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TOWN OF ORO VALLEY
WATER UTILITY COMMISSION ANNUAL REPORT
APRI L 2019
TABLE OF CONTENTS
Page
About the Water Utility Commission...................................................................... 1
ExecutiveSummary................................................................................................ 4
WaterResources..................................................................................................... 6
Regulatory............................................................................................................. 11
Engineeringand Planning.................................................................................... 12
CapitalProjects.................................................................................................... 13
CustomerService.................................................................................................. 17
WaterConservation.............................................................................................. 18
Operations & Maintenance.................................................................................. 20
WaterQuality........................................................................................................ 22
BackflowPrevention............................................................................................ 23
Security................................................................................................................. 24
FinancialHighlights............................................................................................... 25
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
APRI L 2019
ORO VALLEY TOWN COUNCIL
Joseph C. Winfield, Mayor
Melanie Barrett, Vice Mayor
Joyce Jones -Ivey, Councilmember
Josh Nicolson, Councilmember
Rhonda Pina, Councilmember
Bill Rodman, Councilmember
Steve Solomon, Councilmember
ORO VALLEY WATER UTILITY COMMISSION
Byron McMillan, Chair
Anne Campbell, Vice Chair
Chuck Hollingsworth, Commissioner
Charlie Hurt, Commissioner
Robert Milkey, Commissioner
Richard Reynolds, Commissioner
Winston Tustison, Commissioner
TOWN STAFF
Mary Jacobs, Town Manager
Peter A. Abraham, P.E., Water Utility Director
Lee Jacobs, P.E., C.P.M., Engineering Division Manager
Shirley Kiel, 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:
Ka rn Boyce
Robert Jacklitch
Jeff Kane
George Kendrick
Mary C. Kobida
Adam Pence
Christian Swanson
Carolyn Schneider
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. The
commissioners are selected to give a balanced representation of 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, unless otherwise posted. All meetings are noticed on the
Town's website.
In 2018, the commission held 10 Water Utility Commission meetings. Notable actions taken
by the commission in 2018 include:
Meeting Date
Action Item
January 8, 2018
Appointments to the Water Utility Commission Subcommittees
January 8, 2018
Election of the Commission Chair and Vice Chair
February 20, 2018
Recommendation for acceptance of the Preferred Financial Scenario
as identified in the Water Rates Analysis
March 121 2018
Recommendation for acceptance of the Annual Report
May 14, 2018
Recommendation for approval of the 2018 Potable Water Master Plan
1
Additional notable items on commission agendas in 2018 include:
➢ Capital Improvement Program five year budget
➢ 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
Notable issues planned for commission review or action in 2019 include:
➢ Water Rates Analysis and proposed rate changes
➢ Lower Basin Drought Contingency Plan
➢ Groundwater metrics and wellfield condition
➢ Water conservation
➢ Tour of Northwest Recharge and Recovery Delivery System Project
➢ State and federal legislation related to water
64 ➢ 10-Year CAP Water Wheeling Delivery Plan
➢ 10-Year Water Resource Plan
➢ Water Utility code changes
➢ Impact Fee Analysis
In addition to the regular commission meetings, there are meetings conducted by standing
subcommittees. The subcommittee membership is as follows:
Finance Subcommittee
Winston Tustison, Chair
Robert Milkey
Chuck Hollingsworth
Richard Reynolds
Anne Campbell, Chair
Byron McMillan
Charlie Hurt
2
WATER UTILITY COMMISSION 2019
Byron McMillan
Chair
Chuck Hollingsworth
Commissioner
Rick Reynolds
Commissioner
y
Robert Milkey
Commissioner
3
Anne Campbell
Vice Chair
Charlie Hurt
Commissioner
�h
Winston Tustison
Commissioner
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
ANNUAL REPORT
APRI L 2019
EXECUTIVE SUMMARY
The Executive Summary contains information regarding the work done by the Water Utility
Commission and includes a briefing on the Utility's operations, capital projects, water
resource portfolio and financial management.
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, parks and
athletic fields. The potable drinking water system is separate from the reclaimed water
system.
TABLE 1
Total Water Produced in 2018 (Acre Feet)
Groundwater
CAP Water
Reclaimed
Total Water
Water
Produced
5, 213
2, 0 9 8
11893
91204
The Utility uses Central Arizona Project water in the following three ways:
1) Recharge and recover water for delivery to the potable water systems in both Oro
Valley and Countryside
2) Recharge for replacement credit to apply to water pumped from the Utility's wells
3) Recharge and store water in recharge facilities for future use
As of December 31, 2018, the total in the long-term storage credit amount was 22,103 acre
feet and the total in the Groundwater Allowance Account was 19,130 acre feet.
CUSTOMER SERVICE
In 2018, the Utility experienced a one and one half percent growth rate in customer
connections. At the end of 2018, the Utility had 20,075 customer connections serving a
population of approximately 45,160. Utility water sales revenues totaled $13.6 million for
calendar year 2018 with delinquent write-offs of less than one percent.
4
WATER CONSERVATION
l J The Utility encourages water conservation by informing and educating customers.
Specifically in 2018, the following conservation efforts were accomplished:
LJ ➢ 727 students participated in the Conservation Kids program
➢ 44 customer water audits were performed to help customers reduce water use
7 ➢ Transitioned to WaterSmart 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
1
WATER UTILITY OPERATIONS
Water operations are a 24 hour per day, seven days per week operation. Staff performed
routine maintenance on all production and distribution facilities. Utility personnel
�... inspected new development projects and the Utility's capital projects. This past year, the
Utility personnel, with assistance from a security consultant, reviewed, refined and
updated the security program training videos and facilitated a table top exercise.
WATER QUALITY
In 2018, the Utility received 2,755 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. Recommendations on water rates included an
increase in the monthly base rates. If adopted, the majority of customers will realize an
increase of $1.81 per month. The increases in water rates are scheduled to go before Mayor
and Council for approval on May 15, 2019.
