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ANNUAL
REPORT
APRIL 2018
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION ANNUAL REPORT
APRI L 2018
TABLE OF CONTENTS
Page
About the Water Utility Commission...................................................................... 1
ExecutiveSummary................................................................................................ 4
WaterResources..................................................................................................... 6
Regulatory............................................................................................................. 11
Engineering and Panning ................
Capital Projects ........................................
CustomerService.................................................................................................. 15
Water Conservation.............................................................................................. 17
Operations & Maintenance ......................
WaterQuality........................................................................................................ 20
BackflowPrevention............................................................................................ 21
Security ...................................
FinancialHighlights............................................................................................... 23
Appendices
A. Static Groundwater Levels
B. Capital Improvement Program
C. Utility Statistics
D. Asset Inventory
E. Acronyms and Glossary
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
ANNUAL REPORT
APRIL 2018
ORO VALLEY TOWN COUNCIL
Satish I. Hiremath, D.D.S., Mayor
Lou Waters, Vice Mayor
Joe Hornat, Councilmember
ow
Rhonda Pina, Councilmember
Bill Rodman, Councilmember
Mary Snider, Councilmember
Steve Solomon, Councilmember
ORO VALLEY WATER UTILITY COMMISSION
Anne Campbell, Chair
Byron McMillan, Vice Chair
Chuck Hollingsworth, Commissioner
Thomas Kibler, Commissioner
Bill Leedy, Commissioner
Robert Milkey, Commissioner
Winston Tustison, Commissioner
TOWN STAFF
Mary Jacobs, Town Manager
Peter A. Abraham, P.E., Water Utility Director
Lee Jacobs, P.E., Engineering Division Manager
Shirley Kiel, Water Utility Administrator
Danielle Tanner, Senior Office Specialist
Special recognition to Oro Valley Water Utility staff that provided graphics, data, photos and
their time to assist in the preparation of this report:
� Karn Boyce George Kendrick Adam Pence
Robert Jacklitch Mary C. Kobida Carolyn Schneider
1 Jeff Kane Mark Moore Louis Valencia
ABOUT THE WATER UTILITY COMMISSION
The Oro Valley Water Utility Commission is appointed by the Oro Valley Mayor and Council
(Mayor and Council). The Mayor and Council have jurisdiction over rates, fees and water
management issues. In March of 1996, the Mayor and Council created the Oro Valley Water
Utility Commission (commission) to act as their advisory body. Please refer to the Town
Water Code, Article 15-4, on the Town website at
http://www.codepublishing.com/AZ/OroValley/
The commission is composed of seven members that shall serve terms of three years.
Commissioners represent residential and commercial/turf interests served by the Utility.
The primary responsibility of the commission is to review and make recommendations on
Oro Valley Water Utility items that require Mayor and Council action. These items may
include water system development, long-term water resource planning, rate adjustments,
the capital improvement program with a five-year capital budget, state and federal
legislation regarding water related issues, expansion of service areas and water acquisitions.
The commission also supports community programs and education related to the Oro Valley
Water Utility.
The commission welcomes the public to attend its meetings. The commission meets the
second Monday of each month. All meetings are noticed on the Town's website.
1 In 2017, the commission held 10 Water Utility Commission meetings. Notable actions taken
by the commission in 2017 include:
Meeting Date
Action Item
January 9, 2017
Appointments to the Water Utility Commission Subcommittees
March 13, 2017
Election of the Commission Chair and Vice Chair
March 13, 2017
Recommendation for acceptance of the Northwest Recharge and
Recovery Delivery System Intergovernmental Agreement
April 10, 2017
Approval of and recommendation for acceptance of the Annual Report
July 10, 2017
Combining the Water Resources and Conservation Subcommittees
October 9, 2017
Recommendation for acceptance of water code changes pertaining to
conservation and water wasting
Additional notable items on commission agendas in 2017 include:
➢ CAP Water Wheeling Intergovernmental Agreement with City of Tucson
➢ Refunding the Series 2007 revenue bonds
➢ Lower Colorado River Drought Contingency Plan
➢ Drought Preparedness Plan
➢ Long-term water resource planning
➢ Long-term storage credits and groundwater allowance account
➢ Water quality
➢ Alternative Central Arizona Project water delivery options
➢ Annual water level data and aquifer metrics, well analysis and condition
Notable issues planned for commission agendas in 2018 include:
➢ Water Rates Analysis
➢ Potable Water Master Plan
➢ Capital Improvement Project five-year budget
➢ Water Utility Commission Annual Report
➢ Tour of Central Avra Valley Storage and Recovery Project
➢ 10-Year Water Resource Plan
➢ 10-Year CAP Water Wheeling Delivery Plan
➢ Colorado River Drought Contingency Plan
➢ Water Utility code changes
➢ CAP Drought Preparedness Plan
In addition to the regular commission meetings, there are meetings conducted by standing
subcommittees. On July 10, 2017 the commission voted to combine the Conservation
Subcommittee and the Water Resources Subcommittee. As of that date, the subcommittee
membership is as follows:
Finance Subcommittee
Winston Tustison, Chair
Chuck Hollingsworth
Robert Milkey
Water Resources and Conservation Subcommittee:
Anne Campbell, Chair
Bill Leedy
Byron McMillan
The commission and staff would like to thank and acknowledge Thomas Kibler for his
service on the Conservation Subcommittee through July, 2017.
2
WATER UTILITY COMMISSION 2018
Anne Campbell
Chair
Chuck Hollingsworth
Commissioner
Byron McMillan
Vice Chair
Thomas Kibler
Commissioner
3
Bill Leedy
Commissioner
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
ANNUAL REPORT
APRI L 2018
EXECUTIVE SUMMARY
This report provides information to the Mayor and Council and the public on the annual
work of the Water Utility Commission and updated information on the Oro Valley Water
Utility (Utility). The report outlines how the divisions within the Utility work together to
provide the community with a reliable and safe water supply. Through partnerships with
other professional water agencies, the Utility maintains water quality standards, protects
the groundwater supply and conducts long-term future planning for water resources and
capital infrastructure. This report covers information and activities primarily for calendar
year 2017 with some information reported for fiscal year ending June 30, 2017.
WATER RESOURCES
The Utility operates two water systems, the Oro Valley Water Service Area and the
Countryside Water Service Area. There are three sources of supply: groundwater, Central
Arizona Project water and reclaimed water. Groundwater is pumped from the wells in the
aquifer below the water service areas, blended with the Central Arizona Project water and
then delivered through the potable drinking water distribution system. Reclaimed water is
for non -potable uses and is predominantly used for irrigation on golf courses and athletic
fields. The potable drinking water system is separate from the reclaimed water system.
TABLE 1
Total Water Produced in 2017 (Acre Feet)
Reclaimed
Total Water
Groundwater
CAP Water
Water
Produced
5,573
2,093
2,321
9,987
The Utility uses Central Arizona Project water in the following three ways:
1) Recharge and recover water for delivery to the potable water system
2) Recharge and replace water pumped from the Utility's wells
3) Recharge and store water in recharge facilities for future use
As of December 31, 2017, a total of 19,019 acre feet was in the long-term storage credit
account and the total in the Groundwater Allowance Account was 19,130 acre feet.
2
CUSTOMER SERVICE
In 2017, the Utility experienced a one and one half percent growth rate in customer
connections. At the end of 2017, the Utility had 19,751 customer connections serving a
population of approximately 44,500. Utility revenues totaled $12.4 million for calendar year
2017 with delinquent write-offs of less than one percent.
WATER CONSERVATION
The Utility encourages water conservation by informing and educating customers.
Specifically in 2017, the following conservation efforts were accomplished:
➢ 805 students participated in the Conservation Kids program
➢ 66 customer water audits were performed to help our customers reduce water use
➢ AquaHawk Alerting became available to all customers for early leak detection and
water management capabilities
➢ Community outreach providing water conservation information in pamphlets and
brochures, making presentations at homeowner associations and participating at
community events
WATER UTILITY OPERATIONS
Water operations are a 24 hours per day, seven days per week operation. Staff performed
routine maintenance on all production and distribution facilities. The Utility inspected new
development projects and the Utility's capital projects. This past year, the Utility updated
the security program, Emergency Response Plan and the Business Continuity Plan.
WATER QUALITY
In 2017, the Utility received 2,603 analytical results for required water sampling and
operational data. The water system is in compliance with the Arizona Department of
Environmental Quality and the United States Environmental Protection Agency requirements.
FINANCIAL HIGHLIGHTS
The Utility continues to be fiscally sound. Fitch Ratings affirmed the Utility's AA- rating on
the Series 2012 Senior Lien Bonds. Recommendations on water rates included an increase
in the monthly base rates. If adopted, the majority of customers will realize an increase of
$1.83 per month. The increases in water rates are scheduled to go before Mayor and
Council for approval on May 16, 2018.
