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Home My WebLink AboutAnnual Reports - 4/1/2013POONDEV WATER UTILITY COMMISSION ANNUAL REPORT APRIL 2013 Town of Ors Valley and Tucson Water ' Wheeling of CAP Water Celebration Rancho Vistoso Chlorine Storage Facility All l Meter Replacement Program Steam Pump Punch 8 Inch Pipeline Installation TOWN OF ORO VALLEY WATER UTILITY COMMISSIONANNUAL REPORT APRIL 2013 TABLE OF CONTENTS Page About the Water Utility Commission...................................................................... I ExecutiveSummary................................................................................................4 CustomerService.....................................................................................................7 MetersDivision........................................................................................................9 WaterQuality........................................................................................................11 CurrentWater Supply............................................................................................15 Water Resource Planning and Management..........................................................19 Water Conservation Program.................................................................................22 UtilityOperations...................................................................................................24 Security and Emergency Response Plan................................................................28 Engineering and Planning...................................................................................... 30 FinancialHighlights...............................................................................................3 3 Appendices A. Utility Statistics B. Capital Improvement Program TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT 2013 ORO VALLEY TOWN COUNCIL Satish I. Hiremath, D.D.S., Mayor Lou Waters, Vice Mayor Brendan Burns, Councilmember William Garner, Councilmember Joe Hornat, Councilmember Mary Snider, Councilmember Mike Zinkin, Councilmember ORO VALLEY WATER UTILITY COMMISSION Robert Milkey, Chair Winston Tustison, Vice Chair Rick Davis, Commissioner John Hoffmann, Commissioner Rick Reynolds, Commissioner Elizabeth Shapiro, Commissioner Richard Verlaque, Commissioner TOWN STAFF Greg Caton, Town Manager Philip C. Saletta, P.E., Water Utility Director David Ruiz, Engineering Division Manager Shirley Seng, Water Utility Administrator Special recognition to OVWU staff that provided graphics, data, photos and their time to assist in the preparation of this report: Kam Boyce Iris L. Chaparro Robert Jacklitch Jeff Kane George Kendrick Mary C. Kobida Skip Kyle Mark Moore Carolyn Schneider Charles Soper ABOUT THE WATER UTILITY COMMISSION The Town of Oro Valley Water Utility Commission is a seven member commission that is appointed by the Town Council. The Commission meets the second Monday of each month to discuss and review matters pertaining to the Water Utility. The Commission serves in an advisory capacity to Council making recommendations on water policies, water rates and fees, renewable water supplies and water conservation. In 2012, the Commission met nine times to conduct business. All meeting agendas were noticed in accordance with statutory requirements through the Town Clerk's Office and on the Town website. The meetings were broadcast over the internet through the Granicus System. Meeting minutes were taken, posted and then finalized after approval by the Commission. In addition to the regular Commission meetings, there were several meetings conducted by the three Subcommittees. The three Subcommittees include the Finance Subcommittee, the Water Conservation Subcommittee and the Renewable Water Resources Subcommittee. Some specific actions by the Water Utility Commission and recommendations to Council for 2012 include the following: ➢ Election of officers ➢ Review of Water Utility Commission agendas ➢ Recommendation for acceptance of the Annual Report ➢ Recommendation to approve water code changes for Line Extension Agreements ➢ Recommendation to approve application to modify the Town's Designation of Assured Water Supply ➢ Recommendation to approve Intergovernmental Agreement with Pima County for Wastewater Billing Services ➢ Recommendation for no increase in water rates and fees ➢ Review and approval of meeting minutes There are numerous issues that will be addressed as we move forward in 2013. Some of the major issues include: ➢ Comprehensive planning for long-term CAP water delivery ➢ Review of cost of service study for water rates and developing a Preferred Financial ,J Scenario ➢ Review of water development impact fee studies ➢ Review of reclaimed water IGA ➢ Review possible acquisition of CAP Non -Indian Agricultural Water ➢ Review possible acquisition of Groundwater Extinguishment Credits ➢ Review of cash reserve policy The Water Utility Commission welcomes our customers, citizens and public to attend its � meetings. WATER UTILITY COMMISSION 2013 a Robert Milkey, Chair Residential (Town) i Richard Davis, Commissioner At -Large Conservation Subcommittee Chair Winston Tustison, Vice Chair Residential (Town) Finance Subcommittee Chair -2- Richard Verlaque, Commissioner Residential (Town) Conservation Subcommittee Member Elizabeth Shapiro, Commissioner Residential (Countryside) Finance Subcommittee Member Rick Reynolds, Commissioner Commercial/Turf Representative Water Resources Subcommittee Member -3- EXECUTIVE SUMMARY TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT APRIL 2013 In October 1996 the Oro Valley Town Council (Mayor and Council) formed the Oro Valley Water Utility Commission (Commission) to act as the official advisory body to the Mayor and Council regarding water related issues. The Commission is required to prepare an annual report to the Mayor and Council each year. This report is the Commission's seventeenth Annual Report. It includes topics on customer service, water quality, water supply, water resource planning, conservation, and capital improvements. This report covers information and activities for fiscal year (FY) ending June 30, 2012 and calendar year (CY) 2012. CUSTOMER SERVICE The Town of Oro Valley Water Utility (Water Utility or Utility) has 18,716 customer connections serving a population of 42,694. This includes both the customers within the Town boundaries and the Countryside area. The Utility installed 171 new water connections in CY 2012, a 0.92% growth rate. Approximately 2.27 billion gallons (6,956 acre feet) of potable water was delivered to our customers. In addition, approximately 684 million gallons (2,099 acre feet) of reclaimed water was delivered for golf course irrigation and other uses. WATER QUALITY For the eleventh consecutive year, the Utility is proud to report that it did not experience any water quality violations. The number of tests performed in CY 2012 was 2,250 and our water quality was in compliance with all standards established by federal and state agencies. In addition to testing for water quality, the Water Utility administers a backflow prevention program to protect our water system from potential contamination. CURRENT WATER SUPPLY Oro Valley currently delivers water from three sources of supply. Groundwater is pumped from wells in the aquifer below the Town and delivered through the potable water distribution system. Central Arizona Project (CAP) water is delivered to the Oro Valley potable water system through Tucson Water's Distribution System. Reclaimed water is used for turf irrigation and is delivered through a separate reclaimed water distribution system. Oro Valley also uses its CAP water indirectly through groundwater storage credits. Groundwater levels continue to decline in the Oro Valley aquifer but to a significantly lesser extent than in previous years because of the decrease in groundwater pumping. Operation of the reclaimed water system and the delivery of CAP water have slowed the groundwater decline, thus conserving, preserving and protecting our aquifer and our groundwater supply. Plans for future use of our remaining CAP water allocation are being developed. -4- In CY 2012, the Utility pumped 6,161 acre feet (2 billion gallons) of groundwater from its wells. The wells in the Oro Valley Water Service Area produced 5,415 acre feet (1.76 billion gallons) and the wells in the Countryside Water Service Area produced 746 acre feet (243 million gallons). This total pumped from our wells is 1573 acre feet (513 million gallons) less than in 2011. This reduction is due to our CAP deliveries and water conservation efforts in 2012. Well water levels declined an average of 1.29 feet in the Oro Valley Water Service Area and declined 2.75 feet in the Countryside Water Service Area in CY 2012. In 2012, the Utility also delivered 1,283 acre feet (418 million gallons) of its CAP through a wheeling agreement with Tucson Water. The Utility also stored CAP water through an agreement with Kai Farms and through permits to store in Central Arizona Water Conservation District recharge projects to obtain groundwater storage credits within the Tucson Active Management Area. The use of our existing groundwater allowance account and groundwater storage credits reduces our obligations to the Central Arizona Groundwater Replenishment District. The following are some of the Utility's resources and assets as of December 31, 2012: Resources: Employees: Groundwater Supply (Assured Water Supply): Reclaimed Water: Effluent Water: CAP Water: Long Term Storage Credits: Groundwater Allowance Account: Assets: Water Distribution Storage Reservoirs: Potable Water