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HomeMy WebLinkAboutMinutes - Water Utility Commission - 4/13/2009 4 -4-te7t,p JO, Tri\ MINUTES C6a—e)--) '14‘ ORO VALLEY WATER UTILITY COMMISSION REGULAR SESSION MONDAY, APRIL 13, 2009 HOPI CONFERENCE ROOM 11000 N. LA CANADA DRIVE CALL TO ORDER ROLL CALL PRESENT: David Powell, Chair Winston Tustison, Vice Chair Rick Davis, Commissioner Robert Milkey, Commissioner Elizabeth Shapiro, Commissioner John Hoffmann, 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 audience was present. 1. APPROVAL MARCH 9, 2009 MINUTES MOTION: A Motion was made by Commissioner Shapiro and Seconded-by Commissioner Davis recommending approval of the March 9, 2009 minutes. MOTION carried, 6-0 2. WATER UTILITY BUDGET, FINANCING AND RATES Vice Chair Tustison reported the following: -Finance Subcommittee: Met Thursday, April 9, 2009. The Finance Subcommittee discussed a number of items: -Cost of Service Study: Incorporate a method to differentiate rates charged to large industrial users as compared to large multi-family complexes. Vice Chair Tustison indicated that the Finance Subcommittee agreed with Mr. Saletta to postpone the Cost of Service Study because of the Town's budget constraints. -Town Manager's letter: Finance Subcommittee agreed to acknowledge the Town Manager's letter. Vice Chair Tustison explained that the Water Utility Finance Subcommittee primary responsibility was the review of rates and to collect all factual information and use it to recommend a rate structure that is best for long term interest MINUTES, 4/13/09 ORO VALLEY WATER UTILITY COMMISSION and benefit to the community. He mentioned that any political aspects should be made by a different body other than the Finance Subcommittee. The Subcommittee should only focus on facts and financial information made available to them. Vice Chair Tustison requested comments from the other Commissioners. Commissioner Milkey agreed that the subcommittee must do their analysis and concentrate on facts. He mentioned there were cost reductions this year which may cause things to change from last year's analysis and should be reviewed in totality and then move forward. There were no further discussions. -Proposed Budget: Mr. Saletta reported that Oro Valley Water's budget was reviewed on 4/8/09. As part of Item 2 a Budget Outline for FY09-10 was provided. Council had several questions regarding the Water Conservation Program, Meter purchases, Potential for solar, The WIFA Loan and they also spent significant time on personnel. At the end of the session Council directed Staff, Town Manager and the Finance Director to review where the Utility could save costs and to primarily focus on capital projects and outside services. By focusing on these items the Utility could have a potential savings of $130,000 in order to meet the financial cost of the 2.5 positions the Town Manager was recommending as personnel reductions. Staff has reviewed the budget and presented it to the Town Manager. Staff will also present it to Council for their decision. Scheduled Budget Sessions: -4/13, 4/20 and 4/27/09 -Debt Financing and 1999 Bond Redemption: Ms. Seng reported the following: -Debt Financing: The loan application to Water Infrastructure Financing Authority (WIFA) was approved on March 9 by the Commission authorizing Staff to move forward with the WIFA Loan application to Council. Council approved the loan application on March 25 under Resolution (R) 09-15. The loan includes two projects: Phase I existing improvements ($6.7 million) and Oro Valley's share (50%) of the Design of CAP pipeline ($4.2 million). The loan authorization was sent to WIFA however staff has not received the loan packet. Staff contacted WIFA and they are in the process of mailing the information by next week. Staff anticipates the interest loan rate to be at 3% - 3.5% or more. There will be a 15% subsidy rate off WIFA's other existing rate. Question and answer session occurred: -WIFA Loan Authorization Process (Commissioner Shapiro). Ms. Seng explained the loan application process, official statements and closing documents and indicated there was still more to be completed. There were no further questions. -Bond Debt Service: Ms. Seng gave an explanation regarding the debt service amortization payment schedule: (Town of Oro Valley -Excise Tax Revenue Bonds, Series 1999). -The bonds were split between Water Utility Capital Improvements and General Fund Projects. The General Fund portion will be paid in full July 1, 2009. The remaining balance of bonds will be the responsibility of the Water Utility. An explanation was given about the Annual Debt Service payment calendar year 7/1/09, Principal & Interest payments. If the Utility is able to have an early redemption on its bonds the Water Utility will be able to pay off $1,835.000 prior to 2019 with a savings of $490,000 in interest. There is also a prepayment premium of about 1% approx. ($18,000). 