HomeMy WebLinkAboutMinutes - Water Utility Commission - 2/12/2007 MINUTES ITEMORO VALLEY WATER UTILITY COMMISSION
REGULAR SESSION
FEBRUARY 12,2007 #
HOPI CONFERENCE ROOM
11,000 N.LA CANADA DRIVE
APP3BYED 31174°7°?CALL TO ORDER-AT OR AFTER 6:00 P.M.
ROLL CALL- 6:00 P.M. C °
MEMBERS PRESENT: Dave Powell,Chair
Winston Tustison,Vice Chair
George Calabro,Commissioner
Brent Egbert,Commissioner
John P.Hoffman,Commissioner
Elizabeth Shapiro,Commissioner
Harold Vaubel,Commissioner
STAFF PRESENT: Philip C.Saletta,Water Utility Director
Shirley Seng,Utility Administrator
David Ruiz,Engineering Division Administrator
Robert Jacklitch,Project Manager
Jim Peterson,Water Utility Regional Coordinator
OTHERS PRESENT: Council Liaison,B.Gillaspie
Council Member,K.C. Carter
ITEM#1 APPROVAL OF JANUARY 8,2007 MINiJTES- Chair,Dave Powell entertained a motion for approval of the
inuary 8,2007 minutes.
MOTION: Commissioner Shapiro MOVED to approve the January 8, 2007 minutes. Vice Chair Tustison
SECONDED the motion.MOTION PASSED:Unanimously.
ITEM#2 KAI FARMS GROUND WATER SAVINGS FACILITY - Mr.Saletta reported the following:
• Kai Farms - Reviewed issues relating to the proposed Union Pacific Railroad Switch Yard Picacho Peak area, Less
than 500 acres affected. Mr. Kai has received some support from Union Pacific Railroad with respect to 'Save the
Peak'and State Lands.
• Review Long-Term Storage credits - KAI Groundwater Storage Permit = 11,231 acre feet per year. Year 2006 Oro
Valley use 3,994 a/f.Oro Valley with Kai Farms Contract = 1500-4000 of
Mr.Saletta stated that Oro Valley should not have any problems with issues regarding long or short storage credits.
Questions and answers occurred on the following:
-Commissioner Shapiro asked about the Switching Station Fuel/Oil Storage spills and ground contamination risks.
-(P. Saletta) These types of facilities are under the Environmental Protection Act (EPA). EPA has strict spill
prevention and control regulations that the Switching Station must follow. The facilities are design to contain fuels
and chemicals.
-Commissioner Hoffman asked:What are their water needs? - (P. Saletta) Mr. Saletta was not sure what the facilities
water needs were and their specific plans.
-Chair Powell asked:Has the facility been approved by Pinal County? - (P.Saletta) With respect to state land there has
not been any formal action but these types of negotiations have to go through a bid process and sale through the State
Land Commission. (Possibly 2-year process).
-Commissioner, Hoffman asked: Does 'Save the Peak'have any momentum? - (P. Saletta) There is a lot of support
for'Save the Peak',however there is a good chance that approval of the facility will go through.
There were no further questions.No action required on this item.
2-12-07 MINUTES,ORO VALLEY WATER UTILITY COMMISSION
ITEM#3-NORTHWEST WATER PROVIDERS CAP COST STUDY- Mr.Saletta reported the following:
• IGA Cost Study with N.W. Providers: Outlines estimates, ideas and analysis for the delivery of Central Arizona
Project water to N.W area and community.
• Carollo Engineers:Contracted to develop alternative water treatment and delivery options/costs for CAP Project.
Mr.Ruiz gave a power point presentation outlining the following:
Town of Oro Valley Alternative Water Resource Program
• Alternative Water Resource Program
• Alternative Water Resources- Colorado River Water
• CAP route alternatives &pipeline alignments: Oro Valley,Metro Water,Flowing Wells,and Town of Marana
• Treatment Train Alternative 1 &2
• Treatment Train Alternative 3 &4
• Treatment Train Alternative 5
• Concentrate Management Alternative 1 &2
• Concentrate Management Alternative 3
• Concentrate Management Alternative 4
• Concentrate Management Alternative 5
Questions and answers occurred on the following:
-Commissioner Shapiro asked about choosing and deciding treatment alternatives. Mr. Ruiz explained that costs were the
most important factors facing the N.W.Providers.
-Commissioner Egbert asked which one of the alternatives brings down TDS (Total Dissolved Solids) to acceptable levels?
Mr. Ruiz explained that all the alternatives met EPA approval and that the process could be customized to meet the Utility's
needs.
-Vice Chair Tustison asked are all treatment costs included in the cost estimates for CAP Water? Mr. Saletta explained that
the cost estimates were submitted by the Bureau of Reclamation in their Report 2000.The cost study included RO (Reverse
Osmosis) treatment to about 300-400 TDS.