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
https:/lwww.orovallevaz.govltownldepartmentslwater-utility
5
J
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
ANNUAL REPORT
APRI L 2019
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 reliable and safe water supplies. 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) 2018
with additional information reported for fiscal year (FY) ending June 30, 2018.
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 monitors
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
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
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. Data from
these two service areas is combined for regulatory reporting purposes. The following table
provides the water production in acre feet (AF) for both service areas in 2018.
TABLE 2
Total Water Production in 2018
Water Resources
OVWSA
CSWSA
Totals
Groundwater
41750 AF
462 AF
51212 AF
CAP Water
1,913 AF
184 AF
2,098 AF
Reclaimed Water
11893 AF
----
11893 AF
Total
8,556 AF
646 AF
%203 AF
X
Total water production for 2018 was 784 acre feet less than the total water production in
2017. This decrease is due to customer response to cooler, wetter weather conditions as
well as reduced consumption resulting from reduced watering at the Vistoso Golf course in
2018.
The graph in Figure 1 shows total water production in both service areas from 2004 through
2018. The components of total water production include 1) groundwater production 2) CAP
water utilization and 3) reclaimed water utilization. The graph depicts the decrease in
overall water production for 2018 as compared to 2017.
12,000
10,000
8,000
LL 6,000
L
Q
4,000
2,000
�i
j
FIGURE 1
WATER PRODUCTION -ANNUAL COMPARISONS
12,000
RECLAIMED
WATER
(OVWSA)
10,000
CAP
WATER
8,000 (CSWSA)
CAP
WATER
6,000 (OVWSA)
GROUNDWATER
4,000 (CSWSA)
GROUNDWATER
2,000 (OVWSA)
2004 2005 2006 2007 2008 2009 2010 20112012 2013 2014 2015 2016 2017 2018
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 2018, Oro Valley pumped 732 acre feet less than the groundwater target maximum
production rate for the OVWSA wells and 418 acre feet less than the target maximum production
rate for the CSWSA wells. The groundwater production targets have not been exceeded since 2011.
7
7
Groundwater remains the primary potable water resource for the Utility. In 2018, 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 2018.
n TABLE 3
1
Groundwater
Storage
Average
Production Capacity
Capacity
Water Level
(Gallons)
+Rise/ -Decline
OVWSA
13.1 MGD
11 Million
-3.2 Feet
CSWSA
2.2 MGD
1 Million
-3.6 Feet
On an individual basis, water level changes in 2018 for active wells varied from a rise of 1.9
feet to a decline of 6.7 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
2018, the Utility's four CAP wheeling locations delivered 23 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 2018, 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
J
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. 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 Intergovernmental Agreement (IGA) with Tucson Water enabling the
delivery of CAP water to customers through four connections to the Tucson Water system.
There are three CAP water connection points in the OVWSA. One is located on Vista del Sol,
north of Naranja Road and another is on Calle Buena Vista, south of Calle Concordia. In
calendar year 2018, the Utility added the third connection point in the OVWSA. This CAP
wheeling is located near Oracle and Hardy with a capacity to deliver up to an additional 480
acre feet of recovered CAP water supply to the OVWSA. 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 2,098 acre feet of CAP water in 2018 thus reducing its reliance on
groundwater. CAP water deliveries are shown in Table 4.
��
TABLE 4
CAP Water Deliveries in 2018
Locations
Delivery
Vista Del Sol
(OVWSA)
11576 AF
Calle Buena Vista
(OVWSA)
309 AF
Oracle &Hardy
(OVWSA)
29 AF
Camino De Oeste
(CSWSA)
184 AF
Total
2,098 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 CAP water to the Utility's service area. The project is
estimated to be completed in FY2024 and will allow for the annual delivery of up to 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
the lower basin states of Arizona, California and Nevada. In addition, these reservoirs
provide required water deliveries to Mexico. This Colorado River water storage decline is
due to the extended drought the basin has experienced for nearly 19 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 guidelines
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 2018, levels in Lake Mead were at
1,086 feet. Based upon recent August, 2018 model projections the United States Bureau of
A
Reclamation estimates a 55 percent chance of a Tier 1 shortage impacting CAP agricultural
water users and excess CAP water users beginning January 1, 2020.
In 2018 The Arizona Department of Water Resources (ADWR) and Central Arizona Project
staff collaborated with CAP water users and the Lower Colorado River Basin states to
finalize the Lower Basin States Drought Contingency Plan (LBDCP). The LBDCP modifies the
-' 2007 shortage sharing guidelines so that curtailments in CAP deliveries happen sooner and
are larger. The goal of this plan is to close the gap between the over -allocation of the river's
natural replenishment capability, thus leaving enough water in Lake Mead to avoid drastic
cuts to priority subcontract holders like Municipal and Industrial users. The LBDCP was
approved by Governor Doug Ducey on January 31, 2019 and goes into effect January 1,
2020.
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 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 600,000 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
J 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 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 2018, the Utility's reclaimed
system produced 21 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.
_1
j 10
The Utility supplies reclaimed water for the irrigation of five golf courses, athletic fields at
one elementary school and Naranja Park. In 2018, 1,932 acre feet of reclaimed water was
delivered. This is a decrease of 301 acre feet compared to the 2,233 acre feet delivered in
2017. Any excess reclaimed water will be recharged in the Lower Santa Cruz River.
REGULATORY
The ADWR requires the Water Utility to replace all of the groundwater pumped from wells
owned and operated by the 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
2018, the Utilitywas in compliance with all requirements under the DAWS and full expects
p q Y p
to meet all requirements in 2019. 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 are assessed annually to determine the
impact on the aquifer and well production. Groundwater levels have shown declined less
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 2018, the Utility purchased 10,305 acre feet of CAP water for
delivery to recharge facilities. Of that amount, 2,995 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 2018, the Utility calculated that it
had 22,014 acre feet in long-term storage credits.
