meet the
preferred minimum performance.
69% of modeled futures meet
the preferred minimum
performance.
57% of modeled futures meet the
preferred minimum performance.
23% of modeled futures
meet the preferred
minimum performance.
23% of modeled
futures meet the
preferred minimum
performance.

Smallmouth bass
entrainment
Percent of modeled futures in which
the annual count of adult smallmouth
bass that are entrained and survive is
always less than 50 individuals.
18% of modeled futures meet the
preferred minimum performance.
18% of modeled futures meet the
preferred minimum performance.
61% of modeled futures meet
the preferred minimum
performance.
50% of modeled futures meet the
preferred minimum performance.
16% of modeled futures
meet the preferred
minimum performance.
16% of modeled
futures meet the
preferred minimum
performance.

Lake Mead elevation Percent of modeled futures in which Lake Mead elevation is above the
historical minimum elevation of
1,040.92 feet ≥90% of months.
13% of modeled futures meet the
preferred minimum performance.
44% of modeled futures meet the
preferred minimum performance.
57% of modeled futures meet
the preferred minimum
performance.
56% of modeled futures meet the
preferred minimum performance.
58% of modeled futures
meet the preferred
minimum performance.
69% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Colorado River water levels at Pearce
Ferry Rapid are Below 1,090 Feet ≥90%
of months.
58% of modeled futures meet the
preferred minimum performance.
26% of modeled futures meet the
preferred minimum performance.
12% of modeled futures meet
the preferred minimum
performance.
13% of modeled futures meet the
preferred minimum performance.
9% of modeled futures
meet the preferred
minimum performance.
7% of modeled
futures meet the
preferred minimum
performance.

Hoover Dam releases Percent of modeled futures in which monthly releases from Hoover Dam are
within the range observed during
2008–2024 in 100% of the time.
66% of modeled futures meet the
preferred minimum performance.
58% of modeled futures meet the
preferred minimum performance.
32% of modeled futures meet
the preferred minimum
performance.
20% of modeled futures meet the
preferred minimum performance.
34% of modeled futures
meet the preferred
minimum performance.
32% of modeled
futures meet the
preferred minimum
performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-41 Vegetation Including Special Status Species
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Vegetation, including
special status plant
species
Marsh habitat (Lake Powell, Lake Mead,
and Hoover Dam to SIB Reaches) –
Changes in water fluctuations within a
single year compared to historical
conditions.

The No Action Alternative is among
the middle performing alternative
for the Lake Powell reach because
the annual variability is neither the
most similar nor the least similar to
historic conditions for these
reaches. The No Action Alternative
is among the best performing
alternatives for the Hoover Dam to
SIB reaches because it has annual
variability similar to historic
conditions.

The No Action Alternative is among
the least performing alternatives
for the Lake Mead reach because its
annual variability is least like historic
conditions.

The Basic Coordination Alternative
is among the best performing
alternatives for the Lake Mead and
Hoover Dam to SIB reaches because
it has annual variability similar to
historic conditions.

The Basic Coordination Alternative
is among the least performing
alternatives for the Lake Powell
reach because its annual variability
is least like historic conditions.

The Enhanced Coordination
Alternative is among the
middle performing alternative
for the Lake Mead reach
because the annual variability is
neither the most similar nor the
least similar to historic
conditions for these reaches. The
Enhanced Coordination
Alternative is among the best
performing alternatives for the
Lake Powell reach because it has
annual variability similar to
historic conditions. The
Enhanced Coordination
Alternative is among the least
performing alternatives for the
Hoover Dam to SIB reach
because its annual variability is
least like historic conditions.

The Maximum Operational
Flexibility Alternative is among
the best performing alternatives
for the Lake Powell and Lake
Mead reaches because it has
annual variability similar to
historic conditions. The Maximum
Operational Flexibility Alternative
is among the least performing
alternatives for the Hoover Dam
to SIB reach because its annual
variability is least like historic
conditions.

The Supply Driven Alternative is never the best
performing alternative because it never has
variability most similar to historic conditions. The
Supply Driven Alternative is among the middle
performing alternative for the Lake Mead and the
Hoover Dam to SIB reaches because the annual
variability is neither the most similar nor the least
similar to historic conditions for these reaches.

The Supply Driven Alternative is among the least
performing alternatives for the Lake Powell and
Hoover Dam to SIB reach because its annual
variability is least like historic conditions.

Woody riparian habitat (Lake Powell,
Lake Mead, and Hoover Dam to SIB
Reaches) – Changes in water
fluctuations in the preceding 5 years
compared to historical conditions.

The No Action Alternative is among
the middle performing alternative
for the Lake Powell reach because
the annual variability is neither the
most similar nor the least similar to
historic conditions for these
reaches. The No Action Alternative
is among the best performing
alternatives for the Hoover Dam to
SIB reaches because it has annual
variability similar to historic
conditions.

The No Action Alternative is among
the least performing alternatives
for the Lake Mead reach because its
annual variability is least like historic
conditions.

The Basic Coordination Alternative
is among the best performing
alternatives for the Lake Mead and
Hoover Dam to SIB reaches because
it has annual variability similar to
historic conditions.

The Basic Coordination Alternative
is among the least performing
alternatives for the Lake Powell
reach because its annual variability
is least like historic conditions.

The Enhanced Coordination
Alternative is among the best
performing alternatives for the
Lake Powell reach because it has
annual variability similar to
historic conditions. The
Enhanced Coordination
Alternative is among the least
performing alternatives for Lake
Mead and the Hoover Dam to
SIB reach because its annual
variability is least like historic
conditions.

The Maximum Operational
Flexibility Alternative is among
the best performing alternatives
for the Lake Powell and Lake
Mead reaches because it has
annual variability similar to
historic conditions. The Maximum
Operational Flexibility Alternative
is among the least performing
alternatives for the Hoover Dam
to SIB reach because its annual
variability is least like historic
conditions.

The Supply Driven Alternative is never the best
performing alternative because it never has
variability most similar to historic conditions. The
Supply Driven Alternative is among the middle
performing alternative for the Lake Mead reach
because the annual variability is neither the most
similar nor the least similar to historic conditions for these reaches. The Supply Driven Alternative is
among the least performing alternatives for the
Lake Powell and Hoover Dam to SIB reach because
its annual variability is least like historic conditions.

No Alternative is better performing in the Glen
Canyon Dam to Lake Mead reach.

Upland habitat (Lake Powell, Lake
Mead, and Hoover Dam to SIB Reaches)
– Changes in water fluctuations in
either the preceding single year or
preceding 5 years compared to
historical conditions.

Upland habitat would be gained or lost depending on whether conditions are suitable for marsh or woody riparian habitat (see above).

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-42 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Vegetation, including
special status plant
species
(continued)
Marsh habitat suitable area (Glen
Canyon Dam to Lake Mead Reach) - A
change from the median and
interquartile ranges from modeled
historic conditions
Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions
in the Glen Canyon Dam to Lake
Mead reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions in
the Glen Canyon Dam to Lake
Mead reach. However, under the
Maximum Flexibility Alternative
under the driest modeled
conditions, marsh habitat could
increase compared to modeled
historic conditions.

Considering all modeled natural flow conditions, no
alternative is better performing compared to the
modeled historic conditions in the Glen Canyon
Dam to Lake Mead reach. However, under the
Supply Driven Alternative under the driest modeled
conditions, marsh habitat could increase compared
to modeled historic conditions.

Woody Riparian habitat suitable area
(Glen Canyon Dam to Lake Mead
Reach) - A change from the median
and interquartile ranges from modeled
historic conditions.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach. However, under the No
Action Alternative under the driest
modeled conditions, woody riparian
vegetation could increase
compared to modeled historic
conditions.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions
in the Glen Canyon Dam to Lake
Mead reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions in
the Glen Canyon Dam to Lake
Mead reach.