Reservoir Capacity: Reclaimed Water Reservoir Capacity: Potable Water Mains: Reclaimed Water Mains Potable Water Booster Stations: Reclaimed Water Booster Stations: Operating Wells: WATER CONSERVATION 36 13,384 acre feet per year 2,300 acre feet per year 1,500 acre feet per year 109305 acre feet per year K380 acre feet 13,700 acre feet 19 11.600,000 gallons 1,500,000 gallons 343 miles 12 miles 25 2 22 The Water Conservation Program continues to be a vital asset in assisting the Utility to achieve its overall water management goals. In 2012, 144 water audits were performed. Since the program's inception in 2003, participating customers received 1,630 free water audits, which saved our customers both water and money. The Utility encourages water conservation by educating our customers. A Youth Water Conservation Education Program for elementary schools in Oro Valley is currently being developed. This program will be implemented in the fall of 2013. -5- FINANCIAL HIGHLIGHTS, WATER RATES AND FEES The functions and duties of the Water Utility Commission and Staff include reviewing and developing recommendations for water revenue requirements, water rates and fee structures. In 2012, recommendations regarding water rates, fees and charges were provided in the Water Rates Analysis Report. There was no recommended increase in water rates and fees in 2012. The Utility continues to be fiscally sound with cash reserve at 35% of the annual budget. Water rates include a Groundwater Preservation Fee which is used to fund the development of our renewable reclaimed and CAP water supplies. Water development impact fees, which fund expansion of the water delivery system, have been collected to ensure that growth pays its fair share. In 2012, the Utility further reduced its debt obligations and annual debt service through refinancing and paying off principal. CONCLUSION The Oro Valley Water Utility Commission is proud to serve the Mayor and Council of the Town of Oro Valley and its residents and customers. We are pleased to present this Annual Report to the Mayor and Council for their consideration. Any questions regarding this report should be directed to Philip Saletta, Director, Oro Valley Water Utility at 229-5010. Additional information for the Oro Valley Water Utility can also be found on the Town website at mmorovalley,�gov/Town_Government/waterUtility -6- CUSTOMER SERVICE Customer Service personnel include Customer Service Representatives (CSRs) and Utility Operators. This staff is responsible for meter reading, meter installation, billing and collection and customer service for 18,716 water service connections serving 42,694 people. The Utility has grown over the past year and in 2012 an additional 171 meters were installed for a growth rate of 0.92%. Over 4,947 customer accounts were changed in 2012, primarily due to opening and closing of accounts for new move -ins and winter residents. In 2012 the Utility delivered: • 2.27 billion gallons (6,956 acre feet) of potable water • 684 million gallons (2,099 acre feet) of reclaimed water for irrigation to five golf courses and a school athletic field. • Combined total of 2.99 billion gallons (9,055 acre feet) of water delivered and billed to our customers. The Customer Service Division mailed and processed 222,304 bills and 12,216 delinquent notices to our customers during calendar year 2012. The Customer Service Division responds to customer concerns that arise from the operation and management of the water system and in 2012 responded to 31,437 customer contacts averaging 127 contacts per day. Customer contacts can range from handling a payment to responding to questions or problems related to billing, opening or closing an account, water quality or pressure and flow problems. CSRs work closely with field personnel to respond in a timely manner to customer concerns. CSRs are generally the first and sometimes the only contact our customers may have with the Utility. Their training and skills are utilized on a daily basis while addressing customer concerns. Providing professional and courteous service is paramount to the successful operations of the Water Utility. Customer Service staff collects and posts payments for the Water Utility, Pima County Regional Wastewater Reclamation Department and the Town's Storm Water Utility. A fee is charged to Pima County and the Town for this service. The Customer Service Division bills the Town's Storm Water Utility charges to residents within the Town that are Oro Valley Water customers, Tucson Water customers and Metro Water customers. The Water Utility also collects taxes on water use that are imposed by the State of Arizona and the Town of Oro Valley. These taxes are then distributed to the State and Town. The Water Utility receives all of its revenues from water rates and fees and does not receive any funding from taxes. The Utility continually updates customer account information on the Water -on -the -Web site. This includes the ability to view the current water bill, billing and payment information as well as a two year history of water usage. The Utility provides convenient alternative payment methods for our customers. During 2012, the Utility received $1.5 million in credit card payments. Credit card and other payment options are listed below: • Toll free telephone number via IVR (Interactive Voice Response) that accepts credit cards for payment • Online credit card payments accepted at the Water -on -the -Web site. -7- • Credit card payments accepted at the Utility office. • Automated Clearing House (ACH) automatically pays the customer's water bill on the due date and is deducted from their checking or savings account. There are currently 4,336 customers enrolled in this program. This represents 23% of our customer base. • EFT (Bank to Bank transfer of payment funds). This "paperless" form of online payments is received 1 week faster than traditional paper checks. • QR (Quick Response) Code for customers with a Smart Phone that includes the toll L free telephone number for quick easy credit card payments To enhance customer service and to decrease costs, the Utility offers an e-bill or paperless option. This feature sends customers electronic notification that their current water bill is ready to view on the Water -on -the -Web site. Utility customers may request e-billing online. To date, 1270 customers are enrolled in this program. L As part of the 2011 AMI (Advanced Metering Infrastructure) project, F1exNet software r continues to enable Customer Service staff to view customer consumption data and pinpoint �- high water use on their computers while communicating with the customer in person or on the telephone. Where Advanced Metering Infrastructure is installed in the Countryside Water Service Area, F1exNet software facilitates the monitoring of leaks on a daily basis. Utility Operators provide early leak notification to our customers that ultimately save them money and conserves water wasted by leaks that are not discovered and repaired in a timely manner. This new technology monitors water use on an hourly basis, can trigger alerts and allows for better utilization of resources with the least amount of waste. AMI permits the staff to read meters from our office and provides us the ability to obtain billing reads on the same day each month. The Utility will begin AMI installation in the Oro Valley Water Service Area in 2013. As the Customer Service Division looks to the future they will be selecting new technology to streamline procedures and increase efficiencies. Utilizing computer tablet technology, staff is now electronically sending and distributing work orders, service requests, and new and closed account paperwork from CSRs to the Utility Operators. Employing this technology has reduced staff travel time, wear and tear on vehicles and gasoline and has resulted in higher efficiency and productivity. In 2013 the Utility will be launching a customer web portal. Once a customer is enrolled in the on-line service, they will be able to view their water use on an hourly, daily, weekly or monthly basis. They will also be able to tailor personal notifications based on their individual needs. The web portal is scheduled for launch in April of 2013 for the Countryside Water Service Area. Utility statistics including new meter installations, customer contacts, and water deliveries for CY 2012 may be found in Appendix A. -8- METERS DIVISION Advanced Metering Infrastructure Project The Meters Division team started 2012 with great enthusiasm. In the Countryside service area, the Advanced Metering Infrastructure (AMI) project and meter replacement program was completed and in full operation. In addition to the centralized equipment and antenna, over 2,200 meters were installed to facilitate electronic meter reading capabilities. The AMI project and meter replacement program provides for more accurate measurements of water usage and also assures that the volume of water billed is accurate. Additionally, the technology provides an opportunity to use existing resources more efficiently. The Meters team will now redirect their focus and capabilities to other responsibilities such as customer work orders, meter box cleaning, angle meter stop repairs, and meter testing procedures. The insight, knowledge, and experience gained from the project will help the team prepare for the next phase of the AMI project. Using AMI technology provides customers with accurate and complete water use information. With AMI and FlexNet software, staff can review water use history on an hourly, daily, weekly or monthly basis. This is extremely valuable in assisting our customers. Understanding the benefits and efficiencies