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HomeMy WebLinkAboutPackets - Water Utillity Commission (47)       AGENDA WATER UTILITY COMMISSION REGULAR SESSION February 13, 2023 HOPI CONFERENCE ROOM 11000 N. LA CAÑADA DRIVE        REGULAR SESSION AT OR AFTER 5:00 PM   CALL TO ORDER   ROLL CALL   CALL TO AUDIENCE - at this time, any member of the public is allowed to address the Commission on any issue not listed on today’s agenda. Pursuant to the Arizona open meeting law, individual Commission members may ask Town staff to review the matter, ask that the matter be placed on a future agenda, or respond to criticism made by speakers. However, the Commission may not discuss or take legal action on matters raised during "Call to Audience." In order to speak during "Call to Audience", please specify what you wish to discuss when completing the blue speaker card.   REGULAR SESSION AGENDA   1.REVIEW AND APPROVAL OF THE JANUARY 9, 2023 REGULAR SESSION MEETING MINUTES   2.DISCUSSION REGARDING THE WATER UTILITY ANNUAL REPORT (P. ABRAHAM)   3.DISCUSSION AND POSSIBLE ACTION ON PROPOSED WATER RATES (P. ABRAHAM)   4.UPDATE AND DISCUSSION ON COLORADO RIVER (P. ABRAHAM)   5.UPDATE AND DISCUSSION ON WATER RESOURCE USAGE (P. ABRAHAM)   6.TOWN COUNCIL MEETINGS/COMMUNICATIONS (COUNCILMEMBER BOHEN)     7.SUBCOMMITTEE/COMMISSION REPORTS      A.FINANCE SUBCOMMITTEE      B.WATER RESOURCES AND CONSERVATION SUBCOMMITTEE      8.DIRECTOR'S REPORT   CALL TO AUDIENCE - at this time, any member of the public is allowed to address the Commission on any issue not listed on today’s agenda. Pursuant to the Arizona open meeting law, individual Commission members may ask Town staff to review the matter, ask that the matter be placed on a future agenda, or respond to criticism made by speakers. However, the Commission may not discuss or take legal action on matters raised during "Call to Audience." In order to speak during "Call to Audience", please specify what you wish to discuss when completing the blue speaker card.      FUTURE AGENDA ITEMS   ADJOURNMENT   POSTED: 2/9/2023 at 5 p.m. by dt When possible, a packet of agenda materials as listed above is available for public inspection at least 24 hours prior to the Commission meeting in the Town Clerk's Office between the hours of 8:00 a.m. – 5:00 p.m. The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Town Clerk’s Office at least five days prior to the Commission meeting at 229-4700. INSTRUCTIONS TO SPEAKERS Members of the public have the right to speak during any posted public hearing. However, those items not listed as a public hearing are for consideration and action by the Commission during the course of their business meeting. Members of the public may be allowed to speak on these topics at the discretion of the Chair. If you wish to address the Commission on any item(s) on this agenda, please complete a blue speaker card located on the Agenda table at the back of the room and give it to the Recording Secretary. Please indicate on the speaker card which item number and topic you wish to speak on, or if you wish to speak during “Call to Audience,” please specify what you wish to discuss when completing the blue speaker card. Please step forward to the podium when the Chair announces the item(s) on the agenda which you are interested in addressing. 1. For the record, please state your name and whether or not you are a Town resident. 