Considering all modeled natural flow conditions, no
alternative is better performing compared to the
modeled historic conditions in the Glen Canyon
Dam to Lake Mead reach.

Upland habitat suitable area Upland habitat would be gained or lost depending on whether conditions are suitable for marsh or woody riparian habitat (see above).

Native Species Richness (Glen Canyon
Dam to Lake Mead Reach) - A change
from the median and interquartile
ranges from modeled historic
conditions.

Considering all modeled natural flow conditions, no alternative is better performing compared to the modeled historic conditions in the Glen Canyon Dam to Lake Mead reach.

Proportion Native Species Cover (Glen
Canyon Dam to Lake Mead Reach) - A
change from the median and
interquartile ranges from modeled
historic conditions.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach. However, under the No
Action Alternative under the driest
modeled conditions, the No Action
Alternative had the highest
proportion of modeled native cover
compared to modeled historic
conditions.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions
in the Glen Canyon Dam to Lake
Mead reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions in
the Glen Canyon Dam to Lake
Mead reach. However, under the
Maximum Operational Flexibility
Alternative under the driest
modeled conditions, the
Maximum Operational Flexibility
Alternative had the lowest
proportion of modeled native
cover compared to modeled
historic conditions.

Considering all modeled natural flow conditions, no
alternative is better performing compared to the
modeled historic conditions in the Glen Canyon
Dam to Lake Mead reach.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-43 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Vegetation, including
special status plant
species
(continued)
Annual Total Vegetation Cover (Glen
Canyon Dam to Lake Mead Reach) - A
change from the median and
interquartile ranges from modeled
historic conditions.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions
in the Glen Canyon Dam to Lake
Mead reach.

Considering all modeled natural
flow conditions, no alternative is
better performing compared to
the modeled historic conditions in
the Glen Canyon Dam to Lake
Mead reach. However, under the
Maximum Operational Flexibility
Alternative under the driest
modeled conditions, annual total
vegetation cover could increase
compared to modeled historic
conditions.

Considering all modeled natural flow conditions, no
alternative is better performing compared to the
modeled historic conditions in the Glen Canyon
Dam to Lake Mead reach. However, under the
Supply Driven Alternative under the driest modeled
conditions, annual total vegetation cover could
increase compared to modeled historic conditions.

Terrestrial Wildlife Including Special Status Species
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Terrestrial wildlife
species habitat
availability, including
for special status
species
Terrestrial wildlife species using marsh
habitat – Changes in water fluctuations
within a single year compared to
historical conditions.

The No Action Alternative is among the
middle performing alternative for the
Lake Powell reach because the annual
variability is neither the most similar nor
the least similar to historic conditions for
these reaches. The No Action Alternative
is among the best performing
alternatives for the Hoover Dam to SIB
reaches because it has annual variability
similar to historic conditions.

The No Action Alternative is among the
least performing alternatives for the
Lake Mead reach because its annual
variability is least like historic conditions.

Considering all modeled natural flow
conditions, no Alternative is better
performing compared to the modeled
historic conditions in the Glen Canyon
Dam to Lake Mead reach.

The Basic Coordination Alternative
is among the best performing
alternatives for the Lake Mead and
Hoover Dam to SIB reaches
because it has annual variability
similar to historic conditions.

The Basic Coordination Alternative
is among the least performing
alternatives for the Lake Powell
reach because its annual variability
is least like historic conditions.

Considering all modeled natural
flow conditions, no Alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

The Enhanced Coordination
Alternative is among the
middle performing alternative
for the Lake Mead reach
because the annual variability is
neither the most similar nor the
least similar to historic
conditions for these reaches.

The Enhanced Coordination
Alternative is among the best
performing alternatives for the
Lake Powell reach because it
has annual variability similar to
historic conditions. The
Enhanced Coordination
Alternative is among the least
performing alternatives for the
Hoover Dam to SIB reach
because its annual variability is
least like historic conditions.

Considering all modeled natural
flow conditions, no Alternative
is better performing compared
to the modeled historic
conditions in the Glen Canyon
Dam to Lake Mead reach.

The Maximum Operational
Flexibility Alternative is among
the best performing alternatives
for the Lake Powell and Lake
Mead reaches because it has
annual variability similar to
historic conditions. The Maximum
Operational Flexibility Alternative
is among the least performing
alternatives for the Hoover Dam
to SIB reach because its annual
variability is least like historic
conditions.

Considering all modeled natural
flow conditions, no Alternative is
better performing compared to
the modeled historic conditions
in the Glen Canyon Dam to Lake
Mead reach. However, under the
Maximum Flexibility Alternative
under the driest modeled
conditions, marsh habitat could
increase compared to modeled
historic conditions.

The Supply Driven Alternative is never the best
performing alternative because it never has
variability most similar to historic conditions. The
Supply Driven Alternative is among the middle
performing alternative for the Lake Mead and
the Hoover Dam to SIB reaches because the
annual variability is neither the most similar nor
the least similar to historic conditions for these
reaches.

The Supply Driven Alternative is among the least
performing alternatives for the Lake Powell and
Hoover Dam to SIB reach because its annual
variability is least like historic conditions.

Considering all modeled natural flow conditions,
no Alternative is better performing compared to
the modeled historic conditions in the Glen
Canyon Dam to Lake Mead reach. However, under
the Supply Driven Alternative under the driest
modeled conditions, marsh habitat could increase
compared to modeled historic conditions.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-44 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Terrestrial wildlife
species habitat
availability, including
for special status
species
(continued)
Terrestrial wildlife species using woody
riparian habitat – Changes in water
fluctuations in the preceding 5 years
compared to historical conditions.

The No Action Alternative is among the
middle performing alternative for the
Lake Powell reach because the annual
variability is neither the most similar nor
the least similar to historic conditions for
these reaches. The No Action Alternative
is among the best performing
alternatives for the Hoover Dam to SIB
reaches because it has annual variability
similar to historic conditions.

The No Action Alternative is among the
least performing alternatives for the
Lake Mead reach because its annual
variability is least like historic conditions.

Considering all modeled natural flow
conditions, no Alternative is better
performing compared to the modeled
historic conditions in the Glen Canyon
Dam to Lake Mead reach. However,
under the No Action Alternative under
the driest modeled conditions, woody
riparian vegetation may increase
compared to modeled historic conditions
The Basic Coordination Alternative
is among the best performing
alternatives for the Lake Mead and
Hoover Dam to SIB reaches
because it has annual variability
similar to historic conditions.

The Basic Coordination Alternative
is among the least performing
alternatives for the Lake Powell
reach because its annual variability
is least like historic conditions.

Considering all modeled natural
flow conditions, no Alternative is
better performing compared to the
modeled historic conditions in the
Glen Canyon Dam to Lake Mead
reach.

The Enhanced Coordination
Alternative is among the best
performing alternatives for the
Lake Powell reach because it
has annual variability similar to
historic conditions. The
Enhanced Coordination
Alternative is among the least
performing alternatives for
Lake Mead and the Hoover
Dam to SIB reach because its
annual variability is least like
historic conditions.

Considering all modeled natural
flow conditions, no Alternative
is better performing compared
to the modeled historic
conditions in the Glen Canyon
Dam to Lake Mead reach.

The Maximum Operational
Flexibility Alternative is among
the best performing alternatives
for the Lake Powell and Lake
Mead reaches because it has
annual variability similar to
historic conditions. The Maximum
Operational Flexibility Alternative
is among the least performing
alternatives for the Hoover Dam
to SIB reach because its annual
variability is least like historic
conditions.

Considering all modeled natural
flow conditions, no Alternative is
better performing compared to
the modeled historic conditions
in the Glen Canyon Dam to Lake
Mead reach.