Table 5 shows the estimated water storage summary for the end of the 2018 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
2019. The table presents an accounting summary of CAP water storage and long-term
storage credits.
TABLE 5
Water Storage Summary
Calendar Year 2018
(Acre Feet)
Groundwater
Storage Facility
2018 CAP Delivery to
Storage Facility
2018 CAP Recovery
from Storage Facility
Storage Balance
12/31/18
Kai Farms
41000
31500
12,573
Lower Santa Cruz
41005
597
61701
Pima Mine Road
---
1,000
11774
Central Avra Valley
21300
21F213
901
Effluent Storage
---
---
65
Total
10,305
7,310
22,014
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 2018, 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 2018 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 new water infrastructure for the Town of Oro Valley as well
as providing engineering support to the Water Operations group.
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 2018, the New Development Section within the Engineering and Planning Division
completed the following:
➢ Reviewed 16 water improvement plans
➢ Approved 13 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 2018-19 Capital Projects
➢ La Reserve/Alder Springs PRV Station: This project is designed to move water from F
Zone into the E2 Zone creating a more efficient mechanism to move system water from
a pressure controlled to a level controlled system. The project design is expected to be
completed in FY 2018-19 and construction is expected to be complete in May 2019.
➢ Northwest Recharge Recovery and Delivery System -Oro Valley Independent Portion:
�j This project is to design and build a delivery system capable of delivering up to 4,000
J acre feet per year of CAP water into the Oro Valley Water Utility distribution system.
Phase one includes environmental investigation and archaeological studies which are
expected to be completed in FY 2018-19.
➢ Relocation of Pressure Reducing Valve at Well D8 to C4 Zone: This project is to
1 optimize site configuration and separate booster from the PRV. This will allow for a
J more efficient and reliable operation of the C4 Zone. This project is anticipated to be
complete in 2019-20.
Tucson Water CAP Wheeling Station near Oracle Rd. and Hardy: The project is the
Utility's fourth CAP wheeling location. It was designed to deliver up to an additional 480
acre feet per year of the Town's recovered CAP water allocation. Construction was
completed in December 2018.
Backflow Retrofitting of Fire Protection Systems: This is a multi -year project that began
in FY 2017-18 and is expected to continue through FY 2020-21. The purpose of this
j project is to install backflow assemblies on commercial fire lines to ensure the safety of
.� the water system.
➢ Pressure reduction valve design and construction: The project consisted of designing
(in-house) two pressure reducing valve stations to move water from high elevation
pressure zones to low elevation pressure zones. This facilitates the blending of CAP
water throughout the distribution system thus improving system reliability and
balancing water quality. One project is located at the Glover reservoir and the other is at
Jthe Naranja reservoir. Both construction projects are complete.
13
I
Steam Pump Well (pump test equipment)
➢ Nakoma Sky Well: Nakoma Sky well is
located in the future Nakoma Sky
Development. This replacement well
will provide capacity lost when older
wells were taken out of service. The
project will be designed and
constructed in FY 2018-19.
➢ Steam Pump Well: Steam
Pump well is located at
historic Steam Pump Ranch.
This new well will provide
system reliability for future
growth. The well has been
designed and constructed.
Facility equipping is scheduled
for FY 2019-20.
Nakoma Sky Well
➢ MAG Meter Modifications and Installation:
This project is an extension of the AMI meter replacement program. The meters on the
wells will be replaced with AMI metering equipment to allow the Utility to monitor the
production flows in real time as well as take timely production readings. This will
improve the accuracy of accounting for non -revenue water.
14
i
➢ La Cholla Blvd. Regional Transportation Authority (RTA) Project: The Utility's water
mains along La Cholla Blvd. need to be relocated due to an RTA project to widen La
Cholla Blvd. from Overton to Tangerine Rd. The design of this project was completed in
FY 2017-18 and construction is expected to begin in the spring of 2019.
➢ Additional new office space at the production facility: This construction project will
create additional work stations at the production facility to consolidate utility staff for
improved operational efficiency.
➢ High Mesa G Zone booster station 5,000 gallon hydropneumatic tank replacement:
This project is to replace anon -American Society of Mechanical Engineers (ASME)
certified pressure vessel. The replacement of non-ASME certified pressure vessels is
ongoing work to upgrade all pressure vessels within the Utility to ASME safety
standards. The construction is expected to take place in mid to late FY 2018-19.
High Mesa hydropneumatic tank
15
�.,... '
t •r SFr.
Valve Replacement
➢ Oracle and Hardy: The
Oracle and Hardy Wheeling
Station is the Utility's fourth
CAP wheeling location. The
project was designed for a
capacity to deliver up to 480
acre feet of CAP water to
further reduce pumping of
groundwater.
➢ Valve Replacement Program
This is an ongoing project to replace aging and
inoperable water valves throughout the
distribution system. Valves are identified through
valve exercising and through emergency activity.
This project is substantially complete and is
expected to be completed by May of 2019.
Oracle and Hardy Wheeling Station
Future Capital Improvement Projects to be initiated in FY 2019-20 include equipping the
Steam Pump well, hydropneumatic tank replacements, main valve replacements, water
main relocations and continuing with Phase 2 of the NWRRDS. Most of these projects will
be financed with Series 2018 bonds. The proposed five year Capital Improvement Program
for FY 2019-20 through FY 2023-24 may be found in Appendix B.
16
CUSTOMER SERVICE
Customer service is an integral element of the Utility providing a full range of support to its
customers. The Utility's 20,075 metered connections serves a combined population of
approximately 45,163 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 238,000 bills in FY 2017-18 p ,generating $13,619,117
in water sales revenue. This revenue does not include sales taxes, groundwater
preservation fees or service fees. Water sales revenue billed by user classification is
illustrated in Figure 2.
