HomeMy WebLinkAboutMinutes - Water Utility Commission - 1/14/2008 MINUTES j. z ORO VALLEY WATER UTILITY COMMISSION s REGULAR SESSION \ot JANUARY 14,2008 HOPI CONFERENCE ROOM O li. - 11,000 N. LA CANADA DRIVE g. CALL TO ORDER--AT OR AFTER 6:00 P.M. ROLL CALL--6:00 P.M. CALL TO ADUDIENCE MEMBERS PRESENT: David Powell,Chair Winston Tustison,Vice Chair Rick Davis,Commissioner John Hoffmann,Commissioner Brent Egbert,Commissioner Elizabeth Shapiro,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: Barry Gillaspie Council Liaison K.C. Carter,Council member CALL TO AUDIENCE—There were no requests to speak. Commissioner Egbert Resignation: Chair Powell announced Commissioner Egbert's resignation and thanked him for his time and dedication to the Commission. Mr. Egbert submitted his resignation letter effective Tuesday,January 15, 2008. Mr. Egbert accepted a Regional Director engineering position in Nashville,Tennessee.Mr. Saletta also thanked Mr. Egbert for his service. ITEM #1 APPROVAL OF DECEMBER 10, 2007 MINUTES — Commissioner Egbert MOVED to approve the December 10,2007 minutes.Vice Chair Tustison SECONDED the motion.MOTION PASSED: Unanimously. ITEM#2 OVERVIEW OF WATER RATES AND WATER DEVELOPMENT FEES—Mr. Saletta and Ms. Seng reported the following Mr. Saletta indicated that Commissioner Shapiro requested this item. Ms. Seng gave a report on the three funds that comprise the Water Utility,the sources of revenue for each fund and how revenues from each of the funds are used.This particular item was also discussed at the January 10,2008 Finance Subcommittee. Ms. Seng distributed a handout with a breakdown of the various funds. She reviewed the following • Enterprise Fund (Operating Fund): Revenues: Water rates, service fees & charges (e.g. reconnect fees, insufficient funds, service establishment, plan review & inspection fees, interest.) Expenditures: personnel, operating&maintenance,existing system improvements,debt service. Examples and explanations were given for existing system improvements. • Alternative Water Resources Development Impact Fees: Revenues: AWRD Impact fees, Groundwater Preservation Fees, interest earned. Expenditures: renewable water capital infrastructure costs and/or related debt service. (Personnel costs/operations &maintenance expenses are not paid from this fund). An explanation and examples were given for renewable water capital infrastructure improvements and renewable water sources (CAP&Reclaimed Water). 144-08 MINUTES,ORO VALLEYAT W ER UTILITY COMMISSION • Upcoming Meetings — Town Council 1/16/08 Time: 7:00 p.m. Agenda Items: Presentation of State Lands Department -Water Code Changes for the WUC Representation TOV Open House 1/22/08 (State Lands) Time: 6--8:00 p.m. Council Liaison Gillespie explained that it was the State Land Department's first presentation and that staff and the Commissioners may want to attend. Mr. Saletta ended his report. No action was taken or required on this item. FUTURE AGENDA ITEMS • Approval January 14,2008 Minutes • USGS Active Ground-Water Level Network - Commissioner Hoffmann recommended having USGS Active Ground-Water Level Network as a future agenda item. This system tracks groundwater conditions e.g. (wells). The network is available to the public online however;it is not available nation-wide at this time. Chair Powell felt it would be useful information for the Commissioners and the Public Education Conservation Subcommittee to review. ITEM#5 CENTRAL ARIZONA PROJECT DVD--Mr. Saletta presented the CAP Virtual Tour DVD.He explained that the Commissioners would receive half hour of training time. There were no questions Mr. Saletta ended the video presentation. No action was taken or required on this item. CALL TO AUDIENCE--There were no requests to speak. NEXT MEETING:February 11,2008 Location:To Be Determined Chair Powell entertained a motion to adjourn the meeting MOTION: Commissioner Shapiro MOVED to adjourn the meeting. Commissioner Davis SECONDED the Motion. MOTION PASSED:Unanimously. ADJOURNMENT: 7:30 P.M. Prepared by, Iris L. Chaparro Senior Office Specialist 5 1-14-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION -Town Council Report:Report consists of tracking growth projections vs. actual revenue from impact fees.This report will be prepared in October or November. The report will track both revenues collected and new water connections (by Equivalent Dwelling Units) and compared to the amounts projected for Water Impact Fees. Chair Powell requested that the Commission have the opportunity to review the Equivalent Dwelling Unit (EDU) report. Ms. Seng distributed a copy of EDU & Meter Installation for CY 2007 and explained the report. A 5/8-inch meter is equal to one EDU. -Calendar Year 2007 = 383 new connections -New EDU's equivalent= 595 -First 6 Months FY 07-08 = 204 new connections -New EDU's equivalent= 345 -Projections FY 07-08= 320 new connections which is equivalent to 400 EDU's Vice Chair Tustison indicated that after the impact fees increased there were significant increases in the commercial sector but new housing construction decreased. Mr. Saletta concurred and pointed out the EDU area by meter size on the handout. There were no further questions Ms. Seng and Mr. Tustison ended their report. No