The Supply Driven Alternative is never the best
performing alternative because it never has
variability most similar to historic conditions. The
Supply Driven Alternative is among the middle
performing alternative for the Lake Mead reach
because the annual variability is neither the most
similar nor the least similar to historic conditions
for these reaches. The Supply Driven Alternative is
among the least performing alternatives for the
Lake Powell and Hoover Dam to SIB reach
because its annual variability is least like historic
conditions.

Considering all modeled natural flow conditions,
no Alternative is better performing compared to
the modeled historic conditions in the Glen
Canyon Dam to Lake Mead reach.

Terrestrial wildlife species using upland
habitat – Changes in water fluctuations
in either the preceding single year or
preceding 5 years compared to
historical conditions.

Upland habitat would be gained or lost
depending on whether conditions are
suitable for marsh or woody riparian
habitat (see above).

Upland habitat would be gained or
lost depending on whether
conditions are suitable for marsh or
woody riparian habitat (see above).

Upland habitat would be gained
or lost depending on whether
conditions are suitable for
marsh or woody riparian habitat
(see above).

Upland habitat would be gained
or lost depending on whether
conditions are suitable for marsh
or woody riparian habitat (see
above).

Upland habitat would be
gained or lost depending
on whether conditions are
suitable for marsh or
woody riparian habitat
(see above).

Upland habitat
would be gained or
lost depending on
whether conditions
are suitable for
marsh or woody
riparian habitat (see
above).

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-45 Cultural Resources
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Projected end-of-year
lake elevations that
may expose cultural
resources to damage
from wave action,
wet/dry cycling, or
increased ease of
access
Projected end-of-year lake elevations
for Lake Powell (EOWY) and Lake
Mead (EOCY) and number of cultural
resources potentially impacted
Lake Powell:

Under wet hydrologic conditions,
median water levels are at or above
3,680 feet protecting all sites up to
3,700 feet. Under average conditions,
median water levels fall below 3,600
feet exposing at least 274
archaeological sites. Under critically
dry conditions, median water levels
drop below 3,500 feet, potentially
leaving the most sites exposed with
at least 274 sites down to 3,580 feet
and those between 3,580 feet and
3,500 feet out of the 477 sites below
3,580 feet.

Lake Mead:

Under wet hydrologic conditions,
median elevations are around 1,150
feet exposing at least 173
archaeological sites. During average
hydrologic conditions, median
elevations are around 990 feet
potentially exposing all 240 sites.

In critically dry conditions, all 240
sites would likely be exposed due to
low reservoir elevations.

Lake Powell:

Under wet hydrologic conditions,
median water levels are at or above
3,680 feet, protecting at least 686
sites. Under average conditions,
median water levels fall below 3,600
feet exposing at least 274
archaeological sites. Under critically
dry conditions, median water levels
drop below 3,500 feet, potentially
leaving the most sites exposed with
at least 274 sites down to 3,580 feet
and those between 3,580 feet and
3,500 feet out of the 477 sites below
3,580 feet.

Lake Mead:

Under wet hydrologic conditions,
median water levels are around
1,180 feet, exposing at least 119
archaeological sites.

During average hydrological
conditions, median elevations are
around 1,080 feet exposing at least
237 sites. In critically dry conditions,
all 240 sites would likely be exposed
due to low reservoir elevations.

Lake Powell:

Under wet hydrologic conditions,
median water levels are at or
above 3,680 feet protecting at
least 686 sites. Under average
conditions, median water levels
drop to around 3,630 feet, leaving
at more than 193 sites exposed.

Under critically dry conditions,
median water levels drop below
3,500 feet, potentially leaving the
most sites exposed with at least
274 sites down to 3,580 feet and
those between 3,580 feet and
3,500 feet out of the 477 sites
below 3,580 feet.

Lake Mead:

Under wet hydrologic conditions,
median water levels are around
1,210 feet, exposing the fewest
number of sites (fewer than 69
sites).

Under average conditions,
median elevations are around
1,110 feet exposing at least 217
sites. In critically dry conditions,
all 240 sites would likely be
exposed due to low reservoir
elevations.

Lake Powell:

Under wet hydrologic
conditions, median water levels
are at or above 3,680 feet
protecting at least 686 sites.

Under average conditions,
median water levels drop to
around 3,620 feet, leaving at
least 193 sites exposed. Under
critically dry conditions, median
water levels drop below 3,500
feet, potentially leaving the most
sites exposed with at least 274
sites down to 3,580 feet and
those between 3,580 feet and
3,500 feet out of the 477 sites
below 3,580 feet.

Lake Mead:

Under wet conditions, median
water levels are around 1,210
feet, exposing the fewest
number of sites (fewer than 69).

Under average conditions,
median elevations are around
1,130 feet exposing at least 202
sites. Under critically dry
conditions, all 240 sites would
likely be exposed due to low
reservoir elevations.

Lake Powell:

During the wettest flow categories, median water
levels are at or above 3,680 feet protecting at least
686 sites. Under average conditions, median
elevations are below 3,580 feet leaving at least 274
sites exposed. Under critically dry conditions,
median water levels drop below 3,500 feet,
potentially leaving the most sites exposed with at
least 274 sites down to 3,580 feet and those
between 3,580 feet and 3,500 feet out of the 477
sites below 3,580 feet.

Lake Mead:

Under wet conditions, median water levels are
around 1,220 feet, protecting all 240 sites. During
average conditions, median elevations are around
1,160 feet exposing at least 173 sites. Under
critically dry conditions, all 240 sites would likely be exposed due to low reservoir elevations.

Lake Powell:

Percent of modeled futures in which
the preservation risk at Lake Powell is
below 2.72 in at least 90% of months
Lake Mead:

Percent of modeled futures in which
the preservation risk at Lake Mead is
below 2.24 in at least 90% of months
Lake Powell:
23% of modeled futures meet the
preferred minimum performance.

Lake Mead:
7% of modeled futures meet the
preferred minimum performance.

Lake Powell:
21% of modeled futures meet the
preferred minimum performance.

Lake Mead:
22% of modeled futures meet the
preferred minimum performance.

Lake Powell:
58% of modeled futures meet the
preferred minimum performance.

Lake Mead:
26% of modeled futures meet the
preferred minimum performance.

Lake Powell:
36% of modeled futures meet
the preferred minimum
performance.

Lake Mead:
37% of modeled futures meet
the preferred minimum
performance.

Lake Powell:
16% of modeled futures meet the preferred
minimum performance.

Lake Mead:
43% of modeled futures meet the preferred
minimum performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-46 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Projected changes in
river flows that may
contribute to erosion
and exposure of
cultural resources that
may expose sites to
damage from erosion,
wet/dry cycling, or
increased ease of
access
Projected releases from dams and
forecasted river flow volumes that are
outside past releases or flows
Under wet and average hydrologic
conditions, releases fall within past
volumes for the Glen Canyon Dam to
Lake Mead reach and Hoover Dam to
Lake Mohave. During critically dry
conditions, release volumes may
drop below past releases; however,
impacts would only be for sites close
to riverbank.

No impacts below Lake Mohave.

Under wet and average hydrologic
conditions, releases fall within past
volumes for the Glen Canyon Dam
to Lake Mead reach and Hoover
Dam to Lake Mohave. During
critically dry conditions, release
volumes may drop below past
releases; however, impacts would
only be for sites close to riverbank.

No impacts below Lake Mohave.

Under wet and average
hydrologic conditions, releases
fall within past volumes for the
Glen Canyon Dam to Lake Mead
reach and Hoover Dam to Lake
Mohave. During critically dry
conditions, release volumes may
drop below past releases;
however, impacts would only be
for sites close to riverbank.

No impacts below Lake Mohave.

Under wet and average
hydrologic conditions, releases
fall within past volumes for the
Glen Canyon Dam to Lake Mead
reach and Hoover Dam to Lake
Mohave. During critically dry
conditions, release volumes may
drop below past releases;
however, impacts would only be
for sites close to riverbank.

