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Home My WebLink AboutMinutes - Water Utility Commission - 5/12/2008 --‘ collip8 R7p,k. 1 )6. e MINUTES ORO VALLEY WATER UTILITY COMMISSION t . 1 REGULAR SESSION MAY 12,2008 HOPI CONFERENCE ROOM 11,000 N.LA CANADA DRIVE CALL TO ORDER-AT 6:00 P.M. ROLL CALL - 6:00 P.M. MEMBERS PRESENT: David Powell,Chair Winston Tustison,Vice Chair Robert Milkey,Commissioner John Hoffmann,Commissioner Elizabeth Shapiro,Commissioner Rick Davis,Commissioner STAFF PRESENT: Philip C. Saletta,Water Utility Director Shirley Seng,Utility Administrator Robert Jacklitch,Project Manager CALL TO AUDIENCE -None ITEM #1 APPROVAL OF APRIL 14, 2008 MINUTES- Chair Powell entertained a motion to approve the April 14,2008 minutes as corrected by Commissioner Hoffmann. MOTION: Vice Chair Tustison MOVED to approve the April 14, 2008 minutes. Commissioner Shapiro SECONDED the motion. MOTION PASSED: Unanimously. Chair Powell, moved Item#2 Arroyo Grande in order to accommodate Mr.Nelson's Schedule. ITEM #3 - U.S. GEOLOGICAL SURVEY INTERACTIVE WATER WEBSITE - Commissioner Hoffmann introduced Fred Tillman who works for the USGS Arizona Water Science Center and created the interactive website. Commissioner Hoffmann gave a brief update on the organizational aspects of the USGS. A power point presentation was given. • National Assessment of Water Availability and Use -Lower Colorado River • Arizona Ground-Water Conditions -Surface-Water approach -USGS approach to presenting ground-water conditions is to provide multiple layers of simple information visually,man with linked details • Change in water level and storage since predevelopment (map displa)) • Wells experiencing decline &rise in water levels • Depicts recent trends in ground-water levels and current depth to ground-water(Since 2004) No action taken or required on this item. An answer and question occurred: -Define Predevelopment (Vice Chair Tustison) - Data is reviewed before significant use or groundwater development has occurred. -Who is using statistical information on the website (Chair Powell) - Many have visited the site but this could be researched. -AG Areas\water use (Chair Powell) -Agricultural areas are included on the site -Funding&maintenance of website (Chair Powell) - USGS funds site Mr. Tillman encouraged feedback from the Commissioners. Chair Powell also thanked Mr. Tillman and Commissioner Hoffmann for the presentation. r • 5-12-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION There were no further questions Commissioner Hoffmann/Fred Tillman ended their presentation. ITEM #4 WATER RATES ANALYSIS - Ms. Seng indicated that on April 16, 2008 Staff presented a Notice of Intent (NOI) to increase the water rates based on the Preferred Financial Scenario. Council continued the item and did not specify a date when Staff should present their findings. A Finance Subcommittee meeting was held May 6, 2008. Ms. Seng reported some of the Council's concerns: • The range was too large within the middle&upper tiers • Why are Tucson Water rates different from Oro Valley Water Rates? Rates do not provide benefit to those using less water • Consideration should be given to more tiers Possible Solutions • Additional tiers in the rate structures - possibly(5 or 6 tiers) • Phase-in of AWWA capacity ratios for larger meter sizes • Maintain,reduce or minimize base rate Schedule • Council Study Session on 6/11/08 • Possible NOI in August/September Discussion items: • Other issues: Rate shock, Lower rates\effects on future rate increases, Water Conservation and average water use per household • Conservation Pricing-provide an incentive for lower water users • Rate structure must meet revenue requirements,bond covenants and debt service coverage • Simplify concept for Council's benefit,clarify principals of rate structure • Council's concern- conservation and pricing • Relationship between base rate &commodity rate\structural changes • Comprehensive Rate Analysis - Staff may require assistance from Red Oak Consultants • Possibility applying a surcharge for those individuals not conserving • The time extension of Water Rates Analysis &its effect to the Utility should not have any significant effect on revenues for this year because a 5-year financial plan is analyzed each year. Vice Chair Tustison emphasized that 79% of residential users are using less than 12,000 gallons on average and 7% are using more than 18,000 monthly averages. Council mentioned cutting rates for lower residential users however, it is impossible to do this without penalizing the high users. When making rate changes or tier changes it eventually has a cascading affect on the rate structures. The Finance Subcommittee is looking at a 5-year plan, and the Finance Subcommittee tries to develop the plan in the most comprehensive and sensible way it can. If rates are lowered, eventually we will have to pay for it later. Mr. Saletta pointed out the Water Utility's fundamental principles: - Deliver safe &reliable source of water - Utility must be fiscally sound - Conservation&protecting natural water resources There were no further questions. Ms. Seng ended her report. Chair Powell indicated there was a motion on the table for the Commission's approval. MOTION: Vice Chair Tustison MOVED to recommend that Water Utility Staff perform a comprehensive analysis of potential water rate structures to include the tiers,base rates,commodity rates,groundwater 2 