HomeMy WebLinkAboutMinutes - Water Finance Subcommittee - 11/6/2018 MINUTES
ORO VALLEY WATER UTILITY COMMISSION
FINANCE SUBCOMMITTEE
NOVEMBER 6,2018
WATER UTILITY CONFERENCE ROOM
11000 N.LA CANADA DRIVE
CALL TO ORDER—Chair Tustison called the meeting to order at 9:03 a.m.
ROLL CALL
PRESENT: Winston Tustison,Chair
Chuck Hollingsworth,Member
Robert Milkey,Member
ALSO PRESENT: Peter Abraham,P.E.,Water Utility Director
Shirley Kiel,Water Utility Administrator
Danielle Tanner,Sr.Office Specialist
CALL TO AUDIENCE—No speakers.
1. APPROVAL OCTOBER 23,2018 MINUTES
MOTION:A motion was made by Member Milkey and seconded by Member Hollingsworth
to approve the October 23,2018 minutes as written.MOTION carried,3-0.
2.DISCUSSION REGARDING THE 2019 WATER RATES ANALYSIS,INCLUDING
FIXED AND VARIABLE COSTS,FINANCIAL SCENAROS AND RELATED
ASSUMPTIONS
Ms.Kiel provided an overview of the pro formas.
Ms.Kiel reviewed the following updates to the Baseline:
• Revised capital projects to balance expenditures
• Increased volume of water wheeled from 2,350 to 2,510(160 acre feet per year)
• Cost increase for wheeling an additional 160 acre feet per year is$481,800 for the
five year total.Annually the cost increased from$113K to$126K
• Purchase of groundwater extinguishment credits for$300K per year
Discussion ensued regarding the quantity and timing of the groundwater extinguishment
credit purchases.Mr.Abraham discussed the need for the credits in future years and
how they serve as an insurance plan for the Utility.
Ms.Kiel reviewed the following data for Scenario A:
• Baseline data was used
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• Last year's rate increases were implemented
• Resulted in rate increases that were too high
• The scenario was generating more cash than required
Ms.Kiel reviewed the following data for Scenario B:
• Included a purchase of groundwater extinguisment credits in the first two years in
the amount of$300K
• Resulted in monthly increase to customers of less than five percent each year
• Levelized rate increases
• Meets cash reserve requirements but it is close in the out years
Member Milkey requested staff research an increase in the reclaimed rates so the
potable rates do not subsidize the overage costs from reclaimed water operations.
FUTURE AGENDA ITEMS—No items discussed.
The next Finance Subcommittee meeting will be scheduled after the Thanksgiving
holiday.
ADJOURNMENT
MOTION:Member Milkey MOVED to adjourn the meeting at 10:02 a.m.Motion
seconded by Member Hollingsworth.MOTION carried,3-0.
Prepared by:
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 610 day of November,2018.I further certify that the meeting was duly
called and held and that a quorum was present.
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