2 4/13/09 MINUTES, ORO VALLEY WATER UTILITY COMMISSION Ms. Seng indicated that Staff would like a motion from the Commission to proceed with the redemption of the Excise Tax Revenue Bonds Series 1999; Staff will than move the item forward for approval to Council. Question and answer session occurred: Commissioner Milkey asked about the $1,835,000 and would it be borrowed from cash reserves. Ms. Seng said it would be paid from the Utility's approximate $10,000,000 cash bank balance. Commissioner Milkey felt it was an interesting concept and recommended that Staff proceed with the early bond redemption process. MOTION: A Motion was made by Commissioner Milkey and Seconded by Vice Chair Tustison recommending that Town Council authorize staff to proceed with redemption of the Series 1999 bonds. MOTION carried, 6-0. 3. ANNUAL REPORT Mr. Saletta indicated that Staff would be recommending approval of the Annual Report dated April 2009. He proceeded with the power point presentation highlights. -Annual Report Sections: -Water Quality -Customer Service -Water Supply -Water Resource Planning -Water Use -Water Conservation Program -Water Utility Operations -Water System Security -Engineering & Planning -Central Arizona Project Water -Financial Highlights & Rates Mr. Saletta ended his report and requested approval of the 2009 Annual Report. Commissioner Hoffmann commented that the report was exceptionally written and very well prepared and felt it would serve as a good summary for Town Council. MOTION: A Motion was made by-Commissioner Hoffmann and Seconded by Commissioner Shapiro approving the Water Utility Commission Annual Report dated April 2009 and forwarding the report to Town Council for approval. MOTION carried, 6-0. 4. NW WATER PROVIDERS CAP WATER TREATMENT AND DELIVERY SYSTEM Mr. Saletta reported that in March Council members B. Gillaspie, S. Latas, Town Manager, D. Andrews and Assistant Town Manager, J. Watson traveled to Washington to discuss several projects and matters with our Senators and Representatives. One of the key discussions was the N.W. Reliability Reservoir in the U.S. Bureau of Reclamation's Budget and their support to move it forward through the Federal budget. They also met with the Interim Commissioner of Reclamation to discuss Staff's support of this line item. 3 4/13/09 MINUTES, ORO VALLEY WATER UTILITY COMMISSION Progress continues on the alternatives for the pipeline routing and the study should be completed by the end of May. Mr. Saletta ended his report. Mr. Ruiz reported on the Requirement for Qualification process (RFQ). -CAP Water Distribution: A consultant is being obtained to work on the Scope of Work and to assist on is ues such as CAP delivery and blending of groundwater with surface water. Points of consideration -Water Quality and logis ics for the distribution of water. Target Delivery location: Shannon & Naranja. Thi site has an existing reservoir. -4/13: RFQ Advertisement, 5/1: Pre-submittal meeting -5/15: Staff will be accepting RFQ submittals. Interviews will be scheduled in 1-2 months. Mr. Ruiz ended his report. There were no further qLestions. No Action was required on this item. 5. DISCUSSION OF POSSIBLE FIELD TRIP AND FUTURE SPEAKERS Mr. Saletta explained the following: -Field trip May 11 to the Highlands Subdivision: Visit pipeline replacement area and a demonstration on the Aitomated Meter Reading program (AMR) by staff. Mr. Saletta explained that the Comnliissioners would receive valuable training credits. The Commissioners agreed to attend the field trip and car pool with staff. Meeting location: Water Utility Building, Time: 5:30 pm. -Regular WUC meeting will be Called to Order - At or After 7:00 p.m. a Mr. Ruiz also indicated that several of the Homeowner Association residents would be participating in the field trip. -Schedule future trip in the Fall to CAP Recharge Facilities -Schedule future trip to Slowsand Filtration site in Oro Valley -Future Speakers: Possibly schedule Ken Seasholes from CAP to