5-12-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION preservation fees and other fees and charges prior to re-submitting a Notice of Intent to the Town Council with the understanding that a revised Notice of Intent may not be presented until August or early September. Commissioner Shapiro SECONDED the motion. MOTION PASSED: Unanimously ITEM #5 WATER DEVELOPMENT IMPACT FEES - Mr. Saletta reported that on May 7, Council approved the Notice of Intent establishing Town Development Fees and increasing the Alternative Water Resources Development Impact Fees (ANX/RDIF). The Potable Water System Development Impact Fee did not need an increase based upon last year's calculation. Mr. Saletta pointed out the following: • AWRDIF Analysis and report was included in the Commission's packet and is available to the public at the Town Clerks Office. • The current AWRD Impact fees with the 5- year increment phase implementation were reviewed. • Table ES-1 in the report lists the proposed fees based upon meter size • The proposed state legislation S.B. 1406 was discussed. Language in the bill delays, eliminate the collection of any increased amounts for 24 months from the time a plat is approved. The S.B. 1406 legislation has passed the Senate and is presently at the House. • Proposed schedule: Public Hearing on - July 16, Request for adoption on - August 20. If approved, fees would be effective on- November 18. • Staff will prepare a new Ordinance for the Commission's review June 9. At the July 14 WUC Meeting, the Commission should be prepared to recommend approval of the ordinance to Council for the August 20 Council Meeting. A questions &answer session occurred. • Reaction of SAHBA and other development communities (Chair Powell) - SAHBA addressed Council at the May 7 Meeting. There has been only a minor response from SAI-IBA at this time and they continue to actively support this legislation. Mr.Saletta indicated that there was no action required on this item and ended his report. ITEM #6 WATER CONSERVATION ALLIANCE OF SOUTHERN ARIZONA - Ms. Seng reported the following: • The Water Utility has been a member of Water CASA since 2000. The organization helps the Utility meet ADWR conservation requirements also provides an avenue to collaborate with other regional water providers. • The Water Utility shares in ADWR regulations and management plans. Water CASA assists the Utility in obtaining grant funding from the Bureau of Reclamation, provide conservation literature, retrofits, aerators, shower heads (no charge to customers). • Water CASA membership cost for FY 2008-09 is $16,381. Costs are based on groundwater pumpage, which has been reduced due to the use of reclaimed water. Ms. Seng indicated that staff is requesting recommendation to continue the renewal of this agreement. A question&answer session took place. • Which fund is used for payment of the costs associated with the IGA. (Commissioner Hoffmann) - Payment is made from the Enterprise Fund. There were no further questions. Ms. Seng ended her report. Chair Powell indicated there was a motion on the table for the Commission's approval. MOTION: Commissioner Shapiro MOVED to recommend to the Town Council the renewal of the Intergovernmental Member Agreement between the Town of Oro Valley and the Arizona Board of Regents for the University of Arizona to Extend Membership in the Water Conservation Alliance of Southern Arizona. Commissioner Davis SECONDED the motion. MOTION PASSED: Unanimously. 3 5-12-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION ITEM #7 KAI FARMS AGREEMENT - Mr. Saletta reported that the agreement focuses on a ground water savings facility with Kai Farms and has been in place since 1997. The following background information was given: • Allows OVWU delivery of CAP water to Kai Farms which allows Kai Farms to save ground water. • OVWU gains Long Term Storage Credits in TAMA which offsets costs for CAGRD. In 2008 the Utility anticipates a net savings of$80,000 • Agreement expires December 15, 2009 -Kai payment is $12 per acre foot of CAP Water and can use up to 4,000 af per year • If the Utility purchases CAP water for $51 per acre foot at the excess water rate, the cost to Kai would be reduced to $9 per af • Kai is responsible to pay the Town the cost and charges due for CAP Water in the event that the water ordered or delivered cannot be accepted by Kai A questions &answer session occurred. • Agreement's term why is it not for a longer period (Commissioner Hoffmann) - The term is shorter so it can be updated if prices change. • Stability of CAP rates (Commissioner Milkey) - CAP water rates are set for 2 years and renewed annually. They are increasing as O&M increases. • Kai recharge rate &monitoring of CAP meters (Chair Powell) - OVWU has the right to monitor meters but CAW® actually keeps track of what is delivered and purchased to Kai's account. • Future reductions of recharge &CAP water delivery to Kai (Chair Powell) - There may be some decrease due to a decrease of acreage, but there are other opportunities for recharge that could be developed. In addition, over the long term,we would want to develop and use our CAP Water directly. • Kai Farms ground water pumping incentive (Commissioner Hoffmann) -CAP Water incentive rate is $51 per af -CAP charges OVWU $21 capital charge plus $91 af for M&I subcontract water. Kai pays $12 per af which is based upon other agreements that he has with other water providers. There were no further questions.Mr. Saletta