FIGURE 2
Revenge By User Classification
FY 2017-1$
8,994, 41
889,1032
13364.7 6
■ Construction - 4%
❑ Commercial - %
■ Resi dentin I - 66%
■ Irrigation - 1 0''°r'€r
O Reclaimed - 1 %
■'Potable Turf - 'I %
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 2017-18, the Utility processed a total of
$28,797,989 in payments for the Utility and the other two organizations as follows:
➢ Oro Valley Water Utility $ 17,8191350
➢ Pima County Wastewater Reclamation $ 91592,511
➢ Town of Oro Valley Stormwater Utility $ 11386,128
It is important to note that the total payments handled by the 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 payments made with credit cards totaled
$3,4671211. This is a 25 percent increase over credit card payments made in FY 2016-17.
17
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 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 customers which
significantly increases their ability to troubleshoot their 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 new customer portal known as
WaterSmart which was implemented in September 2018. WaterSmart 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 with registering in WaterSmart and to teach them how to establish water
use thresholds.
The major accomplishments by Customer Service staff in 2018 include the following:
➢ Produced over 238,000 water bills
➢ Responded to 33,424 customer contacts averaging 134 contacts per day
➢ Processed 3,052 change of service requests
➢ Issued 3,373 work orders to field staff
➢ Processed 323 new meter installation applications
Utility statistics, including the billing collection rate for 2018, may be found in Appendix C.
WATER CONSERVATION
The Water Conservation Program is an
y 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
both residential and commercial levels.
war
..... ... .. I�II(('
W
The Utility continually looks for ways to expand opportunities for public education and
advocacy regarding water conservation.
The WaterSmart program was implemented in September 2018 and replaced AquaHawk.
WaterSmart increases staff efficiency and effectiveness through the automation of high
water use alerts and customer communication.
➢ There are over 3,300 registered accounts on the Oro Valley WaterSmart customer
portal.
➢ This self-service tool allows customers to access their water use at any time. Early
leak detection and high use notifications conserve water and reduce the shock of
high water bills. A proactive approach where customers are conscious and informed
about their water use will ideally lead to positive impacts that are long term for
both the customer and the Utility.
➢ Over 12,000 Utility identified leaks have been detected since the implementation of
WaterSmart
➢ More than 1,300 leak alerts have been sent to customers and over 4 million gallons
saved
➢ 40 percent of leaks reported by customers were identified as irrigation related
Outreach and education are an important component of the Water Conservation Program.
In addition to speaking engagements and water audits, social media communications such
as Water Wednesdays on the Town's Facebook page has taken the place of more traditional
newsletters. However, educational mailing inserts continue to be an effective way for the
Utility to reach customers.
Water audits are offered to residential, HOA and commercial customers and evaluate
indoor and outdoor water use. Audits continue to decline over time and although several
factors may be involved, a primary reason is customers are now able to identify issues and
determine leaks using the tools in WaterSmart.
➢ 44 audits were completed in 2018 and will be analyzed in 2019 for water savings
➢ Analysis performed in 2018 (for the 66 audits completed in 2017) identified a
combined 24 percent decrease in water use
f The Utility partners with Environmental Education Exchange (www.eeexchange.org) 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 2018 school year, 727 students participated in the Conservation Kids
1 Program.
J
OPERATIONS AND MAINTENANCE
All Production, Distribution and Meter operations personnel are certified operators licensed
by the Arizona Department of Environmental Quality (ADEQ). There are two classifications
required for operators of the Oro Valley Water Utility: the OVWSA distribution system is a
Grade 4 and the CSWSA distribution system is a Grade 2.
_1
All operations personnel work together to address water system problems. On -call staff
7 members respond to water system problems 24 hours per day, seven days per week. This
on -call staffing utilizes atiered-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
3 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 46 production sites. They
uphold operational balance for CAP water delivery to the potable systems, maintain 21
disinfection injection pumps and disinfection residuals at injection points on the potable
and reclaimed water delivery systems. Production staff also performs an annual
Jgroundwater level survey of static water levels in all wells.
The following are major activities and accomplishments of Production personnel in 2018:
➢ 2018after hours —376overtime hours
➢ 7 Potable reservoir cleaning/inspections
➢ Installation of 5 radar level sensors on existing reservoirs
➢ Oracle and Hardy - Setting up Antenna/OCV/ McCrometer flow meter
➢ Well E2 commission
➢ Decommission Deer Run D Zone booster
➢ Well C6 rehab and re -equipping
➢ Exterior roof concrete coatings- 4 facilities, WP16, Reclaim, La Canada and WP13
➢ Lambert Lane PRV replacement
➢ Installed solar setup with radio communications for La Canada PRV
➢ Performed maintenance on 45 Remote Terminal Units, two Master Controllers, two
Human Machine Interfaces, one Network Server and three network repeaters
➢ 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
updates system mapping, installs new assets, performs erosion repairs, asphalt paving and
system flushing. These components are tracked by a database under the Utility's preventive
20
maintenance program. Distribution staff is also responsible for the departmental safety
p rogra m .
Distribution staff has significant direct customer contact and professionally respond to
customers regarding water quality and pressure or flow related problems. Distribution staff
is responsible for repair of main line and service line breaks. Distribution staff bluestakes
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 2018:
➢ Responded to 140 customer inquiries and 471 after hour call outs
➢ Maintained 503 water valves, replaced 5 valves and performed 22 valve adjustments
➢ Maintenance performed on 40 fire hydrants and made 283 repairs to fire hydrants
➢ Performed 124 tests, maintenance and/or repairs on 31 pressure reducing valves
➢ Performed 14,013 bluestakes for potable and reclaimed pipelines
➢ Performed 8 paving patches
➢ Implemented Cartegraph asset program
➢ Designed and built 4-inch PRV station at Lambert Ln/Corbett Ln
Using Town equipment, the Utility's
distribution staff repaired 5 main line
breaks, 7 service line repairs and 3 cut
and plugs. The Utility realized an
estimated savings of $190,000 by
performing this work in-house rather
than hiring an outside contractor to
make these repairs.
