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HomeMy WebLinkAboutMinutes - Water Finance Subcommittee - 12/6/2022 (2)MINUTES ORO VALLEY WATER UTILITY COMMISSION FINANCE SUBCOMMITTEE REGULAR SESSION December 6, 2022 WATER UTILITY CONFERENCE ROOM 11000 N. LA CAÑADA DRIVE            REGULAR SESSION AT OR AFTER 9:30 AM   CALL TO ORDER - Chair Marek called the meeting to order at 9:35 a.m.   ROLL CALL Present: Robert Milkey, Member Tom Marek, Chair Absent: Chuck Hollingsworth, Member Staff Present:Peter A. Abraham, P.E., Water Utility Director Mary Rallis, CPA, Water Utility Administrator CALL TO AUDIENCE - No speakers.   REGULAR SESSION AGENDA   1.REVIEW AND APPROVAL OF THE JULY 13, 2022 REGULAR SESSION MEETING MINUTES    Motion by Chair Tom Marek, seconded by Member Robert Milkey  Vote: 2 - 0 Carried   2.REVIEW AND DISCUSSION REGARDING THE UTILITY’S 2023 WATER RATES ANALYSIS Water Utility Director Peter Abraham explained that Council has discussed allocating unused ARPA funds to the Water Utility. Water Director Peter Abraham reviewed possible ways in which this money could be used depending on the terms of receiving the money. Commissioner Robert Milkey voiced concerns about the ARPA money being used by the Water Utility. Commissioner Milkey also asked if the proper guidelines for allocating the funds would be followed. Water Utility Director Peter Abraham explained that the Town's finance department provided assurances that all proper guidelines would be followed. Water Utility Director Peter Abraham stated that receiving the ARPA money would reduce rates because it would be used to fund Capital projects that would otherwise be funded by operating revenue. Water Utility Director Peter Abraham reviewed 5 Water Rate Pro-Forma scenarios. Discussion about the scenarios ensued: -Commissioner Robert Milkey suggested the inflation rate be increased from 3% to 5% for fiscal years 2023/24 and 2024/25. The remaining years of the 5-year pro-forma would remain at 3% 12/6/22 Minutes, Water Utility Finance Subcommittee Regular Session 1 -Discussed recent Town salary adjustments and that salaries won't affect rate increases -Water Utility Administrator Mary Rallis went over how interest income is calculated and that the estimate is conservative because it fluctuates. -Discussed requesting a presentation on how the Administration Fee is calculated -Commissioner Robert Milkey expressed concerns about not reducing the reclaimed water GPF when debt service is reduced in future years, and suggested lowering the reclaimed GPF and increasing the reclaimed commodity rate in fiscal year 2024/25 -General consensus that Scenario C (rate increase required with ARPA funds and no payback to general fund) looked the best because this scenario resulted in the lowest interest rate increase, followed by Scenario A (rate increases required with no ARPA funds)   FUTURE AGENDA ITEMS   ADJOURNMENT Motion by Chair Tom Marek, seconded by Member Robert Milkey to adjourn the meeting at 11:15 a.m.    Vote: 2 - 0 Carried     I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the Town of Oro Valley Water Finance Subcommittee of Oro Valley, Arizona held on the 6th day of December, 2022. I further certify that the meeting was duly called and held and that a quorum was present. ___________________________ Nicole Noble Senior Office Specialist 12/6/22 Minutes, Water Utility Finance Subcommittee Regular Session 2