gained by using AMI, the Meters Division is excited about expanding this technology into the Oro Valley service area. In 2013, the team is continuing with the AMI and the meter replacement program. There are approximately 2900 meters scheduled for change out within the next phase. As the project starts, the Meters Division team will work closely with external contractors and take the lead role in organizing, planning, and scheduling work. In addition, existing team members will actively participate in the programming of new electronic meters and getting the units ready for operation. This is a team effort with high expectations and the Meters Division team is looking forward to the challenge. Automated Meter Reading Project Due to the projected timeline of the AMI project in Oro Valley, the Meters Division team is continuing with Automated Meter Reading (AMR) equipment in the Stone Canyon service area. Stone Canyon is located in a mountainous region that will not be accessible with the AMI planned for the Oro Valley service area. In 2013, the team will install AMR equipment in the Stone Canyon area. AMR equipment consists of encoder registers that attach to water meters and transmit data via radio waves. As the meter route is driven, a computer located inside the vehicle receives the radio waves and stores the data until it is downloaded for billing. Technological Advancements In 2012, the Meters Division team was excited about using advanced handheld equipment. The technological advancement with the AMI project prompted the water utility to incorporate the use of computer tablets. -9- These tablets allow the Meters Division team to generate or close work orders, receive and send reports, view real time customer usage, and verify delinquent account payments in the field. This coming year will also have opportunities for implementing more technology. In addition C_ to the continued benefits and capabilities of the AMI project in Oro Valley, team members are getting advanced handheld units for manual reading capability. These advanced handheld units will also be capable of data logging, scanning, troubleshooting, and programming that currently require multiple devices. These units have all the necessary features required to work on both AMI and AMR equipment. r L The team will operate more efficiently and increase productivity with these two technologies since there will no longer be a need to return to a central location and get the required equipment. L i� I Li f1 C I L -10- WATER QUALITY There is a complex and extensive framework of regulatory requirements and sampling methodology in place to ensure clean, safe drinking water is served by every public water system in Arizona. Protection of drinking water quality starts with an assessment of the drinking water source quality and continues through regulations that govern water system design and construction. Finally, drinking water quality is assured through scheduled tests required of all public water systems for a wide variety of potential contaminants. As a result of these regulations and continued testing, drinking water supplies in Oro Valley and in many areas throughout the United States are among the cleanest and safest in the world. Water Quality Testing The Water Utility operates two potable water systems. The Oro Valley Water Service Area (OVWSA) that has a Public Water System Number of AZ0410164. It also operates a potable system that is not located within the Town boundaries, known as the Countryside Water Service Area (CSWSA) that has a Public Water System Number of AZ0410175. In 2012 the Utility received 2,250 analytical results for required water sampling and operational data. Over the course of a year the Utility collects hundreds of water samples from approximately 19 "point of entry" sites. These sites include groundwater wells, reservoirs and pumping stations. The Utility also samples from 58 sampling stations required by ADEQ. These stations are located in neighborhoods throughout the water distribution system specifically selected to represent the water quality that is delivered to our customers. The Utility also has an additional twenty-nine sampling stations that can be used during emergencies and to meet future testing requirements. A new water quality sampling station was installed where our CAP water is delivered from the Tucson Water system. Water samples are taken from 50 private residences within the Oro Valley area and tested for lead and copper. The Utility provides all water quality testing results to the Arizona Department of Environmental Quality (ADEQ) and works closely with that agency to ensure all Federal and State standards are met. The website for ADEQ is www.azdey.,,�,Yov. The Town's water system is in full compliance with all State and Federal regulations. -11- The Utility's State certified water operators are legally responsible for the health and safety of our customers. The operators meet this responsibility by maintaining a daily vigilance over the system's production, distribution, and water quality. All of our water operators are licensed by ADEQ and attend continuing education and training through Personal Development Hours required by ADEQ. This also benefits our community and adds value to the Water Utility. Additionally, comprehensive emergency plans have been developed to ensure an immediate response to any adverse water situation. Drinking water standards are regulations that the Environmental Protection Agency (EPA) sets to control the level of contaminants in the nation's drinking water. These standards are part of the Safe Drinking Water Act's "multiple barrier" approach to drinking water protection which includes, assessing and protecting drinking water sources; protecting wells and collection systems; making sure water is treated by qualified operators; ensuring the integrity of distribution systems; and making information available to the public on the quality of their drinking water. Community water suppliers throughout the country are required to provide an annual water quality report to their customers. The report provides information about the source of the drinking water, and any contaminants detected in the water. The OVWSA and the CSWSA Consumer Confidence Reports are annually distributed to all customers in June. The report is also available in the Utility's office and on the website. Detection of a contaminant in drinking water does not necessarily represent a threat to public health. Due to current technology, water utilities are now able to detect extremely low levels of contaminants in drinking water. All drinking water, including bottled water, may reasonably be expected to contain at least small amounts of some contaminants. Oro Valley's groundwater contains naturally occurring dissolved minerals and organic compounds, which have been leached from the rock, sediments, and plant materials through which the water traveled. One would expect to find constituents (ions), such as calcium, magnesium, chloride, bicarbonate, sulfate, and metals such as iron, copper, arsenic and lead, which may be either beneficial or harmless at low concentrations. However, these constituents are harmful at high concentrations. Other contaminants that may be present in source water are microbial contaminants, such as viruses and bacteria. The Utility disinfects its water source by adding sodium hypochlorite at a level of 0.2 to 0.8 parts per million (ppm), as a precaution against bacterial growth. The Total Coliform bacteria group is used as an indicator to more closely monitor the distribution system for possible unwanted bacteria. During 2012, the Utility collected 696 samples for analysis of Total Coliform bacteria, all samples were negative for bacteria. This is a direct result of a successful disinfection program, effective system monitoring, proficient sampling methods, and routine maintenance. The Utility regularly receives inquiries concerning water hardness. Water hardness is a measurement of the concentration of calcium and magnesium. During CY 2012, the hardness levels in Oro Valley range from 1.8 to 12.0 grains per gallon. On average our water quality is in the soft to moderately hard range, which is considered acceptable. Water quality standards are continually researched and regularly modified and changed based on scientific research. -12- In early 2006, EPA released the STAGE 2 Disinfectants and Disinfection By -Products Rule. This is an important component to the agency's multi -pronged strategy to reduce drinking water risks to human health through improved standards for pathogens as well as disinfection by-products. Compliance with the new Groundwater Rule began on December 1, 2009, and is expected to require many small groundwater systems to add disinfection to their systems. The Utility's disinfection program was implemented for both systems in 2002 and presently meets the Ground Water Rule requirement. EPA's rule revisions for lead and copper were published in 2006. The revisions are a targeted update of the current rule including guidance on lead in drinking water in schools, including information on improved testing, monitoring and maintenance efforts. Nitrate, lead, perchlorate, fluoride, and chromium VI are all getting renewed attention from the USEPA as more information has become available and their potential health effects have become better understood. Proposed and Pending USEPA Regulations: • Revised Total Coliform Rule November 2012 • Third Unregulated Contaminant Monitoring Rule March 2012 • Revised Long -Term Lead and Copper Rule 2014 • Carcinogenic Volatile Organic Chemicals Rule 2015 • Epichlorohydrin and Acrylamide TBD Oro Valley is a growing