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HomeMy WebLinkAbout1998-06-01 WUCFD MINUTESDISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION,ARIZONA JUNE 1,1998 -6:00 P.M. BOARD OF DIRECTORS ROLL CALL Chairperson Douglas Coleman Vice Chairperson Anne Surra Mr.R.E.Eck Mr.Joe Durbala Ms.Carol Urich Mr.John Insalaco (absent) MEETING MINUTES Others Present: Curtis Shook,District Manager Keith Lewis, District Finance Director Jan Mason,Deputy District Clerk Doug Dobson, District Operating Manager (One vacancy exists on the board.) 1.Call to order. 2.Roll call. 3.Approval of minutes of April 20,1998. Vice Chairperson Surra moved to approve the minutes of April 20,1998.Mr.Eck seconded the motion.The vote was unanimous and the motion carried. 4.Discussion and possible approval to issue warranty deed to the City of Apache Junction for a twenty-five foot wide easement approximately 649.58 feet in length located on the north side of 34th Avenue east of Winchester Road. District Operating Manager Dobson briefed the board on the item.He stated the water company needs to dedicate a 25 -foot easement for a distance of 649.58 feet on the north side of the easement for 34th Avenue east of Winchester in order to enable Baseline Industrial Park to pave 34th Avenue according to plans.Ms Urich moved to issue a warranty deed to the City of Apache Junction for a twenty-five foot wide roadway easement approximately 649.58 feet in length located on the north side of 34th Avenue east of Winchester Road.Mr.Eck seconded the motion. The vote was unanimous and the motion carried. 5.Discussion and possible adoption of revised charges and policies for service lines and meter installation,reconnection fees,meter deposits, service reestablishment,returned checks,meter rereads,and cut lock fees. District Operating Manager Dobson briefed the board on the item.He stated they were trying to bring the charges and policies up to date and more comparable with Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 1 of 9 other municipalities.Mr.Eck stated he was concerned about the revised fee for water meter installation.Currently they refund the money back,but it is being considered to make this non-refundable.He believes the fee is possibly too excessive, as currently they are going from zero dollars, with the fee being paid back 10% a year,to residential service at $250 non-refundable.He commented he knows it is more expensive in other municipalities,but he believes they should look at what is comparable in the area,especially since Arizona Water Company only charges $35.He sees no problem charging a fee,he just does not believe it should be so high.City Manager Shook commented they could check to see how they arrived at that amount.Vice Chairperson Surra commented it is for service lines and meter installation;if it was just for the service charges,it would only be $25.Mr.Eck stated this was for new service.Vice Chairperson Surra asked if the $25 was for new service and a meter hook-up.Mr.Eck stated it was. Ms Urich asked i f there was another fee.Mr.Eck stated there is a $16 establishment charge,but our district charges a $25 establishment charge.He suggested lowering the fee from $250 to $100 or $125.Vice Chairperson Surra stated they went non-refundable because of bookkeeping.Mr.Eck agreed that could be a pain.City Manager Shook commented it was also required in the original tariff that Consolidated had.Vice Chairperson Surra asked if Mr.Eck i f he was agreeable to i t being non-refundable.Mr.Eck agreed.Vice Chairperson Surra asked how the amount of $250 was suggested.District Operating Manager Dobson stated they are charging $250 right now.For the same service, the City of Mesa charges $499;i f there is a pavement cut,they charge an additional $300.Queen Creek charges a flat rate of $545 for service and hook- up.Arizona Water charges $35.Mr.Eck commented that the district does not appear to be excessive valley -wide,however,someone could complain that if they built their house across the street from the district in Arizona Water's area they would save $215.He is unsure whether or not they are asking too much;he would like to see more discussion on the issue.Mr.Durbala commented he could see going at $250 or around that amount as the district is trying to grow and expand.This would give them some capital for main lines or another well being drilled.Mr.Eck commented you cannot make the customers pay for that.Mr. Durbala added the charge seems to be in line with the other cities around Apache Junction,if not cheaper.Mr.Durbala asked what would be purchased with these fees.District Operating Manager Dobson stated it would be used for the expansion of the services:main extensions,line extensions and meter upgrades. He stated they have to replace the meters originally installed at a later date, especially those that are stuck or damaged.Mr.Durbala asked if they charge anything when someone has a damaged meter.District Operating Manager Dobson said they do not.Vice Chairperson Surra asked if the cost was greater than Arizona Water because they had to go so much farther to attach the homes to the lines,or the other company has a small established area with very little being connected in or out -possibly just changing out an old meter for a new one.She asked if the charge was only $35 because there already was a meter there.Mr. Eck stated that was not the case.District Manager Shook stated though it is the same scenario,he would have to say that Arizona Water would have to go to the Arizona Corporation Commission to change any of their rates.He commented the district is attempting to eliminate the bookkeeping nightmare and put these funds into an account for drilling a new well,which is immediate and necessary,and Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 2 of 9 for a water treatment plant in the next 3 to 5 year :The board can decide if the fund is excessive and needs to be lowered.This could be considered a hook- in charge that would be assessed similar to a development fee or a capital