Meter Operations
Advanced Metering Infrastructure (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 has increased their
technical knowledge and skills to provide this improved customer service feature. Staff uses
analytical and critical thinking skills to analyze and troubleshoot complex metering
problems and technical issues within the AMI system. Staff uses AMI network software,
21
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
members focus their efforts on improving operational efficiencies to perform additional
water system preventive maintenance and commercial meter testing.
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 2018, the Utility received 2,755 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 as required by ADEQ. These stations are located in neighborhoods
specifically selected to represent the water quality delivered to the customers throughout
the water distribution system. The Utility has an additional 90 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.
During 2018, 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 2018, the hardness levels in Oro Valley ranged from 2.0 to 16.0
grains per gallon (36 ppm to 270 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.
22
Due to proposed regulatory changes and requirements, in 2018 the Utility continued
preparation to phase in five proposed and pending USEPA regulations related to monitoring
rules:
➢ Fourth Unregulated Contaminant Monitoring Rule February & August 2020
➢ Revised Long -Term Lead and Copper Rule August 2019
➢ Carcinogenic Volatile Organic Chemicals Rule TBD
➢ Strontium TBD
➢ Epichlorohydrin and Acrylamide TBD
In 2019, the Utility will continue to phase in sampling and monitoring of new contaminants
in accordance with regulatory requirements.
The Utility produced the 2017 Consumer Confidence Report for both water systems in April
of 2018. 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 2018 Consumer Confidence Reports will be completed in April of 2019.
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
2018.
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.
There are 1,626 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 2018:
➢ Tested 208 backflow assemblies
➢ Repaired 11 in -ground and construction water backflow prevention assemblies
➢ Issued 46 permits for new and replacement backflow prevention assemblies
➢ Conducted a survey and inspection of 451 backflow assemblies
23
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 afire
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.
6J In 2018, Utility personnel, with the assistance of a security consultant, reviewed, refined
and updated the security program training videos and facilitated a table top exercise.
Selective training is done on an annual basis in accordance with the guidelines from the
Department of Homeland Security, Federal Emergency Management Agency and the United
States Environmental Protection Agency. Staff completed refresher training in DHS/FEMA
courses IS-00100b, IS-00200.b, IS-00700.a, and IS-00800. The Utility updated the Emergency
Response Plan and Business Continuity Plan on an annual basis and will continue to mitigate
the elements defined in the vulnerability assessment as well as those identified through the
course of business. The Utility is also in process of implementing revisions defined in the
Water Infrastructure Act of 2018 (S.3021).
Security features, which include perimeter fencing, security walls, warning signage, motion
sensors, and cameras at all active production facilities were inspected to maintain integrity.
Hydrants throughout the system are protected by security locking systems.
The Utility is kept abreast of local, regional and national security issues by the Water
Information Sharing and Analysis Center (WaterISAC). 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.
The Utility is also a member of the Arizona Water/Wastewater Agency Response Network
(AZWARN). Members of AZWARN agree to provide assistance to other member utilities in
the event of an emergency.
24
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
cash reserve balances.
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 is the primary fund for the Utility. Costs for the administration,
operations, existing system improvements and debt service are managed in this fund.
The sources of revenue are water sales, service related charges and 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.
25
Table 6 contains the actual revenue billed compared to the revenue budgeted in FY 2017-
18 for all funds within the Utility:
TABLE 6
Revenue Source
Budget
FY 2017-18
Amount Billed
FY 2017-18
Over (Under)
Budget
g
Over (Under)
Budget
g
Potable Water Sales:
Residential
$
8,197,100
$
8.0994,241
$
797,141
9%
Commercial
$
8021700
$
8691032
$
66,332
8%
Irrigation
$
11135,100
$
1,3641965
$
229,865
20%
Turf
$
120,000
$
941569
($
25,431)
21%
Construction
$
220,000
$
5111785
$
291,785
133%
Reclaimed Water Sales:
Turf
$
11545,000
$
1,709,284
$
164,284
11%
Irrigation
$
501000
$
611504
$
11,504
23%
Construction
$
51#800
$
131736
$
7,936
137%
Subtotal Water Sales:
$12,075,700
$13,619,116
$1,543,416
13%
Misc. Service Fees & Charges
$
705,300
$
8001968
$
-95,668
14%
Groundwater Preservation Fees
$
21520,000
$
2,624,484
$
104,484
4%
Total Enterprise Fund
$15,301,000
$17,044,568
$1,743,568
11%
AWRDIF Impact Fees
$
11387,819
$
1,6381175
$
250,356
18%
PWSDIF Impact Fees
$
691,333
$
816,045
$
1241712
18%
Interest Income —All Funds
$
1641887
$
69,770
($
95,117)
(58%)
Total All Funds for FY 2017-18
$17,545,039
$19,568,558
$ 21023,519
12%
The budgeted expenses (excluding depreciation and amortization) for the Operating Fund
are compared to the actual expenses for FY 2017-18 in Table 7:
TABLE 7
Expenses
Budget
FY 2017-18
Actual Spent
FY 2017-18
Over (Under)
Budget
Over (Under)
Budget
Personnel
$ 31268,756
$ 3,144,389
($ 124,367)
(4%)
O&M
$ 61986,100
$ 71201,397
$ 2151297
3%
Capital Outlay
$ 31364,034
$ 11781,013
($ 1,583,021)
(47%)
Total
$13,618,890
$12,126,799
($ 1,492,091)
(11%)
The Utility's personnel costs were under budget due to short term vacancies. The O&M
expenses were slightly over budget due to an increase in CAP water recharge costs, CAP
delivery costs and repairs to a well that were greater than anticipated. Capital expenses
were less than budgeted due to changes in project schedules.