-Chair Powell asked will you be blending with groundwater and will that bring the TDS down? - The Utility will be
strategic and study the blending process and how it's introduced into the system. When blending, it is important to match
PH levels with groundwater levels. There will be a concentrate management program in place to handle management of
waste solids.
-Commissioner Vaubel asked if there is going to be any testing for TDS through the Utility's Engineering staff ? Mr. Ruiz
indicated that it would be prudent for the Utility to perform those types of studies but staff will be working closely with the
consultants and will also use City of Tucson data.
-Commissioner Egbert indicated that he was concerned about the disposal of salts.
A discussion occurred regarding costs estimate for the pipeline, CAP payment responsibility and the Bureau of Reclamation
future agreement to pay$32 million for the Northwest Reliability Reservoir.
There were no further questions.
ITEM #4 - RECLAIMED WATER PROJECT UPDATE - Mr. Ruiz continued the power point presentation on
reclaimed water:
Alternative Water Resources
• Reclaimed Water-Allocation of 4,000 of per year
• Explanation-Reclaimed Water Graphs Phase I &Phase II
• Reclaimed Water Phase II - Includes 2 metering stations, relining 2 golf course ponds (E1 Conquistador & La
Canada), 1 3/4 miles of 24-inch and 16-inch pipeline. When both golf courses are completed they will use
approximately 326 million gallons of water per year.
• Completion:Mid 2008
Questions and answers occurred on the following:
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2-12-07 MINUTES,ORO VALLEY WATER UTILITY COMMISSION
-Commissioner Hoffman asked about the status of unused allocated reclaimed water. Mr. Ruiz explained that Oro Valley
would accumulate groundwater credits.
:ominissioner Calabro asked about sodium levels in the reclaimed water will Oro Valley have a monitoring station to
maintained sodium levels? Mr. Ruiz explained that Phoenix was not treating for TDS and their sodium levels were much
higher.Oro Valley's reclaimed water sodium levels are in the 300-400 range and will probably not require'1llS treatment.
Mr. Saletta indicated that Tucson Water monitors their water quality and posts the results on their website. Once Oro Valley
uses more water staff will perform periodic sampling.
There were no further questions or discussion.
ITEM#5 IMPACT FEE STUDY-Vice Chair Tustison reported that the subcommittee along with staff had been meeting
for the past three months to discuss the impact fees along with all the financial information. He indicated that a number of
alternatives have been reviewed.
Mr.Saletta gave a power point presentation together with background information on the Water Utility Impact Fees.
-Introduction -Future Water Supply
-Water Use and Sources of Supply -Why Do We Need Reclaimed and CAP?
-Capital Costs -Overview
-Existing Water Utility Impact Fees -What is a Potable Water System Development Fee?
-What is an Alternative Water Resources Development Fee? -Basis of the Potable Water System Fee versus Ahern.
Water Resources Fee -Existing Fees
-Impact Fee Methodologies -Arizona Revised Statues-Synopsis of Impact Fee Req.
-Potable Water System Development Fee (PWSDF) -PWSDF-Background and Purpose-PWSDF
-Selected Methodology -PWSDF-Proposed Fee
-Alternative Water Resources Development Fee(AWRDF) -AWRDF-Background and Purpose
-Water Use and Sources of Supply -AWRD-Selected Methodology
-Cost Allocations -Alternative Water Resources Supply
-AWRDF-Total Capital Costs for Alternative Water Resources -Financing Costs
-AWRDF- CAP and Reclaimed Capital and Financing Costs -Alternative Water Resources Supply(11,500 AF)
-AWRDF-Proposed Fee -Groundwater Preservation Fee-Revenue Requirement
-Comments To Date -Alternative Water Supply(Option 2) (11,500 AF)
-Alternative Water Resources Supply(Option 3) -Next Steps Process and Schedule
Mr. Saletta indicated that staff would be requesting direction from the Commission to forward the proposed impact fees to
Town Council February 12,2007.
Call to the Audience: Mr. Dan Anglin- Tucson Association of Realtors Representative stated that they supported SAHBA
request to hold a stakeholders meeting and that they would also like more time to discuss some alternatives. He was very
concerned about the initial 300% increase to the impact fee rates. Mr. Anglin stated that affordable development could be
hindered,and the Town could be affected.He understood Oro Valley's infrastructure,growth and development issues.
A discussion question and answer session occurred on the following:
Commissioner Hoffman commented on expected Water Level Declines, Alternative Water Resource Program Demand&
Growth Projections,Impact Fees,Rate Increases and reduction of demand in the future.
Mr.Saletta discussed EDU(Equivalent Dwelling Units) details
Chair Powell entertained a motion to approve and to forward the Proposed Impact Fees to Mayor&Council.