fee. It would be a one-time charge to assist in line extension and in increasing the quantity of water available.Mr.Durbala asked what would be the potential for a rate increase if they only collected $35 or $50,taking into account the tremendous growth the area is encountering.District Manager Shook stated that would be impossible to say,though obviously if they are taking in one-time capital types of fees,i t lessens the probability that there would be an increase.He estimated they are not looking at a rate increase until they are looking at building a water treatment plant to treat the Central Arizona Project water.Mr.Durbala requested a projected amount of income derived from these fees.District Manager Shook stated they could get that number for him,though he estimated about 500 units over the next twelve to eighteen months.Vice Chairperson Surra asked i f this money was being used against a deposit for defaulted bills or for last bills.District Operating Manager Dobson stated they were.Mr.Eck did not think they should be doing that.Vice Chairperson Surra commented there was no deposit against their defaulting on a bill of the last bill's collection.Mr.Eck stated there was a deposit; there was a $65 security deposit,a $25 establishment charge and another $92 added to the two.Vice Chairperson Surra asked why the security deposit was not shown on the forms. District Operating Manager Dobson stated i t is on the next page over where it recommends no deposit if you have an escrow number.Mr.Eck stated this was for the new policy,not the old one.Mr.Durbala commented it appeared the new growth coming in will pay for some of the additional services requested by them. District Manager Shook agreed.Mr.Eck stated the mains were already paid for, and they were not paid for by the district.They were paid for by the developer. Vice Chairperson Surra asked what portion of the $250 was used by the district before it was refunded.District Manager Shook stated the district did not get use of the interest.District Finance Director Lewis stated is was given back to them over a ten year period.Mr. Eck believed the district did get use of the interest as it was put into a special account for a security deposit,with ten percent of the initial amount refunded back annually for ten years.There had to be an account creating money somewhere.District Finance Director Lewis stated that is not the way i t was done;the district received no use of the money.Vice Chairperson Surra stated the interest that was created is what should have ended up being the fee.Mr. Eck stated it would be difficult to come up with that amount;he added he would be agreeable to a $100 or $125 fee,but he feels $250 is excessive.Vice Chairperson Surra agreed that the district does not have a legal right to do an impact fee unless it goes through the city that collects it.District Manager Shook stated that is not true in this case.He added utilities typically use hook -in charges,especially over the last 5 to 10 years,as a method of capital finance to be able to create the capacity for more water down the road.Vice Chairperson Surra asked if that is what they are doing when they ask them for a certain amount of dollars for accessing pipeline into the new property.District Manager Shook stated that would be line extension, but there is still a major cost involved in finding new ground water or creating a new capacity for water.He commented each new well is in the neighborhood of $500,000:storage capacity is $250,000 for each 1,000,000 gallons.Vice Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 3 of 9 Chairperson Surra commented she is having trouble understanding why the district was able to refund the $250 before and cannot now,unless it is because the district did not have the growth it is experiencing now nor any improvements on what they had.District Manager Shook stated he was not sure how Mr.Stewart would have approached the Arizona Corporation Commission on that regard.Vice Chairperson Surra asked if the district was taking advantage of its status as a municipal entity.District Manager Shook stated the district is a public utility,which means the board can make public decisions on rates and policies that a private utility would have to have approval from the Arizona Corporation Commission for.Vice Chairperson Surra asked if the district had to go before the Arizona Corporation Commission with these revised fees,what would be the expectation of getting a yes.Staff had no answer at this time.District Operating Manager Dobson commented the $250 fee was arrived at because that is what is in place at this time..Vice Chairperson Surra commented then since it is existing,they would not have to go before the commission.District Operating Manager Dobson stated $250 and $275 had already been approved for Consolidated Water for their fees.He added the one inch through to the eight inch turbos are prices they came up with using the purchase costs for those meters,plus what it costs the district to put them in the ground.They are also encouraging property owners requesting anything larger than a one inch meter to buy it and install it themselves so that the district does not have to get into that part.They had to include those in the fee list in case those people want them to put the meters in.Some of the fees are high,some are low.One in particular is $900 lower, while another is $2,000 more.He did not know when they were adopted.Mr.Eck commented they were ongoing fees that were changed through the years as needed. I t originally started at $175 but was increased to $250.He recalled that earlier it was as low as $100.Vice Mayor Surra commented since these fees do not impact current established service,but are only for new service,it appears they may be trying to avoid raising rates on all people who are receiving service by using this basically as a development fee.District Operating Manager Dobson commented he is also trying to get rid of a bookkeeping nightmare.Ms Urich commented i t is not out of line when you look at what Mesa