In 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. Additional information
for the Utility can also be found on the Town's website at
hops://www. orovallevaz. qov/town/departments/water- utility
0
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
ANNUAL REPORT
APRI L 2018
INTRODUCTION
This report provides information to the Mayor and Council and the public on the annual
work of the Water Utility Commission and updated information on the Oro Valley Water
Utility (Utility). The report outlines how the divisions within the Utility work together to
provide the community with a reliable and safe water supply. Through partnerships with
other professional water agencies, the Utility maintains water quality standards, protects
the groundwater supply and conducts long-term future planning for water resources and
capital infrastructure. The report details how the Utility maintains financial health through
analyzing and initiating responsible water rates and through new development cost
recovery. This report covers information and activities primarily for calendar year (CY) 2017
with some information reported for fiscal year (FY) ending June 30, 2017.
WATER RESOURCES
The primary function of the Utility is the production and efficient use of available water
resources that meet or exceed water quality standards. To ensure long-term sustainability,
the Utility works closely with regional water providers, state agencies and the development
community in planning for future water resource requirements. Utility staff closely monitor
all water resources in the Utility's water portfolio. The water portfolio includes
groundwater, Central Arizona Project (CAP) water entitlement, reclaimed water
entitlement, long-term storage credits and groundwater allowance account credits.
Current Water Supply includes groundwater, CAP water and reclaimed water. The Utility
1 operates in two separate water service areas: the Oro Valley Water Service Area (OVWSA)
and the Countryside Water Service Area (CSWSA). The CSWSA was acquired by the Town
J with the acquisition of the private water companies in 1996. This small satellite service area
is located approximately two miles from the western boundary of the Town. All data from
these two service areas are combined for regulatory reporting purposes. The following table
� provides the water production in acre feet (AF) for both service areas in 2017.
TABLE 2
Total Water Production in 2017
Water Resources
OVWSA
CSWSA
Totals
Groundwater
5,069 AF
504 AF
5,573 AF
CAP Water
11905 AF
188 AF
2,093 AF
Reclaimed Water
21321 AF
----
2,321 AF
Total
9,295 AF
692 AF
9,987 AF
Total water production for 2017 was 683 acre feet more than the total water production in
2016. This increase is due to customer response to hotter, dryer weather conditions as well
as additional consumption resulting from metered connections added in 2017.
The graph in Figure 1 shows total water production from 2004 through 2017. The
components of total water production include 1) groundwater production for both service
areas, 2) CAP water utilization for both service areas and 3) reclaimed water utilization. The
graph depicts an increase in overall water production for 2017 as compared to 2016.
FIGURE 1
WATER PRODUCTION -ANNUAL COMPARISONS
12,000
10,000
8,000
cu
L- 6,000
a�
L
a
4,000
2,000
12,000
RECLAIMED
WATER
10,000
CAP
WATER
(CS)
8,000
CAP
WATER
6,000
(OV)
COUNTRYSIDE
4,000
GROUNDWATER
ORO VALLEY
2,000
GROUNDWATER
0 1 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
CALENDAR YEAR
Groundwater target maximums are also illustrated on the graph shown in Figure 1. These
target amounts were defined in a study entitled Groundwater Sustainability Evaluation of
the Oro Valley Aquifer dated March 14, 2007. The study concluded that the annual
groundwater production flow rate for wells in the OVWSA should be established at 5,480
acre feet and 880 acre feet for wells in the CSWSA. In 2017, Oro Valley pumped 411 acre
feet less than the groundwater target maximum production rate for the OVWSA wells and
376 acre feet less than the target maximum production rate for the CSWSA wells.
Groundwater remains the primary potable water resource for the Utility. In 2017, the
Utility's 19 groundwater production wells produced 56 percent of the Utility's total water
production.
7
Table 3 highlights the production capacity in all wells, the storage capacity in all reservoirs
and the average rise or decline in static water levels for the wells in both service areas at
the end of CY 2017.
TABLE 3
Groundwater
Storage
Average
Production Capacity
Capacity
Water Level
(Gallons)
+Rise/ -Decline
OVWSA
13.1 MGD
11 Million
-4.5 Feet
CSWSA
2.2 MGD
1 Million
-1.1 Feet
On an individual basis, water level changes in 2017 for active wells varied from a rise of 1.7
feet to a decline of 8 feet. Details on static groundwater levels for individual wells may be
found in Appendix A.
Central Arizona Project (CAP) Water is the Utility's only other potable water resource. In
2017, the Utility's three CAP wheeling locations delivered 21 percent of the Utility's total
water production. The Utility delivers its entire annual CAP entitlement of 10,305 acre feet
to several recharge facilities in the Tucson Active Management Area. In 2017, the Utility
purchased the entire entitlement for use as follows:
1) Recharge and recover water for delivery to the potable water system
2) Recharge and replace water pumped from the Utility's wells
3) Recharge and store water in recharge facilities for future use
For example, when Oro Valley's CAP water is recharged and recovered for delivery, it is first
delivered to Tucson Water's Central Avra Valley Storage and Recovery Project (CAVSARP).
The recharged CAP water is then recovered and delivered through the Tucson Water system
'] to various connection points on the Oro Valley system for delivery to Utility customers.
The Utility has an IGA with Tucson Water enabling the delivery of CAP water to customers
through three connections to the Tucson Water system. There are two CAP water
connection points in the OVWSA. One is located on Vista del Sol, north of Naranja Road and
7, the other is on Calle Buena Vista, south of Calle Concordia. CAP water is also delivered to
the CSWSA at a connection located on Camino de Oeste, just north of Linda Vista Blvd. The
Utility delivered 2,093 acre feet of CAP water in 2017 thus reducing its reliance on
groundwater.
In calendar year 2018, the Utility will be adding a fourth CAP wheeling location near Oracle
and Hardy to deliver up to an additional 480 acre feet of recovered CAP water supply to the
OVWSA. CAP water deliveries are i shown
o n Table 4.
8
TABLE 4
CAP Water Deliveries in 2017
Locations
Delivery
Vista Del Sol (OVWSA)
11626 AF
Calle Buena Vista (OVWSA)
279 AF
Camino De Oeste (CSWSA)
188 AF
Total
2,093 AF
In calendar year 2017, the Town of Oro Valley, Metro Water and the Town of Marana
collaborated on the development of a unique IGA to construct a future project known as
the Northwest Recharge, Recovery and Delivery System (NWRRDS). The IGA was
unanimously approved by each governing body in March of 2017. This agreement provides
another means for the Town to deliver additional CAP water to the Utility's service area.
The project is estimated to be completed in FY2024and will allow for the annual delivery of
an additional 4,000 acre feet of recovered CAP water.
The reservoirs on the Colorado River supply water to the CAP and other water projects in
1 the lower basin states of Arizona, California and Nevada. In addition, these reservoirs
� provide required water deliveries to Mexico. The Colorado River water storage decline is
due to the extended drought the basin has experienced for nearly 16 years as a result of
decreased precipitation and snowpack. This has decreased flow in the river creating
significant water level declines in Lake Mead and Lake Powell resulting in historically low
reservoir levels. Water demands have exceeded available inflows for supply driving
reservoir levels lower.
Reservoir levels determine supply availability in accordance with shortage approved in
2007 by the Secretary of the Interior and accepted by all seven states within the Colorado
River basin. Those guidelines specify three different water levels in Lake Mead associated
with Tier 1, Tier 2 and Tier 3 shortages. In addition, the guidelines specify the shortage
sharing and associated reductions of deliveries to each state for each of the tiers. A Tier 1
shortage will not reduce the volume of CAP water delivered to municipal water providers,
such as Oro Valley, within the Central Arizona Project. However, CAP water deliveries to
agricultural users, the Central Arizona Groundwater Replenishment District (CAGRD) and
the Arizona Water Banking Authority (AWBA) will be curtailed.
In accordance with the 2007 guidelines, a Tier 1 shortage will be declared when Lake Mead
water levels are predicted to be at an elevation of 1,075 feet or less on January 1 of a given
year. If the August model prediction projects a shortage for January 1 of the following year,
a declaration of shortage would be declared initiating the implementation of the shortage
` sharing guidelines for that year. As of the end of January 2017, levels in Lake Mead were at
1,086 feet. Based upon recent August, 2017 model projections, the United States Bureau of
Reclamation estimates a 15 percent chance of a Tier 1 shortage impacting CAP agricultural
water users and excess CAP water users beginning January 1, 2019.
9
The 2007 shortage sharing guidelines also outline further reductions in delivery of Colorado
River water to the lower basin states if and when higher -tier shortages are declared. Any
further reductions of CAP water deliveries that may be curtailed to municipal water users
could be replaced with CAP water previously stored underground from various
underground storage facilities. The replacement of curtailed CAP water deliveries is
available from underground storage facilities until the storage balance is depleted.
