CALL TO ORDER - AT OR AFTER 6:01 P.M.
There were no speakers.
MOTION: A motion was made by Commissioner Shapiro and seconded by Vice Chair Tustison to Approve the June 11, 2012 minutes.
MOTION carried, 6-0.
Mr. Saletta reported on item #2 and mentioned that emails were sent to the Commission with the water code changes and a draft ordinance. He presented a power point presentation.
Protected Mains -Town has a Line Extension Agreement with developers to build pipeline facilities for the Water Utility.
Review: On site and off site pipeline development and potential costs to developers if construction is along the frontage of an adjacent or nearby property
Water Code Changes - The current Water Code allows the Water Utility Director to execute LEAs without protected facilities. The process includes approving the protected main LEAs administratively and will not need Council’s approval. No funds would be disbursed to the developer unless monies are collected from the adjacent property owner.
The LEA will be extended 15 years from present 10 year term.
Staff is requesting that the Commission forward and recommend these changes to the Water Code Ordinance for approval to Town Council. Mr. Saletta ended his report.
Commissions' Points of Interest
Non-payment from adjacent property owner and payment to original developer.Staff indicated that if payment is not made then no water service would be provided.
Over sizing of main past adjacent property and does original downstream developer have to pay full cost for the over sizing.Staff indicated that oversizing is paid by the Water Utility.
Lambert Lane protected mains and relocation.There were no portected mains as part of this project
Does the secondary developer have obligation to pay the primary developer whether connection is completed?Staff indicated that the charges are collected up front prior to making the water service connection.
If the property is sold and there is no construction is the third party obligated to pay?The party that owns the property at the time of request is required to pay once the pipeline is constructed.
Are there any unforeseen problems changing the agreement from 10 years to 15 years and obtaining Council’s approval?No problems are expected regarding the 15 years since this allows more time in this slow economy.
If a booster station is involved and the contractor needs the property will they be responsible for part of the booster station?Yes, to extend the booster station is protected as determined in the agreement.
MOTION: A motion was made by Commissioner Reynolds and seconded by Commissioner Shapiro to Approve to Council the Ordinance for Water Code changes regarding line extension agreement with protected facilities.
MOTION carried, 6-0.
This Ordinance will be presented to Council at their meeting of September 19, 2012.
The Water Resources Subcommittee met 9/4/2012 to discuss this item.
Mr. Saletta proceeded to give background information on the Assured Water Supply application. The Town has had two applications for Assured Water Supply in year 1996 and 2003. Currently the designation of AWS is through 2013. The basic principal for AWS is to see how much water is available and being used for areas being served by the Water Utility.
Oro Valley’s current AWS allocation is 17,384 AF per year based upon the 2002 Hydrology report. Approximately 13,384 AF is groundwater and 4000 AF is Effluent. This does not include CAP.
Oro Valley Water will submit its application to Arizona Department of Water Resources (ADWR) by December 31, 2012.
Mr. Saletta explained Oro Valley’s membership to Central Arizona Groundwater Replenishment District (CAGRD) and water supply rights.
The Water Utility must continue to provide financial information to the State and also be consistent with water management planning and conservation.
Mr. Saletta gave a review of AWS Comparison Demand Estimates for years 2010, 2013, 2015, 2020 and 2030 through 2033. Mr. Saletta mentioned that ADWR suggested keeping the demand estimates higher. However it is the utility's responsibility to inform ADWR when the 17,384 AF is reached. After year 2023 the Town should not have any problem obtaining assured water supply. We need to work with ADWR to make certain they meet demands according to our growth projections.
Staff requests the Commission take action and recommend to Council the approval of the Assured Water Supply Application.
Commissions’ Points of Interest
-There was discussion that the definition between aquifer draw down 1000 feet below surface water and sustainable water rate 5500 AF safe yield are two different items.
-The growth rate throughout the chart varies but is based upon local government projections.
-Arroyo Grande is included in future growth projections with respect to population projections and associated water demand within the General Plan Area.
There were no further discussions, Mr. Saletta ended his report.
MOTION: A motion was made by Commissioner Reynolds and seconded by Commissioner Davis to Recomend Approval and forward to Council the Modification and Designation of the Assured Water Supply application.