ended his report. Chair Powell indicated there was a motion on the table for the Commission's approval. MOTION: Commissioner Shapiro MOVED to recommend to Town Council a Resolution No. (R) 08 of the Mayor and Council of the Town of Oro Valley, Arizona Approving the Agreement Between the Town of Oro Valley and Kai Farms for a Groundwater Savings Facility Project. Commissioner Hoffmann SECONDED the motion. MOTION PASSED: Unanimously. TOWN COUNCIL MEETINGS/COMMUNICATIONS—Mr. Saletta reported on: All day Council Study Session held Saturday,May 3. OVWU Budget reviewed and approved No action taken or required on this item. SUBCOMMITTEE REPORTS/COMMISSIONER REPORTS - Commissioner Davis reported on the Conservation Subcommittee activities: • Conservation Subcommittee meeting held:May 5,2008 • The Drought Response Plan-Follow-up data sources for historic and current precipitation levels • Discussion:Potential CAGRD Grant Funding&Conservation opportunities • Southern Nevada Water Authority offers (Coupons for car washes) • Discussion: Buffelgrass Management Plan\Fire hazards\Making information available to public • Next meeting:May 19. There were no further questions Commissioner Davis ended his report.No action was required on this item. 4 5-12-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION ITEM#2 DISCUSSION REGARDING ARROYO GRANDE - Mr. Scott Nelson presented a map of the Arroyo Grande Area and gave an explanation about the conceptual plan. The following items were discussed: -Handout:Arroyo Grande information -Planning&Zoning site tour -Work on General Plan Amendment -Require additional language from other departments (e.g.Water Utility-Hydrology investigations,Water resources/infrastructure for future development) -P&Z Department to prepare an Environmentally Sensitive Lands Ordinance A discussion occurred regarding: -Arroyo Grande proceedings &Water Utility's role (Vice Chair Tustison) - The Water Utility is part of the team represented by Philip Saletta. The issues are with respect to water supply for the area and the transfer of CAP Water from State Lands. -Additional water supply availability(Vice Chair Tustison) - This is related to the transfer of CAP Water from State Lands and will be defined and determined during the process and negotiations. -General Plan Amendment to address:population,water supply,infrastructure, CAP availability(Mr. Saletta) -Ground Water: review water demand & ground water aquifer levels (Commissioner Shapiro) - This will be done as part of the hydrogeologic analysis -Public Education key factor(Chair,Powell) -Pinal County Line (Commissioner Davis) - The General Plan Area only goes up to the Pinal County Line. There is additional State Lands north of the Pinal County line. -Review of the graph for projected water sources (Commissioner Hoffmann) - Staff can provide a copy of the graph to the Commission. -Arroyo Grande will be on the WUC Agenda. There were no further questions Mr. Nelson ended his report. No action taken or required on this item. STAFF REPORTS • Potable&Reclaimed Water Projects - Mr.Ruiz reported on: -April 2008:Potable Peak Daily Demand Operations/Precipitation Report -April 2008:Potable Operations Report- Reservoir Levels -April 2008:Reclaimed Water System Report-Water Demand -El Conquistador North&South Pond refill -Painted Sky Reclaim project- Complete:June 08 There were no questions.Mr.Ruiz ended his report.No action taken or required on this item. Ms. Seng reported on: • Customer Service Report - There were 383 meter installations in 2007 which equaled 598 EDU's. Through April of 2008 there were 79 meters installed. This is tracking projection of 320 EDU's. There were no questions.Ms.Seng ended her report. No action taken or required on this item. Capital Projects -Mr.Jacklitch reported on: -Pusch View Bridge Project Status:Complete -La Canada water Main relocation Status: Complete -Pusch View Lane Bid Opening (Lowest bidder: Ashton Company) -King Air Reservoir Status: 60% complete -Innovation Park Drive 16 Inch main -Status:Design process 90% complete Mr.Jacklitch ended his report. No action taken or required on this item DIRECTOR'S REPORT - Mr. Saletta reported on: -Update on NW Water Providers - There is an RFP for a pipeline routing analysis. Staff met with Arizona Representative regarding the Northwest Reliability Storage. Plan to meet with Representative Giffords staff next. -Update on City/County Water Planning Study- A meeting was held tonight and we will request information. -Upcoming Meetings- Meeting with Rep. Giffords 5/14 -Council 5/21 - WUC 6/9 5 5-12-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION Council Study Session -6/11 (Ref: rates & impact fees), -Council 6/18 Reappointments: Commissioner Shapiro,Commissioner Milkey and Chair Powell -WRRC Conference in Phoenix -6/24 (Commission invited to attend all costs covered by the Utility. The Commissioners will gain 8 hours of training. Mr.Saletta ended his report.No action taken or required on this item. FUTURE AGENDA ITEMS • Approval May 12,2008 minutes No action taken or required on this item. CALL TO AUDIENCE - No Speakers. NEXT MEETING: June 9,2008 Location: Hopi Conference Room ADJOURNMENT: Chair Powell entertained a motion to adjourn the meeting. MOTION: Commissioner Davis MOVED to adjourn the meeting. Vice Chair Tustison SECONDED the motion.MOTION PASSED:Unanimously Meeting adjourned: 8:20 P.M. Prepared by: (I/ C4J.A1-0 Tris L.C;haparrc> Senior Office Specialist 6