2. Speak only on the issue currently being discussed by the Commission. Please organize your speech, you will only be allowed to address the Commission once regarding the topic being discussed. 3. Please limit your comments to 3 minutes. 4. During “Call to Audience”, you may address the Commission on any issue you wish. 5. Any member of the public speaking must speak in a courteous and respectful manner to those present. Thank you for your cooperation. “Notice of Possible Quorum of the Oro Valley Town Council, Boards, Commissions and Committees: In accordance with Chapter 3, Title 38, Arizona Revised Statutes and Section 2-4-4 of the Oro Valley Town Code, a majority of the Town Council, Board of Adjustment, Historic Preservation Commission, Parks and Recreation Advisory Board, Stormwater Utility Commission, and Water Utility Commission may attend the above referenced meeting as a member of the audience only.”    Water Utility Commission 1. Meeting Date:02/13/2023   Submitted By:Nicole Noble, Water SUBJECT: REVIEW AND APPROVAL OF THE JANUARY 9, 2023 REGULAR SESSION MEETING MINUTES RECOMMENDATION: Staff recommends approval. EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: I move to approve (approve with changes) the January 9, 2023 regular session meeting minutes. Attachments Draft Minutes  D R A F T MINUTES WATER UTILITY COMMISSION REGULAR SESSION January 9, 2023 HOPI CONFERENCE ROOM 11000 N. LA CAÑADA DRIVE            REGULAR SESSION AT OR AFTER 5:00 PM   CALL TO ORDER - Chair Marek called the meeting to order at 5:00 P.M.   ROLL CALL Present: Kay Lantow, Commissioner Niranjan Vescio, Commissioner David Atler, Commissioner Tom Marek, Chair Alan Forrest, Commissioner Patricia Olson, Commissioner Greg Hitt, Vice Chair Staff Present:Peter A. Abraham, P.E., Water Utility Director Mary Rallis, CPA, Water Utility Administrator Lee Jacobs, P.E., C.P.M., Engineering Division Manager David Allred, Water Operations Manager CALL TO AUDIENCE - There were no speaker requests.   REGULAR SESSION AGENDA   1.REVIEW AND APPROVAL OF THE NOVEMBER 14, 2022 REGULAR SESSION MEETING MINUTES    Motion by Commissioner Alan Forrest, seconded by Vice Chair Greg Hitt  Vote: 4 - 0 Carried   2.WELCOME NEW COMMISSION MEMBERS AND COMMISSIONER INTRODUCTIONS Commissioners and staff took turns introducing themselves.   3.NOMINATION AND ELECTION OF COMMISSION CHAIR EFFECTIVE JANUARY 10, 2023 Commissioner Alan Forrest nominated Commissioner Greg Hitt.    Motion by Commissioner Alan Forrest, seconded by Chair Tom Marek  Motion by Commissioner Alan Forrest, seconded by Chair Tom Marek  Vote: 7 - 0 Carried   4.NOMINATION AND ELECTION OF COMMISSION VICE CHAIR EFFECTIVE JANUARY 10, 2023 Commissioner Patricia Olson nominated Commissioner Alan Forrest.    Motion by Commissioner Patricia Olson, seconded by Chair Tom Marek  Vote: 7 - 0 Carried   5.APPOINTMENTS TO THE COMMISSION FINANCE SUBCOMMITTEE EFFECTIVE JANUARY 10, 2023 (MAXIMUM OF 3) Commissioners Tom Marek, Kay Lantow and Niranjan Vescio were appointed to the Finance Subcommittee.   6.APPOINTMENTS TO THE COMMISSION WATER RESOURCES AND CONSERVATION SUBCOMMITTEE EFFECTIVE JANUARY 10, 2023 (MAXIMUM OF 3) Commissioners Alan Forrest, Greg Hitt and Patricia Olson were appointed to the Water Resources and Conservation Subcommittee.   7.DISCUSSION AND POSSIBLE ACTION ON THE 2023 WATER UTILITY COMMISSION WORK PLAN Water Utility Director Peter Abraham reviewed the 2023 Water Utility Commission Work Plan. Commissioner Forrest suggested that updates to the Colorado River Supply be added as reoccurring agenda item topics. Chair Marek made a motion for Colorado River Supply updates to be added as future agenda items.    