community in an and environment. The future of drinking water quality will continue to command serious attention by everyone involved with water supply for the community. Water quality compliance requirements will continue to increase in both complexity and cost, requiring the support and resources needed to ensure regulatory compliance and to provide a safe and reliable water supply to our customers. -13- BACKFLOW PREVENTION Backflow prevention is an important component of water quality. The Town of Oro Valley Water Utility implemented the Backflow Prevention Program in response to requirements set forth in the Arizona State Drinking Water Regulations. The Backflow Prevention Section administers these requirements in accordance with the Town of Oro Valley Ordinance No. (0) 07-21, the Arizona Department of Environmental Quality Administrative Code, section R18-4-B115, the International Plumbing Code and the guidelines of the University of Southern California Foundation for Cross Connection Control and Hydraulic Research. The Backflow Prevention Program is designed to protect the public water system from high risk service connections which include, but are not limited to, commercial, fire and irrigation. By state statute single family residences are exempt unless a known hazard exists on the premises. The Backflow Prevention Section oversees 1,271 backflow prevention assemblies. The Utility is required to notify each customer on an annual basis to have each active assembly tested. An initial notification letter is mailed followed by a second and final letter. Customers are notified by phone when the second letter is sent. The backflow prevention assemblies must also be tested if they are replaced, relocated or repaired. Completed test forms are recorded into a database and the hard copies must be kept by the Water Utility for 3 years. All assemblies are surveyed on a 3 year cycle. The backflow assemblies that are owned by the Town and in service are maintained, tested and inspected by the Water Utility Backflow Prevention Section. The following are some of the major activities and accomplishments that were performed by the Backflow Prevention Section in 2011: ➢ 158 backflow assemblies owned by the Town of Oro Valley were tested ➢ 57 repairs on in ground and construction water backflow prevention assemblies ➢ 46 permits for new and replacement backflow prevention assemblies The program works to keep the water supply safe from contaminants that could be introduced into the distribution system through backflow, backsiphonage or backpressure from our customers plumbing systems or internal processes. -14- CURRENT WATER SUPPLY Developed Water Resources • Groundwater: 13,384 acre feet per year • CAP Water: 1,500 acre feet per year • Reclaimed water: 2,500 acre feet per year The Town of Oro Valley has a groundwater supply of 13,384 acre feet per year based on its Designation of Assured Water Supply (DAWS) from ADWR. Under our DAWS for each calendar year our groundwater pumping cannot exceed this amount. This amount is an upper limit of pumping and even though we pump less than this amount, we are required to replace or replenish the total amount pumped. In addition, our sustainable groundwater production is modeled to be 5,500 acre feet per year which we are currently exceeding and this has caused significant groundwater level declines over the years. Developing our renewable water supplies reduces our replacement requirements and decreases our ground water level declines protecting and preserving our aquifer. In 2012, Oro Valley pumped 6,161 acre feet of groundwater from our wells and aquifer. This total is 1,573 acre feet less groundwater pumping from our wells due to our CAP water deliveries and water conservation. The wells in the Oro Valley Water Service Area produced 5415 acre feet and the wells in the Countryside Water Service Area produced 746 acre feet. A requirement of our DAWS is that the Town must be a member of the Central Arizona Groundwater Replenishment District (CAGRD). The Town has a Member Service Area Agreement with CAGRD that was approved by Resolution (R) 97-06. Each year under this agreement, the CAGRD assesses the Town an increasing portion of the annual groundwater pumped at an increasing rate to replenish what is deemed "excess groundwater withdrawal". Use of our recovery wells and the recent delivery of our CAP water has significantly reduced our obligations to the CAGRD. The Water Utility operates in two water service areas: the Oro Valley Water Service Area (OVWSA) and the Countryside Water Service Area (CSWSA). The table below provides water capacities of the wells in their respective water service areas. The maximum daily usage occurred on June 18 for the OVWSA and on June 10 for the CSWSA. Water Service Area Well Capacity Daily Capacity Average Day Max Day Oro Valley (OVWSA) 1052 GPM 15.34 MGD 5.83 MGD 8.17 MGD Countryside (CSWSA) 1,796 GPM 2.59 MGD 0.64 MGD 0.97 MGD Groundwater studies indicate that the Oro Valley aquifer has a sustainable groundwater production rate of approximately 5,500 acre feet per year. In 2012, Oro Valley pumped 6,161 acre feet of groundwater. This resulted in pumping our wells 661 acre feet more than the sustainable groundwater production rate for our wells. In the OVWSA, the average annual well water level decline for the last 5 years is 1.76 feet and for calendar year 2012 there was an average well water level decline of 1.29 feet. For wells in the CSWSA, the average annual well water level decline for the last 5 years is 1.54 feet and for calendar year 2012 there was an average well water decline of 2.75 feet. For all wells, water level changes in CY 2012 ranged from a decline of 12.1 feet to a rise of 8.8 feet. -15- The following table lists all production wells, the amount of groundwater pumped and their water level declines: Well Water Level Chance Summa -1 Annual Pumped 393 1 YEAR, CHANGE _1.5 5 YEAR CHANGE -4.6 5 YEAR. AVERAGE -0.91 ,CS- 5 -4.0 -10.8 -2.2 -4 96 -1.8 - . -0.5 C-5 244. 1.1 - 1 0 _ -. 0 C-6 321 1.3 -113, - . 7 -7 321 - .2 - .. 1 -4.4 C-8 234, -5 . - 1- 8 -2. 6 -9 353 - .4 - 11. 8 NA D-1 195 3.3 -4.0 -0.8 D-4 113 4.7 1.0 0 D-5 103 .4. 0 -6. 8 -1:.4 D-6 276 8.8 -0.6 -0. 1 D-7 34,16 J A -11.1 D_u 189 -1 .1 - 6. ` -5'. 3' D-9 717 - .0 -18. - .6 E-1 B -r 12.3 12.2 NA E-2 283 2.6 -0.3 `0.1 E-3 1,40 -4.9 -8. 5 -1 . 7 E-5B 217 7.0 6.5 1. E-6B 262 0.4 -0.7 -0. +1 E-7B 185 -1.6 -2.5 .-0.5 1=-1 496 0.8 -6.1 -1 .2 Footnote.- C-91 4 year average = - .9 Feet E-1 B only 1 year of Data The use and development of our renewable water resources in 2012 has reduced our reliance on groundwater. The use of reclaimed water since October of 2005 has helped to reduce the impact on the Oro Valley aquifer over the last seven years. The Town of Oro Valley currently has a reclaimed water supply of approximately 2,300 acre feet per year. This was acquired in 2003 under an Intergovernmental Agreement (IGA) with Tucson Water (TW). Groundwater pumping has been further reduced this year through the delivery of 1,283 acre-feet (418 million gallons) of our CAP water under a wheeling agreement with Tucson Water. Future development of these renewable water resources will further reduced our groundwater production and will help achieve our goal of protecting and preserving our aquifer. -16- Undeveloped Water Resources • Central Arizona Project Water: 8,805 acre feet per year • Long -Term Storage Credits: 10,380 acre feet • Ground Water Allowance Account: 13,700 acre feet • Effluent Water: 1,500 acre feet per year The Town currently has undeveloped water resources that consist of our CAP water allocation, Long -Term Groundwater Storage Credits, Groundwater Allowance Account and effluent water. On January 24, 2012, deliveries of our CAP water through a connection to the Tucson Water system began. In 2012, 1,283 acre feet of our CAP water were delivered (wheeled) to the Oro Valley Water Utility service area through a connection to the Tucson Water system. This project provides a "wet" renewable water supply to our community reducing groundwater use and reducing obligations to the CAGRD. The long-term groundwater storage credits are used indirectly through recovery wells as "paper water" credits that offset groundwater usage and reduce CAGRD obligations. The Town currently has a total allocation of CAP water in the amount of 10,305 acre feet per year under a Municipal and Industrial (M&I) subcontract with Central Arizona Water Conservation District (CAWCD). Of this amount, 1,500 acre feet are developed through the first phase of the IGA with Tucson. The remaining 8,805 acre feet of our CAP M&I subcontract water is critical to the Town and its future water supply. At this point there is no infrastructure in place to directly deliver or directly recover this remaining amount of our CAP water. However, we continue to recharge our CAP water for groundwater storage credits which are used for replacing groundwater depletions from our recovery wells. The J development of our remaining CAP water will be paced based upon our water demands, aquifer conditions and new growth. 