MOTION carried, 6-0.
Ms. Seng gave some background information regarding the Pima County’s Wastewater IGA.
A draft IGA was sent to the Commission via email.The Town has had an IGA with Pima County Wastewater for billing anc collection services going back to 2004.
The IGA expired in June 2012. We are currently having discussions with Pima County to renew the existing IGA.
Ms. Seng reviewed several major elements of the IGA. The current billing cost is 0.84 cents per bill but will increase to 0.98 cents. Pima County has verbally agreed to pay this rate. Ms. Seng reviewed the sewer billing process. The only change in the scope of the IGA relates to changes in the vacation start/stop dates. A brief discussion occurred regarding Pima County’s Wastewater vacation start and stop dates.
Ms. Seng mentioned that last year the Water Utility collected over $170,000 for billing services. The Water Utility will collect up to $200,000 an increase of $30,000 per year. The duration of this agreement will be one year with four renewals per year. The Town Manager will approve the remaining renewals.
Staff is requesting that the Commission support and recommend approval of Pima County Wastewater IGA to Council. This item will be presented for Council’s approval October 3, 2012. There were no questions, Ms. Seng ended her report.
MOTION: A motion was made by Commissioner Verlaque and seconded by Commissioner Reynolds to Approve and forward to Council the Intergovernmental Agreement with Pima County Wastewater facilities services.
MOTION carried, 6-0.
Vice Chair Tustison reported that on August 20th the Finance Subcommittee met with staff to review financial scenarios with regard to water rates.
The subcommittee requested staff to consider making some minor adjustments to the scenarios. The Finance subcommittee met earlier today to review a new financial scenario and based on the results can support no rate increase in the base and commodity rates for next year but with gradual rate increases the following years.
Ms. Seng gave a power point presentation. She mentioned that the Oro Valley Water Utility was comprised of three funds: - Operating Fund (Revenue: Water Rates, Expenses: Personnel and O&M Existing System and Debt Service -AWRD Impact Fee fund (Revenue: Impact Fees & GPF, Expenses: CIP & Debt for Reclaimed & CAP Projects, -PWSD Impact Fee Fund (Revenue: Impact Fees, Expenses: CIP & Debt for Growth-related projects).
Ms. Seng reviewed the Preferred Financial Scenarios Key Assumptions, and Factors.
Ms. Seng reviewed several of the results for each of the assumptions:
-Meets all rate setting policies & bond covenants -Cash used to minimize future debt -No rate shock -Water rate structure continues to promote voluntary water conservation
-No financial impact to our customers in year 1 -Modest impact to customers in later years
The packet information included the Preferred Financial Scenario Summary of all the funds.
Review: Total Increase to Residential Customer using 8K gals for FY 2012-13 through FY 2016-17. Approximately 85% majority of our customers only use 8K gals of water.
Review: Debt Service Ratio: Revenue Bonds/WIFA. Required to maintain a 1.30% with Senior Lien and WIFA bonds and a 1.0% on excise tax bonds.
Review: Operating Fund FY 2016-17 Ending Cash Balance = $4.8 million -Total Ending Cash Balance= $12.7 million FY 2016-17
Review: Contingent Reserve Fund Requirement = 130% -Total Ending= 230% FY 2016-17
Commissions’ Points of Interest
No increases in GPF/Impact Fees
Decreased CAGRD costs FY 2016-17.
Review: Water Resource Management Costs FY 2012-13 = $405,000, etc. Monies will be used to purchase extinguishment credits.
Discussion: CIP project cost and adjustments
Discussion: The potential of permitting all wells as recovery wells
Review: AWRD Impact Fee Fund
Discussion: Increase and decreases in water well levels
Review: Machinery & Equipment, Vehicles and tool expenditures
Water Rates Analysis Proposed Schedule
-7/12, 8/20, 9/10: Finance Subcommittee meetings held
-9/10: Commission meeting - review
-10/08: Commission meeting - recommendation
-11/07: Council meeting - Present Water Rates Analysis Report
Vice Chair Tustison thanked Staff for their dedication and hard work and coming back with new recommendations to the Subcommittee. We must remind all members of the Council that the rates for the first year are set, however there could be some changes the next two to five years. Ms. Seng said, we do this every year and there are always changes in our operations. TEP power increases impact us. This type of increase determine whether or not we need to raise rates. Work on the Cost of Service Study will begin in January. This study will look at ways we charge our Commercial customers and can also assist us in developing new rate schedules.