Motion by Chair Tom Marek, seconded by Commissioner David Atler  Vote: 7 - 0 Carried   8.UPDATE AND DISCUSSION ON CAPITAL IMPROVEMENT PROJECTS (L. JACOBS) Engineering Division Manager Lee Jacobs presented updates on the following: -Well rehabilitation of Well D-1 and Well C-6 -Nakoma Sky Production Well -Steam Pump Well -Design of redundancy water line in the Catalina Shadows and Palisades area -Design of redundancy water line in the El Conquistador subdivision -Countryside Wheeling Station upgrades -Rancho Vistoso Booster Station rehabilitation -Sun City H and G zones booster pressure tank replacements -Sun City Booster Station evaluation and design Engineering Division Manager Lee Jacobs clarified definitions and locations for the new Commission members.   9.UPDATE AND DISCUSSION ON WATER UTILITY FINANCIALS (M. RALLIS) Water Utility Administrator Mary Rallis presented updates on the following: -FY 2022/23 Revenues -FY 2022/23 Expenses -Customer Service update through 12/31/22   10.UPDATE AND DISCUSSION ON WATER OPERATIONS ACTIVITIES (D. ALLRED) Water Operations Manager David Allred provided an overview of each department in Water Operations and explained each team's role. Water Operations Manager David Allred reported updates on the following: -Water Operations Administration -Water Production activities -Water Control System activities -Water Distribution activities -Water Meter Operations activites -Water Quality activities   11.UPDATE AND DISCUSSION ON WATER RESOURCE USAGE (P. ABRAHAM) Water Utility Director Peter Abraham reported on water usage by type in the following areas: -Oro Valley main service area for January-December 2022 -Countryside service area for January-December 2022   12.TOWN COUNCIL MEETINGS/COMMUNICATIONS (COUNCILMEMBER BOHEN) Councilmember Bohen reported that Council met for the first time in 2023 on January 4th and that Council is back on regular meeting schedule.   13.SUBCOMMITTEE/COMMISSION REPORTS   A.FINANCE SUBCOMMITTEE Commissioner Tom Marek reported that the Finance Subcommittee met twice in December and reviewed different water rate scenarios and chose one that will be presented to the Commission in February.   B.WATER RESOURCES AND CONSERVATION SUBCOMMITTEE - No report.   14.DIRECTOR'S REPORT Water Utility Director Peter Abraham provided the Director's Report which included upcoming meeting and event dates. Water Utility Director reported on the Upper Colorado Basin Snowpack Comparisons.   CALL TO AUDIENCE - There were no speaker requests.   FUTURE AGENDA ITEMS - There were no suggested future agenda items.   ADJOURNMENT Commissioner David Atler made a motion to adjourn the meeting at 6:46 P.M.    Motion by Commissioner David Atler, seconded by Commissioner Alan Forrest  Vote: 7 - 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 Utility Commission of Oro Valley, Arizona held on the 9th day of January, 2022. I further certify that the meeting was duly called and held and that a quorum was present. ___________________________ Nicole Noble Senior Office Specialist    Water Utility Commission 2. Meeting Date:02/13/2023   Submitted By:Nicole Noble, Water SUBJECT: DISCUSSION REGARDING THE WATER UTILITY ANNUAL REPORT (P. ABRAHAM) RECOMMENDATION: N/A EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: N/A Attachments Presentation  Presented by: Peter A. Abraham, P.E. Water Utility Commission Meeting February 13, 2023 Oro Valley Water Utility