1 The Utility has obtained permits to store CAP water at the various recharge facilities listed � below and has stored the following amounts in 2012. • Kai Farms, 2,500 acre feet • Lower Santa Cruz Replenishment Project, 0 acre feet • Pima Mine Road Recharge Project 500 acre feet • Central Avra Valley Storage and Recovery Project 200 acre feet • Southern Avra Valley Storage and Recovery Project 0 acre feet • Total amount stored in 2012 5,000 acre feet The Utility will continue to recharge CAP water for use at our recovery wells and to build long-term storage credits until such time the water is needed for future delivery. In addition to our long-term storage credits, our Groundwater Allowance Account (GWA) J must be used wisely and carefully managed over the next several years. This account had been depleted over past years from 75,000 acre feet to less than 10,000 acre feet. Recent purchases and subsequent pledges of Groundwater Extinguishment Credits (GECs) have increased the current balance of the GWA. Additional purchases of GECs will be evaluated and considered in the future to increase the balance of the Groundwater Allowance Account. -17- By purchasing GECs, the Water Utility is saving its customers money by reducing monetary payments and obligations to the CAGRD and effectively managing our water resources. Included in the Town's DAWS is 4,000 acre feet per year of effluent which is the source of supply for our reclaimed water. Oro Valley owns its wastewater effluent through an IGA with the City of Tucson. The Utility delivered 2,099 acre feet of reclaimed water in 2012. The reclaimed water system supplies irrigation for five golf courses and the athletic fields at one elementary school. The remaining amount of undeveloped wastewater effluent is used for obligations to Pima County and for the Southern Arizona Water Rights Settlement Act (SAWRSA) obligations. In 2013, the Utility will evaluate if interruptible reclaimed water service from Tucson Water is feasible. The Reclaimed IGA will also be reviewed for any other potential changes. Under our Designation of Assured Water Supply, we are required to comply with the Third Management Plan in the Tucson Active Management Area. We have been in compliance with the Assured Water Supply Program and expect to meet all the requirements of this program in 2013. -18- WATER RESOURCE PLANNING AND MANAGEMENT The Utility's water resource planning effort incorporates previous studies and reports that have been developed over recent years. These reports provide the framework for water resource planning and management. Recently, the Water Utility developed plans for short- term and long-term options for the delivery of our CAP water. On January 24, 2012, the Water Utility started delivering a portion of its CAP water through the Tucson Water System. The Water Utility, in cooperation with the other NW Water Providers and Tucson Water will continue planning for the development of our remaining CAP water allocation. Water resource planning will involve investigating alternatives for future water supply and delivery and will include the following: ➢ Groundwater development ➢ Reclaimed water system ➢ CAP water planning and development ➢ Water conservation Water resource planning will involve technical, financial, legal, political, institutional and environmental issues. Involving the public will be a key aspect of a successful program for future water supply. Funding for the development of renewable CAP water and reclaimed water under the water resource planning effort has been included in the Utility's budget under the Alternative Water Resources Development Impact Fee Fund budget. The Water Utility has also been involved in an effort to possibly acquire additional water supply from the Colorado River. This includes review of the available CAP Non -Indian Agricultural Water and a state wide effort known as the ADD Water Program (Acquire, Develop and Deliver). These potential water acquisitions will involve numerous water providers, the Central Arizona Project, the Arizona Department of Water Resources and the U.S. Bureau of Reclamation. The Utility will evaluate our future needs in applying or participating in these programs. Potable Water System The potable water system improvements are included in the Fifteen Year Capital Projects Program. The demand on our wells has been significantly reduced due to use of reclaimed water for irrigation and the delivery of our CAP water through the Tucson Water system. The use of reclaimed and CAP water preserves and protects our aquifer and valuable groundwater. All groundwater depletions must be replaced through the use of our recovery wells, our Groundwater Allowance Account, our Long -Term Storage Credits and/or the Central Arizona Groundwater Replenishment District (CAGRD). Our aquifer has benefited from the development of our renewable water and because water levels are decreasing less, we have been able to acquire more recovery wells. -19- These additional recovery wells were permitted by the Arizona Department of Water Resources in 2012 and will further reduce our reliance on the CAGRD. Reclaimed Water The use of reclaimed water for turf irrigation has a beneficial impact on the Town's aquifer. The Utility will continue to look for opportunities to expand the customer base of the reclaimed water system for turf irrigation. In addition, non -turf irrigation uses such as landscape irrigation, construction water, dust control and street cleaning uses may also be served with reclaimed water to help reduce demands on the groundwater aquifer. The Development and Infrastructure Service Department is currently using reclaimed water for street cleaning and other approved maintenance purposes. This saves the Town both water and money. Central Arizona Project Water The Town has executed an Intergovernmental Agreement with the City of Tucson to deliver a portion of the Town's CAP water wheeled through the Tucson Water system via a connection to the Oro Valley Water Utility system. This project started deliveries of our CAP water on January 24, 2012 and benefits our aquifer by reducing groundwater pumping. This is a regionally cooperative project that was nominated for an award by the Metropolitan Pima Alliance in 2012. OVWU has also been cooperating with Metropolitan Domestic Water Improvement District, Flowing Wells Irrigation District, and the Town of Marana to study opportunities to develop our CAP water. The Utility has developed studies that look at various alternatives and the associated costs for future delivery of our CAP water. The IGA with Tucson allows for up to 2,000 acre feet per year of Oro Valley's CAP water to be delivered (wheeled) through the Tucson Water (TW) system. This is a mutually beneficial project in that Tucson Water uses its excess capacity and receives revenues that shares in operations and maintenance costs. Oro Valley benefits in that it receives "wet" (actual) water deliveries of renewable CAP water and reduces its reliance on groundwater. Oro Valley's CAP water is delivered from the CAP canal and TW's recharge facilities at the Central Avra Valley Storage and Recovery Project and/or the Southern Avra Valley Storage and Recovery Project. The water is then pumped into the TW distribution system and delivered to the northern part of the TW system. A connection to the Oro Valley system was made near Naranj a and Shannon at the TW Naranj a C-Zone Reservoir site. A pump and pipeline were installed by Oro Valley to deliver its CAP water to the Oro Valley water distribution system. All water is accurately metered and accounted for billing purposes and to assure delivery volumes. -20- Oro Valley Central Arizona Project Water Connection Pipeline and Dedication Celebration In the short term, OVWU will also work with Tucson Water to increase deliveries of our CAP water in accordance with our IGA. Studies will be conducted to further develop options for increasing our CAP deliveries within the available amount of excess delivery and storage capacity of the Tucson Water system. The short-term development of a portion of our CAP water provides financial benefit to our customers in that it defers significant expense to develop a major capital project. Additionally since the short-term costs were relatively lower capital expenditures, it could also lower our capital expenditures when we develop our remaining CAP water in the future. Oro Valley Water Utility will continue to plan for the development of the remaining portion of our CAP water. Long-term plans for recharge and recovery and/or treatment and direct delivery of our CAP water will be developed to determine the best alternative and plan for delivering our CAP water in the future. Regional cooperation to develop our CAP water and possibly develop a joint project that provides for economies of scale will continue. The Town of Oro Valley is committed to the use of CAP water and will continue to work regionally to deliver our CAP water to our community. Recent economic conditions and l slower growth rates may push projected water use demands further out in time. In addition, Joptions to expand our CAP water deliveries through Tucson Water will also provide a benefit to defer mayor capital costs for the development and implementation of the more expensive options for CAP water delivery. -21- WATER CONSERVATION PROGRAM Water conservation is an important factor in balancing our current and future water supply needs. Climate and the demands on our water supply place a significant impact on our water resources. Combine the state's and climate with persistent drought conditions and the importance of managing our water resources effectively becomes even greater. The Utility recognizes the complexity and importance of sustained reliability. The Water Conservation Program is an important element in the overall water resource management efforts of the Utility. The following are programs and services provided by the Conservation Division. ➢ Water Audits • Assessment of water use both inside and outside the home or business and includes residential, commercial, and neighborhood common areas • Approximately 144 audits were completed in 2012 • Approximately 1,630 audits have been completed since the program began in 2003 • Average water