The AWBA has been storing water underground for municipal and industrial water users to
guard against the impacts of drought and shortage. Over 500,000 acre feet of water has
been stored underground by the AWBA in the Tucson Active Management Area. This stored
water will be made available to municipal water providers to mitigate any curtailments of
CAP water deliveries to municipal water users. In addition to the AWBA storing water, the
CAGRD has stored water for the future to replenish groundwater.
The Utility also continues to store CAP water to increase the balance of long-term storage
credits. This water will also be available to mitigate curtailments of CAP water deliveries.
The Arizona Department of Water Resources (ADWR) and Central Arizona Project staff are
currently in discussions with the Colorado River Basin states to develop a Drought
Contingency Plan to investigate opportunities to keep water in Lake Mead to prevent a
shortage from occurring or reduce the amount of a potential shortage.
The above actions combined with a diverse water portfolio can reduce the impacts of
drought and shortages. In addition, reducing demands through conservation and an
increased focus on the efficient use of water resources will help to preserve water supplies
for the future.
Reclaimed Water is produced from wastewater effluent from the sanitary sewer system
and then treated for irrigation and other non -potable uses. In 2017, the Utility's reclaimed
system produced 23 percent of the Utility's total water production.
Oro Valley owns all of the effluent produced by its customers. The Utility has an IGA with
Tucson Water to deliver reclaimed water to the OVWSA through their facility at Thornydale
and Tangerine. From that location, the Utility independently operates the transmission and
water distribution system that delivers the reclaimed water to reclaimed water customers
in the OVWSA. No reclaimed water is delivered to the CSWSA.
The Utility supplies reclaimed water for the irrigation of five golf courses, athletic fields at
one elementary school and Naranja Park. In 2017, 2,321 acre feet of reclaimed water was
delivered. This is an increase of 210 acre feet over the 2,111 acre feet delivered in 2016. The
increase in deliveries was possible due to the completion of a capital project in 2017 which
added a fourth booster pump at Tucson Water"s reclaimed facility. This fourth pump will
eliminate the need for the Utility to supplement the reclaimed system with potable water.
In the past, the Utility had to supplement the reclaimed system with potable water because
of production limitations at Tucson Water's reclaimed facility.
10
Reclaimed system expansion is not expected to occur in the near future. Development of
additional reclaimed water infrastructure will be based upon need, the availability of
wastewater effluent and economic feasibility. The Utility uses all of its currently available
reclaimed water.
REGULATORY
The ADWR requires the replacement of groundwater pumped from wells owned and
operated by the Water Utility. To comply with this requirement every acre foot of
groundwater pumped is replaced through annual aquifer recharge utilizing CAP water.
Long-term storage credits can also be used to replace the groundwater pumped to maintain
compliance with ADWR requirements.
The Designation of Assured Water Supply (DAWS) issued by the ADWR requires
compliance with the Fourth Management Plan in the Tucson Active Management Area. In
2017, the Utility was in compliance with all requirements under the DAWS and fully expects
to meet all requirements in 2018. The ADWR requires the Utility to submit water system
information and water usage data in an annual report. The information provided includes
service area boundaries, total water use, population, gallons per capita per day, recharge,
recovery and system water loss.
Pursuant to the DAWS, the Utility has a right to pump a maximum of 13,384 acre feet per
year. However, the 2007 study entitled Groundwater Sustainability Evaluation of the Oro
Valley Aquifer determined that the Oro Valley aquifer has a sustainable groundwater
production rate of approximately 6,360 acre feet per year (5,480 acre feet for the Oro
Valley Service area plus 880 acre feet for the Countryside Service Area). "Sustainable" in this
2007 study refers to the projected volume of water that can be pumped from wells each
year as calculated over a 30-year period through 2037. The Utility has established a goal
thatthe "sustainable" value be a groundwater target maximum value by which annual
groundwater required beyond this threshold would trigger the utilization of additional
renewable water resources. Groundwater levels will be assessed annually to determine the
impact on the aquifer and well production. Groundwater levels have shown less decline
than projected in the 2007 study.
Long -Term Storage Credits are earned when water is recharged and stored underground
for more than one year. In 2017, the Utility purchased 10,305 acre feet of CAP water for
delivery to recharge facilities. Of that amount, 2,639 acre feet were not used for direct
delivery or annual recovery; therefore, increasing the long-term storage credit balance. The
water stored will be saved for future use. At the end of 2017, the Utility calculated that it
had 19,019 acre feet in long-term storage credits.
Table 5 shows the estimated water storage summary for the end of the 2017 calendar year.
The ADWR will make adjustments to the storage balance to account for recharge basin
evaporation and aquifer losses. The final balance will be provided by ADWR in October of
11
2018. The table presents an accounting summary of CAP water storage and long-term
storage credits.
TABLE 5
Water Storage Summary
Calendar Year 2017
(Acre Feet)
Groundwater
Storage Facility
2017 CAP Delivery to
Storage Facility
2017 CAP Recovery
from Storage Facility
Storage Balance
12/31/17
Kai Farms
41000
31573
12,073
Lower Santa Cruz
4,005
1,000
31293
Pima Mine Road
---
11000
21774
Central Avra Valley
21300
21093
814
Effluent Storage
---
---
65
Total
10,305
7,666
19,019
The Groundwater Allowance Account identifies the amount of groundwater that can be
pumped, if desired, and still be considered exempt from the state's requirement for
replenishment in the Tucson Active Management Area. In general, the balance in the
account may be used for any groundwater pumped from a well that has a five-year average
annual decline greater than four feet or water pumped from a well that is not permitted as
a recovery well. In 2017, the Utility did not use any credits from the Groundwater Allowance
Account. All of the Utility's wells are permitted as recovery wells; therefore, long-term
storage credits were used to meet the replenishment requirements instead of using credits
in the Groundwater Allowance Account. The balance in the Groundwater Allowance
Account at the end of 2017 was 19,130 acre feet.
ENGINEERING AND PLANNING
The Engineering and Planning Division is responsible for planning and managing the design,
construction and inspection of all new water infrastructure for the Town of Oro Valley as
well as providing engineering support to the Water Operations group.
1 Engineering and Planning is also responsible for managing and maintaining a Geographic
� Information System (GIS) database on all existing water system infrastructure in
coordination with the Information Technology Department. Maps produced by GIS staff
facilitate Utility operations, planning and engineering.
In 2017, the New Development Section within the Engineering and Planning Division
completed thefollowing:
l ➢ Reviewed 15 water improvement plans
1 ➢ Approved 16 as -built plans
12
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.
The capital projects are described below.
FY 2017-18 Design Projects and Studies
➢ La Cholla Blvd. Regional Transportation Authority (RTA) Project: The Utility's water
mains will require relocation along La Cholla Blvd. due to the widening of La Cholla Blvd.
from two to four lanes from Overton to Tangerine Rd.
This design protect is complete.
➢ Avra Valley Recharge Project Water Quality Evaluation: To ensure the water quality
associated with the future Northwest Recharge, Recovery and Delivery System met
regulatory water quality standards, a water quality study was performed in and around
the area where the Town's CAP water would be recovered.
The study is complete.
➢ High Mesa "G" zone booster station 5,000 gallon hydropneumatic tank replacement:
This design project was performed to replace a non-ASME certified pressure vessel. The
replacement of non-ASME certified pressure vessels is ongoing work to eventually
upgrade all pressure vessels within the Utility to ASME standards.
This design project is complete.
➢ Well D8 5,000 gallon hydropneumatic tank replacement: This design project was
performed to replace a non-ASME certified pressure vessel. The replacement of non-
ASME certified pressure vessels is ongoing work to eventually upgrade all pressure
vessels within the Utility to ASME standards.
This design project is complete.
➢ Tucson Water CAP Wheeling Station near Oracle Rd. and Hardy: This design project
was performed to construct another wheeling location to facilitate the delivery of an
additional 480 acre feet per year of the Town's recovered CAP water. Construction is
slated to begin in early spring 2018.
This design project is complete.
FY 2017-18 Construction Projects include the following:
➢ Pressure sustaining/reduction valve construction: This consists of two construction
projects to install pressure sustaining/reduction valves that facilitate the delivery and
blending of "E" zone CAP water into lower system zones. The delivery and blending of
CAP water into other pressure zones improves system reliability and balances water
13
quality. One project is located at the Glover reservoir and the other is at the Naranja
reservoir.
Both construction projects are complete.
➢ Well E2 re -equipping and piping modifications: This construction project includes a new
5,000 gallon hydropneumatic tank, mechanical equipment, electrical control and
demolition of a small storage tank and booster station. The project improves
operational efficiency and reduces the Utility's asset inventory therefore reducing
maintenance costs.
