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HomeMy WebLinkAboutMinutes - Water Utility Commission - 6/9/2008 MINUTES ORO VALLEY WATER UTILITY COMMISSION REGULAR SESSION JUNE 9,2008 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 David Ruiz,Engineering Division Manager Robert Jacklitch,Project Manager Jim Peterson,Water Utility Regional Coordinator CALL TO AUDIENCE—No speakers. ITEM #1 APPROVAL OF MAY 12, 2008 MINUTES- Chair Powell entertained a motion to approve the May 12, 2008 minutes. MOTION: Vice Chair Tustison MOVED to approve the May 12, 2008 minutes. Commissioner Shapiro SECONDED the motion. MOTION PASSED: Unanimously. ITEM#2 WATER RATES ANALYSIS - Mr. Saletta reported the following: • Handout: 6/11/08 T.C.C. Study Session, attachment: Resolution (R)05-09 & policies relating to finance (lists guiding principals the utility follows regarding rate setting (e.g. 1.3 debt service coverage ratio,reserve fund balance etc.) A Study Session is scheduled which will include discussions regarding policies pertaining to water rates,water rate structure,preliminary financial scenarios,proposed process and schedule. • Water Rate Discussion Overview(PPT Handout) -Review: Enterprise Operation Revenues and Revenue Requirements (Sources of Revenues & Revenue Requirements: Mr. Saletta emphasized that revenues in the Operating Budget do not include Capital Improvement Projects. 31% of operating expenditures include: Debt Service (includes the purchase of the two water companies, Transfer of CAP water, 13% Water resource management payments (CAGRD) & Kai Farms project water. Mr. Saletta pointed out Sources of Revenues: Commodity Rates 66%and Base Rate 28%. -Review: Scenario 1-Initial -Scenario 2&3 -Comparison of Scenarios -Review: Customer Analysis -Review of Schedule: -4/16 Town Council—Continued Notice of Intent -5/12 WUC Meeting to discuss Rates Analysis -6/11 Council Study Session on Water Rates -9/3 Notice of Intent -9/15 Mail Public Hearing notice to customers -10/1 Public Hearing to consider rate increase -11/4 If adopted,new rates are effective Ms. Seng indicated that Scenarios 2&3 still need additional work and that the numbers may change. A discussion session occurred: -Operating costs not strongly dependant on the amount of water delivered. (Commissioner Milkey) Mr. Saletta indicated that fix costs are not related to water deliveries such as: debt service, personnel, CAP related costs and some operating supplies. -All three scenarios generate approximately the same amount of revenue. (Commissioner Milkey) Ms. Seng explained that the scenarios generate similar revenue. -What message does Staff want Council to carry away from the presentation.(Commissioner Milkey) 6-09-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION Mr. Saletta pointed out the following: -Should staff continue reviewing rates this year. -Do the three scenarios need work in terms of base rates, commodity rates, tiered pricing and conservation. -Review proposed schedule and determine if a Cost of Service analysis is required. Chair Powell noted that several Commissioners would be attending the June 11,2008 T.C. Study Session. No action taken or required on this item.There were no further questions Mr. Saletta ended his report. ITEM #3—WATER DEVELOPMENT IMPACT FEES—Mr. Saletta reported the following: • Handout: 6/11/08 T.C.C. Study Session, Existing AWRDIF & Proposed Impact Fees table, Draft Ordinance 08. On May 7, 2008 Council approved a Notice of Intent to move forward with the Alternative Water Resources Development Impact Fees (AWRDIF) and other Town Impact Fees. No changes made to the Potable Water Impact Fees. -Review: 15-17-4 AWRDIF Table: (Demand Adjustment Factor- 5/8-inch meter) • Mr. Saletta reported that Assistant Town Manager Jerene Watson has been tracking State legislation Senate Bill 1406 . There is some indication that the governor may veto this bill. If so,it will be up to Council to decide what steps to take and if they move forward with the impact fee or continue taking the incremental approach. • State bill approved by the House and Senate and will now go to Governor's office for signing. Mr. Saletta recommended that the Commission consider a motion to move