MINUTES
ORO VALLEY WATER UTILITY COMMISSION
REGULAR SESSION
Monday, March 14, 2011
HOPI CONFERENCE ROOM
11000 N. LA CAÑADA DRIVE
 
 
 
CALL TO ORDER - AT OR AFTER 6:00 P.M.

ROLL CALL

PRESENT:
Dave Powell, Chair
Rick Davis, Vice Chair
John P. Hoffmann, Commissioner
Robert Milkey, Commissioner
Richard Reynolds, Commissioner
Elizabeth Shapiro, Commissioner
Winston Tustison, Commissioner

CALL TO AUDIENCE - At this time, any member of the public is allowed to address the Water Utility Commission on any issue not listed on today’s agenda.  Pursuant to the Arizona Open Meeting Law, individual Commissioners may ask Town Staff to review the matter, ask that the matter be placed on a future agenda, or respond to criticism made by speakers.  However, the Water Utility Commission may not discuss or take legal action on matters raised during "Call to Audience."  In order to speak during "Call to Audience" please specify what you wish to discuss when completing the blue speaker card.

Mrs. Erica Weise O.V. Resident requested that the Commission take a closer look at the water rates tier structure. She felt that the variations in the tiers were too high and inequitable. Mr. Saletta mentioned that staff will take a look at the tier structures on the upcoming water rates analysis process, however the Commission can make a request to make this item as an agenda at any time. 

Chair Powell mentioned that the Finance Subcommittee can consider take a closer look at the rate tier structure.

1.

APPROVAL FEBRUARY 14, 2011 MINUTES  Discussion and/or possible action.


Click here for Item #1

MOTION: A motion was made by Vice Chair Davis and seconded by Commissioner Shapiro to Approve the February 14, 2011 Minutes.

MOTION carried, 7-0.

2.

REQUEST FOR APPROVAL OF THE ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT DATED MARCH, 2011  (P. Saletta)  Discussion and/or possible action regarding a request for approval of the Oro Valley Water Utility Commission Annual Report dated March, 2011.


Click here for Item #2

Mr. Saletta reported that the draft report was sent to the Commission on Thursday March 3rd. The Annual Report includes all the additional comments from Commissioner Hoffmann and Commissioner Milkey.

Staff will be editing the report for grammar and various other possible errors. If approved, by the Commission the report will be finalized this week and forwarded to the Council March 28th for their approval at the April 6th Town Council meeting.

The Annual Report also includes Calender Year 2010 and Fiscal Year 09/10 information. Mr. Saletta thanked Staff for all their time and effort. Staff recommends the Commission's  approval of the April 2011 Water Utility Commission Annual Report.

MOTION: A motion was made by Commissioner Tustison and seconded by Commissioner Shapiro to Approve that the Oro Valley Water Utility Annual Report dated April 2011 be presented to Council April 6, 2011 for acceptance.

MOTION carried, 7-0.

3.

UPDATE AND REVIEW OF COMPREHENSIVE PLAN FOR THE DEVELOPMENT OF CENTRAL ARIZONA PROJECT WATER   (P. Saletta)  Discussion and/or possible action regarding the planning for the development of Central Arizona Project Water.  Discussion may include interim delivery of Oro Valley’s CAP water through the Tucson Water system, recharge and recovery, and direct treatment and delivery.  Various studies, costs, impacts to water rates and next steps regarding CAP water delivery may also be discussed.


Mr. Saletta presented a draft presentation to the Commission which will be presented to Town Council March 16, 2011. Mr. Saletta pointed out that Tucson Water had a draft report indicating that the acre foot payment could be in the vicinity of $500. The draft analysis report originally reported the payment to be $562. This payment will be finalized in the Intergovernmental Agreement with Tucson Water and will be brought back to the Commission and Council for approval.  

Mr. Saletta gave a quick over view:
-Water Supply Portfolio    -Water Supply and Usage   -Need to develop Renewable Water Resources
-CAP Delivery Options (Focus on Short-term options)
-Inform and update Council regarding plan to develop CAP water

The reason for the presentation is to inform Council about the Utility’s plan to develop CAP water and to seek direction from Council to proceed with discussions and negotiations with Tucson Water.