This construction project is 95% complete. Final completion date is March 2017.
➢ Lambert Lane Regional Transportation Authority (RTA) Project: The Utility's water
mains required relocation due to the widening of Lambert Lane from two to four lanes
west of La Canada Dr. A new main and two pressure reducing stations were installed.
This construction project is complete.
➢ Pressure Reducing Valves (PRVs) in the Oro Valley Country Club Service Area: Two new
above -ground PRVs were constructed in the Oro Valley Country Club service area. The
new PRVs replaced existing PRVs located in buried vaults in the middle of the street.
These projects improved worker access, safety and system reliability.
This construction project is complete.
➢ Renovation for new office space at the production facility: This construction project
allows for nine new employee work stations and upgrades the SCADA operator work
station. The construction project improves operational efficiency and provides the work
environment for Utility staff.
This construction project is complete.
➢ Installation for a new reclaim booster pump at the Tucson Water Thornydale site: This
construction project provides a fourth booster pump at Tucson Water's reclaimed water
facility. The additional reclaimed capacity provided by this pumping unit reduces the
need for the Utility to supplement potable water to the reclaimed system to meet
summertime reclaimed water demands.
This construction project is complete.
➢ Countryside Service area Drain Valve Assembly (DVA) construction: This construction
project replaced 30 non -operational DVAs in the Countryside Service Area. Operational
DVAs are an important part of a water system for flushing purposes to ensure a high
quality water supply.
This construction project is complete.
➢ Storage tank exterior coating: This consists of two construction projects to provide new
exterior coatings on the Water Plant 4 storage tank and the Big Wash storage tank
(Marketplace). Having high quality protective coatings on water infrastructure ensures a
long service life of our water storage assets.
Both construction protects are complete.
14
Well E2 re -equipping and piping
modifications include a new well pump
and motor, 5,000 gallon hydropneumatic
tank, piping modifications,
instrumentation controls and new
telemetry. Project is 95% complete.
Well E2
Water Plant 4 - 600,000 gallon steel
storage tank exterior industrial coating.
The existing coating showed signs of
degradation and base steel was exposed.
Steel tanks are recoated every 10 years
or as needed. Steel storage tanks are
inspected by staff and contractors on a
routine maintenance schedule.
Water Plant 4 Storage Exterior Coating
Future Capital Improvement Projects to be initiated in FY 2018-19 include the drilling of the
Steam Pump replacement well, hydropneumatic tank replacements, main valve
replacements and relocations. New debt will be incurred to finance these projects. The
proposed five-year Capital Improvement Program for FY 2018-19 through FY 2022-23 may
be found in Appendix B.
CUSTOMER SERVICE
Customer service is an integral element of the Utility providing a full range of support to its
customers. Staff efficiently manage the Utility's 19,751 metered connections serving a
combined population of approximately 44,500 for both water service areas. Customer
service responsibilities include preparing the monthly billing, processing cash receipts,
preparing daily deposits and processing new meter applications. Staff also manages new
and closed accounts as customers move in and out of the water service areas.
Customer Service staff produced over 236,000 bills in FY 2016-17, generating $12.,415,903
in water sales revenue. This revenue does not include sales taxes, groundwater
preservation fees or any service fees. Water sales revenue billed by user classification is
illustrated in Figure 2.
15
FIGURE 2
$808,971'
$2
Revenue By User Classification
FY 2016-17
$8,358,705
$108,405 '
�0I,l30,0"I0
M1713584
® Construction - 2%
0 Commercial - 7%
■ Residential - 67%
® Irrigation - 9%
o Reclaim ed - 14%
®Potable Turf- 1%
The Utility has an IGA with Pima County Regional Wastewater Reclamation Department to
provide their monthly sewer billing. In addition, the Utility provides monthly and quarterly
billing for the Town's Storm Water Utility. In FY 2016-17, the Utility processed a total of
$26,604,615 in payments for the Utility and the other two organizations as follows:
➢ Oro Valley Water Utility $ 16,557,892
➢ Pima County Wastewater Reclamation $ 8,769,569
➢ Town of Oro Valley Stormwater Utility $ 1,277,154
It is important to note that the total payments for Oro Valley Water Utility are in excess of
the water sales billed because the payments processed include sales taxes, groundwater
preservation fees, security deposits and other service fees charged by the Utility.
Of the above payments processed, the amount of payments made with credit cards totaled
$2,773,426. This is an 18 percent increase over credit card payments made in FY 2015-16.
The increase in the use of credit cards for payment of utility bills creates efficiencies for
customer service personnel. The vast majority of these credit card payments are made
online and are electronically entered into the billing system. This eliminates data entry
errors and increases time available for staff to perform other functions.
Advanced Metering Infrastructure (AMI) technology has improved the Utility's customer
service capability. The volume of water lost from leaks has been reduced by 72 percent as a
result of early leak detection notification made possible with AMI technology. Additionally,
staff has the ability to identify the day and time of water use while speaking with the
customer which significantly increases their ability to troubleshoot customers' water
concerns. In the past, Customer Service staff would issue a work order for the field staff to
investigate and respond to customers' inquiries in the field.
AMI technology also created the capacity for the Utility's customer portal known as
AquaHawk Alerting. There are over 5,400 customers registered in the portal. AquaHawk
16
Alerting provides customers the ability to monitor their own water use on an hourly, daily,
weekly or monthly basis. They can also set their individual water use thresholds that will
enable the technology to send them high water use alerts. Customer Service staff use the
Utility's customer kiosk to assist customers in registering in AquaHawk and to teach them
how to establish water use thresholds. In 2017, the Customer Service staff responded to
1,198 inquiries specific to AquaHawk Alerting activities.
The major accomplishments by Customer Service staff in 2017 include the following:
➢ Produced over 236,000 water bills
➢ Responded to 36,647 customer contacts averaging 147 contacts per day
➢ Processed 5,483 change of service requests
➢ Issued 1,631 work orders to field staff
➢ Processed 342 new meter installation applications
Utility statistics including the billing collection rate for 2017 may be found in Appendix C.
WATER CONSERVATION
1 The Water Conservation Program is an important
element of the Utility's overall water resource
management efforts. The conservation program
serves customers through community outreach and
education. It engages the public with self-service
tools and information to help improve the
understanding of water use on a commercial and
residential level.
The Utility continually looks for ways to expand opportunities for public education and
advocacy regarding water conservation.
The AquaHawk Alert notification program allows for direct customer contact to achieve
water and cost savings and is typically delivered by door hanger, text, phone and email. In
2017:
➢ Conservation staff averaged 120 direct contacts per month regarding water use
anomalies which may indicate a continuous leak
➢ Early leak detection is fundamental to efficiency and a conservative estimate for
potential water savings is one million gallons total for those 120 direct contacts
Outreach and education are becoming more technical in nature due to the transition in
community demographics and the Utility's use of technology. In addition to speaking
engagements and training sessions, computer classes were conducted to increase
enrollment in AquaHawk and focused on registration and setting water use thresholds so
customers receive alert notifications directly. Other outreach opportunities include:
17
-1
➢ Social media communication was implemented. Water Wednesdays is found on the
Town's Facebook page.
➢ Water audits are offered to residential, HOA and commercial customers and
evaluate indoor and outdoor water use. AMI has taken audits to a new level and
many issues can be identified and solved over the phone. As a result, the number of
audits is declining and the registration in AquaHawk is increasing.
• 66 audits were completed in 2017 and are analyzed the subsequent year
• For the 56 audits completed in 2016, there was a combined 13 percent
decrease in water use
• Over 5,400 of the Utility's customers (28 percent) have registered in the
AquaHawk customer portal
The Utility partners with Environmental Education Exchange to provide the Conservation
Kids Program. This program meets state educational requirements and has been available
to schools in Oro Valley and the CSWSA since 2014. This educational program focuses on
1st-3rd grade students and creates an awareness of water conservation. In the 2016-17
school year, 805 students participated in the Conservation Kids Program.
OPERATIONS AND MAINTENANCE
All Production, Distribution and Meters operations personnel are certified operators
licensed by the Arizona Department of Environmental Quality (ADEQ). There are two
classifications for the Oro Valley Water Utility: the OVWSA distribution system is a Grade 4
and the CSWSA distribution system is a Grade 2. For more information please visit the ADEQ
website at www.azdeq.gov or the United States Environmental Protection Agency (USEPA)
website at https://www3.epa.gov/enviro/facts/sdwis/search.html
All operations personnel work together to address water system problems. On -call staff
respond to water system problems 24 hours per day, seven days per week. This on -call
staffing utilizes a tiered -level after-hours response protocol in accordance with the existing
Emergency Response Plan.