26
Outstanding Debt
Table 8 is a summary of the outstanding debt (principal only) and the annual debt service
payments (principal and interest) for all funds within the Utility:
TABLE 8
Fund
Bond
Series
Outstanding
Debt
At 12/31/18
Debt Service
Payments
FY 2018-19
Interest
Rate
Maturity
Operating (WIFA)
2008
$ 21390,918
$ 310,866
3.5
2027
Operating (WIFA)
2009
$ 113811098
$ 1491175
2.2
2029
Operating
2012
$ 2,676,450
$ 5801631
4.0
2028
Operating
2012
$ 41878,556
$ 1,058,356
4.0
2028
Operating
2013
$ 11010,000
$ 1,016,859
1.5
2019
Operating (WIFA)
2014
$ 31307,164
$ 377.1060
2.7
2029
Operating
2015
$ 985,710
$ 150,709
2.3
2025
Operating
2017
$11.09241226
$ 1,567,313
2.4
2026
Operating
2018
$ 61105,000
$ 0
3.0
2033
PWSDIF
2012
$ 11504,999
$ 326,494
4.0
2028
Totals
$36,164,121
$ 5,537,463
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 2018-19 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 $1.81 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 2019 and, if adopted, the new rates would become effective July 1, 2019.
� All current water rates, fees and charges including impact fees are available to view on the
Town website at https://www.orovalleyaz.gov/town/departments/water-utilityJrates-and-
J fees
27
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2019 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 2018:
Countryside Water Service Area
Well Name
Annual
Pumped Acre
Feet
1 Year
Change
2018
5 Year
Change
2013-2018
5 Year
Average
2013-2018
CS-1
235
-4.8
-0.4
-0.1
CS-2
228
-2.5
3.3
0.7
Average
-3.6
1.4
0.3
Oro Valley Water Service Area
Well Name
Annual
Pumped Acre
Feet
1 Year
Change
2018
5 Year
Change
2013-2018
5 Year
Average
2013-2018
C-4
85
-4.2
-15.5
-3.1
C-5
337
-3.5
-13.2
-2.6
C-6
192
-3.0
-11.9
-2.4
C-8
262
1.9
-12.4
-2.5
C-9
402
-4.9
-12.3
-2.5
D-1
155
-5.3
-12.8
-2.6
D-6
188
-6.0
-7.5
-1.5
D-7
140
0.9
-7.4
-1.5
D-8
229
0.3
-6.9
-1.4
D-9
431
-2.4
-9.1
-1.8
E-B1
451
-4.5
-13.9
-2.8
E-2
207
-6.7
-10.8
-2.2
E-3
131
-4.6
-10.5
-2.1
E-5B
280
-2.8
-11.0
-2.2
E-6B
464
-0.8
-11.3
-2.3
E-7B
299
-1.7
-10.8
-2.2
F-1
495
-6.3
-9.3
-1.9
Average
-3.2
-11.0
-2.2
A-1
TOWN OF ORO VALLEY
A
WATER UTILITY COMMISSION
fi041NDEU �';l
2019 ANNUAL REPORT
APPENDIX B
PROPOSED FIVE - YEAR
CAPITAL IMPROVEMENT PROGRAM
9
Oro Valley Water Utility
Proposed Capital Projects Program
Water Utility Operating Fund
Existing System Improvement
Project No. Project Name 2019-20 2020-21 2021-22 2022-23 2023-24 1 5 YearTotals
Nakoma Sky D Zone Well $ 800,000
1
$ 800,000
2
Well D8 Replacement Drill & Construct
$ 700,000
$ 900,000
$ 1,600,000
3
Mag Meter Replacements (10/yr.)
$ 75,000
$ 75,000
4
Hydropneumatic Tank Replacement (1/yr)
$ 150,000
$ 100,000
$ 100,000
$ 100,000
$ 100,000
$ 550,000
5
Well Rehabilitation (D1& cs, E5B & E3, TBD)
$ 150,000
$ 150,000
$ 150,000
$ 450,000
6
Well Rehabilitation (TBD,TBD)
1
1 $ 150,000
$ 150,000
$ 300,000
Subtotal
$ 1,175,000
$ 250,000
$ 250,000
1 $ 950,000
$1,150,000
$ 3,775,000
7
Reservoir Rehabilitation (no planned work)
$ _
Subtotal
$ _
$ _
$ _
$ _
$
8
High Mesa E & F Zone Bstr. Enhancements
$ 50,000
$ 50,000
9
El Con Storage - Operational Improvements
$ 50,000
$ 50,000
10
Replace Crimson Canyon Booster Station
$ 250,000
$ 250,000
11
Hydropneumatic Tank Replace (High Mesa)
$ 100,000
$ 100,000
$ 200,000
12
E F Booster Station at LC Res. (Woodburn)
$ 100,000
$ 500,000
$ 600,000
13
Booster Rehab (RDO & Woodshade)
$ 150,000
$ 150,000
14
Booster Rehab (WP4 & TBD)
$ 150,000
$ 150,000
$ 300,000
15
Booster Rehab (TBD & TBD)
$ 150,000
$ 150,000
$ 300,000
Subtotal
$ 400,000
$ 750,000
$ 400,000
$ 150,000
$ 200,000
$ 1,900,000
16
12-inch F-zone main (Woodburn Booster)
$ 100,000
$ 100,000
17
Fireline Backf low Protection
$ 200,000
$ 200,000
$ 400,000
18
Drinking Fountain Re -work
$ 50,000
$ 50,000
19
Palisades Neighborhood Pipeline Redudancy
$ 500,000
$ 500,000
20
Countryside DVA Replacements
$ 210,000
$ 210,000
21
6-inch PRV on Rancho Sonora Dr
$ 70,000
$ 70,000
22
6-inch PRV on Stargazer Dr.
