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HomeMy WebLinkAboutMinutes - Water Utility Commission - 9/28/2009 tpl'21D1 ITEM _yp .MINUTES � # ORO VALLEY WATER UTILITY COMMISSION SPECIAL MEETING MONDAY, SEPTEMBER 28, 2009 HOPI CONFERENCE ROOM 11000 N. LA CANADA DRIVE CALL TO ORDER ROLL CALL PRESENT: Rick Davis, Vice Chair Winston Tustison, Commissioner Robert Milkey, Commissioner Rick Reynolds, Commissioner Elizabeth Shapiro, Commissioner John Hoffmann, Commissioner EXCUSED: David Powell, Chair STAFF PRESENT: Philip C. Saletta, Water Utility Director Shirley Seng, Utility Administrator OTHERS: Vice Mayor, KC Carter Doug McKee, Oro Valley Resident CALL TO AUDIENCE - No Speakers 1. WATER UTILITY COMMISSION RECOMMENDATION ON WATER RATES Chair, Tustison reported that the subcommittee dedicated a lot of time studying all the various options. Chair Tustison stated the four most important issues the Commission should keep in mind. 1. Build the Alternative Water Resources Development Impact Fund (AWRDIF) over $6 million at the end of five years 2. Keep the Enterprise Fund over $2.5 million at the end of five years 3. Limit borrowing as much as feasible 4. Avoid any rate shock with the water rates He also thanked Staff for all the time they spent evaluating and processing the different scenarios. Ms. Seng thanked Chair Tustison and Commissioner Shapiro for their participation. n •. 9/28/09 Minutes, Oro Valley Water Utility Commission Ms. Seng reviewed several of the Commissioners' comments based on the last Finance Subcommittee Meeting. -Finance Subcommittee Selection - Scenario A-3 as the Preferred Scenario with the Alternate being Scenario C-1. -Financing Differences — FY 09-10 both stay the same -Scenario C-1 includes $5.9 million financing in Yr 11-12, Scenario A-3 includes $3.4 million financing FY 12-13. Both scenarios depict GPF increases from $0.55 - $0.75 per 1,000 gallons in FY 09-10. -Preferred Scenario: Small rate increases in the Base Rate & Commodity Rate each year. -Alternate Scenario C-1: No rate increases until last two years. FY 12-13 and 13-14 includes increases in the Base Rate and Commodity Rate. Both scenarios A-3 and C-1 meet the Utility's financial criteria. Ending Cash Balance: C-1 Year five = $2.2 million, Scenario A-3 = $2.6 million -Alternative Water & Potable Water Impact Fee Funds: Ending Cash balances are consistent in both scenarios. Ms. Seng reviewed the Summary pages for both Scenarios. -Reviewed: Scenarios A-3 & C-1 GPF water rate increases. There were no questions from the Commission. Ms. Seng reviewed the Service Fees & Charges current and proposed fees. -New Service Establishment Fee -New Service Establishment Fee After Hours -Backflow Permit Fees -Reconnection Fees Costs -Reconnection Fees After Hours -Meter Installation -Security Deposits A discussion occurred on: -Subsidizing New Service Establishment Fee & Cost Recovery (Commissioner Hoffmann). Ms. Seng explained that cost recovery was not geared towards a full recovery. Mr. Saletta stated that the Utility was very careful about avoiding rate shock for these fees and charges also. It's been a while since the fees were increased and we could always go back using the same methodology next year. He suggested keeping the fees at a lesser rate. -Correction: Delete text (gasoline) under Vehicle Costs (Commissioner Milkey). Ms. 2 t. 9/28/09 Minutes, Oro Valley Water Utility Commission Seng noted the correction. -Reconnection Fees/Delinquent account turn off- after hours (Commissioner Milkey). Ms. Seng explained the Utility's reconnection process -What percentage of customers are tenants (Commissioner Hoffmann). Ms. Seng indicated she did not have the information. Mr. Saletta mentioned that there may be situations where the property owner still has the water meter and account under their name. They are still owners but renting the home. If a customer leaves without paying their final bill the security deposit will be applied against the outstanding balance. -Water payment tenant versus apartment owner (Commissioner Shapiro). Ms. Seng indicated that the water bills are paid by the apartment owner. -Commercial Security Deposits - the proposed 2 times estimated monthly usage how will it be estimated, are there standards