action was taken or required on this item. ITEM#4 UPDATE ON NORTHWEST WATER PROVIDERS--Mr. Saletta reported on the following. -The Northwest Water Managers recently met on January 10,2008 -Discussion at that meeting included review of an alternative pipeline route and associated costs. The pipeline route parallels 1-10 south to Linda Vista then east on Linda Vista, north to Shannon to Naranja.. Costs were higher for the alignments and Tangerine may be the preferred alignment for the N.W. Providers. The entities will take a look at a routing feasibility study. This study will take into consideration developed/undeveloped land, easements, ROW, environmental issues (vegetation, wildlife habitat). It will also consider project costs technical issues,hydraulics,and water delivery. Central Arizona Project Water - Pilot Study fQr Water Treatment: Consider adding a microfiltration pilot, and VSEP to the existing Slowsand filter Reverse Osmosis pilot study. -N.W. Providers Intergovernmental Agreement: The N.W. Providers discussed that the IGA was the best approach from an operational and governance perspective point of view. The next step will be to develop basic elements for the IGA. Mr. Saletta indicated that Carollo Engineers has done an excellent job with the preliminary cost estimates and was pleased with the progress. An answer and question occurred: -CAP Water System elevation & delivery to Oro Valley (Commissioner Egbert). Mr. Saletta explained that the water must be lifted and delivered about 600 to 700 vertical feet. There is roughly 2,060 ft elevation at I-10 and Tangerine. Oro Valley would like to pump 2660 ft, Flowing Wells and Metro Water delivery elevation is approximately 400 feet. -Micro filtration\VSEP Treatment in other parts of the country (Vice Chair Tustison). Mr. Saletta explained that VSEP treatment had been used at smaller scales,microfiltration treatment is a standard process and slow sand filtration has been used for a long time. -Microfiltration Utilization (Commissioner Shapiro). Mr. Saletta indicated that it was a very fine filtering process that reduces turbidity. -Delivery of 600 ft vs. Gravity Feed (Commissioner Davis). Mr. Saletta and Mr. Ruiz gave examples of O.V. unique elevations (e.g. C-zone (2700 ft), D-zone, E-zone etc.) Mr. Ruiz explained that all CAP water would be pumped into the existing system, but some enhancements could be made to specific zones in the potable water distribution system. There were no further questions Mr. Saletta ended his report. No action was taken or required on this item. Chair Powell indicated that Item 5 would be moved below future agenda items. 3 144-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION TOWN COUNCIL MEETINGS/COMMUNICATIONS — Council Liaison Gillaspie reported on the Town Council's monthly activities: • January 16,2008-State Land Presentation-Ref:planning process\conceptual plan. • January 22, 2008 — State Land Open House second follow up meeting will take place at the next regular T.C. Council meeting (ref: Preliminary plan). Council member Gillaspie encouraged the Commissioners to attend the meeting. • Proposition 200—Ref: Alternative Water issues and Conservation SUBCOMMITTEE REPORTS—No reports. STAFF REPORTS—Mr. Ruiz reported on Capital&Reclaimed Projects: • Capital Projects -Pusch View Lane Bridge for Well C-9—The construction project was awarded and will be completed 4-5 months. • Reclaim Projects -Reclaimed Water System Report December 2007 — Demand decreased, 8.5MM gal used. Year Total = 496,216,000 gallons. -Potable Operations Report December 2007—Reservoir Levels= 7MM Gal. Demand: Average 6MM Gal. -Potable Peak Daily Demand Operatipns/Precipitation December 2007— Demand drops • Hilton Golf Course Point Relining Project (Power Point Presentation): Mr. Ruiz presented various slides regarding the Hilton Golf Course Relining -Map: Phase 2 Reclaimed Water System -Construction Update: Notice to proceed issued 11/26/07 -Project completion February,2008 -South Pond liner complete by April 2008 -A photo presentation of the project construction was shown to the Commission. There were no questions Mr. Ruiz ended his presentation. No action was taken or required on this item. Ms. Seng gave a brief report on Customer Service: • Credit Cards: The Utility will look into the ability to allow customers to pay their water bills with credit cards. A slight fee may be charged for this service. In the near future, customers will have the capability to make on-line payments. DIRECTORS REPORT—Mr. Saletta reported on: • Citizens Planning Institute: Congratulation to Commissioner Hoffmann who recently graduated form the CPI. Mr. Hoffmann enjoyed the opportunity and experience he was also impressed with the diversity of speakers and presenters. • Handout:January 9,2008 Presentation to Sun City Government Affairs Committee • Attachments: Articles Tucson Water Rates -Marana's potential to purchase portion of Tucson's Water System within Marana's boundary -Storms filling reservoirs at Colorado River upper basin • Pima County Comprehensive Plan—Pima.County's recently approved water resources and water development in unincorporated Pima County. This action does not affect the lands within the Town of Oro Valley