Mr. Saletta reviewed the OVWU Water Use and Supply Map and explained that Oro Valley’s goal is to be under the 5,500 AF sustainable groundwater production level.  He also explained the various options of 1,000 through 3,000 acre-feet per year (AF/YR) interim deliveries through Tucson Water’s delivery system. Mr. Saletta mentioned that the Projected Demand is based upon 1% to 3% growth rate. 

Mr. Saletta also explained the need for Renewable Water because of declining water levels, meeting Assured Water Supply requirements, the need to reduce reliance on Central Arizona Groundwater Replenishment District, and that this project will deliver "wet" water not "paper" water credits.

Staff will also present the various Short-term CAP Delivery Options available to Oro Valley based on Cost per AF estimates. He explained that the net adjusted cost after considering power and CAGRD savings is approximately $387 (1,000 AF/YR), $445 (1,500 AF/YR) and $678 (3,000 AF/YR).  All of the advantages and disadvantages will be listed in the CAP Delivery Options table. 

Although, there are no significant increases as a results of these projects it will affect the Utility’s ending cash balances because the 1500 AF option will be cash funded. The 3,000 AF/YR option will effect the ending balance because of the debt service payments.   

-The cost per acre-foot (AF) estimates are they based on the original cost of $562? (Commissioner Reynolds). Mr. Saletta confirmed that the estimates included the $562 per acre-foot cost. These costs could come down when a set payment is agreed upon. 

-Is the cost per AF being adjusted before it is presented to Council? (Commissioner Milkey). Mr. Saletta stated that Council will receive the same information that the Commission has to date and that the costs will not be adjusted until finalized payment to Tucson Water has been determined and agreed upon. That payment amount will be brought back to the Commission and Council for approval in the IGA.

-Will you be keeping the Commission informed about the negotiations with Tucson Water? (Commissioner Shapiro). Mr. Saletta indicated he will keep the Commission updated. He explained that negotiations could take a while but he is hopeful that everything could be completed by June with approval possibly in July. 

Schedule:
-7/?/11: Town Council consideration of IGA
-8/1/11: OVWU Staff commence design
-10/1/11: OVWU Staff commences construction
 -1/1/12: Short-term/interim CAP delivery in operation

Commissioner Milkey requested that any significant developments or updates between Town Council be emailed to the Commission as quickly as possible.

Mr. Saletta explained that if the Water Utility Commission has reviewed the Tucson Water short-term CAP delivery options and recommends moving forward with discussions and negotiations, a draft Intergovernmental Agreement will be developed for review and future consideration by the Commission and Council.

Mr. Saletta indicated that Staff requests and recommends moving forward.  

Mr. Saletta also mentioned that the results with Tucson Water’s study looks good, but we need to proceed cautiously with the IGA.

Is there sufficient time until the IGA is finalized to get infrastructure construction done and be ready and operational in January? (Commissioner Reynolds). 

Mr. Ruiz explained that Staff is meeting with Tucson Water to discuss what infrastructure would be required to deliver the required volume of wheeled water to the Town of Oro Valley. Design would not start until the IGA is approved. He was very confident that Tucson Water would be ready and also explained that they were currently modeling their water flows. Staff will be meeting with Tucson Water design staff in the near future. The design work off-site connection points to Oro Valley’s water system will be done by Oro Valley. Mr. Ruiz felt that both design projects could be completed in 3 months and take approximately 3 to 6 months to build. 

Commissioner Milkey emphasized the over-pumping of 2,100 AF a year of groundwater and if we can replace 1,500 AF, we have really cut the percentage in over-pumping.

Commissioner Tustison indicated that Council must understand the importance of 5,500 AF sustainable groundwater level and the details in the chart. Mr. Saletta mentioned he would spend time with Council answering any questions.

Commissioner Hoffmann also felt that Council must be allocated sufficient time to understand what is being presented. Mr. Saletta indicated that the presentation could take 5-7 minutes and will be followed with a question and answer session.

Commissioner Shapiro indicated that the Countryside wells were declining and asked how will CAP wheeling would affect the Countryside area. Mr. Saletta mentioned that over the last five years, Countryside area wells have declined .75 feet on average and are doing better than Oro Valley’s aquifer. Countryside will not receive CAP direct water delivery but will receive its water through the recovery wells located in the Countryside Water Service Area.