Discussion on Draft Water Utility Annual Report Outline Called the “Water Utility Annual Report –April 2023” Report documents Commission actions and Utility activities for calendar year 2022 as well as the finances for FY21-22 Required by Article 15-4-5 of the Town Code Report is prepared by the Water Utility staff Commission reviews and comments on the report Town staff renders the report to Town Council on behalf of the Commission Report becomes a public document Contents About the Water Utility Commission Executive Summary Water Resources Regulatory Engineering & Planning Capital Projects Customer Service Water Conservation Operations & Maintenance Water Quality Backflow Prevention Security Financial Highlights Schedule 02/13/23 Draft report emailed to the Commission 03/03/23 Comments due to Nicole (nnoble@orovalleyaz.gov) 03/13/23 Final presentation to the Commission and recommendation to render the report to the Town Council 03/24/23 Final adjustments to the report, if any 03/29/23 Utility staff renders the report to Town Council on behalf of the Commission 03/29/23 Utility staff transmit the report to the Clerk’s office for public record notification Discussion    Water Utility Commission 3. Meeting Date:02/13/2023   Submitted By:Nicole Noble, Water SUBJECT: DISCUSSION AND POSSIBLE ACTION ON PROPOSED WATER RATES (P. ABRAHAM) RECOMMENDATION: N/A EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: N/A Attachments Presentation  Mary Rallis, C.P.A., Water Utility Administrator Peter A. Abraham, P.E., Water Utility Director Water Utility Commission Meeting February 13, 2023 Oro Valley Water Utility Discussion & Action on Proposed Water Rates Presented by Develop water rates that generate sufficient revenue to: Water Rates Analysis Goals Meet revenue and cash reserve requirements Meet debt service coverage requirements Ensure revenue stability Maintain the overall financial health of the Utility The water rates shall also: Promote water conservation Be the minimum necessary to avoid rate shock Adapt to changing rate drivers and consumer trends Be equitable between customer classifications Recover the cost of service (Potable & Reclaimed) Assumptions consistent with the General Fund Water Rates Analysis Assumptions Personnel costs Increases in ASRS contributions Increases in healthcare costs Inflation rates Projected at 5% annually during the 5-year projection period SFR growth rates Projected at 797 SFR’s during the 5-year projection period Interest income Interest rates are projected at 2% annually during the 5 -year projection period Assumptions specific to the Water Utility Water Rates Analysis Assumptions Personnel costs No new employees were added during the 5-year projection period Increasing CAP water delivery & wheeling costs Projected Tier 2a shortage in FY 2023/24 –12% increase in delivery charge Wheeling costs increasing 5% annually over the 5-year projection period Increasing reclaimed water delivery costs Reclaimed water delivery costs increasing of 5% over the 5-year projection period Existing System Capital Projects Cash funding of capital projects over the 5-year projection period Recommendation on Water Rates for FY 23-24 Potable Water Rates Increase to potable base rates Increase to potable commodity rates (Tiers 1-4), commercial and master-metered multifamily No change to construction commodity rate No change to potable groundwater preservation fee Reclaimed Water Rates No change to reclaimed base rates Increase to the reclaimed