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HomeMy WebLinkAboutMinutes - Water Finance Subcommittee - 9/18/2018 MINUTES ORO VALLEY WATER UTILITY COMMISSION FINANCE SUBCOMMITTEE SEPTEMBER 18,2018 WATER UTILITY CONFERENCE ROOM 11000 N.LA CANADA DRIVE CALL TO ORDER—Chair Tustison called the meeting to order at 9:00 a.m. ROLL CALL PRESENT: Winston Tustison,Chair Chuck Hollingsworth,Member Robert Milkey,Member ALSO PRESENT: Shirley Kiel,Water Utility Administrator Stacey Lemos,Chief Financial Officer CALL TO AUDIENCE—No speakers. 1. APPROVAL FEBRUARY 7,2018 MINUTES MOTION:A motion was made by Member Milkey and seconded by Member Hollingsworth to approve the February 7,2018 minutes as written.MOTION carried,3-0. 2.DISCUSSION REGARDING THE 2019 WATER RATES ANALYSIS,INCLUDING SCENARO BASELINE AND INITIAL ASSUMPTIONS Ms.Kiel reviewed the following basic assumptions: • The analysis starts in FY 19/20 and goes through FY 23/24 • The single family residental growth projections are greater than last year • Commercial growth is to be determined • Inflation rate is 1.5%annually based on economic forecasting • Merit increases are 3.0%annually and health care increases are 5.0%annually • ASRS projected increases are 2.5%annually • Interest rates range from 2.58%to 2.75% Ms.Kiel reviewed the bond issue from the last rates analysis: • Orignally planned to do a traditional bond for 20 years but now plan to go out for a 15 year private placement jointly with the General Fund at an estimated interest rate of 3.5%for$6M for existing system improvements • The annual debt service will be approximately$535,000 • The bond issue will be forwarded to Town Council for approval in October Ms.Kiel reported there will be revisions to the CIP based on the new Master Plan but no changes with the Northwest Recharge and Recovery Delivery System project.She added there will be a revision to the CAP deliveries.The utility plans to take delivery of up to 480 acre feet of additional CAP water beginning in FY 2019.This is due to a new wheeling station that will be completed this fiscal year. Ms.Kiel explained she will use average water use patterns from FY 16/17 since FY 17/18 was an unusually dry and hot year. Ms.Kiel reviewed the following revised reclaimed water allocation based on actual data from FY 17/18: • Reduction in reclaimed water use and increase in potable water use resulted in a slight change in allocation percentage • Will use revised allocation percentage in the financial analysis and future budgets • Budgeted revenue/costs for reclaimed system for FY 18/19 Discussion ensued regarding: • Golf course information and future options • Reclaimed debt service ending dates Ms. Kiel said a Baseline Scenario will be prepared for the next Finance Subcommittee meeting in October.Water Rates will coincide with the budget process again this year. A recommendation from the Water Utility Commission will be requested in February. Ms.Lemos reported Finance is preparing the Town's 5-year financial forcast. FUTURE AGENDA ITEMS—No items discussed. The next Finance Subcommittee meeting is scheduled for October 23rd at 9 a.m. ADJOURNMENT MOTION:Member Milkey MOVED to adjourn the meeting at 9:43 a.m.Motion Seconded by Member Hollingsworth.MOTION carried,3-0. Prepared by: �- \tea--L Danielle Tanner Senior Office Specialist I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the Water Utility Commission Finance Subcommittee of Oro Valley, Arizona held on the 18th day of September,2018.I further certify that the meeting was duly called and held and that a quorum was present.