for restaurants or other businesses? (Commissioner Reynolds). Ms. Seng stated that Staff had not yet estimated the monthly usage on different sized meters. Mr. Saletta indicated that there was some monthly data available to determine the amount. -Meter Installation Costs for Submeters in Landscape Ordinance - (Vice Chair Davis). Mr. Saletta explained that the fees would be the same if the meter is purchased from Oro Valley Water. There were no further questions on the Service Fees and Charges. Ms. Seng ended her report. Water Rates Analysis Report Draft 9.28.09- Ms. Seng pointed out several sections of the report and changes. -Table Comparative Summary of Operating Expenses (Pg. 9) -Graph O&M Budgeted Expenses (Pg. 11) Review: -Debt Service -Personnel Expenditures -Least Controlled O&M Costs -Minimal Controlled O&M Costs -Most Control O&M Costs Question & Discussion Session -Discrepancies in Table versus Pie Chart. (Commissioner Hoffmann). Ms. Seng noted the change and will make appropriate corrections. Mr. Saletta explained O&M includes: field costs, CAP, CAGRD but no Debt Service or Personnel expenses. Commissioner Hoffmann will submit his text changes and comments to Staff. -No Merit increases and no Cost of Living Allowances is it a fair assumption? (Commissioner Hoffmann). Ms. Seng indicated that it was a fair assumption. She 3 9/28/09 Minutes, Oro Valley Water Utility Commission explained that Yr. 2010-2011 the Town may be projecting a 2.5% Merit or Cola increase. Mr. Saletta explained that if in the next five years the economy changes these numbers can also change with the new 5-Year Scenario. -Increase in services and use of Remote Radio Reads (Vice Chair Davis). Ms. Seng explained all new radio reads will not be activated at time of installation. This will be done in a methodical manner. Ms. Seng stated that approximately 35% of the Utility's budget is allocated for Operations & Maintenance expenditures that the Utility has little control over. Ms. Seng explained that the basis for the assumptions is the best information available today. Staff reevaluates and analyzes the assumptions every year. -Is there any information in the report regarding for the acquisition of CAP Water via Tucson Water? (Commissioner Milkey). Mr. Saletta explained that the time frame for CAP water through Tucson distribution system would be off by at least a year, and felt it was not appropriate including any costs at this time. -CAGRD fee is it determined by the amount of Water pumped. (Commissioner Shapiro). Ms. Seng explained the terms of the contract. Mr. Saletta gave a brief explanation on how excess water is applied to groundwater usage. The CAGRD fee is a contractual obligation. -Need concise statement in the Draft Water Rates Analysis Report - Why was Preferred Scenario A-3 was selected over Alternate Scenario C-1. (Commissioner Milkey). He suggested the statement be incorporated into the report. Commissioner Hoffmann agreed and thought the statement could be in the report's conclusion. Mr. Saletta agreed with Commissioner Tustison's opening statement and guiding principals and that it should be in the report. Consensus: The Commissioner's agreed with Commissioner Milkey's suggestions. Commissioner Milkey suggested the information be incorporated into the Executive Summary and Conclusion of the report. Vice Chair Davis called for a Motion to approve the Proposed Notice of Intent to Increase Water Rates, Fees and Charges. MOTION: A Motion was made by Commissioner Tustison and Seconded by Commissioner Shapiro to recommend to Town Council to approve the Proposed Notice of Intent to Increase Water Rates, Fees and Charges and to further recommend that Scenario A-3 be the Preferred Financial Scenario and Scenario C-1 be the Alternate Financial Scenario. MOTION carried, 6-0. 4 9/28/09 Minutes, Oro Valley Water Utility Commission Handout: Town Council Communication dated 10.7.09 Ref: Notice of Intent to Increase Water Rates, Fees and Charges for the Oro Valley Water Utility. CALL TO AUDIENCE - No Speakers ADJOURNMENT: 6:45 p.m. MOTION: A Motion was made by Commissioner Shapiro and Seconded by Commissioner Milkey to adjourn. MOTION carried, 6-0. Prepared by, et; d Citya-t Iris L. Chaparro Senior Office Specialist 5