No impacts below Lake Mohave.

Under wet and average hydrologic conditions,
releases fall within past volumes for the Glen
Canyon Dam to Lake Mead reach and Hoover Dam
to Lake Mohave. During critically dry conditions,
release volumes may drop below past releases;
however, impacts would only be for sites close to
riverbank.

No impacts below Lake Mohave.

Projected availability
of sediments along
the river which may
be transported by
wind and deposited
on archaeological
sites
Percent of modeled futures in which
annual sand area >50th and
vegetation cover <50th percentile or
sandbar volume >1.5 initial condition
at least one out of every 3 years
11% of modeled futures meet the
preferred minimum performance.
5% of modeled futures meet the
preferred minimum performance.
15% of modeled futures meet the
preferred minimum performance.
15% of modeled futures meet
the preferred minimum
performance.
2% of modeled futures
meet the preferred
minimum performance.
2% of modeled
futures meet the
preferred minimum
performance.

Paleontological Resources
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Paleontological
preservation risk due
to dam operations
Percent of modeled futures in which
monthly preservation risk rank at Lake
Powell stays below 2.9 at least 90% of
months
22% of modeled futures meet the
preferred minimum performance.
18% of modeled futures meet the
preferred minimum performance.
47% of modeled futures meet
the preferred minimum
performance.
28% of modeled futures meet the
preferred minimum performance.

13% of modeled futures meet the preferred
minimum performance.

Percent of modeled futures in which
monthly preservation risk rank at Lake
Mead stays below 2.3 at least 90% of
months
6% of modeled futures meet the
preferred minimum performance.
15% of modeled futures meet the
preferred minimum performance.
18% of modeled futures meet
the preferred minimum
performance.
29% of modeled futures meet the
preferred minimum performance.
35% of modeled futures meet the preferred
minimum performance.

Paleontological
resource preservation
and stability due to
altered sediment
transport
Percent of modeled futures in which
annual sand area >50th and
vegetation cover <50th percentile or
sandbar volume >1.5 initial condition
at least one out of every 3 years
11% of modeled futures meet the
preferred minimum performance.
5% of modeled futures meet the
preferred minimum performance.
15% of modeled futures meet
the preferred minimum
performance.
15% of modeled futures meet the
preferred minimum performance.
2% of modeled futures meet the preferred minimum
performance.

Percent of modeled futures in which
the fraction of sand mass transported
by sandbar-forming flow rates (above
37,000 cfs) is at least 0.4 over 34 years
(40% of the sand transport)
49% of modeled futures meet the
preferred minimum performance.
74% of modeled futures meet the
preferred minimum performance.
82% of modeled futures meet
the preferred minimum
performance.
82% of modeled futures meet the
preferred minimum performance.
77% of modeled futures meet the preferred
minimum performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-47 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Impacts of increased
disturbance,
unauthorized
collection, and
recreational impacts
on paleontological
resources due to dam
operations and
altered water levels
Percent of modeled futures in which
Lake Powell elevation stays above
3,500 feet in 100% of months
20% of modeled futures meet the
preferred minimum performance.
25% of modeled futures meet the
preferred minimum performance.
82% of modeled futures meet
the preferred minimum
performance.
87% of modeled futures meet the
preferred minimum performance.
24% of modeled futures meet the preferred
minimum performance.

Percent of modeled futures in which
Lake Mead elevation stays above 975
feet in 100% of months
25% of modeled futures meet the
preferred minimum performance.
58% of modeled futures meet the
preferred minimum performance.
75% of modeled futures meet
the preferred minimum
performance.
79% of modeled futures meet the
preferred minimum performance.
71% of modeled futures
meet the preferred
minimum performance.
80% of modeled futures
meet the preferred
minimum performance.

Tribal Resources
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Reservoir Elevations
that may expose TCPs,
archaeological sites, or
sacred sites to
increased access and
visitation
Lake Powell EOWY elevations Lowest elevations in the critcally dry flow category exposing the greatest
number of sites to visitation
Second lowest elevations in the
critcally dry flow category
Highest elevations in the
critcally dry flow category
exposing the fewest number of
sites to visitation
Second highest
elevations in the critcally dry flow
category
Tied in the middle
performing for elevations
in the critcally dry flow
category
Tied in the middle
performing for
elevations in the
critcally dry flow
category
Lake Mead EOCY elevations in feet Lowest elevations in all flow categories exposing the greatest
number of sites to visitation
Second lowest elevations in all flow
categories
Third lowest elevations in all
flow categories
Third highest elevations in all flow
categories
Second highest elevations
in all flow categories
Highest elevations in
all flow categories
exposing the fewest
number of sites to
visitation
Projected changes in
river flows that may
contribute to erosion
and exposure of
archaeological sites or
sacred sites
Projected releases from dams and
forecasted river flow volumes that are
outside past releases or flows
Under wet and average hydrologic
conditions, releases fall within past
volumes for the Glen Canyon Dam
to Lake Mead reach and Hoover
Dam to Lake Mohave. During
critically dry conditions, release
volumes may drop below past
releases; however, impacts would
only be for sites close to riverbank.

No impacts below Lake Mohave.

Under wet and average hydrologic
conditions, releases fall within past
volumes for the Glen Canyon Dam to
Lake Mead reach and Hoover Dam to
Lake Mohave. During critically dry
conditions, release volumes may
drop below past releases; however,
impacts would only be for sites close
to riverbank.

No impacts below Lake Mohave.

Under wet and average
hydrologic conditions, releases
fall within past volumes for the
Glen Canyon Dam to Lake
Mead reach and Hoover Dam
to Lake Mohave. During
critically dry conditions, release
volumes may drop below past
releases; however, impacts
would only be for sites close to
riverbank.

No impacts below Lake
Mohave.

Under wet and average
hydrologic conditions, releases fall
within past volumes for the Glen
Canyon Dam to Lake Mead reach
and Hoover Dam to Lake Mohave.

During critically dry conditions,
release volumes may drop below
past releases; however, impacts
would only be for sites close to
riverbank.

No impacts below Lake Mohave.

Under wet and average hydrologic conditions,
releases fall within past volumes for the Glen
Canyon Dam to Lake Mead reach and Hoover Dam
to Lake Mohave. During critically dry conditions,
release volumes may drop below past releases;
however, impacts would only be for sites close to
riverbank.

No impacts below Lake Mohave.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-48 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Projected changes in
natural resources
important to Native
Americans including
riparian vegetation
and wildlife
Woody riparian habitat most similar to
historic conditions
Among the middle performing
alternatives for the Lake Powell
reach, among the best performing
alternatives for the Hoover Dam to
SIB reaches, and among the least
performing alternatives for the
Lake Mead reach.

Among the best performing
alternatives for the Lake Mead and
Hoover Dam to SIB reaches and
among the least performing
alternatives for the Lake Powell
reach.

Among the best performing
alternatives for the Lake
Powell reach and among the
least performing alternatives
for Lake Mead and the Hoover
Dam to SIB reach.

Among the best performing
alternatives for the Lake Powell
and Lake Mead reaches and
among the least performing
alternatives for the Hoover Dam
to SIB reach.

Never the best performing alternative but among
the middle performing alternatives for the Lake
Mead reach because the annual variability is neither
the most similar nor the least similar to historic
conditions for these reaches. Among the least
performing alternatives for the Lake Powell and
Hoover Dam to SIB. The best performing
alternative in the Glen Canyon Dam to Lake Mead
reach.

