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HomeMy WebLinkAboutMinutes - Water Finance Subcommittee - 12/4/2018 MINUTES ORO VALLEY WATER UTILITY COMMISSION FINANCE SUBCOMMITTEE DECEMBER 4,2018 WATER UTILITY CONFERENCE ROOM 11000 N.LA CANADA DRIVE CALL TO ORDER—Chair Tustison called the meeting to order at 9:05 a.m. ROLL CALL PRESENT: Winston Tustison,Chair Chuck Hollingsworth,Member EXCUSED: 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 NOVEMBER 6,2018 MINUTES MOTION:A motion was made by Member Hollingsworth and seconded by Chair Tustison to approve the November 6,2018 minutes as written.MOTION carried,2-0. 2.DISCUSSION REGARDING THE 2019 WATER RATES ANALYSIS,INCLUDING FIXED AND VARIABLE COSTS,FINANCIAL SCENAROS AND RELATED ASSUMPTIONS Ms.Kiel reviewed the following: • Revision of the CAP capital costs in all financial scenarios • Annual purchase of Groundwater Extinguishment Credits in all scenarios • The Groundwater Preservation Fees and the impact fee funds are the same in all scenarios • Vistoso Golf Course reduction in O&M costs and revenues are included in all scenarios Ms.Kiel reviewed the following information for Scenario A: • Proposed potable rate increases were based on last year's rate analysis. • Proposed rates generated more revenue than needed. • Did not address the deficit in golf course revenue—no increase in reclaimed rates 12-04-18 Water Utility Commission Finance Subcommittee 1 Ms.Kiel reviewed the following information for Scenario B: • Proposed lower potable rate increases than in Scenario A • Levelized the proposed potable rate increases to avoid rate shock • Adequate cash reserves are maintained • Did not address the deficit in golf course revenue—no increase in reclaimed rates Ms.Kiel reviewed the following information for Scenario C: • Proposed potable rate increases are lower than Scenarios A&B • Proposed rate increases are levelized to avoid rate shock • Decreases the deficit in golf course revenue by increasing reclaimed rates • Includes conservative cash reserves Ms.Kiel discussed how several of the assumptions included in the projections may yield different outcomes than expected over the next year. Mr.Abraham discussed Oro Valley Water Utility's rates compared to other regional water providers. Ms.Kiel will review this information with Member Milkey prior to the next Water Utility Commission meeting. The Subcommittee members reached concensus that Scenario C should be recommended as the preferred scenario. Ms.Kiel will provide an update on the water rates analysis to the Water Utility Commission at the January meeting.A recommendation on water rates will be requested in February. FUTURE AGENDA ITEMS—No items discussed. ADJOURNMENT MOTION:Member Hollingsworth MOVED to adjourn the meeting at 9:47 a.m.Motion seconded by Chair Tustison.MOTION carried,2-0. 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, 12-04-18 Water Utility Commission Finance Subcommittee 2 Arizona held on the 4th day of Decembber,2018.I further certify that the meeting was duly called and held and that a quorum was present. 12-04-18 Water Utility Commission Finance Subcommittee 3