MINUTES
ORO VALLEY WATER UTILITY COMMISSION
REGULAR SESSION
Monday, October 10, 2011
HOPI CONFERENCE ROOM
11000 N. LA CAÑADA DRIVE
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PRESENT: |
DAVID POWELL, CHAIR
RICHARD DAVIS, VICE CHAIR
RICHARD REYNOLDS, COMMISSIONER
ELIZABETH SHAPIRO, COMMISSIONER
WINSTON TUSTISON, COMMISSIONER
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| EXCUSED: |
JOHN HOFFMAN, COMMISSIONER
ROBERT MILKEY, COMMISSIONER
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STAFF PRESENT:
Philip C. Saletta, P.E. Water Utility Director
Shirley Seng, Utility Administrator
David Ruiz, Engineering Division Manager
Jim Peterson, Water Utility Regional Coordinator
OTHERS PRESENT: Council Liasion, Barry Gillaspie
There were no speakers at this time.
Chair Powell requested approval of the minutes.
MOTION: A motion was made by COMMISSIONER SHAPIRO and seconded by COMMISSIONER REYNOLDS to Approve the minutes.
MOTION carried, 5-0.
Mr. Saletta reported that the Intergovernmental Agreement (IGA) was being implemented. O.V. Water Utility has applied for the Central and Southern Avra Valley Storage and Recovery Projects permitting. These facilities are own and operated by Tucson Water. The permit applications have been received by ADWR. The Utility has received notice that they are complete and moving forward. The recovery well permits have also been received by ADWR. These permits could be approved in November and in place to be able to proceed with the interim delivery of CAP through Tucson Water.
Bill Insert: Mr. Saletta reported that a Frequently Asked Questions flyer about the delivery of CAP water was mailed to customers in their bills. The insert also mentions a CAP Water Open House is planned for Monday, November 14, 2011 from 5:30 - 7:00 p.m. in the Council Chambers. A formal presentation will be made from 6:00 - 6:30 p.m.
Chair Powell asked how the meeting will be incorporated through the presentations.
Mr. Saletta explained there would be several posters on easels with map illustrations on hand outlining several of the CAP water delivery routes. Staff will also provide water quality information. The Water Utility CAP Team will be available to answer questions. All the illustrations can be viewed by the public from 5:30 to 6:00 p.m. and again from 6:30 to 7:00 p.m. Immediately thereafter the Water Utility Commission will hold their regular meeting. The Water Utility CAP Team will be available to answer questions from the public.
CAP staff will be available to answer questions from public 5:30 - 6:00 p.m.
-Pipeline design: The Water Utility has completed its pipeline design and working on acquiring the easements. We are about 70% complete on our design work for the facilities going onto Tucson Water’s property. Oro Valley Operations staff is currently working on water quality, flushing of water lines and fire hydrants.
Project Construction: Construction will begin early November and CAP water delivery should commence mid January 2012.
Question and answer session occurred.
-Are we permitting to take credit for those wells as recovery wells for our system? (Commissioner Reynolds). Mr. Saletta said yes.
We had recovery wells, are we adding to the numbers that we can now use as recovery wells? (Commissioner Shapiro). Mr. Saletta said yes, it is tied to the Intergovernmental Agreement with Tucson Water.
There were no further questions, Mr. Saletta ended his report. No action was required on this item.
Commissioner Tustison mentioned that the Finance Subcommittee met on Tuesday, Octobert 4th to review the water rates analysis. The subcommittee asked many questions and felt that Staff responses were very forthright and clear. At the end of the meeting the Subcommittee had a very good understanding of all the materials in the Water Rates Analysis Report. The Subcommittee feels confident recommending to Council, that there be no rate increase for the next year. A formal motion will be recommended after discussion.
Ms. Seng reported that all the assumptions were reviewed by the Commission at their last month’s meeting. The first draft of the rate report was sent electronically to the Commission along with the 5-year projections.
Ms. Seng reviewed several highlights in the Preferred Financial Scenario Summary.
-Debt Service Coverage: This is determined by combining the Enterprise Fund, the Alternative Water Resources Development Impact Fee Fund and the Potable Water System Development Impact Fee Fund. The debt service coverage requirement is met every single year in the analysis. FY 2015-16 was the lowest debt service coverage at 1.39. The debt service coverage requirement is 1.30. Ms. Seng also pointed out that the financial analysis was done without any increases in water rates, fees or charges.