Critical fish habitat (Colorado River) Modeling presented for aquatic species suggests that between 41
and 50% of futures would meet
acceptable critical habitat
performance standards
Modeling suggests that between 41
and 50% of futures would meet
acceptable critical habitat
performance standards
Modeling suggests that
between 11 and 20% of
futures would meet acceptable
critical habitat performance
standards
Modeling suggests that between
11 and 20% of futures would
meet acceptable critical habitat
performance standards
Modeling suggests that between 51 and 60% of
futures would meet acceptable critical habitat
performance standards
Recreation
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Reservoir elevation
impacts on shoreline
recreational facilities,
reservoir boating, and
sport fishing
opportunities
Percent of modeled futures in which the
proportion of Lake Powell recreation
sites open stays above 0.7 (historical
benchmark) for all summer months
(May 31 – August 31) each year
17% of modeled futures meet the
preferred minimum performance.
15% of modeled futures meet the
preferred minimum performance.
45% of modeled futures meet
the preferred minimum
performance.
26% of modeled futures meet
the preferred minimum
performance.
13% of modeled futures
meet the preferred
minimum performance.
13% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which the
proportion of Lake Mead recreation
sites open stays above 0.8 (historical
benchmark) for all summer months
(May 31 – August 31) each year
8% of modeled futures meet the
preferred minimum performance.
35% of modeled futures meet the
preferred minimum performance.
37% of modeled futures meet
the preferred minimum
performance.
42% of modeled futures meet
the preferred minimum
performance.
45% of modeled futures
meet the preferred
minimum performance.
53% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Powell elevation is above the
identified boating hazard minimum
(3,620 ft) for at least 20% of months
66% of modeled futures meet the
preferred minimum performance.
61% of modeled futures meet the
preferred minimum performance.
84% of modeled futures meet
the preferred minimum
performance.
83% of modeled futures meet
the preferred minimum
performance.
48% of modeled futures
meet the preferred
minimum performance.
48% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Mead elevation is above the
identified boating hazard minimum
(1,170 ft) for at least 10 percent of
months
29% of modeled futures meet the
preferred minimum performance.
39% of modeled futures meet the
preferred minimum performance.
58% of modeled futures meet
the preferred minimum
performance.
68% of modeled futures meet
the preferred minimum
performance.
78% of modeled futures
meet the preferred
minimum performance.
81% of modeled
futures meet the
preferred minimum
performance.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-49 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative
(LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Glen Canyon Dam
releases impacts on
whitewater boating
and sport fishing
Percent of modeled futures in which
daytime flows (7am – 7pm) below Glen
Canyon Dam are at least 5,000 cfs every
day
78% of modeled futures meet the
preferred minimum performance.
80% of modeled futures meet the
preferred minimum performance.
98% of modeled futures meet
the preferred minimum
performance.
57% of modeled futures meet
the preferred minimum
performance.
97% of modeled futures
meet the preferred
minimum performance.
97% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
daily water temperature at Lees Ferry
never exceed 20°C
22% of modeled futures meet the
preferred minimum performance.
24% of modeled futures meet the
preferred minimum performance.
71% of modeled futures meet
the preferred minimum
performance.
59% of modeled futures meet
the preferred minimum
performance.
21% of modeled futures
meet the preferred
minimum performance.
21% of modeled
futures meet the
preferred minimum
performance.

Dams and Electrical Power Resources
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Reservoir Elevations
and Power Pool
Robustness
Percent of modeled futures in which
Lake Powell elevation is always above
minimum power pool (3,490 feet).
24% of modeled futures meet the
preferred minimum performance.
33% of modeled futures meet the
preferred minimum performance.
86% of modeled futures meet the
preferred minimum performance.
95% of modeled futures meet
the preferred minimum
performance.
28% of modeled futures
meet the preferred
minimum performance.
28% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Mead elevation is always above
minimum power pool (950 feet).
30% of modeled futures meet the
preferred minimum performance.
61% of modeled futures meet the
preferred minimum performance.
81% of modeled futures meet the
preferred minimum performance.
87% of modeled futures meet
the preferred minimum
performance.
76% of modeled futures
meet the preferred
minimum performance.
84% of modeled
futures meet the
preferred minimum
performance.

Energy Capacity of the
Glen Canyon Dam and
Hoover Dam
Powerplants
August power capacity (megawatt
[MW]) under average hydrology
conditions
Glen Canyon Dam: 500-635 MW
Hoover Dam: 125-1,240 MW
Glen Canyon Dam: 635-750 MW
Hoover Dam: 400-1,550 MW
Glen Canyon Dam: 625-790 MW
Hoover Dam: 1,300-1,600 MW
Glen Canyon Dam: 600-650 MW
Hoover Dam: 1,200-1,700 MW
Glen Canyon Dam: 620 -
740 MW
Hoover Dam: 1,380-1,700
MW
Glen Canyon Dam: 620
-740 MW
Hoover Dam: 1,490 -
1,725 MW
August power capacity (MW) under
critically dry hydrology conditions
Glen Canyon Dam: 0-520 MW
Hoover Dam: 0-250 MW
Glen Canyon Dam: 0-525 MW
Hoover Dam: 0-1,260 MW
Glen Canyon Dam: 250-625 MW
Hoover Dam: 200 -1,270 MW
Glen Canyon Dam: 225-380 MW
Hoover Dam: 249 – 1,425 MW
Glen Canyon Dam: 0-390
MW
Hoover Dam: 0-1,500
MW
Glen Canyon Dam: 0-
390 MW
Hoover Dam: 240-
1,550 MW
Energy Generation of
the Glen Canyon Dam
and Hoover Dam
Powerplants
Water year generation (Megawatt
Hours [MWh]) under average
hydrology conditions
Glen Canyon Dam:
3-4 MWh
Hoover Dam:

1.3-3.3 MWh
Glen Canyon Dam:

3.1-3.7 MWh
Hoover Dam:

2.8-3.6 MWh
Glen Canyon Dam:
3-4.1 MWh
Hoover Dam:

2.7-3.8 MWh
Glen Canyon Dam:

3.3-4 MWh
Hoover Dam:

2.9-3.8 MWh
Glen Canyon Dam:

3.1-3.6 MWh
Hoover Dam:

2.9-3.9 MWh
Glen Canyon Dam:

3.1-3.6 MWh
Hoover Dam:

2.9-4 MWh
Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-50 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational
Flexibility Alternative
Supply Driven
Alternative (LB Priority)
Supply Driven
Alternative (LB Pro
Rata)
Energy Generation of
the Glen Canyon Dam
and Hoover Dam
Powerplants
(continued)
Water year generation (MWh) under
critically dry hydrology conditions
Glen Canyon Dam:
0-2 MWh
Hoover Dam:
0-2.2 MWh
Glen Canyon Dam:
0-2.3 MWh
Hoover Dam:
0-3 MWh
Glen Canyon Dam:

1.8-2.7 MWh
Hoover Dam:

1.7-2.7 MWh
Glen Canyon Dam:

1.9-2.4 MWh
Hoover Dam:

1.9-3 MWh
Glen Canyon Dam:
0-2 MWh
Hoover Dam:

0.4-3.2 MWh
Glen Canyon Dam:
0-2 MWh
Hoover Dam:
2-3.1 MWh
Glen Canyon Dam and
Hoover Dam spillway
infrastructure and life
safety
Percent of modeled futures in which
the January 1 Lake Powell elevation
does not exceed 3,684 feet, the target
elevation to preserve flood control
storage, in at least 90% of years.
60% of modeled futures meet the
preferred minimum performance.
70% of modeled futures meet the
preferred minimum performance.
69% of modeled futures meet the
preferred minimum performance.
66% of modeled futures meet
the preferred minimum
performance.
82% of modeled futures
meet the preferred
minimum performance.
82% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Powell elevation is below 3,700
feet in 100% of months. The higher
the percentage, the more likely Lake
Powell will remain below the spillway
crest.
49% of modeled futures meet the
preferred minimum performance.
56% of modeled futures meet the
preferred minimum performance.
48% of modeled futures meet the
preferred minimum performance.
43% of modeled futures meet
the preferred minimum
performance.
64% of modeled futures
meet the preferred
minimum performance.
64% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
the Glen Canyon Dam spillway is not
utilized.
65% of modeled futures meet the
preferred minimum performance.
70% of modeled futures meet the
preferred minimum performance.
66% of modeled futures meet the
preferred minimum performance.
63% of modeled futures meet
the preferred minimum
performance.
76% of modeled futures
meet the preferred
minimum performance.
76% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Mead stays below 1,205.4 feet,
the elevation of the Hoover Dam
spillway crest, in at least 90% of
months
82% of modeled futures meet the
preferred minimum performance.
76% of modeled futures meet the
preferred minimum performance.
60% of modeled futures meet the
preferred minimum performance.
50% of modeled futures meet
the preferred minimum
performance.
43% of modeled futures
meet the preferred
minimum performance.
40% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Mead elevation stays below
1,219 feet in at least 90% of months.