savings of 20% in the first year after the audit Water Audits Completed 2003-2012 300 250 200 'a 150 Q 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ➢ Education and Resources ■ Conservation literature for children and adults is available to Oro Valley customers at no cost and is offered at the library and our main office • Water -Wise Landscaping for Southern Arizona CD • Water Ways Newsletter published in the Oro Valley Vista ■ Conservation staff participates in events and public speaking opportunities ➢ Youth Water Conservation Education Program As part of our water conservation education efforts, the Water Utility is in the process of developing a youth education program for Oro Valley schools that includes 2 components and time scales. _22_ The first component is to design a children's water conservation activity booklet for 3rd grade education levels which is found to be an optimum level to introduce conservation curriculum. The booklet would be a stand alone product and available for distribution at events and through our office. The projected completion date is summer 2013. The second component is the development of an outreach education program in participating schools. Instructors will present conservation education and distribute the activity booklet to reinforce lessons learned. The anticipated start of this program is fall 2013. ➢ Incentives The current incentive program includes irrigation system rain sensors which are sold at a reduced rate to our customers. It also includes low -flow shower heads and low -flow sink aerators at no cost to our customers. • Approximately 665 rain sensors have been sold to date • A Rain Sensor Installation Guide is distributed by the Utility and is also available on our website ➢ Research Partnerships with Town departments, organizations and professionals in the water management industry continue to be vital in assessing the latest practical technologies and methodologies in water resource management. Information is then passed on to our customers through a variety of venues such as education programs, audits, and consultations. ➢ Additional Programs related to Water Conservation In addition the water conservation programs above, the Water Utility has developed its renewable water resources to conserve our groundwater. This includes the reclaimed water system and the delivery of a portion of our Central Arizona Project water. The use of renewable water resources is vital for groundwater conservation and preservation to help the Town achieve sustainability. The Utility also has a Drought Preparedness Plan, which identifies criteria and action plans for various stages of drought. -23- WATER UTILITY OPERATIONS Production Facilities Division Water Utility personnel in the Production Facilities Division are responsible for the operation and maintenance of the wells, booster pumps and reservoirs on two potable water distribution systems and the booster pumps, metering stations and reservoir on the reclaimed water delivery system. There are a total of 49 sites that are maintained by the Production Facilities staff. All Production Facilities personnel are operators licensed and certified by the Arizona Department of Environmental Quality (ADEQ). The operators have the direct responsibility to operate the facilities section of the water systems according to the regulations and rules set forth by the EPA (40CFRI41) and ADEQ (Arizona Administrative Code Title 18). Water systems are classified by the level of operator certification required by ADEQ. Operator certifications are classified into one of four grades by facility type, size, complexity and population served. The grade corresponds with the level of system complexity, with Grade 1 being the most simple and Grade 4 being the most complex. More information can be viewed regarding water quality and water systems at the ADEQ website at www. azdeg. gov. The two potable water systems are chlorinated systems controlled and monitored by the Production Facilities Division. Chlorine dosage rates and residuals are monitored on a daily basis. The potable system located within the Town of Oro Valley Water Service Area (OVWSA) is a Grade IV Water Distribution and a Grade II Water Treatment system and currently delivers water to twenty pressure zones and a consecutive system located at La Cholla Air Park. The potable system that is not located within the Town boundaries, known as the Countryside Water Service Area (CSWSA), is a Grade III Water Distribution system that currently delivers water to a single pressure zone at the Countryside development. The Public Water System Number is AZ0410175 for CSWSA. The groundwater production capacity within the OVWSA is currently 14.72 million gallons per day (10,219 gpm) with a storage capacity of 10.7 million gallons. The groundwater production capacity within the CSWSA is currently 2.59 million gallons per day (1,797 gpm) with a storage capacity of 0.90 million gallons. The CAP delivery capacity into the OVWSA system is 1.44 million gallons per day (1000 gpm). Production Facility Operations The Production Facility Staff continue to be proactive in the implementation of facility upgrades and a preventive maintenance program. Facility sites are evaluated annually to determine necessary upgrades to ensure efficient operation of the facilities. A continuing effort to retrofit water level sensing equipment in each production well will help the Utility collect monthly water level data and will assist in the development of a more accurate water level database and to analyze trends. Monthly monitoring of the water levels also helps the Utility identify potential problems with either the pumping unit and/or the well itself and schedule required maintenance before a well and/or pumps fail. -24- Production Facility Operations The following are some of the major activities and accomplishments that were performed by the Production Facilities Division in CY 2012: ➢ Responded to and minimized impact on systems resulting from low (below Freezing) temperatures. ➢ Maintained disinfection injection pumps and tested disinfection residuals daily at well site injection points on systems AZ0410164 and AZ0410175 . ➢ Performed mechanical and general maintenance at 22 wells, 27 booster stations, and 19 storage tanks including follow-up electrical preventative maintenance. ➢ Performed the annual groundwater level survey and report. ➢ Assisted with four reservoir exterior and interior inspections. ➢ Assisted with the well monitoring capital project and quarterly reports. ➢ Competently operated the potable and reclaimed systems utilizing the SCADA system. ➢ Responded to approximately 232 after hours calls. ➢ Completed 107 work orders. ➢ Performed SCADA network system maintenance on forty-four Remote Terminal Units, two Master Controllers, two Human Machine Interfaces, and one Network Server. ➢ Performed approximately 5700 chlorine tests and 4,400 routine site checks. ➢ Initiated SCADA equipment upgrades. ➢ Developed operational balance for CAP water delivery to the 10-164 system. ➢ Started well meter replacement program. ➢ Moved liquid chlorine storage from the Big Wash facility to the Reclaimed Facility. ➢ Assisted Engineering with the initiation of the Energy Efficiency Program. The Supervisory Control and Data Acquisition (SCADA) system is continuously updated, improved and programmed to streamline operational control, data trending, and alarm annunciation. The SCADA system, a centralized industrial network, currently monitors and controls all potable and reclaimed system facility sites. Utility staff monitors and operate all water systems via the SCADA system on a twenty four hour seven day a week (24/7) basis. Production facilities staff is also responsible for the installation and maintenance of security devices at the Utility's facilities. The SCADA system is currently undergoing a major upgrade. Production staff works very closely with Distribution Facilities and Water Quality personnel to address any system problems. The Production Facilities staff is on -call 24/7 and utilizes a tiered level after-hours response protocol that is in accordance with the developed Emergency Response Plan. Production staff is continually monitoring and checking the system to provide safe and reliable water service for our customers. -25- Distribution Facilities Division Utility personnel in the Distribution Facilities Division are responsible for the operation and maintenance of 343.1 miles of potable water main, 12.6 miles of reclaimed water mains for a combined total of 355.7 miles of water mains. There are 2,066 fire hydrants and 7,525 valves on the water distribution system. All Distribution Facilities personnel are operators licensed and certified by the Arizona Department of Environmental Quality (ADEQ). The operators have the direct responsibility to operate the distribution section of the water systems according to the regulations and rules set forth by the EPA (40CFRI41) and ADEQ (Arizona Administrative Code Title 18). The staff conducts maintenance programs and repairs that keep the distribution system functioning properly and minimizes problems that are inherent to water distribution systems. Data bases have been established for the documentation of maintenance and replacement of hydrants; pressure reducing valves, and air release valves. A valve exercising program that helps monitor equipment and develop maintenance cycles has been established. The program provides information and equipment history data that facilitate a proactive replacement program. The Division works closely with Customer Service and responds to complex customer work orders such as high/low pressure complaints, water