There were no further questions, Mr. Saletta ended his report. No action was required on this item.

Call to Audience: Mr. Doug McKee, Oro Valley resident mentioned the problems with the water table declines, and questioned the accuracy of the 5,500 AF sustainable groundwater production established several years ago. He felt there could be new engineering data to re-verify or re-calibrate the existing 5,500 AF. He also mentioned that the residents and Council must understand why the 3,000 AF delivery option was being delayed, what are the financial obligations or engineering reasons. He also felt that CAP deliveries could be increased. 

4.

OVERVIEW OF THE CENTRAL ARIZONA PROJECT ACQUISITION, DEVELOPMENT AND DELIVERY WATER PROJECT  (P. Saletta)  Discussion and/or possible action regarding the CAP Acquisition, Development and Delivery (ADD) Water Project.  This is a project that involves numerous stakeholders and the CAP Staff to look at new water supplies for Arizona.


Mr. Saletta updated the Commission regarding the Acquisition, Development and Delivery Water Project (ADD Water):

He explained that CAP staff and various other stakeholders meet to discuss the opportunities to deliver more Colorado River water to Arizona. He indicated that the canal has more delivery capacity than water delivered through CAP water rights off the Colorado River. This capacity is estimated to be about 300,000 AF. However, there is a problem getting the required capacity and having it delivered to the numerous water providers.  

There are several parties interested in the ADD water project, development interests, Arizona Department of Water Resources, Central Arizona Groundwater Replenishment District, Arizona Water Banking Authority, Arizona Municipal Water Users Association, Southern Arizona Water Users Association, Northern Arizona Municipal Users Association.

There have been discussions on how CAGRD fits into the acquisition and allocation process, will they be competing with water providers, and how will they will meet their demands in the future. Oro Valley is also a CAGRD customer. 

There are several outstanding issues:
-Planning costs, acquisition costs, delivery costs
-Availability of water on the river and whether the numerous parties pursue this effort individually/jointly or will CAGRD do it independently. There could be a lot of synergies if all work together.    

Mr. Saletta believed it was important for Oro Valley to participate in the ADD Water project in order to consider additional supply of Colorado River Water for Oro Valley’s future growth by year 2025.

He also emphasized that the acquisition for additional sources of water supply could be very expensive in addition to the infrastructure, but it was very important for Oro Valley to participate in the project.

Mr. Saletta indicated he was the representative for Oro Valley and the Southern Arizona Water Users Association.

-What kind of sources of water are they making available? (Commissioner Hoffmann). Mr. Saletta said they could have purchase some agricultural water rights on the Colorado River or treat brackish groundwater depending on the feasibility and availability in West Phoenix area. However, the main focus is the Colorado River water. 

There were no further questions, Mr. Saletta ended his report. No action was required on this item.

5.

UPDATE ON METER REPLACEMENT PROGRAM         (S. Seng)  Discussion and/or possible action regarding the activities and benefits of the Meter Replacement Program.


Click here for Item 5

Ms. Seng reported on the Meter Replacement Program:

-Overview: Purpose, Statistics, Automated Meter Reading (AMR), New meter type, Proposed meter replacement project in Countryside service area

-Purpose: Replace all malfunctioning meters that typically under register flow as they age. Ms. Seng gave several examples (monitor volume of water, bill for actual water used, reduce lost and unaccounted water, water conservation).

-Statistics: Formal meter replacement began late in 2008, Prior to program implementation, the utility replaced a total of 503 meters in a 7 year period
-Meter replaced since new program: CY 2009= 627, CY 2010= 469, CY 2011 (ytd) = 252  Total: 1,348

-Photos:  3-inch meter replacement. Ms. Seng circulated two 5/8 inch meters for the Commission's viewing. She explained the significant difference in size between a 3-inch meter and a 5/8 inch meter.

-Automated Meter Reading: (AMR) equipment consists of transponders, receivers and encoders, Currently 474 meters are equipped with AMR. The data is sent from meter to receiver to laptop computer. The data is downloaded to the billing system, AMR eliminates data entry errors by manual reading and reduces labor costs 
-AMR installations prioritized based on safety first followed by reduction in read times

-The area where AMR's are installed include the Highlands Subdivision, Oro Valley Market place, Mercado Del Rio Commercial site and Campo Bello Subdivision. 