and Queen Creek charge.Mr.Eck stated he frequently heard when he worked for Consolidated that if the city could get it,the prices would go down and the quality of water go up.Vice Chairperson Surra stated the city never made that promise;they said the prices would not go up.Mr.Eck commented that the city is raising the prices.Vice Chairperson Surra stated they are not;the monthly service charges are staying the same and the quality of the water is being increased plus they are replacing a lot of pipe that was substandard.Mr.Durbala asked if the district could say that 65% or 70% of the $250 would go for capital improvements with the rest going into the general operating fund.District Manager Shook stated that could be adopted as general policy.Vice Chairperson Surra asked why they would want it for if it was not used for capital.Mr.Eck stated you want it to pay for the expense of putting in the service.He added if the service is an average service,you could have a $100 fee.If it is a difficult service, involving extra labor and materials,you have an additional fee.Chairperson Coleman asked if the meter itself cost $50.District Operating Manager Dobson stated that was correct.Chairperson Coleman commented that Arizona Water appears to be taking a loss on each meter they put in.District Operating Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 4 of 9 Manager Dobson commented that depends on the brand they are putting in.Vice Chairperson Surra stated it could be that they are not doing any as they have not grown a lot in this area due to their water supply;that may be why they have not had to raise their fees.District Operating Manager Dobson corrected himself, stating the only change on the minimum monthly sheet is that they have added an 8" meter and they arrived at the figure by using a ratio of the others.Vice Chairperson Surra commented i t was good that they were not voting on this tonight,as she will have to think about this. Mr. Eck commented he also disagrees with the reconnection fee for delinquencies. It is going from $25 to $50.Vice Chairperson Surra stated she is not sure she would disagree with that as prevention of delinquency is a good thing and sometimes the fee is the only thing that will prevent it.Mr.Eck believes the prevention is the way the accounts are handled;if they are delinquent, you turn off the water.Mr.Durbala thought that was for after hours only.Mr.Eck stated the reconnection fee is $50;a $30 bill now turns into an $80 bill to get the water back on.Financial reasons could make these people get further and further behind.Mr. Durbala asked what Arizona Water charges.Mr.Eck stated he was told they charge $21.Mr.Eck stated he believes the $50 charge is excessive.District Operating Manager Dobson stated the reasons behind the $50 charge is that they have to send a man out with a truck to turn the meter off, and then the man and truck will have to be sent out again to turn it back on. He added they do courtesy turn offs and turn ons at no charge;Arizona Water charges for those.Mr. Eck believed they charged for after hours only.He added the trucks will go out at one time for 10 to 15 turn offs,however, they will be going out individually for the turn on.Vice Chairperson Surra commented she would rather keep the district comparable to other city owned or municipal rather than private and profitmaking organizations.She believes the district brings a stability to the user,with more concern about keeping the rates down and better service and quality.She commented municipal employees are very quality minded about the kind of work they do.She would like us to be more comparable with the city rates,and be justifiable and equitable for the users.She does not want to keep being compared to Arizona Water.As a larger organization, they can buy in volume and do things in volume that the district cannot.Mr.Eck reminded her that Arizona Water serves about 80% of this community.Mr. Durbala added that is slowly changing,and the district has to pay more for some of the services it gets.Ms Urich commented she thought the percentage was higher than that.District Manager Shook commented he was unsure of the percentage,and added a lot of subdivisions have been hooked up in the last two years.When the district was originally bought,i t was around 30%to 35%;he would not be surprised if it was in the 20's now.Vice Chairperson Surra commented this means they have to give the same i f not better service and keep the rates as low as possible.They might need more front end money in order to do that.Mr.Eck stated they are about three times as much for rates when compared to other municipalities.Vice Chairperson Surra stated that was okay as the district is probably only one quarter of their households.She does not have a problems with being half as great as them in price,but she does have a problem being compared to private industry.Mr.Eck commented they have no choice in their situtation. Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 5 of 9 District Operating Manager Dobson stated there are three items on the page that he has made changes in.For those with a 5/8" meter for a non -homeowner,it is suggested to stay with $65 for a deposit,and if they have no delinquent payments,they get that money back.They are suggesting no deposit for a homeowner with an escrow number.He explained what a cut lock fee is and that they would like to get reimbursed for those locks.Mr.Durbala asked if anyone gets prosecuted for that.District Operating Manager Dobson stated he has prosecuted people for that.Mr.Durbala asked Mr.Eck if Arizona Water had prosecuted anyone for stealing water.Mr.Eck commented they had prosecuted a few.Mr.Durbala commented the fee is only $10.District Operating Manager Dobson commented the fee is for the lock only.Vice Chairperson Surra asked if they were assessed for water use.District Operating Manager Dobson stated they have no way of knowing how much water has been used.Vice Chairperson Surra suggested charging more for the cut locks,as there appears to be a