quality, service line breaks, hydrant repairs, system pressure regulating valves, system air relief valves and system flushing. Repair of water line leaks are always treated as an emergency and are repaired quickly to minimize impacts to our customers. The Division also is responsible for bluestaking all underground water mains. The Division is responsible for maintaining 15 active and 7 inactive pressure reducing valves (PRV) for a total of 22 PRVs, 760 air relief valves and 878 drain valve assemblies. The following are some of the major activities and accomplishments that were performed by the Distribution Facilities Division in CY 2012: ➢ Maintained, replaced and/or repaired 23 fire hydrants ➢ Flow tested 42 fire hydrants for fire protection ➢ Performed 100 tests and/or repairs for the maintenance and operation of the 22 pressure reducing valves ➢ Maintained, replaced and/or repaired 58 air relief valves ➢ Maintained, replaced and/or repaired 4 drain valve assemblies ➢ Performed 3,537 bluestakes for underground pipeline and facilities locations ➢ Responded to and repaired 6water pipeline break ➢ Responded to 461 customer inquiries in the field ➢ Responded to and repaired 20 service line breaks ➢ Responded to 212 after hour call outs ➢ Installed 32 new hydrant defenders ➢ Installed 240 feet of 6-inch water main and one fire hydrant at Steam Pump Ranch. -26- The Distribution Division also has significant direct customer contact and responds to customers regarding pressure or flow related problems in the field. The Distribution Division, in conjunction with the Production Facilities Division, provides 24-hour on -call staffing to respond to water system problems. In addition to providing 24-hour on call service, the Distribution staff has taken on more responsibilities by repairing more main line and service line breaks. The Distribution staff will continue to provide a high level of professional performance and courteous service to our customers. -27- SECURITY AND EMERGENCY RESPONSE PLAN The Public Health Security Act and the Bioterrorism Preparedness and Response Act were enacted in 2002. This federal mandate required the Utility to perform a Vulnerability Assessment (VA) and develop an Emergency Response Plan (ERP) that incorporates the vulnerabilities identified by the VA. Under Homeland Security Presidential Directive No. 7 (HSPD7) the Water Utility infrastructure is considered critical infrastructure of national interest. Under current Federal guidelines, water operations personnel are considered first responders. Though primarily mandated by State rules with public health responsibilities, water operators also have a public safety responsibility with relevance to the water systems they are charged with operating. First response staff and vehicles are placed in an after hours position to directly respond to any developing emergency in order to minimize any situational impact on the integrity of the water system. Production Facilities and Distribution Facilities staffs coordinate their response actions and will respond with an appropriate level of personnel to mitigate the problem. Currently, the combined first response staff from Distribution and Production can handle the initial stages of two small-scale concurrent system events or one widespread system event. Any facilities security situations directly involve the Oro Valley Police Department as a first response action. The VA and the ERP were submitted in 2004 and are reviewed annually. In 2012, Utility personnel, with the assistance of a security consultant, reviewed, refined and updated the security program, Emergency Response Plan, and the Business Continuity Plan (BCP). The ERP and BCP are currently up to date regarding the Utility operational or response situations, contact information and procedures. The changes are designed to protect and "harden" the facilities against potential threats from the acts of people who wish to do harm to the residents of Oro Valley. In 2012, under the security program, a series of training classes and exercises were made available and completed by the Utility Staff. This training is done on an annual basis as per the guidelines from the Department of Homeland Security, FEMA, and the EPA. Utility personnel will continue to complete the required training and certification for Incident Management courses provided by FEMA. Operations personnel also receive emergency management courses provided by ADEQ. The Utility will continue to implement the elements defined in the VA, ERP and the BCP as well as those that may be identified through the course of business. The hydrant lock program continues to be implemented through the new development process and all hydrants within Oro Valley systems are protected from illegal entry and use. In 2012, 32 new hydrant defenders and locks were installed. There is extensive cooperation under this program with the three fire districts serving Oro Valley Water Utility customers, the Oro Valley Police Department, and other area water providers. Security features, which include perimeter fencing, security walls, warning signage, motion sensors and cameras at all active production facilities were inspected to maintain integrity. _28_ The Water Utility also has the equipment and capability to test water samples under a first response scenario. A continuing program has been initiated to chemically characterize ("fingerprint") the water produced. This will help identify any anomalies during a suspected event involving water quality. These baseline data are taken on a monthly basis. The Utility is kept abreast of local, regional and national security issues via weekly situation reports provided by Water Information Sharing and Analysis Center (Water ISAC). The Utility is also a member of the Arizona Water/Wastewater Agency Response Network (AZWARN) which mutually cooperates with other water and wastewater providers in an emergency. -29- ENGINEERING AND PLANNING The Engineering and Planning Division is responsible for planning and managing the design, construction and inspection of all new water infrastructures for the Town of Oro Valley as well as planning for the delivery of new water resources to the Town. New water infrastructure is constructed both through the new development process where the developer finances the project and through the Water Utility's capital improvement program. Geographic Information System (GIS) The GIS is responsible for managing and maintaining a Geographic Information System data base on all existing water system infrastructure in coordination with the Information Technology Department. Maps produced by GIS facilitate Operations and Planning and Engineering. New Development The New Development Section is responsible for facilitating development by reviewing and approving water improvement plans for proposed new developments. In 2012, the New Development Section reviewed and approved 10 water improvement plans for construction. Five plans were constructed, inspected, approved as -built, and placed into service. The completion of these New Development projects together with Capital projects added approximately 1.55 additional miles of pipeline to the existing water distribution system. Construction Inspection All new development and capital projects are inspected during construction for conformance with the approved design as well as material and installation standards. The Water Utility has two full time Construction Inspectors and utilizes the services of a consultant inspector to assist when specialized inspections are required. CAPITAL PROJECTS The Engineering and Planning Division manages the design and construction of capital projects identified in the capital improvement program. and annual operating budget. These projects are designed to improve efficiencies to existing facilities and improve service levels. These capital projects are described below. Design Projects Completed the design of Tangerine Hills Hydrant and Valve Replacement project. Construction scheduled to commence in March of 2013. Completed design for the control valve at High Mesa Reservoir. Construction scheduled to commence in March of 2013. Completed design of the Chlorine Storage Building. -3 0- Planning Studies Completed the study of blending groundwater and CAP water to further reduce total dissolved solids and hardness. We continue to evaluate the potential of delivering CAP water through the Oracle Road corridor and possibly the Countryside water service area. Construction Projects Completed East Lambert Lane Water Main Improvements Replaced and relocated over two miles of 16-inch water main as part of the road widening and improvements project. The new main was placed in service August 2012 Completed Chlorine Storage Building Constructed a new chlorine storage building and facility which relocated chlorine storage to a safer and more operationally efficient location. The new building was placed in service December 2012. Completed Campo Bello Main Replacement Proiect Replaced existing water lines that served the Campo Bello Subdivision with 3.4 miles of new 12-inch, 8-inch and 6-inch water lines and installed 22 new fire hydrants. , - mono- - -- ' .•�-lam s+,w••�.t ar + ^ -jw ^-' �: %� wc.'•.�+►�r -r - .:. -. �"•^�.- Lam'+=f'��►y„�-• • mil► .,�� _ • ,u ;. ~ �.� �..t : s '7tvy,'+ r ~� •" ~�-!