New Meter Type iPERL: - Circulated the new Dana Kepner meter iPERL and the existing meters to the Commission. iPERL is very accurate and has no moving parts with magnetic field technology and a 20 year life. In the Countryside Water Service Area, 188 iPERL meters have been installed.

A brief discussion occurred about the cost of the new meters and whether it required a low flow indicator. Ms. Seng indicated that the meters did not require a low flow indicator. 

Ms. Seng also mentioned there was less pressure lost since there are no moving parts with these new meters.

-Is the initial cost of the i-PERL significantly greater than the others? (Commissioner Milkey). Ms. Seng said yes, but the iPERL meter costs were included in the last rate increase to Council so the meter rates were appropriately increased. She explained that the meters are made in 5/8 & 3/4 inch, the 1 inch are not available yet.

The Proposed Meter Replacement in the Countryside Service Area are 2,223 meters and is a 40 minute round trip for field staff with a manual meter read time of 1 person for 32 hours.

Proposed project: Replace existing 5/8" meters with iPerl meters, all commercial have been replaced with T2 & C2 meters  -Install radio read equipment on meters,  All meters would be read electronically from the office through Automated Meter Infrastructure (AMI) tower base station. 

-Do the meters read in total gallons or can you also get instantaneous flows in gallons per minute? (Commissioner Davis). Ms. Seng was not certain, but if the project is approved she would have the vendor come in and give a presentation for the Commission.

-Can you tell if someone has a leak from these meters? (Commissioner Shapiro). Ms. Seng responded yes, all staff that have access to the Utility’s data billing base will have the software availability, also every customer can have read-only access to their own account via the Internet and can see their water consumption patterns (by the hour, day, week or monthly).  

Ms. Seng outlined the advantages and disadvantages of the Proposed Meter Replacement.

-What is the life expectancy of the i-PERL versus the old meters? (Chair Powell). Ms. Seng mentioned that the i-PERL was about 20 years as opposed to the existing 10 years. 

-Public Relations:  -Billing inserts   -Article in Countryside Community Association newsletter    -Open house at Countryside Community Center
Commissioner Shapiro mentioned that she would be glad to help Staff with the open house and newsletters.

How long will water service be interrupted with the new meter replacements? (Commissioner Milkey).  Ms. Seng mentioned it could take only 10 minutes per meter.

-When would you anticipate doing this program? (Commissioner Tustison). Ms. Seng indicated if approved in the budget it could begin July or August. 

Ms. Seng also indicated there were 2,223 meters in Countryside Service area there are more meters than homes.

-Do you have the separate number for the unaccounted water in Countryside? (Commissioner Milkey). Ms. Seng indicated that for year 2010 it was 9.75% and it was higher than Oro Valley’s combined average but it is reported to the State together.

-If someone has a leak in their meter are they being replaced with the new i-PERL meters. Ms. Seng indicated yes, and that Oro Valley meter replacements will also have the i-PERL meters.

There were no further questions, Ms. Seng ended her presentation. No action was required on this item.

Commissioner Shapiro asked to be excused from the meeting.

6.

TOWN COUNCIL MEETINGS/COMMUNICATIONS            (Councilmember Gillaspie)


Councilmember Hornat reported Council will meet Wednesday, March 16.

7.

SUBCOMMITTEE/COMMISSIONER REPORTS


a.

Finance Subcommittee                    (Commissioner Tustison)


Commissioner Tustison had no report.

b.

Conservation Subcommittee            (Commissioner Davis)


Commissioner Davis mentioned that Vester has not responded to their rainwater harvesting request. Ms. Boyce is also working closely with Public Works maintenance staff for some feedback.

c.

Renewable Water Resources Subcommittee      (Commissioner Hoffmann)


Commissioner Hoffmann had no report.

8.

STAFF REPORTS


a.

Customer Service Report               (S. Seng)


Click here for Item 8a

Ms. Seng reported on the Customer Service Report:
-New Meter Installations for February: 2
-Actual New Meter Installations for FY 10-11: 39
-EDUs as of 2/28/11: 65
Ms. Seng ended her report.

b.