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2-12-07 MINUTES, ORO VALLEY WATER UTILITY COMMISSION
MOTION: Vice Chair Tustison MOVED to forward a recommendation to the Town Council to adopt a Notice of
Intent to increase the potable water impact fees and the alternative water resources development impact fees as shown
on the proposed impact fee schedule. I further move to recommend that Staff further evaluate other fee options as
described above in this communication. Commissioner, Shapiro SECONDED the motion. MOTION PASSED:
Unanimously.
ITEM #6 UPDATE ON WATER RATES REVIEW AND ANALYSIS - Vice Chair Tustison reported that the
subcommittee along with staff had been meeting to discuss Water Rates for the next fiscal year. The Subcommittee decided to
review and possibly change the tiered water rate structure.
Proposed Objectives:
-Encourage water conservation by applying higher rates as the volume used increases
-Minimize rate increases for residents at the lowest level Tier 1
-Progressively raise rates in Tiers 2-4 as a means to promote conservation
Vice Chair Tustison explained that the proposed tiered water rate structure would achieve an overall revenue stream that
would match or slightly exceed expenses incurred by the Utility during the next fiscal year. The Subcommittee is currently
working on the amount of each tier in the proposed water rate structure. The Subcommittee and Staff were looking for
direction from the Commission Members on which tiered water rate structure to use in the analysis. Vice Chair Tustison
ended his report.
Ms.Seng reported on the Tiered Water Rate Structures:
• Explanation: Water Use Data Table 12/01/05 - 12/01/06 (5/8" x 3/4") water meters residential users
- Approximately 87% of the Utility's customers are represented under this existing structure
• Usage contained within tiers (conservation,generate revenue requirements),promote conservation
• Explanation:Existing Rate Structure (Tier 1 Tier 2 Tier 3)
• Explanation:Proposed Rate Structure (Tier 1 Tier 2 Tier 3 Tier 4)
• Propose rate structure/revenue generated
• Explanation:Rate Comparison&Water Use Trends
• Explanation:Alternative Rate Analysis
• Explanation:Table For Monthly Charges &Percent Increase Comparison(Customers with 5/8 X 3/4" meters)
A discussion question and answer session occurred on the following:
-Commissioner Hoffman asked about the tiered structure and possibly normalizing it for number of people per household.
Mr. Saletta indicated that households that had more members, such as families, would pay more if their water use increased
and that it was standard throughout the industry. Chair Powell and Commissioner Shapiro agreed that the existing standards
encouraged conservation.
-Chair Powell asked about the Groundwater Preservation Fee (GPF) plus the proposed rate increase. Mr. Saletta indicated
that both items would be reviewed during the Rates Review and Analysis process.
-Commissioner Hoffman asked for clarification of tiered rate structure and charges. Ms. Seng indicated that some rounding
was used for the tier break downs
-Commissioner Egbert asked for clarification of the Tiered Rate Structure versus Meter Sizes. Ms. Seng stated that tiers
change based on usage for each meter size.
Ms. Seng also explained that Staff would present an alternate rate scenario using existing tier structure to Council in case they
were not comfortable with the new tier rate structure.
Ms. Seng indicated that Staff is seeking direction from the Commission Members on whether to proceed with the present rate
analysis 4 tier rate structure or to stay with the existing three-(3)tier rate structure.
No further discussions occurred.
Chair Powell entertained a motion to approve and forward the proposed 4 tiered water rate structure to Mayor&Council.
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. 2-1207 MINUTES, ORO VALLEY WATER UTILITY COMMISSION
MOTION: Commissioner Shapiro MOVED to direct Water Utility Staff to proceed with the Water Rates Analysis
using the attached proposed 4 tiered water rate structure. Vice Chair Tustison SECONDED the motion.MOTION
PASSED:Unanimously.
ITEM#7 UPDATE ON 2007 ANNUAL REPORT -Ms. Seng reported the following:
-Text: Staff is currently collecting information from various staff members. First draft of the Annual Report - 2007 maybe
mailed or emailed to the Commissioners by the month end. Commission comments will also be requested by next scheduled
meeting (March 12,2007).
Town Council: 2007 Annual Report should be presented to Council before the Water Utility Commissions April meeting.
Ms.Seng ended her report.
ITEM#8 2007 REFUNDING OF TAX EXCISE BONDS-Mr.Saletta reported the following:
Existing Bonds: Bonds that are currently being considered for refunding and refinancing are -valued at $17,000,000 to
19,000,000. These bonds could be refunded and rolled into a new refinance package saving the Town and the Water Utility on
future debt service payments. Preliminary calculations show a net present value savings of approximately$1,000,000. Bond
payments are high because of the original debt structure. If refunded and rolled into a new package, the net difference
(savings) would be approximately$4,000,000 in total debt service.
-Explanation:Total debt service 20-year period.