speak on CAP perspective and issues for June 2009 Water Utility Commission meeting. There were no other requests by the Commissioners. Mr. Saletta ended his report. No Action Required ori this item. 6. UPDATE ON RECLAIMED WATER SYSTEM Mr. Ruiz reported the following: March 2009 - Reclaimed Water System Chart -Monthly Demand 51 million gallons (Usage 1.7 million per day) -Demand is picking up and all 5 courses are receiving reclaim along with Painted Sky Elementary School. Mr. Ruiz gave an explanation about El Conquistador's pond and leak problems. A leak was detected in February. The contractor has performed an inspection and is working 4 4113/09 MINUTES, ORO VALLEY WATER UTILITY COMMISSION on solving the leak problems and is working on patching the problem areas. The golf course is receiving reclaimed water through their wet well. Mr. Saletta indicated that the Hilton staff has been very cooperative and the contractor is working to solve the problems through their sub-contractors. Mr. Saletta emphasized there was a bond in place and in effect until the warranty period is over. The Water Utility will take proper steps if the contractors cannot meet its responsibility. -End Users Reclaimed Water Forum: Scheduled April 23rd, Location: Council Chambers Time: 8:00 a.m. to 11:00 a.m. Guest speaker: Dr. David Kopec, Office Location: U of A Farms, Campbell and Roger Road -Topic: Use of Reclaimed Water and How to Mitigate Problems. Mr. Saletta and Mr. Ruiz invited the Commission and Council to attend. Mr. Ruiz also indicated that Staff would like to have forums at least twice a year. Commissioner Davis recommended a future speaker Ken Markum (Specialty - Reclaim Water effects on Bermuda Grass). There were no further questions. Mr. Ruiz ended his report. 7. TOWN COUNCIL MEETINGS/COMMUNICATIONS No report given. 8. SUBCOMMITEE/COMMISSIONER REPORTS Finance Subcommittee - No Report Conservation Subcommittee Commissioner Davis reported that the Subcommittee was in the process of reviewing the Landscape Ordinance. Mr. Milkey indicated that they continue to review the draft Landscape Ordinance and that a number of issues must be solved before presenting it to Council. Unsolved Issues: (Plant materials and p g watering protocols to help reduce water consumption primarily in commercial, recreational and residential irrigation systems. Subcommittee Goals: Present ordinance to Town Council by August. Financial Issues: Cost of implementation -Water Utility & Public Works Tasks, Planning & Zoning -Fee implementation -Plant pallet is still under consideration need expert landscapers and architects -Use of water features in open areas: (Commissioner Milkey believed that the consensus was that the water features should not be permitted). -Passive or Active water harvesting (Requirements will need to be in place) -Storm water issues -Water Utility's Budget Chair Powell stated that the Subcommittee was doing an excellent job addressing these issues. Commissioner Milkey felt it would be beneficial to have Bayer Vella to speak on the Landscape Ordinance. Mr. Saletta explained that Mr. Vella and Ms. Boyce were 5 4/13/09 MINUTES, ORO VALLEY WATER UTILITY COMMISSION tentatively scheduled to attend the May or June WUC meeting. Commissioners Davis and Milkey ended their report Ms. Seng pointed out the Quarterly Drought Monitor report March 2009. Water year begins: October 1, 2008 through September 30, 2009. The Town of Oro Valley maintains a Stage 1 Drought Conditions due to precipitation and static water levels. There were no further questions. Renewable Water Subcommittee - Commissioner Hoffmann indicated there was no meeting. 9. STAFF REPORTS a. Customer Service Report March 2009 - Installation of 9 meters, Equivalent to 30 EDU's Total meter installation beginning FY July 08 = 177 FY 2009 Projections = 250 -EDU's for Impact Fees projections: 587 EDU's resulting from larger meters primarily used for O.V. Market Place b. WIFA Debt Authorization Ms. Seng indicated that the WIFA Debt Authorization item was previously covered under Item #2. c. Meter Reader Supervisor and Meter Replacement Program -Council member Garner requested a review of the Meter Reader Supervisor position and Meter Replacement Program. Staff submitted a report to Council on April 1st. -Meter Reader Supervisor position was filled by internal employee Bobby Drew. The Meter Readers have replaced over 275 malfunctioning meters while reading meters and checking them for accuracy. The