commodity rate No change to the reclaimed groundwater preservation fee Changes to the Finance Subcommittee Recommendation December 2022: Finance Subcommittee –Unanimously recommended Scenario “A” as the preferred scenario January of 2023: Council approved $5.3M in ARPA funding to be distributed to Town departments Of the $5.3M in ARPA funding the Water Utility was allocated $2.3M towards Capital projects without a payback to the general fund ARPA funding to the Utility has resulted in lower water rates over the 5 -year Proforma Water Utility staff prepared Scenario “D” in response to the additional funding The $2.3M in ARPA funds decreased the proposed rate increase for a 5/8-inch metered customer using 7k gallons per month from 6.5% to 4.8% Changes to the Finance Subcommittee Recommendation Commodity Tiers Current Proposed Scenario “A” Scenario “A” Increase Proposed Scenario “D” Scenario “D” Increase Difference Between Scenario “A” & “D” Tiered Rate Tiered Rate Increase Tiered Rate Increase Decrease Tier 1 $ 2.34 $ 2.70 $ 0.36 $ 2.65 $ 0.31 $ 0.05 Tier 2 $ 3.25 $ 3.95 $ 0.70 $ 3.88 $ 0.63 $ 0.07 Tier 3 $ 4.53 $ 6.15 $ 1.62 $ 6.05 $ 1.52 $ 0.10 Tier 4 $ 6.29 $ 8.94 $ 2.65 $ 8.80 $ 2.51 $0.14 Meter Size Current Scenario “A”Scenario “A” Monthly Rate Scenario “D”Scenario “D” Monthly Rate Difference Between Scenario “A” & “D” Rate (in inches)Potable Base Rates Potable Base Rates Increase Potable Base Rates Increase Decrease 5/8 $ 19.94 $ 21.54 $ 1.60 $ 21.14 $ 1.20 $ 0.40 3/4 $ 29.90 $ 32.29 $ 2.39 $ 31.69 $ 1.79 $ 0.60 1 $ 49.83 $ 53.82 $ 3.99 $ 52.82 $ 2.99 $ 1.00 1.5 $ 99.66 $ 107.63 $ 7.97 $ 105.64 $ 5.98 $ 1.99 2 $ 159.46 $ 172.22 $ 12.76 $ 169.03 $ 9.57 $ 3.19 3 $ 318.90 $ 344.41 $ 25.51 $ 338.03 $ 19.13 $ 6.38 4 $ 498.29 $ 538.15 $ 39.86 $ 528.19 $ 29.90 $ 9.96 6 $ 996.58 $ 1,076.31 $ 79.73 $ 1056.37 $ 59.79 $ 19.94 8 $ 1,594.53 $ 1,722.09 $ 127.56 $ 1690.20 $ 95.67 $ 31.89 Comparison of Potable Base Rates Scenario “A” to Scenario “D” Comparison of Potable Commodity Tiers Scenario “A” to Scenario “D” Operating Revenues Budget FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 REVENUES Water Sales Potable Water Sales (exclude golf courses)14,009,000$ 14,663,309$ 15,846,912$ 17,168,612$ 18,338,817$ 19,224,615$ Potable Water Sales from Growth - 32,441 106,010 203,224 327,657 441,983 Potable Water Sales - Golf Course - 111,469 117,106 123,028 129,180 133,205 Total Potable Water Sales 14,009,000 14,807,219 16,070,028 17,494,864 18,795,654 19,799,803 Reclaimed Water Sales 1,374,000 1,384,079 1,384,079 1,384,079 1,384,079 1,384,079 Total Water Sales 15,383,000 16,191,298 17,454,107 18,878,943 20,179,733 21,183,882 Other Operating Revenue Groundwater Preservation Fees Groundwater Preservation Fee - Potable 2,141,500 2,165,400 2,165,400 2,165,400 2,165,400 2,165,400 Groundwater Preservation Fee - Reclaimed 258,500 258,500 258,500 258,500 258,500 258,500 Groundwater Preservation Fee - Growth - 9,308 23,474 33,127 37,960 42,563 Total Groundwater Preservation Fees 2,400,000 2,433,208 2,447,374 2,457,027 2,461,860 2,466,463 Water Resource & System Development Impact Fees 1,101,346 867,525 988,878 1,365,711 1,448,742 956,943 Service Fees & Charges 824,000 800,000 800,000 800,000 800,000 800,000 Interest Income 250,000 520,461 423,885 278,402 213,375 238,491 Total Other Operating Revenue 4,575,346 4,621,194 4,660,137 4,901,140 4,923,977 4,461,897 Total Operating Revenue 19,958,346$ 20,812,492$ 22,114,244$ 23,780,083$ 25,103,710$ 25,645,779$ Operating Expenses