PRESENT:

David Powell, Chair Winston Tustison, Vice Chair Rick Davis, Commissioner Elizabeth Shapiro, Commissioner

ABSENT:

John Hoffmann, Commissioner

EXCUSED:

Robert Milkey, Commissioner

STAFF PRESENT:

Philip C. Saletta, Water Utility Director
Shirley Seng, Utility Administrator
David Ruiz, Engineering Division Manager

STAFF ABSENT:

Robert Jacklitch, Project Manager

Chair Powell mentioned that the audience is allowed to speak during "Call to Audience" and can address their issue by completing a blue speaker card.

There were no speakers.

MOTION: A motion was made by Commissioner Davis and seconded by Commissioner Shapiro approve the January 12, 2009 minutes.  

MOTION carried, 4-0.

Ms. Seng reported the following:

-Commissions Packet - Copy of February Oro Valley Vista Publication. Ms. Seng explained that the O.V. Vista is a Town publication replacing numerous publications from other departments within the Town and consolidating all publications into one.  She pointed out the WaterWays section on page 7. This publication mailed monthly to Oro Valley residents in Oro Valley however it does not reach Countryside residents. Staff is looking into extending the mailing of the Oro Valley Vista to Countryside or having the WaterWays section of the publication mailed to Countryside as a separate billing insert every other month. Staff will also investigate the mailing and printing expenses for the insert.

Question and Answer Session:
-How many residents in Countryside area? (Chair Powell). Ms. Seng indicated there were appoximately 5000 customers, 2500 connections. Chair Powell asked if there were any good comments from the residents regarding the O.V. Vista as opposed to the single WaterWays publication. Ms. Seng indicated she had not received any feedback from the public.

Mr. Saletta assured the Commission that Staff was making every effort to get the information out to all customers. 

There were no further questions.  No Action Required on this item.

Mr. Saletta reported that D. Ruiz, K. Boyce and J. Tanler met Thursday, February 5th at Arizona Department of Water Resourses (TAMA). We discussed Gallons per Capita Day (GPCD) exceedence. Arizona Department of Water Resources (ADWR) goal is to get water providers to sign up for the Modified Non Per Capita Conservation program under the Third Management Plan and prior to the Fourth Management Plan.

Ms. Boyce will be setting a meeting March 2nd with the Conservation Subcommitte to review the list of Best Management Practices as part of the Modified Non Per Capita Conservation Program (NPCCP). Mr. Saletta mentioned that it very important for the Utility to become active in this program.

~ADWR indicated that Oro Valley Water did not exceeded their GPCD in 2006 and preliminary calculations indicates that Oro Valley did not exceed it in 2007. In addition, Oro Valley also has not had problems with unaccounted-for-water loss exceedence. ADWR has indicated that if a water provider is in compliance in later years than no further action may be needed. This is still being decided by ADWR.

The List of Best Management Practices was reviewed. The Conservation Subcommittee will select 5 management practices from the list. 

Mr. Saletta expects to hear back from ADWR about the GPCD program in the near future. The Best Management Practices will be presented to the Commission for recommendation and then to Town Council.

Chair Powell pointed out that the Utility was already initiating some of the Best Management practices from the list.

Question and Answer Session
~Oro Valley Water Per Capita Per Day exceedance (Commissioner Shapiro). Mr. Saletta explained Oro Valley’s population 2006-2007 and ADWR’s gallons per capita per day calculations and population census numbers for that period. During years 2000-2005 Oro Valley exceeded its ground water allotments due to Oro Valley’s five and one-half golf courses, however Oro Valley had allotments for only three and one-half golf courses. Since Vistoso and Stone Canyon golf courses were built after 1994 they were not included in the ground water allotment for the GPCD program.

~When was the Rancho Vistoso parcel annexed to Oro Valley (Chair Powell). Ms. Seng explained that Rancho Vistoso was annexed in the early 90’s.

There were no further questions, Mr. Saletta ended his report. No Action Taken on this Item.

Mr. Saletta proceeded to give a slide presentation on the pipeline routing. An explanation was given of Oro Valley’s pipeline route, alignments and various alternatives for the N.W. Water Providers: Metro Water, Town of Marana, Flowing Wells.
The water delivery is based on deliveries as follows: Flowing Wells 3,000 acre-feet, Oro Valley  10,000 acre-feet, Metro Water 10,000 acre-feet and the Town of Marana up to 7,000 acre-feet. Oro Valley Water Utility is at furthest and the highest elevation compared to the other partners. Oro Valley will need to pump water to C-Zone and will need to build its own pump station to get from A to C zone areas. All the other providers need only A-Zone water and have no need to pump an additional 200 feet higher. The consulting engineers Westland Resources and Carollo Engineers will be looking at some additonal sub-alternatives to address these concerns and optimize the last segments of the pipeline and pump station.