Ms. Seng stressed that the no rate increase scenario won’t guarantee there will be no rate increase in future years. What staff is recommending is that there be no rate increase for this fiscal year. Every year we must review these financial projections to evaluate extraordinary Operations & Maintenance costs and Capital Projects planned or that could occur in future years. Ms. Seng outlined some of the reasons why the financial analysis worked with no rate increases. The Water Utility reduced debt by paying off series 2001 and 1999 bonds, refinanced higher interest rate bonds, reduced operating costs and deferred capital expenditures. In prior years the analysis included a large debt service payment related to the $60.0 - $80.0 million CAP direct delivery project now on hold because we have Council’s approval for the wheeling of CAP water. Staff is asking for a recommendation from the Commission for no rate increase for FY 2011/12.
Chair Powell commented he appreciated the thorough job that Staff and the Subcommittee had made with the water rates over the past years.
Question and answer session occured.
-Are there any costs included in this analysis for the increase in wheeling CAP water from 1,500 AF to 3,000 AF? (Commissioner Reynolds). Ms. Seng indicated there was not. We assumed throughout this five year projection period CAP deliveries will not increase over 1,500 AF. Mr. Saletta mentioned that the capital cost to increase CAP deliveries from 1,500 to 3,000 AF was approximately $6.0 million to $8.0 million. Mr. Saletta mentioned that it was Council’s policy to have the water rates reviewed every year and to establish a five year projection, however at this time staff will be recommending no rate increase for the first year only.
-Are we going to have to borrow money in year four? (Commissioner Shapiro) Ms. Seng explained that in year five it was assumed that we will borrow money to pay for existing system improvements in the amount of $2.8 million through a WIFA loan at a rate of 4.25% interest for 20 years.
Mr. Saletta explained the Water Rates Analysis acceptance process to the Commission indicating that if Council accepts the report, then no further action would be required.
There were no further questions. Chair Powell requested the Commission’s vote on the item.
MOTION: A motion was made by COMMISSIONER TUSTISON and seconded by COMMISSIONER SHAPIRO to Recomend Approval to forward the Water Rates Analysis Report to Town Council with a recommendation that there be no water rate increase for FY 2011-12.
MOTION carried, 5-0.
Mr. Saletta gave the Commissioners a brief background update regarding the ADD Water Project.
ADD Water Project (Acquisition Development and Delivery) concept:
-Obtain more renewal water from the Colorado River and deliver that excess capacity to the CAP canal.
Currently, they estimate over 300,000 AF per year of excess capacity in the canal. The canal will be able to handle CAP deliveries and the additional 300,000 AF per year.
-Objective: Review agricultural water rights on the river. This issue could have some problems but hopefully can be resolved.
-Bureau of Reclamation (B.O.R.) must be on board and willing to accept the ADD Water Project. Several steps need to be taken with the B.O.R. such as project approval, project authorization, basis for negotiations and contracts.
The Central Arizona Water Conservation District (CAWCD) CAP staff made recommendations to their board that the ADD water project be placed on hold to allow them more time to discuss the project with B.O.R.
Many of the stakeholders felt that is was important to keep the ADD Water Project going. A group known as the Stakeholders Coalition was formed to keep the interested water users together to help with discussions such as acquiring, developing and delivering more water from the Colorado River through the CAP project. There is still the need to get CAWCD Board, Bureau of Reclamation. and Arizona Department of Water Resources approvals.
Mr. Saletta mentioned that he was representing the Southern Arizona Water Users Association and Oro Valley Water Utility on the ADD Water. Mr. Saletta felt it was important to remain involved with the group while they moved forward. In the future, if there is continued growth or annexations we will need additional water supplies from the Colorado Water River.
There were no further questions Mr. Saletta ended his report. No Action was required on this item.
Chair Powell recognized Council Liaison Gillaspie. Councilmember Gillaspie had no report.
Commission Tustison had no report.
Commissioner Davis reported the subcommittee was glad that the Water Harvesting program was taking place.
Chair Powell had no report.