forward with recommending to Council the Alternative Water Resources Impact Fee Ordinance. Chair Powell entertained a motion to recommend that the attached ordinance be forwarded to Town Council for approval. MOTION: Vice Chair Tustison MOVED to recommend to Town Council that they adopt the proposed ordinance amending Chapter 15, Section 15-17-4 of the Town Code to increase the Alternative Water Resources Development Impact Fees. Commissioner Shapiro SECONDED the motion. MOTION PASSED: Unanimously. There were no further questions. Mr. Saletta ended his report.. ITEM #4 RENEWABLE WATER RESOURCES SUBCOMMITTEE — Chair Hoffmann reported the following: • The Renwable Water Resources Subcommittee met 5/28/08 some public attendance was present. The handout was discussed: Graph & Map —Water Use and Sources of Supply & N.W. CAP Providers Delivery System Alternative Map. Mr. Saletta reported the following: • Cost Estimate Study included various water treatment alternatives such as slow sand filtration,micro filtration, reverse osmosis, concentrate management,VSEP), delivery,pipeline alternative route and pumping stations. • Total project costs dependant on alternative route & treatment process. Total Estimated project costs =$185 million- $235 million. Oro Valley's estimated share ($65 million to$85 million) • Reviewed slides Source of Supply & Pipeline Routing: Sources of Supply: Sustainable Groundwater Production target of 5,500 AF,Alternative Water Resources: CAP allocation =10,305 af with a possible loss of 1300 af due to treatment process. Reclaimed water: Staff expects reclaimed water to be on line end of July 2008 and CAP Water delivery by year 2014. A questions &answer session occurred. Observed Reclaim water has not increased after the completion of Phase II project (Commissioner Milkey). Mr. 3aletta explained that it could be due to how cost effective delivery alternatives are, how far they're from the reclaim lines,and that they may not be enough turf or irrigated areas to have a high demand. 2 6-09-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION -Do the reclaim plans include the Naranja Town site park? (Commissioner Milkey). Mr. Ruiz indicated that the plan included extending the system east side of La Canada on the north side of Naranja for irrigation purposes to the )ark's site. [here were no further questions. Mr. Saletta ended his report.No action required on this item. ITEM#5 ARROYO GRANDE—Mr. Saletta reported on Arroyo Grande and the Utility's involvement: • Staff attended Planning& Zoning Commission Study Session meeting various open houses. A presentation on future water supplies and planning was given. • Town's pre-annexation development agreement: The State land agreement is still in its initial stages. Ms. S. More,P&Z Director is preparing an informational packet and a letter to Arizona State Land. • General Plan Amendment is on schedule.The application is currently under review. • Neighborhood meetings and open houses are planned to discuss Arroyo Grande planning efforts. A questions &answer session occurred. • Type of ground water availability in Arroyo Grande (Commissioner Shapiro). Mr. Saletta said that he believed there was ground water in the region and that it could be connected to the same aquifer. There may be opportunity for some well productivity.Anyone requesting permission for a well must comply with the ground water code and assured water supply or be a member of the CAGRD. If the area is annexed Oro Valley Water will be the provider for the area. If well drilling is required, the Utility will pursue in a manner that is cost effective and efficient with respect to the Utility's existing well requirements. • Developer versus Water Supply (Vice Chair Tustison). Mr. Saletta indicated that a developer must submit preliminary water plans. However, for an individual homeowner if his property is more than 100 feet away of the Utility's line they can build an exempt well. A policy and state law is in place, and they must follow ground water requirements. Mr. Tustison emphasized that the Town and the Utility must make it clear that they can limit growth. There were no further questions. Mr. Saletta ended his report. No action required on this