Question & Answer Session

-What is the difference in pipe diameter in C compared to A? (Chair Powell). Mr. Ruiz explained that it was a network pipe system with a series of interconnected pipes not a single large pipe. He explained that the existing system must be analyzed through a modeling program; however through this process the Utility may need to upsize some existing pipelines. Mr. Saletta also explained that there were 8-inch and 12-inch pipelines throughout the distribution system. 

What are the pumping costs over 10-15 year period and how do they differentiate within the different zones? (Vice Chair Tustison). Mr. Saletta explained the cost effectiveness pumping to A Zone verses other zones. He explained that the Utility will analyze power on an annual basis and then prepare a net present value of these costs over 20 years.

What are the Right-of-Way criteria? (Chair Powell). Mr. Saletta pointed out the Segment Ranking slide. The Utility has a ranking system in place that includes Environmental Regulatory Requirements, Utility Relocations, Public Disruptions, Pavement Replacement, and Easement Acquisitions. Each segment is reviewed and ranked systematically. The five criterias are evaluated and applied to the pipe and pump routing segments. 

Mr. Saletta explained that Oro Valley was exploring other sub-alternatives. For example:  Camino de Oeste & Thornydale. He explained that Tucson Water continues to work in the reverse osmosis/slowsand filtration pilot study and laboratory analysis from the water quality side but have not shown interest in the pipeline aspect of the project. Mr. Saletta clarified that the Northwest Partners would build and operate their own treatment plant.

In answer to Vice Chair Tustison question, Mr. Saletta pointed out Tucson’s Water service area and its service boundary to Marana. 

If negotiations slow down between Marana and Tucson Water will it delay the final decision were the pipeline will be? (Vice Chair Tustison). Mr. Saletta felt that the pipeline would not be delayed but Marana would need to make a decision about over-sizing the pipeline.  

What is the time frame for the Final Report? (Commissioner Davis). Mr. Saletta indicated that the report could be finalized in two months. The pipeline routing and cost will need to be in place followed by the design of the pipeline & pump stations. The next steps are to finalize the Task 3 technical memo. Evaluate the proposed sub-alternatives, finalize the route selection, finalize the report.

-Handout: D. Andrews, Town Manager’s letter dated 1.29.09 to Arizona State Land Commissioner, Ref: NW Water Providers CAP Water Treatment and Delivery System Project. In the event that State Lands is annexed the Town is asking for their support on this water project. Recently the Central Arizona Water Conservation District supported moving forward with the design on the N.W. reliability.

There being no further questions, Mr. Saletta ended his report. No Action Taken on this Item.

Mr. Saletta reported the following:

~Packet attachment - Projects list submitted for the Arizona Water Infrastructure Financing Authority Project Priority List 

Federal Stimulus package: Staff believes that any monies that become available to the State for infrastructure will go through the Governor’s office for proper disposition. Any projects related to water or wastewater will go to Arizona Water Infrastructure Financing Authority. Two years ago the Utility borrowed monies for the Reclaimed Water System from WIFA and saved a whole percentage point and also reduced fees. Staff would like to consider borrowing monies again for several projects.

~Northwest Water Providers CAP Water Treatment & Delivery System Design. (O.V. application request $4,000,000,  Metro Water request $4,000,000). Mr. Saletta continued to give a breakdown of the Utility’s Capital Improvement Projects (Phase 1 & Phase 2). All projects have been submitted to Arizona Water Infrastructure Financing Authority. Mr. Saletta explained that the Finance Subcommittee at WIFA has approved and recommended that the projects be considered for the Project Priority List. WIFA will notify the Water Utility with their decision. Staff will also notify the Commission and forward it to Council for approval and loan and authorization.   

Staff believes that by obtaining a lower interest rate now it would save the Utility in the financing interest and debt service. Mr. Saletta requested that the Water Utility Commission approve moving forward with the Arizona Water Infrastructure Financing Authority application.

Ms. Seng clarified three separate WIFA applications: CAP Water Treatment & Delivery System Design, Phase 1 and Phase 2. Although these projects are placed on the Prority List it does not obligate the Town to apply for WIFA funding. 

Chair Powell requested a motion from the Commission.

MOTION: A motion was made by Vice Chair Tustison and seconded by Commissioner Shapiro recommend that Water Utility Staff move forward with the application for Phase 1 Project, Phase 2 Project and the CAP Design Project and that they be included on the WIFA Priority Project List.

MOTION carried, 4-0.