Production personnel are responsible for the operation and maintenance of wells, booster
pumps and reservoirs on the potable water system. In addition, Production personnel are
responsible for the booster pumps, metering stations and the reservoir on the reclaimed
water system. These systems are monitored with the use of SCADA technology. Production
staff performs routine mechanical and electrical maintenance at 47 production sites. They
uphold operational balance for CAP water delivery to the potable systems, maintain 23
disinfection injection pumps and disinfection residuals at injection points on the potable
and reclaimed water delivery systems. Production staff also performs an annual
groundwater level survey of static water levels in all wells.
The following are the major activities and accomplishments of Production personnel in
2017:
➢ Responded to after-hours situations which totaled 378 work hours
W
➢ Completed 798 assigned work orders including electrical
➢ Assisted with six reservoir exterior and interior inspections/cleaning
➢ Performed maintenance on 48 Remote Terminal Units, two Master Controllers, two
Human Machine Interfaces and one Network Server
➢ Performed RSLogix 500 program modifications and FactoryTalk View graphics
interface modifications on two HMIs as needed
Distribution personnel are responsible for maintenance and replacement of water distribution
system components. Components include water mains, valves, fire hydrants, pressure reducing
valves, drain valve assemblies, air relief valves and service lines. Staff update system mapping,
install new assets, perform erosion repairs, asphalt paving and system flushing. These
components are tracked by database under the Utility's preventive maintenance program.
Distribution staff are also responsible for the departmental safety program.
Distribution staff have significant direct customer contact and professionally respond to
customers regarding water quality and pressure or flow related problems. Distribution staff
are responsible for repair of main line and service line breaks. Distribution staff are also
responsible for bluestaking underground water mains for all new and existing construction
projects throughout the Town's water service area. Arizona law requires that all
underground utilities be bluestaked prior to any excavation in order to ensure the safety
and welfare of the community by protecting underground facilities from damage. An
inventory of all facility assets may be found in Appendix D.
The following are the major activities and accomplishments of Distribution staff in 2017:
➢ Responded to 151 customer inquiries and 252 after hour call outs
➢ Maintained 686 water valves, replaced five valves and performed 48 valve
adjustments
➢ Maintenance performed on 318 fire hydrants and made 22 repairs to fire hydrants
➢ Performed 108 tests, maintenance and/or repairs on 27 pressure reducing valves
➢ Performed 12,573 bluestakes for potable and reclaimed pipelines
Using Town equipment, the Utility's
distribution staff repaired 6 main line
breaks and 8 service line repairs. The
Utility realized an estimated savings
of $150,000 by not having to use an
outside contractor to make these
repairs.
19
Meters Operations
AMI is an integral part of the Oro Valley Water system. The advanced metering technology
transformed how the Utility gathers water use data, how staff collaborate with customers
and improved water data management practices. The AMI system has improved customer
service by providing historical, on -site water usage data to the customer to explain a
problem such as a water leak. This saves customers water, money and promotes continued
water conservation efforts. Utility staff have increased their technical knowledge and skills
to provide this improved customer service feature. Staff use analytical and critical thinking
skills to analyze and troubleshoot complex metering problems and technical issues within
the AMI system. Staff use AMI network software, Meter Data Management software, field
collection and meter reading hardware, GIS software and data collection software to
manage water usage data and develop solutions to solve complex problems and mitigate
water use issues that impact Utility customers.
AMI technology also provides an opportunity to increase operational efficiency by
eliminating the need for labor intensive manual meter reading and reducing travel time. By
increasing operational efficiencies, meter operations staff can focus their time and
capabilities on oversight of the AMI system and related software. This includes proactively
monitoring and maintaining the AMI system, providing instruction and insight for electronic
equipment installations, programming, maintenance and repairs. Meter operations staff
focus their efforts on improving operational efficiencies to perform additional water system
preventive maintenance and commercial meter testing.
J WATER QUALITY
Water quality sampling and testing is an important priority to provide safe and reliable
water. The Town's water system is in full compliance with all state and federal regulations.
The Utility is regulated by the ADEQ and provides all required water quality testing results
to ADEQ. The Utility works closely with ADEQ to ensure all federal and state standards are
met. The website for ADEQ is www.azdeq.gov.
In 2017, the Utility received 2,603 analytical results for required water sampling and
operational data for the potable water system and all ADEQ requirements were met. Each
year, the Utility collects hundreds of water samples from 16 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 and are specifically selected to represent the
water quality delivered to the customers. The Utility has an additional 77 sampling stations
that can be used during emergencies and to meet future testing requirements. Every three
years, water samples are taken from 50 private residences within the water service areas
and tested for lead and copper. This sampling was completed in June of 2016 and met the
USEPA's rules for lead and copper. The Utility provides all water quality testing results to
ADEQ and works closely with that agency to ensure all federal and state standards are met.
20
During 2017, 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 through wellhead chlorination, effective system monitoring, proficient sampling
methods and routine maintenance.
Testing includes water hardness which is a measurement of the concentration of calcium
and magnesium. During 2017, the hardness levels in Oro Valley ranged from 2.0 to 14.0
grains per gallon (34 ppm to 240 ppm). The Utility's water hardness ranges from soft to very
hard with the majority of the water testing at moderately hard to hard. The water hardness
varies depending on the volume of CAP water that is being blended at any given time in a
specific pressure zone.
Due to proposed regulatory changes and requirements, in 2017 the Utility continued
preparation to phase in five proposed and pending USEPA regulations related to monitoring
rules:
➢ Fourth Unregulated Contaminant Monitoring Rule March 2018-2020
➢ Revised Long -Term Lead and Copper Rule August 2018
➢ Carcinogenic Volatile Organic Chemicals Rule TBD
➢ Strontium TBD
➢ Epichlorohydrin and Acrylamide TBD
In 2018, the Utility will continue to phase in sampling and monitoring of new contaminants
in accordance with regulatory requirements.
The Utility produced the 2016 Consumer Confidence Report for both water systems in April
of 2017. These reports are available electronically. Notices were mailed to customers letting
them know the reports could be found on the Town's website under the Utility's main page.
The 2017 Consumer Confidence Reports will be completed in March of 2018.
In addition to sampling the potable water system, water quality samples are routinely taken
on the reclaimed water system for chlorine levels and turbidity to assure compliance with
regulatory standards. All ADEQ standards and regulations for reclaimed water were met in
2017.
BACKFLOW PREVENTION
Backflow prevention is an important component of water quality designed to protect the
public water system. The purpose of this program is to keep the water supply safe from
contaminants that could be introduced into the distribution system through backflow, back
siphoning or back pressure from customer's plumbing systems or internal processes.
The Backflow Prevention Program is administered in accordance with the Town of Oro
Valley Ordinance (0) 07-21, ADEQ Administrative Code, section R18-4-13115, the
International Plumbing Code and the guidelines of the University of Southern California
Foundation for Cross Connection Control and Hydraulic Research.
21
There are 1,594 backflow prevention assemblies in the program that are located in the Oro
Valley water service areas. The following are some of the major activities and
accomplishments performed by the Backflow Prevention Division in 2017:
➢ Tested 210 backflow assemblies
➢ Repaired 26 in -ground and construction water backflow prevention assemblies
➢ Issued 59 permits for new and replacement backflow prevention assemblies
➢ Conducted a survey and inspection of 586 backflow assemblies
Completion of the backflow assembly survey and inspections revealed that there were a
number of fire service lines installed between 1999 and 2004 that did not have backflow
assemblies installed. During that time frame, backflow assemblies were not required on fire
service lines. Water sits idle in fire lines until the line is flushed for testing or when a fire
event occurs. This situation could create a potential hazard to the water system. As such,
the Utility has developed a three-year capital program to retrofit backflow assemblies on all
fire lines that do not currently have them.
SECURITY AND EMERGENCY RESPONSE
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 relevant to the water systems they
operate. Any security situations also directly involve the Oro Valley Police Department as a
first response action.
In 2017, Utility personnel, with the assistance of a security consultant, reviewed, refined
and updated the security program, Emergency Response Plan (ERP) and the Business
Continuity Plan (BCP). A series of training classes and exercises were made available to and
completed by Utility staff. This training is done on an annual basis in accordance with the
guidelines from the Department of Homeland Security, Federal Emergency Management
Agency and the USEPA. The Utility will continue to implement the elements defined in the
vulnerability assessment, the ERP and the BCP as well as those identified through the course
of business.
The hydrant lock program is implemented through the new development process to protect
hydrants from illegal entry and unauthorized use. In 2017, the Utility staff installed 56 new
hydrant defenders with locks. Security features, which include perimeter fencing, security
walls, warning signage, motion sensors and cameras at all active production facilities were
inspected to maintain integrity.