The higher the percentage, the more
likely Lake Mead will have reserve
flood control storage.
99% of modeled futures meet the
preferred minimum performance.
98% of modeled futures meet the
preferred minimum performance.
90% of modeled futures meet the
preferred minimum performance.
87% of modeled futures meet
the preferred minimum
performance.
79% of modeled futures
meet the preferred
minimum performance.
78% of modeled
futures meet the
preferred minimum
performance.

Percent of modeled futures in which
Lake Mead elevation never exceeds
1,226.9 feet. At this elevation the
volume of spillway discharge triggers
a “Imminent Life-Threatening
Emergency” response.
91% of modeled futures meet the
preferred minimum performance.
90% of modeled futures meet the
preferred minimum performance.
83% of modeled futures meet the
preferred minimum performance.
81% of modeled futures meet
the preferred minimum
performance.
71% of modeled futures
meet the preferred
minimum performance.
69% of modeled
futures meet the
preferred minimum
performance.

Glen Canyon Dam
electricity rates and
market value
Glen Canyon Dam electricity rates
and market value
Results in much steeper rate
trajectories and higher probabilities
of major rate increases compared to
the action alternatives.

Results in much steeper rate
trajectories and higher probabilities
of major rate increases compared to
the other action alternatives.

Results in substantially smaller
rate increases and less frequent
rate adjustments than the No
Action Alternative and Continued
Current Strategies Comparative
Baseline (CCS Comparative
Baseline) under dry hydrologic
conditions.

Results in substantially smaller
rate increases and less frequent
rate adjustments than the No
Action Alternative and CCS
Comparative Baseline under dry
hydrologic conditions.

Results in substantially
smaller rate increases and
less frequent rate
adjustments than the No
Action Alternative and
CCS Comparative
Baseline under dry
hydrologic conditions.

Results in substantially
smaller rate increases
and less frequent rate
adjustments than the
No Action Alternative
and CCS Comparative
Baseline under dry
hydrologic conditions.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-51 Socioeconomics
Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven Alternative (LB
Pro Rata)
Economic
contributions and
social conditions
associated with
changes in agriculture
due to water
shortages
Level of annual impacts on acres
of fallowed agricultural lands
during a maximum shortage
For Arizona non-tribal
agriculture entitlement
holders, the No Action
Alternative has the lowest
level of impact on acres of
fallowed lands during a
maximum shortage of 0.6
maf, with an increase of
about 1,000 fallowed acres.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the No Action
Alternative is among the
alternatives with the lowest
level of impact on acres of
fallowed lands during a
maximum shortage of 0.6
maf, with no change in
fallowed acres.

For Arizona tribal agriculture
entitlement holders, the No
Action Alternative has the
lowest level of impact on
acres of fallowed lands during
a maximum shortage of 0.6
maf, with an increase of
about 12,000 fallowed acres.

For Arizona non-tribal
agriculture entitlement holders,
the Basic Coordination
Alternative is among the
alternatives with a low level of
impact on acres of fallowed
lands during a maximum
shortage of 1.5 maf, with an
increase of about 6,000
fallowed acres.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Basic Coordination
Alternative is among the
alternatives with the lowest
level of impact on acres of
fallowed lands during a
maximum shortage of 1.5 maf,
with no change in fallowed
acres.

For Arizona tribal agriculture
entitlement holders, the Basic
Coordination Alternative is
among the alternatives with a
medium level of impact on
acres of fallowed lands during a
maximum shortage of 1.5 maf,
with an increase of about
49,000 fallowed acres.

For Arizona non-tribal
agriculture entitlement holders,
the Enhanced Coordination
Alternative is among the
alternatives with a medium
level of impact on acres of
fallowed lands during a
maximum shortage of 3.0 maf,
with an increase of about
62,000 fallowed acres.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Enhanced
Coordination Alternative has
the highest level of impact on
acres of fallowed lands during a
maximum shortage of 3.0 maf,
with an increase of about
283,000, 5,000, and 700
fallowed acres for California
non-tribal, California tribal, and
Nevada tribal agriculture
entitlement holders,
respectively.

For Arizona tribal agriculture
entitlement holders, the
Enhanced Coordination
Alternative is among the
alternatives with a medium
level of impact on acres of
fallowed lands during a
maximum shortage of 3.0 maf,
with an increase of about
39,000 fallowed acres.

For Arizona non-tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of impact
on acres of fallowed lands during
a maximum shortage of 4.0 maf,
with an increase of about 102,000
fallowed acres.

For California non-tribal
agriculture entitlement holders,
the Maximum Operational
Flexibility Alternative is among the
alternatives with a high level of
impact on acres of fallowed lands
during a maximum shortage of 4.0
maf, with an increase of about
205,000 fallowed acres.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Maximum
Operational Flexibility Alternative
is among the alternatives with the
lowest level of impact on acres
of fallowed lands during a
maximum shortage of 4.0 maf,
with no change in fallowed acres.

For Arizona tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of impact
on acres of fallowed lands during
a maximum shortage of 4.0 maf,
with an increase of about 67,000
fallowed acres.

For Arizona non-tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a low level of
impact on acres of fallowed lands
during a maximum shortage of 2.1
maf, with an increase of about
7,000 fallowed acres.

For California non-tribal
agriculture entitlement holders,
the Supply Driven Alternative (LB
Priority approach) is among the
alternatives with a low level of
impact on acres of fallowed lands
during a maximum shortage of 2.1
maf, with an increase of about
12,000 fallowed acres.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Priority approach)
is among the alternatives with the
lowest level of impact on acres
of fallowed lands during a
maximum shortage of 2.1 maf,
with no change in fallowed acres.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a high level of
impact on acres of fallowed lands
during a maximum shortage of 2.1
maf, with an increase of about
52,000 fallowed acres.

For Arizona non-tribal
agriculture entitlement holders,
the Supply Driven Alternative
(LB Pro Rata approach) is
among the alternatives with a
medium level of impact on
acres of fallowed lands during a
maximum shortage of 2.1 maf,
with an increase of about
61,000 fallowed acres.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Pro Rata
approach) is among the
alternatives with a high level of
impact on acres of fallowed
lands during a maximum
shortage of 2.1 maf, with an
increase of about 153,000,
3,000, and 500 fallowed acres
for California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, respectively.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Pro Rata
approach) is among the
alternatives with a medium
level of impact on acres of
fallowed lands during a
maximum shortage of 2.1 maf,
with an increase of about
39,000 fallowed acres.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-52 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven Alternative (LB
Pro Rata)
Economic
contributions and
social conditions
associated with
changes in agriculture
due to water
shortages
(continued)
Level of annual impacts on
market value of crop production
from a maximum shortage
For Arizona non-tribal
agriculture entitlement
holders, the No Action
Alternative has the lowest
level of impact on market
value of crops during a
maximum shortage of 0.6
maf, with a loss in market
value of about $1.8 million.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the No Action
Alternative is among the
alternatives with the lowest
level of impact on market
value of crops during a
maximum shortage of 0.6
maf, with no loss in market
value.