Mr. Saletta discussed that there was a recent article regarding Tucson Water selling of ground water storage credits. He indicated that they were not permanently selling or transferring or remarketing any of their CAP allocation or subcontract water. They have previously stored CAP water in their recharge facilities and are trying to sell this stored water. They will use the revenues to continue to buy their CAP allocation and recharging it to the same locations. He explained the stored water would than be available as ground water storage credits.

Mr Saletta has contacted Jeff Biggs, Director of Tucson Water and is pursing discussions regarding the possibilities of Oro Valley acquiring Tucson Water’s GW Extinguishment Credits which could be utilized to offset the Town’s ground water pumping. The purchase of the Extinguishment Credits would be valuable, because it would  save money by reducing the Utility’s payments to Central Arizona Groundwater Replenishment District while maintaining Oro Valley’s Ground water Allowance Account Balance.

-Oro Valley Request for Funds: Staff estimates if 4000 af of Tucson’s Water GW Extinguishment Credits could be purchase and approved by Council an additional $100 to $150 per af would be saved compared to CAGRD payments (Approx. $333 per af). The Utility could save an additional $400,000 over the next two years after payment is made to Tucson Water. 

Staff plans to continue discussions with Tucson Water unless there are any objections from the Commission. This item will be forwarded to Council for approval and the appropriation of funds from budgeted contingency funds in the Water Utility Budget.

Question and Answer Session
-In answer to Commissioner Shapiro’s question, Mr. Saletta explained the Utility’s savings through CAGRD and the purchases of Tucson’s Water Extinguishment Credits.

-In answer to Chair Powell’s question about capital costs, Ms. Seng explained that after Town Council approval staff could proceed with the transferring of funds from Contingency Fund into an expenditure line item in order to pay for Tucson’s Water GW Extinguishment credits.   

-In answer to Vice Chair Tustison question, Ms. Seng explained that she did not have any information on net income exceeding net expenses at this time but it could be obtained through the Munis System.

-In answer to Commissioner Shapiro’s question, Mr. Saletta indicated that the monies paid to CAGRD was a budgeted line item and was paid in October 2008. He explained that Tucson Water would like to have payment before June 2009.

-In answer to Commissioner Davis question, Ms. Seng indicated that in CY 07-08 Oro Valley experienced approximately 4% shortfall in water use, but she believed it did not affect the Utility financially. Mr. Saletta explained that it will be difficult in the next couple of years for the Utility in terms of growth but the Utility is currently fine financially. No Action Taken on this item.

Vice-Mayor Carter gave a brief Council update regarding the following:

~Boards, Commissions, Committee Selection Process
Council is reviewing the Boards, Committee’s and Commission’s selection procedure to help and possibly participate in the interview process. This will help develop an easier working relationship with Council. Vice-Mayor Carter indicated that OVWU Commission would probably not change. He mentioned that some of the existing Boards and Committees do not have a Council Liaison representative. There were no questions from the Commissioners.

~Other Town Council Discussions: 
-Town of Oro Valley’s Budget deficit of 2.2 million
-Update: Goldwater Institute Lawsuit (Gift law clause) 
-Update: Oro Valley’s Businesses and Financial Crisis (Ike’s Market Closing)
-Update: Oro Valley’s RTA   
Vice-Mayor Carter ended his report.

Vice-Mayor K.C. Carter gave a brief Council update regarding the following:

~Boards, Commissions, Committee Selection Process
The Council is reviewing selection process of the Boards, Committee’s and Commission’s in order to help  streamlining the selection process. He indicated the possibility of Council interviewing future applicants to Committee, Boards etc. This process will help streamline the selection process and help develop an easier working relationship with Council. Vice-Mayor Carter indicated that OVWU Commission would probably not change. He mentioned that some of the existing Boards, Committees do not have a Council Liaison representative and some of the Department Heads are making the selections. There no questions from the Commissioners.

~T.C. Discussions: 
-Town of Oro Valley’s Budget deficit (2.2 million).
-Update Goldwater Institute Lawsuit (Gift law clause) 
-Update Oro Valley’s Businesses and Financial Crisis (Ike’s Market Closing)
-Update Oro Valley’s RTA   

Vice-Mayor Carter ended his report.

Vice-Mayor K.C. Carter gave a brief Council update regarding the following:

~Boards, Commissions, Committee Selection Process
The Council is reviewing selection process of the Boards, Committee’s and Commission’s in order to help  streamlining the selection process. He indicated the possibility of Council interviewing future applicants to Committee, Boards etc. This process will help streamline the selection process and help develop an easier working relationship with Council. Vice-Mayor Carter indicated that OVWU Commission would probably not change. He mentioned that some of the existing Boards, Committees do not have a Council Liaison representative and some of the Department Heads are making the selections. There no questions from the Commissioners.