$ 70,000
$ 70,000
23
Rancho Verde Hydrants
$ 100,000
$ 100,000
24
Main Valve Replacements
$ 50,000
$ 50,000
$ 50,000
$ 150,000
25
La Cholla -Lambert to Tangerine (RTA)
$ 480,000
$ 480,000
26
Hilton Hotel & Casitas Main Replacement
$ 150,000
$ 150,000
27
Linda Vista Citrus Tracts Main Replacement
$ 250,000
$ 250,000
$ 250,000
$ 750,000
28
Pusch Ridge Estates Main Replacement
$ 250,000
$ 250,000
$ 500,000
Subtotal
Structures
$ 940,000
$ 720,000
$ 720,000
$ 500,000
$ 650,000
$ 3,530,000
29
aWalls
Wall Upgrades and Improvements
$ 100,000
$ 100,000
Subtotal
Meters& Equipment
$ 100,000
$ -
$ -
$ -
$ -
$ 100,000
30
Water Meters - New Connections
$ 106,000
$ 116,500
$ 99,000
$ 66,800
$ 61,600
$ 449,900
31
SCADA Legacy Replacement
$ 100,000
$ 100,000
32
Instrumentation Replacement
$ 250,000
$ 250,000
33
Electric Sub -metering Wells/Boosters
$ 75,000
$ 75,000
Subtotal
Vehicles
$ 281,000
$ 116,500
$ 349,000
$ 66,800
$ 61,600
$ 874,900
34
Replacement Vehicles - Meter Operations
$ 75,000
$ 50,000
$ 125,000
35
Replacement Vehicles - Dist Vehicles
$ 50,000
$ 70,000
$ 120,000
36
Replacement Vehicles - Production Vehicles
$ 70,000
$ 75,000
$ 145,000
37
Replacement Vehicles - Const Inspectors
I$
80,000
$ 80,000
Subtotal
$ 70,000
$ 125,000
$ 125,000 1
$ 70,000
$ 80,000
$ 470,000
Total Existing System Improvements $ 2,966,000 1 $1,9611500 1 $1,844,000 1 $1,736,800 $2,141,600 1 $ 10,649,900
B-1
Oro Valley Water Utility
Proposed Capital Projects Plan
Groundwater Preservation Fees
CAP Water De I i ve ry System Improvements (Existing Customers)
Project
Project Name
%
2019-20
2020-21
2021-22
2022-23
2023-24
5 Year Total
1
Program Support Services
40%
$
44,000
$ 192,000
$ 296,000
$ 8,000
$
540,000
2
Pipeline Design (recovered water & trans miss ior40%
$
440,462
$
4407462
3
NWRRDS Forebay Design
40%
$
66,154
$
66,154
4
Well Improvement Analysis & Recovery Permits
40%
$
40,000
$
40,000
5
Well Drilling & Testing
40%
$ 234,000
$
234,000
6
Pipeline Construction
40%
$ 880,923
$ 880,923
$
11761,846
7
NWRRDS Forebay Reservoir Construction
40%
$ 132,077
$ 132,077
$
264,154
8
Construction Permitting, Drill, Develop, Testing
40%
$ 780,000
$
780,000
9
Well l5quiping Design & Site Improvements
40%
$ 390,000
$
390,000
Subtotal NWRRDS Partnered Projects
$
590,616
$ 426,000
$1,309,000
$2,191,000
$ -
$
41516,616
10
Pipeline Route Study & Prelim Design
40%
$
_
11
IShannon Rd Forebay Res & Bstr Prop Acquistior
$
80,000
$
80,000
12
Pipeline Easement Acquisition (9.68 miles)
40%
$
300,000
$
300,000
13
Pipeline Design (9.68 miles 16-inch DIP)
40%
$
560,000
$
560,000
14
NWRRDS Forebay Reservoir Bstr Station Design
40%
$
40,000
$
40,000
15
Shannon Rd. Forebay Res & Bstr Station Design
40%
$ 120,000
$
120,000
16
Bstr Station Construct at NWRRDS Forebay Res
40%
$ 200,000
$
200,000
17
Shannon Rd Forebay Reservoir Construction
40%
$ 280,000
$ 280,000
$
560,000
18
Bstr Station Construct at Shannon Rd Forebay
40%
$ 100,000
$ 100,000
$
200,000
19
Pipe Const. from Bstr. at NWRRDS to LC Resery
40%
$3,920,000
$
3,920,000
Subtotal NWRRDS Independent Projects
$
980,000
$ 120,000
$ 200,000
$ 380,000
$4,300,000
$
5,980,000
20
NWRRDS Interconnect to Tangerine Rd.
40%
77-
$ 180,000
$
180,000
21
NWRRDS Interconnect to Lambert Ln.