item. CALL TO AUDIENCE: Mr. Mckee addressed the Commission on several topics. • Public input and concerns on Sources of Water. There will be two Public Hearings scheduled. The Utility will have an opportunity to make its presentation and educate the public. • Sources of Water Supply Slide: Mr. Mckee had some concerns about the water demand curve with or without the Arroyo Grande project. He felt that the slide should indicate how delivery was going to be handled under both scenarios. Mr. McKee also questioned the word "sustainability" versus equilibrium of ground water production. The Utility must reassure the public that 5500 a/f of sustainable ground water production will have substantial equilibrium,and that there will be substantial CAP water for the future. He felt there could be some public resistance with the Arroyo annexation and General plan as well. There could be a public petition preventing annexation from occurring until CAP water delivery is available. • Display impact to ground water conservation. • Depletion of Colorado River water and Arizona's allocation status and possible cutbacks. • State Land initiative: Possibility of preserving and protecting 60% of land as undeveloped areas. Mr. Mckee had no further comments. TOWN COUNCIL MEETINGS/COMMUNICATIONS—Council Liaison Gillaspie and Council member Carter reported the following: Council Liaison Gillaspie shared some of Mr. McKee concerns and pointed out some of Oro Valley's policies: -The Town must reassure the Public regarding assured water supply. Water supply will be agreed upon when the developer submits its plans and engineering studies are in place prior to Council approval. The Town will establish a policy and framework to control what happens with respect to future development. The Town must reassure the Public that it will not jeopardized water supply to existing customers. 3 6-09-08 MINUTES, ORO VALLEY WATER UTILITY COMMISSION -State Land Initiative Open Land Preservation— Council Liaison Gillaspie was uncertain whether 60% of the land is in fact designated as open land. Arizona Game & Fish Department has received scientific mapping of open space areas and they are trying to overlay quantifiable boundaries for open space and wild life corridors. The impact for preservation is to move open space requirement towards the eastern Tortolitas or designate it as 100% open space. A State land dispute has occurred regarding transfer of density and future home development. Council Liaison Gillaspie read some of the Town's policies regarding water issues and ended his report. -Council member Carter reported on Steam Pump Ranch well site. -Kai Farms IGA approved by T.C. signed& executed. (P. Saletta) SUBCOMMITTEE/COMMISSIONER REPORTS — Commissioner Davis reported on the Water Conservation Subcommittee: • Landscape Code Review Process -(ADWR) Model Irrigation Efficiency Ordinance • ADWR meeting:June 20, 2008 (Conservation subcommittee members will be present) STAFF REPORTS-Mr.Ruiz reported on the following: • Potable&Reclaimed Water Projects -May 2008: Potable Peak Daily Demand Operations/Precipitation Report -May 2008: Potable Operations Report-Reservoir Levels -May 2008:Reclaimed Water System Report—Water Demand Mr.Jacklitch reported on the following: • CIP Projects -Pusch View Lane Bridge—Status: Complete -Reviewed: SCADA functionality and purpose -Design Projects: King Air in ground reservoir -Planned 2 new booster stations with solar systems -16"water main at Innovation Drive -E-1 Zone well replacement (1st&Tangerine) DIRECTOR'S REPORT—Mr. Saletta reported the following • Upcoming Meetings: -6/11 T.C. Study Session on Rates &AWRDIF -6/18 T.C. meeting (Water CASA IGA for approval, Reappointment of WUC Members: Chair: D. Powell, Commissioners: B. Shapiro, R. Milkey FUTURE AGENDA ITEMS • Approval June 9,2008 minutes CALL TO AUDIENCE—No Speakers. NEXT MEETING: July 21,2008 Location: Hopi Conference Room ADJOURNMENT: Chair Powell entertained a motion to adjourn the meeting. MOTION: Commissioner Davis MOVED to adjourn the meeting. Commissioner Hoffmann SECONDED the motion. MOTION PASSED: Unanimously Meeting adjourned: 7:35 P.M. Prepared by: _ZZ : OCyffiefifa Tris L.Chaparro Senior Office Specialist. 4