For Arizona tribal agriculture
entitlement holders, the No
Action Alternative has the
lowest level of impact on
market value of crops during
a maximum shortage of 0.6
maf, with a loss in market
value of about $17.4 million.

For Arizona non-tribal
agriculture entitlement holders,
the Basic Coordination
Alternative is among the
alternatives with a low level of
impact on market value of
crops during a maximum
shortage of 1.5 maf, with a loss
in market value of about $10.3
million.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Basic Coordination
Alternative is among the
alternatives with the lowest
level of impact on market
value of crops during a
maximum shortage of 1.5 maf,
with no change in market value.

For Arizona tribal agriculture
entitlement holders, the Basic
Coordination Alternative is
among the alternatives with a
high level of impact on market
value of crops during a
maximum shortage of 1.5 maf,
with a loss in market value of
about $77.6 million.

For Arizona non-tribal
agriculture entitlement holders,
the Enhanced Coordination
Alternative is among the
alternatives with a medium
level of impact on market
value of crops during a
maximum shortage of 3.0 maf,
with a loss in market value of
about $79.6 million.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Enhanced
Coordination Alternative has
the highest level of impact on
market value of crops during a
maximum shortage of 3.0 maf,
with a loss in market value of
about $691.8 million, $10.9
million, and $0.6 million, for
California non-tribal, California
tribal, and Nevada tribal
agriculture entitlement holders,
respectively.

For Arizona tribal agriculture
entitlement holders, the
Enhanced Coordination
Alternative is among the
alternatives with a medium
level of impact on market
value of crops during a
maximum shortage of 3.0 maf,
with a loss in market value of
about $52.4 million.

For Arizona non-tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of impact
on market value of crops during a
maximum shortage of 4.0 maf,
with a loss in market value of
about $130.7 million.

For California non-tribal
agriculture entitlement holders,
the Maximum Operational
Flexibility Alternative is among the
alternatives with a high level of
impact on market value of crops
during a maximum shortage of 4.0
maf, with a loss in market value of
about $628.6 million.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Maximum
Operational Flexibility Alternative
is among the alternatives with the
lowest level of impact on market
value of crops during a maximum
shortage of 4.0 maf, with no
change in market value.

For Arizona tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of on
market value of crops during a
maximum shortage of 4.0 maf,
with a loss in market value of
about $101.0 million.

For Arizona non-tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a low level of
impact on market value of crops
during a maximum shortage of 2.1
maf, with a loss in market value of
about $11.1 million.

For California non-tribal
agriculture entitlement holders,
the Supply Driven Alternative (LB
Priority approach) is among the
alternatives with a low level of
impact on market value of crops
during a maximum shortage of 2.1
maf, with a loss in market value of
about $25.4 million.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Priority approach)
is among the alternatives with the
lowest level of impact on market
value of crops during a maximum
shortage of 2.1 maf, with no
change in market value.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a high level of
impact on market value of crops
during a maximum shortage of 2.1
maf with a loss in market value of
about $83.1 million.

For Arizona non-tribal
agriculture entitlement holders,
the Supply Driven Alternative
(LB Pro Rata approach) is
among the alternatives with a
medium level of impact on
market value of crops during a
maximum shortage of 2.1 maf,
with a loss in market value of
about $78.2 million.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Pro Rata
approach) is among the
alternatives with a high level of
impact on market value of
crops during a maximum
shortage of 2.1 maf, with a loss
in market value of about $473.8
million, $7.7 million, and $0.5
million, for California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, respectively.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Pro Rata
approach) is among the
alternatives with a medium
level of impact on market
value of crops during a
maximum shortage of 2.1 maf
with a loss in market value of
about $51.6 million.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-53 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven Alternative (LB
Pro Rata)
Economic
contributions and
social conditions
associated with
changes in agriculture
due to water
shortages
(continued)
Level of annual impacts on
economic contributions, including
jobs, labor income, and total
economic output from a
maximum shortage
For Arizona non-tribal
agriculture entitlement
holders, the No Action
Alternative has the lowest
level of impact on economic
contributions during a
maximum shortage of 0.6 maf,
with a loss of over 10 jobs,
about $0.6 million in labor
income, and $2.8 million in
economic output.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the No Action
Alternative is among the
alternatives with the lowest
level of impact on economic
contributions during a
maximum shortage of 0.6 maf,
with no loss in jobs, labor
income, or economic output.

For Arizona tribal agriculture
entitlement holders, the No
Action Alternative has the
lowest level of impact on
economic contributions during
a maximum shortage of 0.6
maf, with a loss of about 135
jobs, $10.7 million in labor
income, and $34.8 million in
economic output.

For Arizona non-tribal
agriculture entitlement holders,
the Basic Coordination
Alternative is among the
alternatives with a medium level
of impact on economic
contributions during a maximum
shortage of 1.5 maf, with a loss
of about 80 jobs, $3.5 million in
labor income, and $15.8 million
in economic output.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Basic Coordination
Alternative is among the
alternatives with the lowest
level of impact on economic
contributions during a maximum
shortage of 1.5 maf, with no
change in jobs, labor income, or
economic output.

For Arizona tribal agriculture
entitlement holders, the Basic
Coordination Alternative is
among the alternatives with a
high level of impact on
economic contributions during a
maximum shortage of 1.5 maf,
with a loss of about 800 jobs,
$45.3 million in labor income,
and $153.1 million in economic
output.

For Arizona non-tribal
agriculture entitlement holders,
the Enhanced Coordination
Alternative is among the
alternatives with a high level of
impact on economic
contributions during a maximum
shortage of 3.0 maf, with a loss
of about 500 jobs, $29.0 million
in labor income, and $126.8
million in economic output.

For California non-tribal
agriculture entitlement holders,
the Enhanced Coordination
Alternative is among the
alternatives with a high level of
impact on economic
contributions during a maximum
shortage of 3.0 maf, with a loss
of about 4,000 jobs, $246.5
million in labor income, and $1.0
billion in economic output.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Enhanced
Coordination Alternative has the
highest level of impact on
economic contributions during a
maximum shortage of 3.0 maf,
with a loss of about 63 jobs, $3.9
million in labor income, and
$15.9 million in economic output
for California tribal entitlement
holders, and a loss of about 13
jobs, $0.1 million in labor
income, and $0.9 million in
economic output for Nevada
tribal agriculture entitlement
holders.

For Arizona tribal agriculture
entitlement holders, the
Enhanced Coordination
Alternative is among the
alternatives with a high level of
impact on economic
contributions during a maximum
shortage of 1.5 maf, with a loss
of about 500 jobs, $31.2 million
in labor income, and $104.5
million in economic output.

For Arizona non-tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of impact on
economic contributions during a
maximum shortage of 4.0 maf, with
a loss of about 900 jobs, $46.8
million in labor income, and $207.6
million in economic output.

For California non-tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of impact on
economic contributions during a
maximum shortage of 4.0 maf, with
a loss of about 5,000 jobs, $336.3
million in labor income, and $1.0
billion in economic output.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Maximum Operational
Flexibility Alternative is among the
alternatives with the lowest level
of impact on economic
contributions during a maximum
shortage of 4.0 maf, with no
change in jobs, labor income, or
economic output.

For Arizona tribal agriculture
entitlement holders, the Maximum
Operational Flexibility Alternative
has the highest level of on
economic contributions during a
maximum shortage of 1.5 maf, with
a loss of about 1,000 jobs, $57.1
million in labor income, and $199.2
million in economic output.

For Arizona non-tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a medium level
of impact on economic
contributions during a maximum
shortage of 2.1 maf, with a loss of
about 90 jobs, $3.8 million in labor
income, and $17.0 million in
economic output.