~T.C. Discussions: 
-Town of Oro Valley’s Budget deficit (2.2 million).
-Update Goldwater Institute Lawsuit (Gift law clause) 
-Update Oro Valley’s Businesses and Financial Crisis (Ike’s Market Closing & various others)
-Update Oro Valley’s RTA service  

Vice-Mayor Carter ended his report.

There were no Subcommittee Reports.

a.	Customer Service Report

Ms. Seng provided the following:
~Update 7/1/08 - 1/31/09 Meter Connections
-Total Metered Connections:  18,345
-Projected New Meter Installations FY 08/09: 250   
-Actual New Meter Installations 1/31/09: 168
-Projected EDUs:  312        
-Actual EDUs 1/31/09: 557
-New meters January 09: 15 
New metered installation summary:  Residential = 128    Commercial= 27  Irrigation=12
Reclaim Turf= 2      Turf= -1

b.	Update on Meter Replacement Program (S. Seng)

-New Postion Meter Reader Supervisor: Main objective to implement and monitor meter replacement program while supervising the meter readers. To implement this program it will require updating data from the 18,300 metered connections. The Meter Readers are also creating work orders for meters registering zero water usage, erratic usage, checking for accurancy and if necessary replacing the meters.

Since July 2008 the Utility has replaced a total of 410 meters 205 work orders have been submitted by Customer Service staff. The Utility replaced 504 meters over a 6 year period, without the Meter Replacement program or increase in staff. It is important to realize that 410 replacements have taken place in 7 months. At this time there is no analysis on water usage and how it will affect revenues. Staff will keep the Commission updated.

c.	Capital Projects

Mr Ruiz reported on CIP for Mr. Jacklitch:
-Pusch View Lane Well C9 - Construction is complete. Chlorination and flushing well is being done.
-La Canada Reservoir: Capacity - 3.0 MG (E-zone) Location: King Air & Moore Road. The design and specifications are 99% complete. This project will be out to bid in February and is currently on WIFA's Priority List - Phase I.
~Innovation Way: 16-Inch Water Main is complete. Currently listed on WIFA's Priority List - Phase 1. This project will be out to bid in February.
~Well  E1B Drilling: Staff will be evaluating the bids and selecting a driller. Staff scheduled a meeting with the homeowners in the surrounding area, however only 1 resident attended out of the 30-40 invitations. Staff is currently working on a plan to help mitigate noise levels (noise barriers). 
~Highlands Main Replacement: Main replacement is about 95% complete. Scheduled completion: March 2009. Pavement work will be completed by mid-March.  

d.	Potable and Reclaimed Water Systems Report

Mr. Ruiz reported on the following:
January 2009 Graphs 

~Potable System: Daily Demand levels decreased = 5 to 6 Million per day
~Potable Reservoir Storage: The reservoir demand is doing well.
~Reclaim Water System: Reclaim water total used = 20 Million gallons
~Monthly Water Pumped/End User: A brief outline was given.

~El Conquistador Golf Course South Pond: The Utility is currently doing additional testing for leaks and checking all components. There is enough water in the pond for operational usage. When the leak was detected the Utility switched the pond to potable water for irrigation ADEQ was automatically notified. Every two years ADEQ sends a representative to check the Reclaim Water facilities. Staff was able to accommodate the representative through the process. Oro Valley Water Utility received a letter that they were fully compliant.  

Mr. Ruiz ended his report.  

a.	Board and Commission Appointments

Mr. Saletta pointed out that Council will be discussing Boards and Commissions appointments at the February 18th Council Meeting. 

b.

Budget

Handout: General Fund Options for Deficit Reduction -Fiscal Year 2009/10. 
Outlines: -Potential Deficit in the General Fund    -Options for Council Consideration to Potential shortfall  

In terms of the final budget, the Water Utility will also be reviewing its FY 09/10 projections and applying the same methods based on growth and projected sales.

c.	Upcoming Meetings

Mr. Saletta reported:
~February 12: La Canada Roadway and Reclaim Water Ribbon Cutting Ceremony    -Location: (Crystal Place & La Canada) Time: 8:00 a.m.
~February 18: Council meeting   -Arizona WIFA meeting    
~March 4: Council meeting     -March 5:  Citizens Planning Institute (Handout Incl.)  
~March 9: WUC meeting        -March 17: WRRC Conference (WUC Training credits) 

There were no questions, Mr. Saletta ended his report.

There were no Agenda items provided.
 

No speakers.

Meeting: March 9, 2009   Location: Hopi Conference Room 

MOTION: A motion was made by Vice Chair Tustison and seconded by Commissioner Shapiro adjourned

MOTION carried, 4-0.

Meeting adjourned 7:30 p.m.