The Utility is kept abreast of local, regional and national security issues by the Water
Information Sharing and Analysis Center and is also a member of the Arizona
Water/Wastewater Agency Response Network which mutually cooperates with other water
and wastewater providers in an emergency within the state.
22
FINANCIAL HIGHLIGHTS
The Utility is financially sound and continues to manage its revenues, control expenditures
and reduce debt. In February 2018, the Utility's bond ratings were reviewed by Fitch Ratings
who affirmed its AA- rating with a stable outlook. Ratings criteria include stable economic
base, sufficient water supply for current and long-term needs, a manageable capital
improvement plan, timely rate increases, maintaining adequate debt service coverage and
maintaining an adequate cash reserve balance.
Revenues and Expenditures
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 Utility has three funds:
➢ The Operating Fund provides funding for the Utility administration and operations
existing system improvements and debt service payments. The sources of revenue for
this fund are water sales, service related charges and the Groundwater Preservation
Fees (GPF). The GPF funds are dedicated to pay for debt or capital costs related to
renewable water resources, renewable water supplies and for costs to wheel CAP
water to the Town.
➢ The Potable Water System Development Impact Fee Fund (PWSDIF) 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 the system expansion is paid for by new
development.
➢ The Alternative Water Resources Development Impact Fee Fund (AWRDIF) provides
funding for the development of renewable sources of water supply and any
infrastructure required for delivery of those resources. The source of revenue for this
fund is alternative water resources development impact fees. These fees are paid by
new development for renewable water supply and infrastructure attributed to new
growth.
23
Table 6 contains the actual revenue billed compared to the revenue budgeted in FY 2016-
17 for all funds within the Utility:
TABLE 6
Revenue Source
Budget
FY 2016-17
Amount Billed
FY 2016-17
Over (Under)
Budget
g
Over (Under)
Budget
g
Potable Water Sales:
Residential
$ 8/116/483
$ 81358,705
$ 242,222
3%
Commercial
$ 828,238
$ 8081978
($ 19,260)
(2%)
Irrigation
$ 11103,950
$ 1,171,584
$ 67,634
6%
Turf
$ 129,967
$ 1081405
($ 21,562)
(17%)
Construction
$ 2111274
$ 2291416
$ 18,142
9%
Reclaimed Water Sales:
Turf
$ 1,525,356
$ 11678,711
$ 153,355
10%
Construction
$ 500
$ 81734
$ 8,234
1646%
Irrigation
$ 45,627
$ 511370
$ 5,743
13%
Subtotal Water Sales:
$11,961,395
$12,415,903
$454,508
38%
Misc. Service Fees & Charges
$ 6971800
$ 7691638
$ 71,838
10%
Groundwater Preservation Fees
$ 21346,000
$ 2/424/466
$ 78,466
3%
Total Enterprise Fund
$15,005,195
$15,610,007
$ 604,812
4%
AWRDIF Impact Fees
$ 11040,089
$ 1,638,792
$ 5981703
57%
PWSDIF Impact Fees
$ 519,058
$ 816,353
$ 297,295
57%
Interest Income —All Funds
$ 1271200
$ 11,020
( $ 116,180)
(91%)
Total All Funds for FY 2016-17
$16,691,542
$18,076,172
$1,384,630
8%
The budgeted expenses (excluding depreciation and amortization) for the Operating Fund
are compared to the actual expenses for FY 2016-17 in Table 7:
TABLE 7
Expenses
Budget
FY 2016-17
Actual Spent
FY 2016-17
Over (Under)
Budget
Over (Under)
Budget
Personnel
$ 31161,854
$ 31036,446
($ 125,408)
(4%)
O&M
$ 7/112/994
$ 61922,368
($ 190,626)
(3%)
Capital
$ 31613,765
$ 31298,306
($ 315,459)
(8%)
Total
$13,8881613
$13,257,120
($ 631,493)
(5%)
The Utility's personnel costs were under budget due to short term vacancies prior to filling
vacant positions. The O&M expenses were under budget largely due to CAP water recharge
costs coming in less than anticipated. Capital expenses were also less than budgeted due to
changes in project schedules and timing.
24
Outstanding Debt
W-1
The Utility has paid down outstanding debt by $27.5 million over the last ten years. Table 8
is a summary of the outstanding debt and the annual debt service payments (principal and
interest) for all funds within the Utility:
TABLE 8
Fund
Bond
Series
Outstanding
Debt
At 12/31/17
Debt Service
Payments
FY 2017-18
Interest
Rate
Maturity
Operating (WIFA)
2008
$ 2,613,309
$ 3111000
3.5
2027
Operating (WIFA)
2009
$ 11484,834
$ 149,225
3.2
2029
Operating
2012
$ 3,132,839
$ 589,759
3.6
2028
Operating
2012
$ 5,710,516
$ 110741995
3.5
2028
Operating
2013
$ 2,005,000
$ 1,024,072
1.5
2019
Operating (WIFA)
2014
$ 31592,731
$ 3771158
2.7
2029
Operating
2015
$ 11100,550
$ 1521142
1.9
2025
Operating
2017
$131186,444
$ 111655,771
2.4
2026
PWSDIF
2012
$ 1,761,645
$ 331,916
3.5
2028
Totals
$34,587,868
$ 51666,038
Water Rates
The functions and duties of the commission include annually reviewing and developing
recommendations for water revenue requirements, water rates and fee structures. The
commission evaluates staff recommendations based on an annual water rates analysis to
ensure the recommendations meet Town policies and bond covenants. The Utility bases its
financial analysis on the American Water Works Association Cash Needs Approach.
The financial analysis for FY 2017-18 resulted in a recommendation to increase the base
rates for potable water customers while keeping the tiered water use rates the same. These
proposed changes will result in a monthly increase of $1.83 for the majority of the Utility's
customers. The proposed rates will allow the Utility to recover more of the fixed costs
through revenue from base rates. The proposed water rates will be presented to the Town
Council in May 2018 and, if adopted, the new rates would become effective July 1, 2018.
U All current water rates, fees and charges including impact fees are available to view on the
Town website at https://www.orovalleyaz.govJtown/departments/water-utility/rates-and-
1 fees
25
�y,�Ev gA2p`
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2018 ANNUAL REPORT
APPENDIX A
STATIC GROUNDWATER LEVELS
STATIC GROUNDWATER LEVELS
The following table lists all production wells, the amount of groundwater pumped and their
water level changes as measured in January of 2017:
Countryside Water Service Area
Well Name
Annual
Pumped Acre
Feet
1 Year
Change
2017
5 Year
Change
2012-2017
5 Year
Average
2012-2017
CS-1
349
-0.4
1.7
0.3
CS-2
124
-1.7
4.0
0.8
Average
-1.1
2.8
0.6
Oro Valley Water Service Area
Well Name
Annual
Pumped Acre
Feet
1 Year
Change
2017
5 Year
Change
2012-2017
5 Year
Average
2012-2017
C-4
83
-4.9
-14.7
-2.9
C-5
477
-4.9
-12.7
-2.5
C-6
301
-2.4
-12.0
-2.4
C-8
296
-8.6
-16.6
-3.3
C-9
420
-0.8
-12.0
-2.4
D-1
133
-4.5
-8.8
-1.8
D-6
113
-3.8
-11.8
-2.4
D-7
182
-3.9
-9.9
-2.0
D-8
183
-4.0
-9.7
-1.9
D-9
382
-2.0
-6.8
-1.4
E-B1
471
-7.3
-9.4
-1.9
E-2
259
-2.3
-5.6
-1.1
E-3
123
-3.7
-7.4
-1.5
E-5 B
330
-5.8
-9.9
-2.0
E-6B
533
-8.0
-13.0
-2.6
E-7B
330
-7.0
-13.3
-2.7
F-1
515
-2.3
-5.7
-1.1
Average
-4.5
-10.5
-2.1
A-1
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2018 ANNUAL REPORT
APPENDIX B
PROPOSED FIVE - YEAR
CAPITAL IMPROVEMENT PROGRAM
Oro Valley Water Utility
Proposed Capital Projects Program
Prepared: January 19, 2019
Water Utility Operating Fund
Existing System Improvement
ect No.
w
Project Name
20'18-20�19
20'19-2020
2020-202'1
202'1-2022
2022-2023
5 YearTotals
1
Nakoma Sky Replacement Drill & Construct
$
800,000
$
800,0001
2
Well D8 Replacement Well Drill & Construct
$ 700,000
$
700,000
3
Mag Meter Replacements (20)
$
75,000
$
75,000
$
150,000
4
Well Production Modifications
$
50,000
$
501000
$
505000
$ 501000
$
2001000
5
Hydropneumatic Tank Replacement
$
1005000
$
1001000
$
1001000
$
300,000
6
Replace Well Pumps
$
100,000
$ 100,000
$
200,000
Subtotal
Reservoirs
$
975,000
$
225,000
$
250,000
$
503000
$ 8503000
$
23350,000
$
-
Subtotal
Boosters-
$
-
$
-
$
-
$
_
$ _
$
_
7
.......