Budget OPERATING EXPENSES FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Potable Operating Expenses Personnel 3,350,590 3,469,581 3,582,983 3,700,292 3,821,649 3,947,199 Operations & Maintenance 3,266,787 3,427,564 3,598,943 3,706,911 3,821,686 3,940,084 Power for Pumping 900,000 960,300 960,300 989,109 989,109 1,018,782 CAP Wheeling Costs 1,949,000 2,098,203 2,198,272 2,303,193 2,413,114 2,413,908 CAP Delivery Costs 2,160,000 2,623,200 2,860,215 3,220,890 3,426,990 3,499,125 CAP Capital Costs paid by GPF Revenue 409,080 387,165 474,825 452,910 438,300 438,300 Total Potable Operating Expenses 12,035,458$ 12,966,014$ 13,675,538$ 14,373,305$ 14,910,848$ 15,257,398$ Reclaimed Operating Expenses Personnel 302,474 313,216 323,453 334,043 334,998 356,332 Operating & Maintenance 942,834 946,720 989,440 1,036,701 1,086,259 1,140,442 Power for Pumping 60,000 64,020 64,020 65,941 65,941 67,919 Total Reclaimed Operating Expenses 1,305,308$ 1,323,956$ 1,376,913$ 1,436,686$ 1,487,199$ 1,564,692$ WRSDIF Operating Expenses CAP Capital Costs 168,000 159,000 195,000 186,000 180,000 180,000 Total WRSDIF Operating Expenses 168,000$ 159,000$ 195,000$ 186,000$ 180,000$ 180,000$ Total Operating Expenses 13,508,766$ 14,448,970$ 15,247,451$ 15,995,991$ 16,578,047$ 17,002,090$ Debt Service, Capital, Proposed Rate Increases & Ending Cash Balances Debt Service Budget Debt Service - Potable- Existing System FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 P&I - 2012 Sr. Lien Bonds - Existing System-Refinance 2003 573,666 - - - - - P&I - 2014 WIFA Loan - Sr. Lien - AMI 376,642 376,530 376,416 376,298 376,178 376,054 P&I - 2015 Excise Tax Bonds - Refinance 2005 149,979 151,222 150,756 149,918 - - P&I - 2017 Excise Tax Bonds - Refinance 2007 1,640,294 1,639,079 1,638,991 1,638,851 1,638,703 - P&I - 2018 Excise Tax Bonds - Exist. System CIP- 15 yrs. $6M 515,326 514,660 515,154 514,546 514,338 514,506 P&I - 2021 Sr. Lien Bonds - Refinance 2007 & 2009 WIFA & 2012 176,375 367,404 274,422 275,489 276,064 274,061 Total Potable Existing System Debt Service 3,432,282$ 3,048,895$ 2,955,739$ 2,955,102$ 2,805,283$ 1,164,621$ Debt Service - GPF P&I - Sr. Lien Bonds - Reclaimed Ph.1 (2012)1,045,662 - - - - - P&I - 2021 Sr. Lien Bonds - Refinance 2007 & 2009 WIFA & 2012 302,297 629,711 470,345 472,174 473,158 469,726 Total GPF Debt Service 1,347,959$ 629,711$ 470,345$ 472,174$ 473,158$ 469,726$ Debt Service - WRSDIF - Growth Related P&I - Sr. Lien Bonds - Growth Related (2012)322,578 - - - - - P&I - 2021 Sr. Lien Bonds - Refinance 2007 & 2009 WIFA & 2012 36,004 75,000 56,019 56,237 56,354 55,945 Total WRSDIF Growth Related Debt Service 358,582$ 75,000$ 56,019$ 56,237$ 56,354$ 55,945$ Total Water System Debt Service 5,138,823$ 3,753,606$ 3,482,103$ 3,483,513$ 3,334,795$ 1,690,292$ Capital Outlay Meters & Equipment & Vehicles 924,290$ 430,000$ 390,000$ 730,000$ 730,000$ 890,000$ Capital Improvements: Existing System 1,150,000 1,650,000 1,500,000 1,500,000 1,500,000 1,500,000 Groundwater Preservation Fees 660,000 1,040,000 4,680,000 2,980,000 1,200,000 - NWRRDS Projects 990,000 1,560,000 7,020,000 4,470,000 1,800,000 - Other Potable Growth Related Projects 1,085,688 2,900,000 - - - 250,000 Total Capital Outlay 4,809,978$ 7,580,000$ 13,590,000$ 9,680,000$ 5,230,000$ 2,640,000$ Net Balance From Operations (3,499,221)$ (4,970,084)$ (10,205,310)$ (5,379,421)$ (39,132)$ 4,313,397$ Growth - New Metered Connections 300 119 138 197 210 133 Monthly (Avg.) increase to residential customer using 7K