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HomeMy WebLinkAboutMinutes - Water Finance Subcommittee - 8/27/2013 ACTION SUMMARY MINUTES ORO VALLEY WATER UTILITY COMMISSION FINANCE SUBCOMMITTEE MEETING AUGUST 27, 2013 WATER UTILITY CONFERENCE ROOM 11000 N. LA CANADA DRIVE ORO VALLEY, AZ 85737 CALL TO ORDER at 10:03 a.m. PRESENT: Winston Tustison, Chair, Finance Subcommittee Robert Milkey, Chair, Water Utility Commission Shirley Seng, Water Utility Administrator Philip Saletta, Water Utility Director Jeff Kane, Meter Operations Supervisor Stacey Lemos, Finance Director Call to the audience No public attendance at the meeting. Discussion of the following items occurred and no action was taken: 1. Discussion and possible action regarding applying for a loan from the Water Infrastructure Finance Authority of Arizona (WIFA) a. Previously discussed the need for a WIFA loan with the Finance Subcommittee and the Water Utility Commission on April 8, 2013 b. Discussed the need to finance the meter replacement project. c. Discussed WIFA loan specifics: i. Interest rates—2012 average interest rate was 2.76% ii. Davis-Bacon wage requirements 1) WIFA is obtaining a wage determination from the Dept. of Labor iii. No loan origination fees or bond underwriter's fees d. Discussed the schedule for the loan process i. Estimating Council approval in January 2014 2. Discussion and possible action regarding the cost of service study and water rates a. Discussed reasons for cost of service study i. Tiered rate structure needs to be aligned with customer classifications ii. Commercial customer classification impacted by tiered rates b. Discussed the key steps in a cost of service study c. Discussed the results of the cost of service study d. Discussed the principals used to develop equitable water rates e. Discussed changes to water rates f. Discussed 2 water rate scenarios i. Equivalent increases to all customer classifications ii. Gradual increases to reclaimed customers classification g. Discussed proposed increases to service fees and charges i. Increase to construction inspection fees ii. Increase to late payment fee h. Discussed the schedule to implement new water rates i. Estimating Town Council adoption in November 2013 ii. New rates would become effective in December 2013 but not billed until January 2014 3. Discussion and possible action regarding the impact fee analysis a. Discussed new impact fee law i. AZ State Legislature passed SB 1525 in 2011 ii. Affects municipal impact fees including water&wastewater iii. New law defines what can and cannot be included in the impacts iv. New fees must in place by August 1, 2014 or unable to collect impact fees b. Discussed the key elements of the new legislation i. Ten year time frame ii. Previous debt may be included (Equity Buy-In) iii. Land use assumptions iv. Infrastructure Improvements Plan (IIP) v. Update IIP every five years vi. Eligible credits c. Discussed the approval process and schedule i. Two public hearings prior to Council adoption ii. Estimating Town Council adoption on April 2, 2014 iii. New impact fees would become effective on June 1, 2014 Adjourned at 11:05 a.m. I hereby certify that I prepared the foregoing minutes and that they are a true and correct copy of the minutes of the Finance Subcommittee meeting held on the 27th day of August 2013. I further certify that the meeting was duly called and held and that a quorum was present. 7 Prepared by: Shirl eng, Wate U 'lity Admi istrator