Supervisor oversaw the replacement of 286 meters at the Highlands Subdivision project and performed the installation of the AMR equipment. It takes a Meter Reader about 4-5 hours to read these meters however by using the AMR equipment it only takes 15 minutes to read all the meters. By introducing the AMR system to other subdivisions it could increase the ability to perform more maintenance and replace malfunctioning meters. -The Supervisor has taken time to investigate different types of meters used in commercial facilities and came across Omni meters which were installed at O.V. Market Place and other commercial places. These meters have a testing device built into them therefore the meters do not need to be taken out of service to be tested. They also have the ability to store flow data for one year making it easier for Staff to check. -The Supervisor has taken the initiative to re-design meter routes. All Meter Readers have been crossed trained to take over different routes so that they are 6 4/13/09 MINUTES, ORO VALLEY WATER UTILITY COMMISSION familiar with the entire O.V. Water Service areas. -ADWR has identified the implementation of a meter replacement program as one of the Best Management Practices in the Non-Per Capita Water Conservation Program. Since July 2008 a total of 561 meters have been replaced, this includes 286 meters in the Highlands Subdivision. Staff has only completed the tracking of only 175 of the 561 meters 3 months prior to and 3 months after the meter replacement. As a result of the meter replacement program, an additional 3,140,000 gallons of water has been billed. The increase in revenue for one year from the 175 meters is projected to be approximately $42,000.00. In addition to increased water sales, the meter replacement program will also increase the Groundwater Preservation Fees. Ms. Seng mentioned that the replacement of malfunctioning meters would be an ongoing process and will continue to increase revenues as long as the meters are operating. Ms. Seng ended her report. d. Capital Projects Mr. Jacklitch reported the following: -Pusch View Well: On line as of Friday, April 10th. This well is permitted to pump up to 1100 acre-feet per year into the distribution system. -CIP 5-year Program: Projects included: Reservoirs, Wells, Booster stations and Main replacements. All of these projects are part of the WIFA Loan Program with the exception of the Lambert Lane project. -Economic Stimulus Funding: Most of the $55-$56 million that WIFA will be receiving through the Economic Stimulus Funding has been accounted for by other water agencies, however the Water Utility will continue to pursue its request for funding. -Economic Stimulus Provisions: Buy American, Contractor must pay Union Scale Wages. These provisions must be in the Town's contract when going out to bid. The Procurement and Legal Departments are working on language for these contracts. Mr. Jacklitch ended his report. e. Potable Water System Report March 2009 -Potable System Graph -Monthly Water Demand = High 7 Million gallons per day Low = 5 Million gal. per day -March 10th: Only one event registered for precipitation. March 2009 -Potable Overall Reservoir Storage Graph Storage Available= 7 million gallons. Storage level always available in case of fire flow demand. The demand does not significantly affect water storage levels because the Utility's well system has the capacity to keep up with supply/demand. Mr. Ruiz ended his report. 7 4113/09 MINUTES, ORO VALLEY WATER UTILITY COMMISSION 10. DIRECTOR'S REPORT a. Upcoming Meetings Mr. Saletta reported the following: -4/15: Town Council Meeting -Council Agenda Item: 2009 -WUC Annual Report -4/20 and 4/27: Budget Study Session -4/23: Reclaimed Water Users Forum -5/6: Town Council Meeting: -Council Agenda Item: 1999 Bond Redemption -5/16 — 5/8: Arizona Water Association Meeting (AZWA): Attendee: P. Saletta, D. Ruiz, G. Kendrick -(Presentation will be given by Mr. Ruiz & Mr. Kendrick Topic: O.V. Water Uility's System Security -5/11: WUC Meeting Mr. Saletta ended his report. 11. FUTURE AGENDA ITEMS -Update on Proposed Landscape Code Ordinance -(Bayer Vella and K. Boyce) CALL TO AUDIENCE No audience present. NEXT MEETING: Next meeting scheduled for May 11, 2009 ADJOURNMENT: MOTION: A Motion was made to adjourn by Commissioner Hoffmann and Seconded by Vice Chair, Tustison. MOTION carried, 6-0. Meeting adjourned: 7:20 p.m. Respectfully, of aty, Iris L. Chaparro Senior Office Specialist 8