HomeMy WebLinkAboutMinutes - Water Finance Subcommittee - 12/11/2023D R A F T
MINUTES
ORO VALLEY WATER UTILITY COMMISSION
FINANCE SUBCOMMITTEE
REGULAR SESSION
December 11, 2023
WATER UTILITY CONFERENCE ROOM
11000 N. LA CAÑADA DRIVE
REGULAR SESSION AT OR AFTER 9:00 AM
CALL TO ORDER
ROLL CALL
Present: Niranjan Vescio, Member
Kay Lantow, Member
Tom Marek, Chair
Staff Present:Mary Rallis, Water Utility Administrator
Peter A. Abraham, Water Utility Director
CALL TO AUDIENCE
No public speakers.
REGULAR SESSION AGENDA
1.REVIEW AND APPROVAL OF THE DECEMBER 6, 2023 REGULAR SESSION MEETING MINUTES
Motion by Member Niranjan Vescio, seconded by Chair Tom Marek to approve the December 6, 2023
meeting minutes
Vote: 3 - 0 Carried
2.REVIEW AND DISCUSSION REGARDING THE WATER UTILITY'S 2024 WATER RATES
Water Utility Director Peter Abraham reviewed the rate scenarios as follows:
Reviewed the baseline with only one scenario at the last meeting. There are two major rate
drivers this year:
Water Resource price increase- even though we are going from a tier 2 to a tier 1, CAP is
charging all customers Tier 3.
Administrative Fee is paid to the general fund. This amount is not known until after rates
are set. Rates are set in February, and the administrative fee amount is decided in May.
The fee has more than doubled in the past three years.
Water Utility Director Peter Abraham informed the committee that Capital funds are not a factor
to increase rates
12/11/23 Minutes, Water Utility Finance Subcommittee 1
It is one of the few cases that Water Utility Director Peter Abraham has asked for a higher rate
increase because of the increase of costs.
Reviewed Scenario A as follows:
Residential customers, 87% of consumers, 5/8" meter
Reviewed cash reserves
The majority of the customers are in Tier 1
Anticipation to pay NWRRDS project debt leads to a 10% increase in groundwater fees
Need to borrow 12 mill $ that will be paid by impact fees; Gd water pres fee will have a
10-cent-raise to pay for future debt fees & a base fee
Planning gives an estimate of how much growth will be projected, which helps with the impact
fees
Reviewed Scenario B:
Started off with scenario A and the 6% increase; each tier is decreased by 5% (decreased
commodity rate)
with this scenario, FY 24/25 it falls short
Reviewed Scenario C:
Decrease the base rate by 1% and the tiers by 5%
Two fiscal years are below
Reviewed Scenario D:
Decrease base rate by 1% and leave tiers alone
Reduces the rate and is below 8%
Cash reserve amount is decent
Water Utility Director Peter Abraham reviewed a spreadsheet comparing the other near jurisdictions,
showing Oro Valley Water Utility as the lowest cost provider.
Water Utility Director Peter Abraham shared that even though he is asking for a rate increase, Oro
Valley water will still be able to provide water at a lower rate compared to the other water service
providers.
Discussion ensued amongst the commission and staff regarding the scenarios as follows:
scenario B & C do not work
reviewing worst case scenario
no rates raise in 2020 per Council's recommendation
water conservation has helped limit the amount in increase of rates
Management has been supportive of the rates increase thus far
Motion by Member Niranjan Vescio, seconded by Member Kay Lantow to present all
recommendations to Water Utility Commission at the January regular session meeting.
Vote: 3 - 0 Carried
ADJOURNMENT
Motion by Chair Tom Marek, seconded by Member Kay Lantow Motion to adjourn the meeting at
10:42 a.m.
Vote: 3 - 0 Carried
12/11/23 Minutes, Water Utility Finance Subcommittee 2
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 11th day of December 2023. I
further certify that the meeting was duly called and held and that a quorum was present.
Dated this _____ day of ____________________, 2023.
___________________________
Maritza M Valenzuela
Senior Office Specialist
12/11/23 Minutes, Water Utility Finance Subcommittee 3