High Mesa E and F Zone Bstr. Enhancements
$
501000
$
50,000
8
El Con Storage - Operational Improvements
$
50,000
$
50,000
9
Replace Crimson Canyon Booster Station
$
250,000
$
250,000
10
Hydropneumatic Tank Replacement
$
100,000
$
100,000
$
1001000
$
300.1000
11
Woodburn Booster Relocqation E-F Zone
$
100,000
$
5001000
$
600,000
12
Booster Station Modifications
$
50,000
$
50,000
$
50,000
$ 50,000
1 $
200,000
Subtotal
$
1009000
$
3503000
$
6503000
$
3009000
$ 509000
1 $
1,450,000
13
s
12-Inch F-Zone Main (Woodburn Booster)
$
1001000
$
100,000
14
Fireline Backflow Protection
$
188,000
$
1883000
$
188,000
$
5641000
15
Drinking Fountain Re -work
$
503000
$
50,000
16
Valve Exercising & Documentation
$
150,000
$
150,000
17
Rancho Feliz Valve & DVA Replacements
$
1503000
$
150,000
18
Countryside DVA Replacements
$
210,000
$
210,000
19
2 PRVs - Corbett Lane & Aldersprings
$
70,000
$
60,000
$
130,000
20
Rancho Verde Hydrants
$
100,000
$
100,000
21
Main Valve Replacements
$
50,000
$
50,000
$
50,000
$
50,000
$
2001000
22
La Cholla -Lambert to Tangerine (RTA)
$
6001000
$
200,000
$
800,000
23
Hilton Hotel & Casitas Main Replacement
$ 1507000
$
150,000
24
Linda Vista Citrus Tracts Main Replacement
$
250,000
$
250,000
$ 2501000
$
750,000
25
Pusch Ridge Estates Main Replacement
$ 500,000
$
500,000
26
TW Wheeling at Oracle & Hardy (roll over)
$
150,000
$
150,000
Subtotal
Structures & Walls
$
132083000
$
858,000
$
638,000
$
400,000
$ 900,000
$
4,004,000 -U
27
Wall Upgrades and Improvements
$
85,000
$
1101000
$
195,000
28
Operations Office Improvements - Reclaim
$
150,000
$
150,000
III Subtotal
w • Equipment
Meters
$
2353000 1
$
1109000 1
$
1
$
1
$ 1
$
345,000
29
SCADA Legacy Replacement
$
100,000
$
100,000
30
Instrumentation Replacement
$
2505000
$
2505000
31
Electric Sub -metering Wells/Boosters
$
75,000
1
$
751000
Subtotal 1
1
Vehicles
$
-
$
175,000
$
-
$
2503000
$ -
$
425,000
32
Replacement Vehicles - Meter Operations
$
75,000
$
501000
$
125,000
33
Distribution Vehicles
$
501000
$ 703000
$
1201000
34
Production Vehicles
$
70,000
$
75,000
$
1451000
35
Inspector Vehicles
$
_
36
Water Meters - New Metered Connections
$
1211000
$
945000
$
78,000
$
48,000
$ 58,000
$
399,000
Subtotal $ 121,000 $ 164,000
M,
1, , ., , .. ,.. .., .. .. ... .. ... 1.
Total Existing System Improvements $ 2,639,000 $ 1,882,000
$ 203,000 $ 1739000 $ 128,000
.. ,. ,,.
AtZ
$ 1,741,000 $ 1,173,000 $ 1,928,000
$ 789,000
.. ,..
$ 9,363,000
B-1
Oro Valley Water Utility
Proposed Capital Projects Program
Prepared: January 19, 2018
Groundwater Preservation Fees
CAP Water Delivery System Improvements (Existing Customers)
Project No.
Project Name
r Partnered
NWRRDS • wProjects:
%
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023
1 5 Year Total
Program Support Services
40%
$ 160,000
$ 44,000
$ 192,000
$ 296,000
$ 8,000
$ 700,000
2
Pipeline Design
40%
$ 440,462
1 $ 440,462
3
Forebay Design
40%
$ 66,154
$ 66,154
4
Well Improvement Analysis & Permitting
40%
$ 40,000
$ 40,000
5
Well Drilling & Testing
40%
$ 234,000
$ 2341000
6
Pipeline Construction
40%
$ 880,923
$ 880,923
$ 1,761,846
7
Forebay Reservoir Construction
40%
$ 132,077
$ 132,077
$ 2641154
8
Well Const. Permit/DrilllDevelopiTest
40%
$ 780,000
$ 780,000
9
Well Equiping Design/Site Improvements
40%
$ 390,000
$ 390,000
10
Subtotal NWRRDS Partnered Projects
Pipeline Route Study & Prelim Design 40%
$ 160,000
$ 80,000
$ 590,616
$ 4261000
$ 113099000
$ 2,191,000
$ 4,6763616
$ 80,000
11
Reservoir & Booster Property Acq.
40%
$ 80,000
$ 80,000
12
Pipeline Easement Acquisition
40%
$ 300,000
300,000
13
Pipeline Design (9.68 miles 16-in. DIP)
40%
$ 560,000
$ 5601000
14
NWRRDS Res & Bstr Station Design
40%
$ 401000
$ 40,000
15
Shannon Res & Bstr Station Design
40%
$ 120,000
$ 120,000
16
NWRRDS Bstr Station Construction
40%
$ 200,000
$ 2001000
17
Shannon Reservoir Construction
40%
$ 280,000
$ 280,000
18
Shannon Bstr Station Construction
40%
$ 100,000
$ 100,000
Subtotal NWRRDS Independent Projects
$ 80,000
$ 980,000
$ 120,000
$ -
$ 580,000
$ 197603000
Total NWRRDS Capital Improvements $ 240,000 $ 1,570,616 $ 546,000 $ 1,3095000 $ 2,771,000 $ 6,436,616
Alternative Water Resources Develoment Impact Fee Fund
CAP Water Delivery System Improvements (New Growth)
Project No. Project Name
��WNWRRDS Partnered Projects:
%
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023
1 5 Year Total
1
Program Support Services
60%
$ 240,000
$ 66,000
$ 288,000
$ 444,000
$ 12,000
$ 1,050,000
2
Pipeline Design
60%
$ 660,692
$ 660,692
1
3
Forebay Design
60%
$ 99,231
$ 99,231
4
Well Improvement Analysis & Permitting
60%
$ 60,000
$ 60,000
5
Well Drilling & Testing
60%
$ 351,000
$ 351,000
6
Pipeline Construction
60%
$ 1,321,385
$ 1,321,384
$ 2,642,769
7
Forebay Reservoir Construction
60%
$ 198,116
$ 198,115
$ 396,231
8
Well Const. Permit/Drill/Develop/Test
60%
$ 15170,000
$ 111703000
9
Well Equiping Design/Site Improvements
60%
$ 585,000
$ 585,000
10
Subtotal NWRRDS Partnered Projects
NWRRDS Independent Projects:
Pipeline Route Study & Prelim Design 60%
$ 2401000
$ 120,000
$ 885,923
$ 639,000
$ 1,9633501
$ 3.286.499
$ 7,014,923
$ 120,000
11
Reservoir & Booster Property Acq.
