Vice Chair Tustison reported that staff had been working on a project that will lower municipal bond interest rates for outstanding bonds originally issued in 2003 that would be refunded and save the Water UTility over $2.0 million.
Mr. Saletta reported that the principal balance being refunded was approximately 20.0 million. Staff is moving forward and will be presenting this item to Council on the 18th of April and staff is requesting the Commission’s support and recommendation for Council approval.
Ms. Lemos Finance Director reported on the 2003 bonds and refunding process. The current 5.0% interest rate on the outstanding bonds will be refunded with bonds at 3.0%. A resolution for the bond refunding will be presented to Council April 18th and the new bond pricing could take place as early as May.
There will be a reduction in outstanding debt to reduce annual debt service payments which will facilitate meeting the debt service coverage requirement.
There is scheduled a due diligence conference call on April 10th with underwriters, legal, and staff to review the preliminary official statement.
There is a possibility of an upgrade to the Town’s bond rating. Oro Valley’s present bond rating is AA-.
Mr. Saletta explained that the funds used to pay down the principal balance will be paid from the Potable Water System Development Impact Fee Fund.
There were no further discussions or questions.
MOTION: A motion was made by and seconded by to
MOTION carried, 4-0.
Mr. Saletta gave a presentation regarding the Sustainable Annual Groundwater Production Rate requested as an agenda item by Commissioner Shapiro. Mr. Saletta covered the following areas:
The purpose and use of 5500 acre feet per year of Sustainable Annual Groundwater Production Rate was to prorate cost of renewable supplies between existing customers and future growth and use as a tool to reduce groundwater pumping. It is used for aquifer and well management and provided a good basis for impact fees and planning without significant groundwater modeling costs.
The basis for the 5500 acre feet per year was a report conducted by Brown & Caldwell dated March of 2007. The report used data from USGS, U of A and the Water Utility records. The Theis method was used to calculate drawdown and water levels in the Oro Valley Water Utility wells.
Mr. Jacklitch gave an explanation regarding the Geologic Cross Section Criteria. He reviewed plot formations, unsaturated basin fill deposits, Saturated basin fill deposits (groundwater aquifer), Upper and Lower Tinaja water bed formations and Sustainability threshold levels in Oro Valley wells. He also indicated that Oro Valley receives most of its water from the Upper Tinaja Beds.
Mr. Jacklitch reviewed the screening levels for each of the well formations, and also explained the water level projection estimations for year 2037.
Mr. Saletta mentioned that some of Oro Valley’s wells do not fully penetrate the aquifer. The Utility performed the study with 21 wells, however with 16 wells we were still able to pump water to achieve the 5500 AF. The results also revealed that it could be possible to continue to pump at 888 AF per year at the Countryside area.
There was discussion regarding: -Recharge estimates that ranged from 3800 acre feet per year to 7500 acre feet per year. -Pumping projection at 5500 acre feet per year for another 30 years after year 2007 -Monitoring of wells, water leves and maintenance
-History of water well levels in Countryside areas
-The term sustainable rate relative to the 5500 acre feet per year amount
-Population and demand projections
-The use of groundwater over the sustainable rate and the expense to the community.
There were no further discussions.