Capital Projects                  (B. Jacklitch)


Mr. Ruiz reported for Mr. Jacklitch:
Construction Projects
-Well E1B: This project is about 95% complete and operational by April.
-N. La Canada $3.0 MG Concrete Buried Reservoir:  This project is about 65% complete. All of the concrete work has been completed. A steel coil wrap will be installed by next week . This project is predicted to be operational by late fall.

-N. La Canada 24" Pipeline: This pipeline will actually connect to the La Canada Reservoir and is about 50%.

Design Projects
-Lambert Lane Water Main: The design work is complete. The project is tied to Public Work’s roadway widening improvement however we are waiting for Public Works decision regarding financing. The Water Utility will be utilizing the same contractor for the pipeline work.

-Sheraton El Conquistador Booster Station: This project will be going out to bid by May of this year.

-Campo Bello Main Replacement: This area has one of the oldest water mains in our system. It was originally installed in 1946, all these mains will be replaced. Staff is presently working on design. It will help tie over some of the area in the south side of Town. Oro Valley currently has agreements with Metro Water and Tucson Water to serve these customers.
Mr. Ruiz ended his report.

c.

Potable and Reclaimed Water System Report        (D. Ruiz)


Click here for Potable Water System Report

Click here for Reclaimed Water System Report

Mr. Ruiz reported on the following:
Potable Water System - February 2011
-Reservoir level capacity: 7.0 million gallons
-Daily demand: 4.0 -6.0 million gallons per day
-Peak demand months: April through June   

-Precipitation: February 27: 1/2 inch  
The Utility typically will try to do some maintenance at least 2-3 times a year to accommodate peak time period.  

Reclaimed Water System - February 2011
-February Usage: 33.0 million gallons  
-Staff is working with the Town’s contractor APS on their Green Energy Efficient project. At the reclaimed sites four pumps motor controls will be changed to variable speed pumps. This will help with water flow as well as with energy surges during start up time. It will save on energy and power costs.
Mr. Ruiz ended his report

In answer to Commissioner Hoffmann’s question about offering rebates to customers who experienced damage due to the February 3rd freeze. Mr. Saletta explained that the Utility has a standard policy regarding leaks. As long as customers can provide how much cost was involved and have repaired the leak the Utility will reimburse a percentage of their bill. This is a one time policy per customer, however the Utility is waiving this policy due to freeze.

9.

DIRECTOR’S REPORT                          (P. Saletta)


a.

Colorado River Snowpack


Mr. Saletta reported on the Arkansas, Colorado and Rio Grande basin mountain snowpack. The water supplies and the snow pack in the Colorado River basins is looking very good as much as 100% through 150% in certain areas.  

Arizona and the New Mexico have about 70% to 89%  of normal snow pack. However, these areas generally do not contribute much to the Colorado River Basin. 

b.

Upcoming Meetings


3/16: Town Council Regular Meeting
4/06: Town Council Regular Meeting: Items: 2011 Annual report and several other items.
4/11: Water Utility Commission Meeting
Mr. Saletta ended his report.
 

FUTURE AGENDA ITEMS

There were no suggested future agenda items.

CALL TO AUDIENCE - At this time, any member of the public is allowed to address the Water Utility Commission on any issue not listed on today’s agenda.  Pursuant to the Arizona Open Meeting Law, individual Commissioners may ask Town Staff to review the matter, ask that the matter be placed on a future agenda, or respond to criticism made by speakers.  However, the Water Utility Commission may not discuss or take legal action on matters raised during "Call to Audience."  In order to speak during "Call to Audience" please specify what you wish to discuss when completing the blue speaker card.

Mr. Doug McKee Oro Valley resident requested having a Production Report showing how much water was pumped in comparison to the 5,500 AF deliveries.

NEXT MEETING:  APRIL 11, 2011    LOCATION: HOPI  CONFERENCE ROOM

ADJOURNMENT: 7:10 P.M.

MOTION: A motion was made by Vice Chair Davis and seconded by Commissioner Hoffmann to adjourn the meeting.

MOTION carried, 7-0.