boundaries Town or city boundaries, but could affect O.V. Countryside Water Service Area. Mr. Saletta explained Pima County's requirements for developers. Developers must show that the ground water being depleted is not going to severely affect the groundwater table in the aquifer. Pima County Staff is currently working with developers and other water entities to get a clearer understanding of these regulations and requirements (e.g. mapping & information). Pima County Board of Supervisors has approved this plan. This plan will affect areas that file for a comprehensive amendment and rezones in Pima County. There are associated water conservation requirements under these new Pima County regulations. • Water Ways Newsletter- Last issue will be February of 2008. Water Ways feature articles will now be published in the Oro Valley Vista publication. Future articles may include: Conservation, Planning, Water Resources, Commission Issues. • Central Arizona Project Water — Central Arizona Water Subcontracts have been validated and signed by the courts. Oro Valley formally has an allocation of 10,305 a/f as a result of the Arizona Water Rights Settlement. 4 1-14-08 MINUTES,ORO VALLEY WATER UTILITY COMMISSION • Potable Water System Development Impact Fees: Revenues: PWSD Impact fees, interest earned. Expenditures: Expansion related potable water system capital infrastructure costs and/or related debt service. An explanation and examples of expansion related potable water capital improvements were provided. • Rates Analysis: All water rates are associated with the Enterprise Fund. In addition to water rates,Staff reviews the Groundwater Preservation Fees on an annual basis. The Enterprise Fund,AWRDIF Fund and the PWSDIF Fund are combined in the rate analysis to determine the debt service coverage ratio. Debt Coverage Ratio Explanation: Net revenues for any given year must equal 1.3 times the annual debt service. This ratio is based on bond covenants and Mayor&Council water policies. A question and answer session followed: -Funds for CAP water treatment/construction & delivery-(Commissioner Egbert). Explanation: CAP project would be funded through the Alternative Water Resources Development Impact Fee Fund. Existing customers pay through the Groundwater Preservation Fees and new growth pays through Impact Fees. There were no further questions,Ms.Seng ended her report. No action was taken or required on this item. ITEM #3—WATER RATES ANALYSIS - Vice Chair Tustison reported that the Finance Subcommittee met January 10, 2008 to review the water rates analysis and schedule. Mr. Tustison welcomed other Commissioners to attend the Finance Subcommittee meeting. Chair Powell emphasized that Staff must be contacted in advance because of the "Open Meeting Law" and posting of meetings. Mr. Saletta gave a brief explanation about: Open Meeting Law, Non- subcommittee member attendance, action items/motions and possible quorum. He also indicated that Commissioners Tustison and Shapiro could only make motions at these meetings. Ms. Seng gave a report on the following: • Review Current Tentative Rate Analysis Schedule: -Presentation to T.C. Study Session: April 9, 2008 -W.U.C. Recommendation:April 14 -Notice of Intent adopted by T.C.April 16 -Public Hearing May 21 -Rates Effective:June 21 -Customer Billing effective:July • Discussion and Analysis of Fees: The following fees will also be reviewed as part of the Water Rates Analysis and proposed increases: Groundwater Preservation Fee (GPF), Credit Card Fees, Meter Fees (Automatic Meter Reads&Meter Repair/Replacement Program) • Review Key Elements: 1.TEP Proposed Rate Increase (14.9%—23%):Staff estimates: 15%increase ($150K per year) 2. Reduce WIFA debt service by $1M: The Utility realized cost reductions when bidding the reclaim construction project. 3. Central Arizona Groundwater Replenishment District (CAGRD): Estimate $500K - $1M. This is an extensive calculation depending on the use of Long Term Storage credits (LTS)with recovery wells. 4. CAP Reallocation: Increase debt service ($21K) 5.Tucson Water Reclaimed Water Treatment: The Utility will experience reclaimed water increases. Cost assumptions could reach as high as$1.50 per 1,000 gal. Over the next 5 years. 6.Municipal Operations Center:Considerations: land acquisition,planning process,future facilities,rent. 7.Analysis Years 4&5:Include operating costs for CAP system to treat and deliver CAP water to O.V. Use Carob Study to develop estimated operating costs. • Groundwater Preservation Fee: L Review Basis for GPF: -Supportive Documentation: —2003 Annual Report - 2003 Senior Lien Bonds -T.C. Council Approval of GPF by Resolution No.03-89 on October 1,2003 2. Groundwater Preservation Fee: The GPF is reviewed annually and adjusted as needed. The GPF is not an impact fee. The GPF is a fee assessed to all customers to fund Reclaimed Water and CAP water capital infrastructure. • Reporting for the Alternative Water Resources Development Impact Fees (Discussion): -Statutory Requirement : Require all water providers to prepare a formal report on Impact Fee Funds (report on revenue,expenditures,detail information on capital projects construction,bond repayments.This report is due the end of September every year. 2