Chair Milkey requested a poll from the Commission if they felt comfortable taking action and moving forward with Item #5 or would they rather wait for next month’s meeting.
The Commission unanimously agreed to move forward and take action since there were no recommended changes to the water rates.
MOTION: A motion was made by Vice Chair Tustison and seconded by Commissioner Shapiro to Recomend Approval of the Preferred Financial Scenario with no water rate increase in FY 2012/13 to Town Council.
MOTION carried, 6-0.
Councilmember Hornat suggested that Staff be prepared to give an explanation regarding Pima County’s Wastewater vacation start/stop dates when it is presented to Council.
Councilmember Hornat requested an update about Tucson Water interrupted CAP water delivery. He also mentioned that Council may ask if the interruption impacted Oro Valley. Mr. Saletta indicated that it did not impact CAP deliveries to Oro Valley.
Councilmember Hornat ended his report.
Commissioner Tustison had no report.
Commissioner Davis reported the following: The Conservation Subcommittee met 9/05/2012 to discuss the Water Conservation Program for local schools. Staff received two bids which vary considerably. The contract was awarded to Environmental Education Exchange and they are currently work with Tucson Water. The conservation booklet will be customize for Oro Valley schools and used as an educational tool. The cost is approximately $12,000. They will also have teachers do specific presentations. The total cost for this program is $26,000.
The second bidder was Arizona Project WET. They proposed starting the educational program from scratch but the Subcommittee felt it was not necessary. Total cost for this program was $95,000.
Classroom presentations would begin next fiscal year.
The Conservation subcommittee requested that the program be added to the budget this coming year. First phase: Develop the activity booklet this year. Second Phase: Implement the program in Oro Valley schools the following year. No action was required by the subcommittee. Commissioner Davis ended his report.
Commissioner Reynold’s reported that the Water Resources subcommittee met Sepember 4th. Several of the agenda items were:
-Discussion and/or possible action regarding the Designation of the Assured Water Supply Application.
-Discussion regarding the current status of CAP wheeling through Tucson Water and the temporary outage.
Commissioner Reynold’s ended his report.
Ms. Seng reported the following:
-Packet information - A bill insert Go Green Paperless was sent to customers, Quick Reference (QR) codes were created to help customers link to the Water Utility’s website through the use of their Smart phones. A second QR code links customers to the Water Utility’s toll free telephone number for bill payments.
Customer Service Report - August 2012:
-Current Metered Connections -Projected Meter Installations for FY 12-13 -Actual EDU’s as of 8/13/12 -Meter Replacements -Water Audits
Ms. Seng ended her report.
Mr. Jacklitch reported on several projects: -Lambert Lane Project water main installation -Campo Bello Main replacement
-Chlorine Storage Facility. Mr. Jacklitch ended his report.
Mr. Ruiz presented several slides on the Potable and Reclaimed Water Systems:
-Total Water Production Report -2011-12 -Monthly Water Production Report-August 2012 -Daily Demand/Overall Reservoir Storage Average/Precipitation Report -August 2012 -Reclaimed Water Deliveries-August 2012
Mr. Ruiz ended his report.
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MPA Common Ground Award Finalist |
Mr. Saletta mentioned that Oro Valley is being considered as a finalist for MPAs Common Ground Award. An article will be featured in Tucson Life Style Magazine - November’s issue.
Mr. Saletta reviewed the Colorado and Arizona River WaterWatch monthly streamflows.
CAP Total System Contents (new slide) - Reviewed several area capacities: Lake Powell, Lake Mead, Morrow Point, Navajo Reservoir and Lake Havasu. Mr. Saletta will e-mail the slide to the Commissioners.
Future Tours:
-Mark Wilmer CAP facility -Location: Lake Havasu Schedule: November, January or February
-CAP Headquarters -Location: Phoenix
Mr. Saletta ended his report.
Before adjourning the meeting, Chair Milkey thanked the Finance Subcommittee for their work with the Water Rates Analysis and Staff’s support.