� f -tea _ ` �. .00 • Campo Bello Main Replacement -31- Future Projects C Capital improvement projects planned for FY 2013-14 include the following: ➢ Replace 10 flow meters at various well sites ➢ Well E8 Rehabilitation ➢ Naranja Shannon La Cholla Water Main Design a ➢ Replace Security Wall at Countryside Well CS2 ➢ Pusch Ridge Interconnect r, ➢ Water Main Valve Replacement L ➢ Energy Efficiency Booster Station Upgrades ➢ Reclaimed Water booster pump addition n ➢ Reclaimed Water retention basin geotechnical liner ➢ Reclaimed Water bridge for valve vault ➢ Reclaimed Water 12-inch main extension to Naxanja Park r' See Appendix B for the 15 Year Capital Project Program. The capital projects for existing system improvements FY 2013 -14 are planned to be cash funded. It is proposed that projects in future years will be cash funded and/or debt financed through loan or bond proceeds. -32- FINANCIAL HIGHLIGHTS The Utility's revenue consists of potable and reclaimed water sales, groundwater preservation fees, miscellaneous service fees and charges, water development impact fees and interest income. The Water Utility has three funds: ➢ The Operating Fund provides funding for the Water Utility administration and operations as well as existing system improvements. The sources of revenue for this fund are water sales and service related charges. ➢ The Potable Water System Development Impact Fee Fund provides funding for expansion related projects for new growth. The source of revenue for this fund is potable water development impact fees. These fees are paid at the time a meter is purchased. The funds collected ensure that system expansion is paid for by new development. ➢ The Alternative Water Resources Development Impact Fee Fund provides funding for the development of renewable sources of water supply, specifically reclaimed water and CAP water and any infrastructure required for delivery of those resources. The sources of revenues for this fund are impact fees and Groundwater Preservation Fees (GPF). Alternative water resources development impact fees are paid by new development for that portion of renewable water supply and infrastructure attributed to new growth. The GPF is paid by existing customers for their portion of renewable water supply and related infrastructure. The following table contains the actual revenue received for FY 2011-12 for all funds within the Utility: Revenue Source Amount Received Potable Water Sales: Residential $ 7,929, 806 Commercial $ 973,614 Irrigation $ 1, 093 5474 Turf $ 123,317 Construction $ 118,961 Reclaimed Water Sales: Turf $ 1,631,840 Construction $ 653 Irrigation $ 13,468 Misc. Service Fees & Charges $ 557,221 Total Enterprise Fund $1294429354 Groundwater Preservation Fees $ 2,365,968 Alternative Water Resources Development Impact Fees $ 75%958 Development Impact Fees Potable Water System $ 4655762 Interest Income $ 13208 Total All Funds for FY 2011-12 $1691669650 -33- I The budgeted expenditures (excluding depreciation and amortization) for the Operating Fund [ are compared to the actual expenditures for FY 2011-12 in the following table: Expenditures Budget FY 2011-12 Actual Spent FY 2011-12 Difference Under (Over) Budget Percentage Under (Over) Budget Personnel $ 2,422,709 $ 2,49704 ($ 75,155) (3 %) O&M $ 4,49%205 $ 4,010,406 $ 488,799 11 % Capital $ 4,162,000 $ 2,740,506 $ 1,421,494 34 % Totals $1190839914 $ 992489776 $ 198359138 17 % The Utility's capital expenditures were under budget as a result of delays in construction of potable water system projects. Debt Service The following table is a summary of the outstanding debt and debt service payments (principal and interest) for all funds within the Utility: Fund Bond Series Outstanding Debt As of 12/31/12 Debt Service Payments FY 2012-13 Maturity Dates of Bonds / Loans Operating 2003 $ 7,21500 $ L243M58 07/01 /2019 Operating 2003 $ 45000 $ 46%987 07/01/2028 Operating 2005 $ 15511,400 $ 151,245 07/01 /2025 Operating 2007 $1550055550 $ 7915111 07/01/2026 Operating (WIFA) 2009 $ 1,95 8,644 $ 1505820 07/01/2029 Operating 2012 $ 451525069 $ 925583 07/01/2029 AWR.DIF 2003 $ 810,000 $ 8505612 07/01/2028 AWRDIF (WIFA) 2008 $ 354505303 $ 3 73 5496 07/01 /2027 AWRDIF 2012 $ 755675320 $ 1685736 07/01/2029 PWSDIF 2003 $ 3405000 $ 3665337 07/01/2023 PWSDIF 2003 $ 3155000 $ 2625213 07/01/2028 PWSDIF 2012 $ 458755611 $ 1085716 07/01/2029 Totals v.::,.,....,:.:..........:>:::.:,::,::::..:.:�?:�:..:....:....:;::. .,� i::.i::.:? �;. ..,.. ;??i 47 650 897 $ 5 028 914 R;<o:<,i\;...eriii ' i',\\�;\�.\.•i?,eiii:s.\e?.,'.\1.;\;..\\:i: .:.:::.i.???....`....•:`.::...i\`..`..:...\\\,.,:,?..?.»:..,.. As has been done in the past, in May 2012 the Utility paid off older bonds with higher interest rates and refinanced at lower interest rates to reduce outstanding debt and annual debt service payments. The new debt was structured to realize the most savings 10 years out when the need for new debt would be greater. Additionally, the Utility paid down the debt in the PWSDIF by $3,000,000 with this refinance. The Water Utility and Finance Department will continue to review bonds and debt service to look for opportunities to reduce debt obligations when it is fiscally sound and there is a financial benefit. By reducing outstanding debt, it will be easier to maintain the required 1.30 debt service coverage requirement which may result in smaller rate increases. I LI I�I -34- Water Rates and Development Fees The functions and duties of the Commission include reviewing and developing recommendations for water revenue requirements, water rates and fee structures. The Commission annually evaluates staff recommendations based on a water rates analysis to assure the recommendations meet Town policies and bond covenants. The Utility bases its financial analysis on the American Water Works Association (AWWA) Cash Needs Approach. In 2012, the Town Council did not consider a water rate increase because, after reviewing the Water Rates Analysis Report prepared by staff, the Water Utility Commission determined no increases in water rates or service charges were required. All current water rates, fees and charges are available to view on the Town website at hgp: //www. orovalleyaz. gov/Town Government/WaterUtility/Water- Rates and Fees. htm As recommended by the Water Utility Commission last year, the Utility has hired a consultant, CH2M HILL, to conduct a cost of service study. CH2M HILL will incorporate the water rates analysis in the study. The study is anticipated to be completed by the end of June 2013. With the changes in the state statute regarding development impact fees, CH2M HILL will also be preparing an impact fee analysis on the Utility's two impact fees. The study must be completed by November of 2013 in order to have the revised fees in place by August 1, 2014. The Alternative Water Resources Development Impact Fees were increased in December 2008 and the Potable Water System Development Impact Fees were increased in September 2007. The current impact fees are also on the Water Utility website and the Town website in the Town Code — Chapter 15 Water Code. Each year, on or before September 28th, an accounting of the water development impact fees is presented in a report required by Arizona Statute and is available for public review. In accordance with Mayor and Council Policy, a Water Rates Analysis Report will be prepared during 2013 that contains information on the three funds that comprise the Oro Valley Water Utility. Each fund will be individually analyzed with regard to revenue and J revenue requirements. It is anticipated that the Water Rates Analysis Report will be completed in June of 2013 and reviewed by the Water Utility Commission shortly thereafter. If, after receiving the recommendation of the Commission, the Council approves a Notice of Intent to increase water rates or fees, a public hearing date will be set to review and consider the recommended increases and hear comments from residents and customers. Council action on water rates will be taken only after that public hearing. J -35- O�P�LEY Aq��o O� y9 r ► FUNDED g1 TOWN OF ORO VALLEY WATER UTILITY COMMISSION 1013 AiT U AL REPORT APPENDIX A UTILITY STATISTICS YEAR 2010 2011 2012 Customer Base 18,474 181545 18,716 Water Deliveries in Gallons 21358,509,000 2739511421000 27266,515,000 Reclaimed Water Deliveries in Gallons 6377690,000 735,065,000 683,925,000 Bluestakes 37127 21880 37537 Customer Contacts Customer Service 33,323 33,718 317437 Field Operations 31557 5,290 3,241 Water Conservation -Audits 178 119 143 Water Quality Samples 51891 27969 21250 Meter Reads 2201098 219,973 2221304 Billing Collection Rate 99.59% 99.83% 99.99% A-1 BI uestakes 47000 2,880 31500 37000 2,500 27000 1,500 11000 500 2010 2011 2012 A-2 A-3 Accounts By User Type As of December 31, 2012 17 777 ■Construction - 1% ❑ Commercial - 2% ■ Residential - 95% ■ Irrigation - 2% ❑Reclaimed - 0% ■Potable Turf - 0% Gallons Sold By User Type January - December 2012 236,128, 000 ■Construction - 1% ❑ Commercial - 7% t y ■ Residential - 59% a ; 4 , £tfi z•`s,:... 683,VQ 25,000 ■ Irrigation - 8% ❑ Reclaimed - 23% 541026,000 ■ Potable Turf - 2% 208,488,000 17,022,000 Revenue By User Type January - December 2012 ■ Construction - 1 % ❑ Commercial - 8% ■ Residential - 67% o p r= ■ Irrigation - 9 /o ❑Reclaimed - 14% $936,301 $1,046,518 ■ Potable Turf -1 % $146, 691 1,566,931 $123,121 $ A-5 i 1 1 A O� TOWN OF ORO VALLEY WATER UTILITY COMMISSION F �, 2013 ANNUAL REPORT APPENDIX B FIFTEEN - YEAR CAPITAL IMPROVEMENT PROGRAM ~ L a) U) r co ti N O N n c CV co N O N CO O N to CN O N O O O O O 0 0 0 0 LO m CO N 69- 6) O O O O 0 0 0 CT0 O O r N (;} 6)- O O O O 0 0 0 O O CD c- 69- 64 O O O 0" f) 63 6� O O 0 o va O O O O 0 0 o cri LO I,- Imo• 69 69- O O 0 L6 M 69, 64 O O o 6 N O 64 6f� ' 6F} bT O O O O O o CT CT Lo '1- I- 63 69 O O O O 0 0 CT0 O O N LO 69- 69- O O O O 0 0 CTL 0 O Lio O N 69 6k O O 0 0 O N 64 64 O O O 0 O 41 63 y} 63 O O 0 0 O N 63 63 O O O O o 0 0 LC) N 'I I d3 I 63 O O O O 0 0 ui o N O co cj 63 1 6 . 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