60%
$ 120,000
$ 120,000
12
Pipeline Easement Acquisition
60%
$ 450,000
$ 450,000
13
Pipeline Design (9.68 miles 16-in. DIP)
60%
$ 8403000
$ 840,000
14
NWRRDS Res & Bstr Station Design
60%
$ 60,000
$ 60,000
15
Shannon Res & Bstr Station Design
60%
$ 180,000
$ 180,000
16
NWRRDS Bstr Station Construction
60%
$ 300,000
$ 3003000
17
Shannon Reservoir Construction
60%
$ 420,000
$ 420,000
18
Shannon Bstr Station Construction
60%
$ 1503000
$ 150,000
Subtotal NWRRDS Independent Projects
$ 120,000 1
$ 1,470,000-1
$ 180,000 1
$ -
$ 870,000
$ 2,640,000
Total NWRRDS Capital Improvements
$ 360,000 1 $ 2,355,923
$ 819,000 1 $ 1,963,501 $ 4,156.499 1 $ 9,654,923
B-z
Oro Valley Water Utility
Proposed Capital Projects Program
Prepared: January 19, 2019
Potable Water System Ueveloment Impact Fee Fund
Expansion Related Improvements
B-3
'A 1
TOWN OF ORO VALLEY
fio�� WATER UTILITY COMMISSION
2018 ANNUAL REPORT
APPENDIX C
UTILITY STATISTICS
FINANCIAL STATISTICS
656,000,000
65410001000
65230001000
65010001000
648,000,000
646,000,000
6441000 3000
6421000 3000
CAP Water Deliveries in Gallons
654, 908,177
648, 997, 437
6463616,244
2015 2016
2017
C-1
C-2
153000
103000
51000
2015 2016 2017
Billing Collection Rate
99.99% 99.99%
100.00%l0
,14
95.00%
95.00 %
94.00°
92.00% f;
r
90.00%
2015 2015 2017
C-3
�ONnFO 1
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2018 ANNUAL REPORT
APPENDIX D
ASSET INVENTORY
ASSET INVENTORY
Assets as of December 31, 2017
Potable Assets
Quantity
Value
CAP Water Rights (allotment in acre feet)
10,305
$ 61172,361
Land
---
21189,864
Wells (active & inactive)
19
9,682,957
Booster Stations
26
4,945,758
Reservoir Capacity (million gallons)
11.8
12,509,248
Fire Hydrants
21291
2,9901043
Meters
19,751
91179,781
Services
---
4,546,439
Equipment
---
2,037,519
Structures
---
1,824,230
Vehicles
29
11813,568
Telemetry
---
4511416
Buildings & Improvements
---
358,733
Water Mains (miles)
366
621733,729
The value of the following appurtenances are included in water mains:
Va Ives
81190
Pressure Reducing Valves
27
Air Relief Valves
878
Drain Valve Assemblies
924
Subtotal Value of Potable Assets
$ 1211435,646
Accumulated Depreciation
( 411105,617 )
Net Value of Potable Assets
$ 80,330,029
Reclaimed Assets
Quantity
Value
Land
---
$ 220,796
Telemetry
---
20, 088
Booster Stations
2
7.12711902
Reservoir Capacity (million gallons)
1.5
2,294,968
Water Mains (miles)
14
12,013,432
The value of the following appurtenances are included in water mains:
Va Ives
77
Air Relief Valves
51
Fire Hydrants
3
Drain Valve Assemblies
1
Subtotal Value of Reclaimed Assets
$ 21,821,186
Accumulated Depreciation
( 41108,109 )
Net Value of Reclaimed Assets
$ 17,713,077
Total Value of all Water Assets Net of Depreciation
$ 98,043,106
D-1
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2018 ANNUAL REPORT
APPENDIX E
ACRONYMS AND GLOSSARY
ACRONYMS
"I
ADEQ
Arizona Department of Environmental Quality
ADWR
Arizona Department of Water Resources
AF
Acre Feet
AMI
Advanced Metering Infrastructure
AWBA
Arizona Water Banking Authority
AWRDIF
Alternative Water Resources Development Impact Fee
AZWARN
Arizona Water and Wastewater Agency Response Network
BCP
Business Continuity Plan
CAGRD
Central Arizona Groundwater Replenishment District
CAP
Central Arizona Project
CAVSRP
Central Avra Valley Storage and Recovery Project
CSWSA
Countryside Water Service Area
DAWS
Designation of Assured Water Supply
EPA
Environmental Protection Agency
ERP
Emergency Response Plan
FY
Fiscal Year
GIS
Geographic Information System
GPF
Groundwater Preservation Fee
GPM
Gallons per Minute
IGA
Intergovernmental Agreement
LSCRRP
Lower Santa Cruz Replenishment Project
LTSC
Long -Term Storage Credit
MGD
Million Gallons per Day
NRRDS
Northwest Recharge and Recovery Delivery System
OVWSA
Oro Valley Water Service Area
PDEQ
Pima County Department of Environmental Quality
PWSDIF
Potable Water System Development Impact Fee
SCADA
Supervisory Control and Data Acquisition
Water CASA
Water Conservation Alliance of Southern Arizona
E-1
GLOSSARY
Acre Foot — The term used to define a large volume of water. One acre foot is equal to
325,851 gallons.
Arizona Water/Wastewater Agency Response Network — AzWARN is a statewide mutual
assistance program between water and wastewater utilities. This volunteer based network
allows utilities to help one another in times of emergency when the resources of a utility
are overwhelmed. The foundation of the network is a signed mutual aid agreement
between all participating utilities.
Aquifer — An underground layer of water -bearing permeable rock or unconsolidated
materials (gravel, sand, or silt) from which groundwater can be extracted using a water well.
Central Arizona Groundwater Replenishment District (CAGRD) - It was created in 1993 to
replenish (or recharge) the amount of groundwater pumped or delivered to its members
which exceeds their pumping limitations using any water source available except
� groundwater.
M
Central Avra Valley Storage and Recovery Project — An approved Underground Storage
Facility operated by Tucson Water located in the Tucson Active Management Area located
approximately one mile west of Sandario Road and just south of Mile Wide Road, in the
Avra Valley, Pima County, Arizona.
.� Colorado River Basin —The drainage basin of the Colorado River is located in the
southwestern United States and northwest Mexico. The 1,450 mile river drains an
expansive, arid watershed that encompasses parts of seven U.S. (Wyoming, Colorado, Utah,
New Mexico, Arizona and California) and two Mexican states (Sonora and Baja). Rising in
the central Rocky Mountains in the U.S., the river flows generally southwest across the
Colorado Plateau and through the Grand Canyon before reaching Lake Mead on the
Arizona —Nevada line, where it turns south toward the international border at Yuma,
Arizona. After entering Mexico, the Colorado approaches the large Colorado River Delta
where it naturally empties into the Gulf of California.
Effluent —Generally refers to wastewater that is treated and discharged to a natural water
course. For Oro Valley Water Utility its effluent is treated at facilities owned and operated by
Pima County. This treated wastewater effluent is the source of Oro Valley's reclaimed water.
1 Five -Year Capital Improvement Plan —Along-term plan for the future development of
� water related projects to develop and deliver water supply to our community. It includes
existing system improvements and expansion related projects to meet future demands.
Groundwater —The water located in an aquifer beneath earth's surface in soil pore spaces
and in the fractures of rock formations. The depth at which soil pore spaces or fractures and
voids in rock become completely saturated with water is called the water table.
Groundwater Extinguishment Credits —Credits that are generated when a grandfathered
Jgroundwater right is extinguished or retired and never be used again. The credits are issued
E-2
a certificate from the Arizona Department of Water Resources. Ownership of the credits can
be transferred from the owner to another entity within the same Active Management Area.
Kai Farms — An approved Groundwater Savings Facility located at a farm near Redrock,
Arizona that uses CAP water for irrigation.
Lake Mead — The largest water storage reservoir in the United States with a capacity of
25,900,000 acre feet. It is located on the Colorado River about 24 miles southeast of Las
Vegas, Nevada. Hoover Dam forms the lake and provides hydro -electric power.
Lake Powell — A water storage reservoir located on the Colorado River near Page, Arizona
with a capacity of 24.300 million acre feet. Glen Canyon Dam forms the lake and provides
hydro -electric power.
Long -Term Groundwater Storage Credit — A credit for storing CAP water or wastewater
effluent that is accrued when this water is delivered to and recharged into an approved
underground water storage facility. Once the water is recharged and stored and a deduction
is taken for losses to the aquifer, it becomes a credit that can be used in the future either by
direct delivery or used as credits to replace groundwater pumped from recovery wells.
Lower Santa Cruz Replenishment Project — An approved Underground Storage Facility
operated by the Central Arizona Project located in the Tucson Active Management Area
near Marana, Arizona.
Northwest Recharge Recovery and Delivery System — Partnership project between The
Town of Oro Valley, Metro Water and The Town of Marana to plan, design, construct and
operate a recovery and delivery system to facilitate the delivery of recovered CAP water
from the Lower Santa Cruz Recharge Project and the Avra Valley Recharge Project to each
partners respective service area.
Pima Mine Road Recharge Project — An approved Underground Storage Facility operated by the
Central Arizona Project located in the Tucson Active Management Area near Sahuarita, Arizona.
Recharge — Recharge refers to the replenishment of an aquifer's groundwater. An aquifer
recharges water that percolates into the ground. Recharge takes advantage of water
supplies available now and stores them for future use. Recharge also allows the slow
introduction of new water supplies into our drinking water system by blending the new
source with existing groundwater.
Tucson Active Management Area — One of five Active Management Areas in Arizona
established under the 1980 Groundwater Code to manage groundwater usage through the
Assured water Supply Program.
Turbidity — Turbidity is the cloudiness or haziness of a fluid caused by large numbers of
individual particles that are generally invisible to the naked eye, similar to smoke in air.
Water Information Sharing and Analysis Center — WaterISAC is a community of water
sector professionals who share a common purpose: to protect public health and the
environment. This one -of -a -kind resource serves as a clearinghouse for government and
private information that helps members identify risks, prepare for emergencies and secure
the nation's critical water infrastructure.
E-3