For California non-tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a medium level
of impact on economic
contributions during a maximum
shortage of 2.1 maf, with a loss of
over 100 jobs, about $8.5 million in
labor income, and $36.9 million in
economic output.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Priority approach) is
among the alternatives with the
lowest level of impact on
economic contributions during a
maximum shortage of 2.1 maf, with
no change in jobs, labor income, or
economic output.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a high level of
impact on economic contributions
during a maximum shortage of 1.5
maf, with a loss of about 900 jobs,
$48.2 million in labor income, and
$163.9 million in economic output.

For Arizona non-tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Pro Rata
approach) is among the
alternatives with a high level of
impact on economic
contributions during a maximum
shortage of 2.1 maf, with a loss of
500 jobs, about $28.4 million in
labor income, and $124.3 million
in economic output.

For California non-tribal
agriculture entitlement holders,
the Supply Driven Alternative (LB
Pro Rata approach) is among the
alternatives with a high level of
impact on economic
contributions during a maximum
shortage of 2.1 maf, with a loss of
about 3,000 jobs, $173.4 million
in labor income, and $689.2
million in economic output.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Pro Rata
approach) is among the
alternatives with a low level of
impact on economic
contributions during a maximum
shortage of 2.1 maf, with a loss of
about 45 jobs, $2.8 million in
labor income, and $11.2 million in
economic output for California
tribal entitlement holders, and a
loss of about 9 jobs, $0.1 million
in labor income, and $0.6 million
in economic output for Nevada
tribal agriculture entitlement
holders.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Pro Rata
approach) is among the
alternatives with a high level of
impact on economic
contributions during a maximum
shortage of 1.5 maf, with a loss of
about 400 jobs, $30.7 million in
labor income, and $102.8 million
in economic output.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

ES-54 Post-2026 Colorado River Reservoir Operations DEIS January 2026 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven Alternative (LB
Pro Rata)
Economic
contributions and
social conditions
associated with
changes in agriculture
due to water
shortages
(continued)
Impacts on nonmarket values
and social conditions from
changes in agriculture
For non-tribal and tribal
agriculture entitlement
holders in Arizona, California,
and Nevada, the No Action
Alternative is among the
alternatives with the lowest
level of impact on access
and quality of nonmarket
values and social conditions
due to the little to no
increases in acreages of
fallowed agriculture lands
expected from shortages,
under this alternative.

For Arizona non-tribal
agriculture entitlement holders,
the Basic Coordination
Alternative is among the
alternatives with a low level of
impact on access and quality of
nonmarket values and social
conditions due to the low level
of impact on acreages of
fallowed agriculture lands from
shortages.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Basic Coordination
Alternative is among the
alternatives with the lowest
level of impact on access and
quality of nonmarket values and
social conditions due to the
little to no increases in acreages
of fallowed agriculture lands
expected from shortages, under
this alternative.

For Arizona tribal agriculture
entitlement holders, the Basic
Coordination Alternative is
among the alternatives with a
medium level of impact on
access and quality of nonmarket
values and social conditions due
to the medium level of impact
on acreages of fallowed
agriculture lands from
shortages.

For Arizona non-tribal and tribal
agriculture entitlement holders,
the Enhanced Coordination
Alternative is among the
alternatives with a medium
level of impact on access and
quality of nonmarket values and
social conditions due to the
medium level of impact on
acreages of fallowed agriculture
lands from shortages.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Enhanced
Coordination Alternative is
among the alternatives with a
high level of impact on access
and quality of nonmarket values
and social conditions due to the
high level of impact on
acreages of fallowed agriculture
lands from shortages.

For Arizona non-tribal and tribal
agriculture entitlement holders,
the Maximum Operational
Flexibility Alternative is among the
alternatives with a high level of
impact on access and quality of
nonmarket values and social
conditions due to the high level of
impact on acreages of fallowed
agriculture lands from shortages.

For California non-tribal
agriculture entitlement holders,
the Maximum Operational
Flexibility Alternative is among the
alternatives with a high level of
impact on access and quality of
nonmarket values and social
conditions due to the high level of
impact on acreages of fallowed
agriculture lands from shortages.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Maximum
Operational Flexibility Alternative
is among the alternatives with the
lowest level of impact on access
and quality of nonmarket values
and social conditions due to the
little to no increases in acreages of
fallowed agriculture lands
expected from shortages, under
this alternative.

For Arizona non-tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a low level of
impact on access and quality of
nonmarket values and social
conditions due to the low level of
impact on acreages of fallowed
agriculture lands from shortages.

For California non-tribal
agriculture entitlement holders,
the Supply Driven Alternative (LB
Priority approach) is among the
alternatives with a low level of
impact on access and quality of
nonmarket values and social
conditions due to the low level of
impact on acreages of fallowed
agriculture lands from shortages.

For California tribal and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Priority approach)
is among the alternatives with the
lowest level of impact on access
and quality of nonmarket values
and social conditions due to the
little to no increases in acreages of
fallowed agriculture lands
expected from shortages, under
this alternative.

For Arizona tribal agriculture
entitlement holders, the Supply
Driven Alternative (LB Priority
approach) is among the
alternatives with a high level of
impact on access and quality of
nonmarket values and social
conditions due to the high level of
impact on acreages of fallowed
agriculture lands from shortages.

For Arizona non-tribal and tribal
agriculture entitlement holders,
the Supply Driven Alternative
(LB Pro Rata approach) is
among the alternatives with a
medium level of impact on
access and quality of nonmarket
values and social conditions due
to the medium level of impact
on acreages of fallowed
agriculture lands from
shortages.

For California non-tribal,
California tribal, and Nevada
tribal agriculture entitlement
holders, the Supply Driven
Alternative (LB Pro Rata
approach) is among the
alternatives with a high level of
impact on access and quality of
nonmarket values and social
conditions due to the high level
of impact on acreages of
fallowed agriculture lands from
shortages.

Agenda Item 3.

Executive Summary (Summary of Potential Effects)
Some performance indicator descriptions include italics to denote a definition of the “preferred minimum performance” that was used as a significant reference point for technical analysis. The following were considered when determining preferred minimum performance:
input from resource experts, the severity of negative outcomes associated with not satisfying a given performance level, historical (observed) data, and/or reasonably expected outcomes if current operations and recent hydrology continued. To find more information about preferred minimum performance levels, see Volume III – Technical Appendices.

January 2026 Post-2026 Colorado River Reservoir Operations DEIS ES-55 Impact Category Performance Indicator
Impacts Summary
No Action Alternative Basic Coordination Alternative Enhanced Coordination Alternative
Maximum Operational Flexibility
Alternative
Supply Driven Alternative (LB
Priority)
Supply Driven Alternative (LB
Pro Rata)
Economic
contributions and
value associated with
Lake-Based and
River-based
Recreation
Changes in recreation visitor
spending and associated
regional employment, labor
income, and total economic
output from lake-based
recreation-related activities
Under No Action and all
Alternatives, declining
reservoir elevations at Lake
Mead and Lake Powell reduce
access to boating, marina
operations, and shoreline
recreation in dry conditions.

This is expected to lead to a
decrease in visitation and
associated spending on
lodging, food services, and
transportation-related
spending in nearby gateway
communities. Businesses that
rely on water-based visitation,
including marinas, guide
services, motels, and
equipment rentals, are
expected to experience losses
in jobs and labor income.

Downstream economic
effects also weaken, reducing
Potential for overall economic
output.

Decreases in visitation and
associated spending would
occur under dry conditions as
described under the No Action
Alternative. Operational
changes increase the frequency
and duration of low-elevation
conditions at Lake Powell,
reducing marina operability and
shortening boating seasons are
likely to further reduce
economic contributions
associated with recreational use
at this reservoir. For Lake Mead,
there is more robust
performance related to
recreation site access and
navigation thresholds, therefore
visitation and spending
associated with this reservoir
are anticipated to be
maintained at levels at or above
that of the No Action
Alternative.