40%
$ 340,000
$
340,000
Subtotal NWRRDS Internal Projects
$
-
$ -
$ -
$ -
$ 520,000
$
52%000
Total NWRRDS Capital Improvements
$195701616
$ 5461000
$1.509,000
$2,571,000
$4,820,000
711
B-2
Oro Valley Water Utility
Proposed Capital Projects Plan
Alternative Water Resources Develoment Impact Fee Fund
CAP Water Delivery System Improvements (New Growth)
Project
JProject Name
PartneredNWRRDS Projects:
%
2019-20
2020-21
2021-22
2022-23
2023-24
5 Year Total
1
Program Support Services
60%
$ 66,000
$ 288,000
$ 444,000
$ 12,000
$ 810,000
2
Pipeline Design (recovered water & transmissio
60%
$ 660,692
$ 660,692
3
NWRRDS Forebay Design
60%
$ 99,231
$ 99,231
4
Well Improvement Analysis & Recovery Permits
60%
$ 60,000
$ 60,000
5
Well Drilling & Testing
60%
$ 351,000
$ 351,000
6
Pipeline Construction
60%
$1,321,385
$1,321,385
$ 2,642,770
7
NWRRDS Forebay Reservoir Construction
60%
$ 198,116
$ 198,116
$ 396,232
8
Construction Permitting, Drill, Develop, Testing
60%
$1,170,000
$ 1,170,000
9
Well Equiping Design & Site Improvements
60%
$ 585,000
$ 585,000
Subtotal NWRRDS Partnered Projects
NWRRDS Independent Projects:
$ 885,923
1 $ 639,000
j $1,963,501
1 $3,286,501
$ -
$ 6,774,925
10
Pipeline Route Study & Prelim Design
60%
$ _
11
Shannon Rd Forebay Res & Bstr Prop Acquistio
60%
$ 120,000
$ 120,000
12
Pipeline Easement Acquisition (9.68 miles)
60%
$ 450,000
$ 450,000
13
Pipeline Design (9.68 miles 16-inch DIP)
60%
$ 840,000
$ 840,000
14
NWRRDS Forebay Reservoir Bstr Station Design
60%
$ 60,000
$ 60,000
15
Shannon Rd. Forebay Res & Bstr Station Design
600o
$ 180,000
$ 180,000
16
Bstr Station Construct at NWRRDS Forebay Res
60%
$ 300,000
$ 300,000
17
Shannon Rd Forebay Reservoir Construction
60%
$ 420,000
$ 420,000
$ 840,000
18
Bstr Station Construct at Shannon Rd Forebay R
60%
$ 150,000
$ 150,000
$ 300,000
19
Pipe Const. from Bstr. at NWRRDS to LC Resery
60%
$5,880,000
$ 5,880,000
Subtotal NWRRDS Independent Projects
NWRRDS Internal Projects:
$1,470,000
$ 180,000
$ 300,000
$ 570,000
$ 6,4503000
$ 8,970,000
20
NWRRDS Interconnect to Tangerine
60%
$ 270,000
$ 270,000
21
NWRRDS Interconnect to Lambert
60%
$ 510,000
$ 510,000
NWRRDS Internal Projects
$ -
$ -
$ -
$ -
$ 780,000
$ 780,000
"Subtotal
TotalRRDS Capital Improvements
$ 2,355,923
$ 819,000
$ 2,263,501
$ 3,856,501 $ 7,230,000 $ 16,524,925
Potable Water System Develoment Impact Fee Fund
Expansion Related Improvements
Project
Project Name
Cate go 2019-20
2020-21
2021-22 2022-23 2023-24
5 Ye ar Total
1
iW
Steam Pump D-Zone Well
NOW"
Potable $ 800,000
$ 800,000
2
Palisades C-Zone Storage Tank & Pipe
Potable
$ 500,000
$ 300,000
1,450,000
2,000,000
$ 4,250,000
3
Moore Rd. Interconnect F-Zone
Potable
$ 750,000
$ 750,000
Total Expansion Related Capital Improvements
$ 800,000
$1,250,00
$$ 300,000 $1,450,000 1 $ 2,000,000
$ 5,800,000
B-3
TOWN OF ORO VALLEY
���� WATER UTILITY COMMISSION
DE�
2019 ANNUAL REPORT
APPENDIX C
UTILITY STATISTICS
FINANCIAL STATISTICS
6905000,000
6805000,000
67030005000
66010001000
6503000,000
64010003000
63030001000
620,000,000
750,000,000
70030005000
65010001000
60010001000
i
55030003000 r
50010003000 -I--
2018
629,684, 248
R:
x
2016 2017 2018
C-1
C-2
151000
101000
51000
B l u e to ke s
12,573
14013
11,'190
2016 2017 2018
C-3
D Eo
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2019 ANNUAL REPORT
APPENDIX D
ASSET INVENTORY
ASSET INVENTORY
Assets as of December 31, 2018
Potable Assets
Quantity
Value
CAP Water Rights (allotment in acre feet)
10,305
$ 6,172,361
Land
---
2,1891864
Wells (active & inactive)
34
10,074,973
Booster Stations
26
41945,758
Reservoir Capacity (million gallons)
12.5
12,509,248
Fire Hydrants
21310
3,.074,648
Meters
20,075
91179,781
Services
211422
41714,849
Equipment
---
21062,516
Structures
---
11998,819
Vehicles
33
11987,135
Telemetry
---
4511416
Buildings & Improvements
---
3581733
Water Mains (miles)
367
641479,601
The value of the following appurtenances are included in water mains:
Valves
8,364
Pressure Reducing Valves
29
Air Relief Valves
914
Drain Valve Assemblies
941
Subtotal Value of Potable Assets
$ 12411991702
Accumulated Depreciation
( 43,967,382)
Net Value of Potable Assets
$ 801232,320
Reclaimed Assets
Quantity
Value
Land
---
$ 220,796
Telemetry
---
201088
Booster Stations
2
7,271,902
Reservoir Capacity (million gallons)
1.5
2/294/968
Water Mains (miles)
14
12,312,153
The value of the following appurtenances are included in water mains:
Valves
77
Air Relief Valves
51
Fire Hydrants
3
Drain Valve Assemblies
1
Subtotal Value of Reclaimed Assets
$ 22,119,907
Accumulated Depreciation
( 41590,642)
Net Value of Reclaimed Assets j
$ 17,529,265
Total Value of all Water Assets Net of Depreciation 1
$ 97,761,585
D-1
TOWN OF ORO VALLEY
WATER UTILITY COMMISSION
2019 ANNUAL REPORT
APPENDIX E
ACRONYMS AND GLOSSARY
ACRONYMS
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.
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 11450 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.
Fire Service Line —The pipe supplying fire flow to a building by any means other than a
public fire hydrant
Five Year Capital Improvement Plan — A long-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.
E-2
Groundwater Extinguishment Credits — Credits that are generated when a grandfathered
groundwater right is extinguished or retired and never be used again. The credits are issued
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.
E-3