-Water Utility Bond Refinance is schedule for April,2007 and also includes bonds for the General Fund.
Mr. Saletta indicated that there was no need for action from the Commission but that Staff wanted the Commissioners to be
aware of this item, and that the bond issue would be the subject of a February 13th Council Study Session at 5:30 p.m. Mr.
Saletta mentioned that the Finance Director had been reviewing this issue,because a portion of the bonds are shared with the
Town's General Fund.Updates will be reported to the Commission.
Ir.Saletta ended his report.
SUBCOMMITTEE REPORTS-
Water Conservation and Education Subcommittee- Commissioner Egbert reported the following:
• Intermountain Environmental Inc - Received preliminary quote to set up solar powered weather stations at various
well sites.The weather stations will help gather data and rainfall measurements.
• 2007 Annual Report- Reviewed 1st draft of the conservation section in the Annual Report. The Subcommittee made
several comments and suggestions.A meeting will be scheduled the week of February 19th.
• Three weather stations will be set up at several well sites. A modem will be installed linking them to the Town's
website enabling customers to obtain real time data.
Ms. Seng indicated that the weather stations would be a tool for the Utility's own monitoring program contained in the
drought preparedness plan submitted to Arizona Department of Water Resources.
STAFF REPORTS:
Report on various projects:Mr.Jacklitch reported the following:
-Pusch View Lane Well G9: Design Drawing in final stages.When the design is completed,staff will proceed going
out to bid probably first week of March. Construction Schedule:April 2007
-Pusch Ridge Reservoir: The tank has been built, and pouring of the concrete has been completed. The contractor is
finishing the installation of piping in the booster station and the control building inside facilities. Completion Date:
April 2007.The Utility is working cost sharing efforts with the developer.
Mr.Jacklitch ended his report.
Potable Water System and Reclaimed Water System Status: Mr.Ruiz reported the following:
Peak Daily Demand Operations Report
-January 2007: High Demand 6.5 MG January 16th -Daily Averages =5 MG per day
-Precipitation:January 18th
Well Production Report
-January 2007:Total Production = 171 MG
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.2-1.407 MINUTES, ORO VALLEY WATER UTILITY COMMISSION
-Avg.Daily Production =5.3 MG
-Operational Capacity=35.70%
Reclaimed Water System
-January 2007:Usage = 16 MG
Mr.Ruiz ended his report.
TOWN COUNCIL MEETINGS/COMMUNICATIONS- Council Liaison Gillaspie reported the following:
-January 17- Council approved cost sharing IGA with Northwest Water Providers
-February 7- Council approved Central Arizona Water Conservation District subcontract for initial CAP water allocation
-February 7 - Council approved Reverse 911 system voice operated response system.
Council Member Gillaspie mentioned that the Council was very interested about the outstanding bond and the financial
impact to the Town of refinancing.
Council Member Carter alerted the Commission about the ongoing problems at La Canada construction north of Naranja
west side and the rebuilding of the golf course green. He was concerned about the effects to the reclaimed water line and
asked staff to check with the engineers in solving these problems. He also mentioned that there would be a Study Session or a
possible Executive Session to discuss these issues. Council Member Carter was also very concerned about the refinancing and
outstanding bonds.
In answer to Council Member Carter, Mr. Saletta explained that the Reclaimed Water Rates would be part of the rate review
process and would be included with the potable water rates at a Town Council Study Session.
DIRECTOR'S REPORT: Mr.Saletta reported the following:
-Upcoming Meetings
-February 13, 2007: Meeting with Tucson Water and other water providers Topic: Discuss Cooperative Regional
Water Project
-February 7, 2007: Arizona Infrastructure Financing Authority Project Planning Committee approved Oro Valley's
request for a $6,000,000 loan which will be presented to the Water Infrastructure Financing Authority Board (WIFA)
February 21,2007: Interest rate could vary between 3.6 and 3.8 percent. This loan will fund Phase II of the Reclaimed
Water System
-February 13,2007-Town Council Study Session
Mr.Saletta ended his report.
FUTURE AGENDA ITEMS
1. Approval March,2007 Minutes
2. USGS Annual Update- Topic:Regional Wide Aquifer Assessment (J.Hoffman)
3. Water Rates/Impact Fee- Update
4. Annual Report 2007-Update
Chair Powell indicated that the USGS update could be scheduled in March or April Water Utility Commission meeting.
NEXT MEETING:- March 12,2007 Location:Hopi Conference Room
Chair Dave Powell entertained a motion to adjourn the meeting.
MOTION: Commissioner, Shapiro MOVED to adjourn the meeting. Commissioner Calabro
SECONDED the motion.MOTION PASSED: Unanimously.
ADJOURNMENT: 8:15 P.M.
Prepared by,
f: '
Ins L. Chaparro
Office Specialist
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