gals.N/A 4.8%4.8%4.8%4.4%3.6% Monthly (Avg.) increase to residential customer using 7K gals.N/A $2.11 $2.17 $2.33 $2.24 $1.87 Monthly increase to reclaimed customer using 10M gals.N/A 3.6%0.0%0.0%0.0%0.0% Monthly increase to reclaimed customer using 10M gals.N/A $1,000.00 $0.00 $0.00 $0.00 $0.00 Debt Service Coverage Ratio: Sr. Lien & WIFA 2.28 4.39 5.83 6.60 7.21 7.35 Debt Service Coverage Requirement = 1.30 Required Operating Fund Cash Reserves (20% of personnel, O&M, debt)3,272,794$ 3,390,340$ 3,506,673$ 3,662,437$ 3,753,006$ 3,509,682$ (does not include depreciation/amortization) Operating Fund Cash Reserves 7,645,024$ 5,727,554$ 4,661,821$ 3,885,730$ 3,952,311$ 6,101,037$ Groundwater Preservation Fees 5,401,484 5,879,936 2,801,279 1,403,656 1,790,037 3,400,267 WRSD Impact Fee Fund 16,193,509 12,662,444 6,601,524 3,395,818 2,903,725 3,458,165 Total Ending Cash Balance 29,240,017$ 24,269,934$ 14,064,624$ 8,685,204$ 8,646,073$ 12,959,469$ Recommendation on Proposed Potable Water Rates Recommended Base Rate Increase Potable water base rates increase by meter size: 87% of customers have a 5/8 -inch meter and will see a $1.20 per month increase in the base rate. Recommended Commodity Rate Increase Increases in commodity rates are dependent on volume of water consumed Meter Size Current Proposed Monthly (in inches)Potable Base Rates Potable Base Rates Increase 5/8 $ 19.94 $ 21.14 $ 1.20 3/4 $ 29.90 $ 31.69 $ 1.79 1 $ 49.83 $ 52.82 $ 2.99 1.5 $ 99.66 $ 105.64 $ 5.98 2 $ 159.46 $ 169.03 $ 9.57 3 $ 318.90 $ 338.03 $ 19.13 4 $ 498.29 $ 528.19 $ 29.90 6 $ 996.58 $1,056.37 $ 59.79 8 $1,594.53 $1,690.20 $ 95.67 Commodity Tiers Current Proposed Increase Tier 1 $ 2.34 $ 2.65 $ 0.31 Tier 2 $ 3.25 $ 3.88 $ 0.63 Tier 3 $ 4.53 $ 6.05 $ 1.52 Tier 4 $ 6.29 $ 8.80 $ 2.51 Potable Water Cost Comparisons Comparison of monthly bills to other service providers for a 5/8-inch SFR Meter: 87% of Water Utility customers have a 5/8-inch meter and consume an average 7,000 gallons per month. Water Provider Cost for 7,000 Gallons Cost for 15,000 Gallons Cost for 25,000 Gallons Cost for 40,000 Gallons Oro Valley Current $43.88 $79.24 $137.12 $242.22 Oro Valley Proposed $45.99 $84.23 $151.56 $277.81 Metro Water $47.75 $89.20 $158.20 $278.20 Marana Water $53.89 $101.50 $174.00 $310.45 Tucson Water $52.56 $129.92 $274.00 $558.86 Recommendation on Proposed Reclaimed Rates and Fees Recommended reclaimed rates and fees: No change is recommended for: Reclaimed water Groundwater Preservation Fee A water rate increase is recommended for: Reclaimed water commodity rate. Reclaimed water comparison of monthly water bill to other reclaimed water service providers. Golf irrigation is the primary consumer of reclaimed water. Typical 18-hole course consumes 10,000,000 gallons/month. Reclaimed Current Proposed No change Groundwater Preservation Fee/1,000 gallons $0.47 $0.47 $0 Reclaimed Current Proposed Increase Commodity Rate/1,000 gallons $2.25 $2.35 $0.10 Water Provider Cost for 10,000,000 Gallons Oro Valley Current $27,930.83 Oro Valley Proposed $28,930.83 Metro Water N/A Marana Water N/A Tucson Water $30,168.27 Schedule 02/13/23 WUC Meeting –Recommendation on water rates 03/01/23 Town Council –Adoption of Notice of Intent to increase rates 03/02/23 Publish public hearing date on Town website –Minimum 60-day notice 03/02/23 Publish Notice of Intent in newspaper –Minimum 20-day notice 06/07/23 Town Council –Public Hearing on proposed rate increase 07/08/23 New rates become effective –30 days after adoption