Ms. Seng reported the following:
Customer Service Report September 30, 2011:
Metered Connections Projected Meter Installations for FY 11-12: 35
Actual New Meter Installations as of 9/30/2011: 26
Actual New Meter Installations for September: 3
Actual EDU’s for September: 3
Meter Replacements FY 11-12
Month of September: 10
Ms Seng reported that the AMI Project will involve replacing approximately 2,200 meters. Utility staff has already installed meter risers for those that were buried too deep and have cleaned out meter boxes to facilitate the replacement process.
As of today, our contractor has installed the necessary servers for this project. The Utility is still waiting for the arrival of the mast. Installation of the meters will take place when all the electronics are installed.
-10/27: Kickoff meeting scheduled with the contractors
-10/31: Commence installation of new meters
Ms. Seng ended her report.
Mr. Ruiz reported for Mr. Jacklitch.
Construction Projects
Lambert Lane: This project is currently under construction. Traffic between La Canada and Lambert is being monitored by Oro Valley Police.
There are several utilities being worked on at the same time. All of the water utility’s pipeline work will be phased in. The project will be on going for over a year.
N. La Canada 3.0MG Concrete buried Reservoir: The reservoir is in service, but several other improvements such as landscaping, security wall and paving have to be completed.
CAP Interconnect Design: There are two designs phases in this project. Tucson Water’s on site design and O.V. Water offsite pipeline design have been completed. Several easements need to be approved before we this project goes out to contract.
Campo Bello: This is a main replacement project. Advertising should take place in January and construction could begin June 2012.
Relocation of Chlorine Facility: The chlorine facility will be moved to Oro Valley’s reclaimed facility. This facility is located at Big Wash near Oro Valley’s Market Place. Construction Schedule: November 2011
Mr. Ruiz ended his report.
2011 Well Pumpage Monthly Report - September 2011
Exceeded Sustainable rate: 5,500 AFY in August
Annual Well Pumpage Report - September 2011
Exceeded Sustainable rate of 5,500 AFY. Mr. Ruiz reported that by next year the annual pumpage will decrease by 1,500 AF getting it closer to the sustainable rate.
Reclaimed Water System - September 2011
Daily Demand Total: 60.3 million gallons
Yearly total: 595.097 million gallons
Potable Water System Demand and Precipitation - September 2011
Total reservoir capacity: 9.5 million gallons
Daily Demand: Down 8.5 million gallons to 5.5 million gallons
Precipitation: 2 rain event
Mr. Ruiz ended his report.
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DIRECTOR’S REPORT (P. Saletta) |
Mr. Saletta mentioned there were three positions with term ending December 31, 2011. Two of these positions are eligible for reappointments Commissioner Milkey and Commissioner Shapiro. Both Commissioners have sent letters accepting reappointments to the Water Utility Commission.
Mr. Saletta also mentioned that Chair Powell had served his full two terms. He thanked him for his dedication and service to the Commission. This position has been advertised and currently the Clerk’s office is accepting applications. All applications will be reviewed and an interview committee will be established consisting of Council liaison, Commission’s Vice Chair and Water Utility Director.
Mr. Saletta mentioned the order for CAP water was placed on September 30 for a total of 5,000 AF. He also mentioned that 2,000 AF will be delivered to Central Avra Valley Storage and Recovery project, 500 AF will be in Pima Mine Road and 2,500 AF will be delivered to Kai Farms in the Groundwater Savings facility. For CY 2013 the delivery could be as much as 6,000 AF.
looking at 6000 a/f for next year
Colorado Stream flow: Pointed out several of the areas with above normal stream flow (Colorado Rockies, Utah). Pointed out southern/ western areas Colorado, Northern New Mexico experiencing normal stream flow.
Arizona Stream flow: Pointed out several areas in northern Arizona where streamflow was very good.
Bureau of Reclamation Weekly Report: Lake Powell 72% full with over 17.0 million AF of water storage
-Lake Mead 50% full but in the last 8 months has risen more than 30 feet. It is about 1,118 feet elevation above sea level, total storage is approximately 13.0 million AF out of 26.0 million total capacity. There have also been several planned large releases out of Lake Powell.
FUTURE AGENDA ITEMS: There were no agenda item suggestions at this time.
There were no speakers.
NEXT MEETING: NOVEMBER 14, 2011 LOCATION: COUNCIL CHAMBERS
MOTION: A motion was made by COMMISSIONER TUSTISON and seconded by COMMISSIONER REYNOLDS to Adjourn
MOTION carried, 5-0.