WUC Finance Subcommittee & Staff Recommendation The Water Utility Commission Finance Subcommittee & staff respectfully request that the Commission body make a recommendation to forward the water rates, as presented, to the Mayor and Council for their consideration for approval. Water Rates Analysis Discussion    Water Utility Commission 4. Meeting Date:02/13/2023   Submitted By:Nicole Noble, Water SUBJECT: UPDATE AND DISCUSSION ON COLORADO RIVER (P. ABRAHAM) RECOMMENDATION: N/A EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: N/A Attachments Presentation  Peter A. Abraham, P.E. Water Utility Director Water Utility Commission February 13, 2023 Oro Valley Water Utility Update & Discussion on Colorado River Colorado River System Colorado River system is 1,450 miles long, Rocky Mountains to Gulf of California Provides water to seven US states & Mexico Upper Basin States: Colorado, New Mexico, Utah and Wyoming Lower Basin States: Arizona, California and Nevada 7.5 MAF/year for each Lower Basin Colorado River Allocations California: 4.4 MAF/Yr. Arizona: 2.8 MAF/Yr. (1.6 MAF/Yr. CAP) Nevada: 0.3 MAF/Yr. Supplies water for 40 million people Annual delivery volumes to lower basin states determined by water surface elevations of Lake Mead In the midst of a 23-year drought Lower Basin Drought Contingency Plan CAP priority system that governs CAP water deliveries in times of shortage OVWU CAP water allocation is part of the M&I Pool 1.2M AF structural deficit eliminated prior to M&I delivery curtailments 1.2 M AF delivery reduction results in a 640,000 AF/Yr. reduction in CAP deliveries Lower Basin Drought Contingency Plan Consensus Based Model 2007 Guidelines + DCP Lower Basin Drought Contingency Plan Consensus Based Model California Model OVWU Water Resource Utilization Model (2021 Data) Ground Water 13,384 AF/Yr. Permitted Reclaimed Water 1,928 AF CAP Water 10,305 AF/Yr. Allocated Water Deliveries Long Term Storage Credits 29,500 AF Groundwater Allowance Account AZ Water Bank 600,000 AF CAGRD Future Water Leases 2,600 AF 1,928 AF Replace 5,000 AF of groundwater pumped Conservation 5,000 AF 2,705 AF stored in 2021 Shortage firming CAGRD can be used to replace GW pumped Discussion Discussion    Water Utility Commission 5. Meeting Date:02/13/2023   Submitted By:Nicole Noble, Water SUBJECT: UPDATE AND DISCUSSION ON WATER RESOURCE USAGE (P. ABRAHAM) RECOMMENDATION: N/A EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: N/A Attachments Presentation  Peter A. Abraham, P.E. Water Utility Director Water Utility Commission February 13, 2023 Oro Valley Water Utility Update & Discussion on Water Resource Usage Oro Valley Main Service Area January 2023 Water Use by Type Countryside Service Area January 2023 Discussion Discussion    Water Utility Commission 8. Meeting Date:02/13/2023   Submitted By:Nicole Noble, Water SUBJECT: DIRECTOR'S REPORT RECOMMENDATION: N/A EXECUTIVE SUMMARY: N/A BACKGROUND OR DETAILED INFORMATION: N/A FISCAL IMPACT: N/A SUGGESTED MOTION: N/A Attachments Presentation  Peter A. Abraham, P.E. Water Utility Director Water Utility Commission Meeting February 13, 2023 Oro Valley Water Utility Director’s Report Upcoming Meetings February 15, 2023 Town Council Regular session Council Chambers @ 6 p.m. March 1, 2023 Town Council Regular Session Council Chambers @ 6 p.m. March 13, 2023 Water Utility Commission Meeting Hopi Room @ 5 p.m. Water News –Upper Colorado Basin Snowpack Comparisons Water News -2023 Colorado Snow Water Equivalent Thank You