greater cost involved when you add in the cost of the water.Mr.Durbala commented it could take as long as 90 days to figure out that a lock was cut.District Operating Manager Dobson stated they put the lock on at night,and in those areas where they think the lot might get cut,they go out and check it the next morning.Mr. Durbala asked i f there was a way to take the meter out and cap the line. District Operating Manager Dobson stated there is one house that they have cut the lock off five times in six months.Vice Chairperson Surra commented that at $10 it is cheaper than having the service connected.Mr.Eck suggested if the lock is continually being tampered with,a police report should be made and charges pressed.District Operating Manager Dobson stated that has been done. Vice Chairperson Surra suggested a larger fee,and Mr.Eck added the service should be disconnected.Ms Urich asked if a stronger lock could be found that could not be hacksawed.District Manager Shook stated they would just get boltcutters.Vice Chairperson Surra suggested charging them $100 for the cut lock and still report them to the police.Mr.Durbala stated the health department would have to be called if they have no water to the house.Mr.Eck stated they are,but it takes time. District Operating Manager Dobson stated they needed to talk about the policy for returned checks.He commented they have a $5 charge,and if it goes through again and comes back, they have a $15 charge.However, they have had people come in and pick up the bad check,pay the $15 charge and what is due with another bad check.Vice Chairperson Surra asked if they would take a check when someone is picking up a bad check.District Operating Manager Dobson stated they have no other choice.Vice Chairperson Surra stated they can take a cashier's check, money order or cash,and he has that right.Mr.Durbala agreed.District Operating Manager Dobson stated he is asking for that right now.Ms Urich commented that he is asking if he can do that after the third bad check has been written.District Operating Manager Dobson stated if they give him three bad checks,the customer must pay with cash or money order only for the next nine months.Ms Urich asked why they should have to wait for three bad checks, when one should do it.District Operating Manager Dobson commented one could happen to anybody.He is concerned about the ones that do it every six to eight months. Ms Urich suggested changing it to two rather than having it at three.District Operating Manager Dobson stated they could change it to anything that they want. Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 6 of 9 Mr.Durbala commented he does not have a problem with three, but he is thinks an insufficient check should be paid with either cash or a money order.He thinks the inconvenience they have to go through is only fair.Vice Chairperson Surra agreed that would be an inconvenience,and she suggested it might be easier to assess another deposit to those people who have proven themselves unworthy of the trust of the initial deposit.If the deposit is to help take care of their last bill,it could be those people would need give an additional deposit.This way, if another insufficient check was written,it would come out of that immediately, and then have them make the deposit good again.District Operating Director Dobson stated they have some people that will give you insufficient checks eight months out of the year.Vice Chairperson Surra stated every time an insufficient check is written,those people need to pay that amount in cash,cashier's check or money order.She clarified that he wants to make them pay in cash or money order for an additional 6 to 9 months after that check.District Operating Manager Dobson stated that would be if they had done it to the district three months in a row or over a 6 month period.Vice Chairperson Surra did not want them to be able to pick up their insufficient checks unless they were replaced by cash,cashier's check or money order.District Finance Director Lewis commented that is what the city requires -cash,cashier's check or money order to cover an insufficient check,and that begins with the first check.There was general discussion by the board commenting that it appears to be the policy most everywhere and that it should be the policy here.Vice Chairperson Surra added that if the party does not cover the amount with cash, cashier's check or a money order, they then use the check to prosecute them.Vice Chairperson Surra stated she would not want to encourage them to do it a second time,and added because their payment is delinquent,the water should be turned off until they come in and pick up that check and make a cash payment.She commented the city is funding several places where people can go to assist them in their payments for utilities.District Operating Manager Dobson commented they have several coming in now who get that assistance.Mr.Durbala agreed with Vice Chairperson Surra that insufficient checks need to be paid by cash,cashier's check,money order or even a certified check,and that there should be no exception.Ms Urich agreed that it should commence with the first bad check.Vice Chairperson Surra stated they should get "x"number of days to make the payment before the water gets disconnected. 6.Discussion of possible adoption of district construction specifications for water main and service construction. Chairperson Coleman asked if they were basically moving to the MAG standards. District Operating Manager Dobson stated that was correct.He commented the city has already adopted them and the district would also like to adopt them,and it involves the 600 and 700 specifications.It involves how utilities will be installed.Ms Urich asked i f Pinal County has similar standards.District Operating Manager Dobson did not believe so.District Manager Shook stated the MAG standard is generally what people use;they use it as a base for any standards that they may have.They vary according to soil or topographical requirements.Vice Chairperson Surra asked if the contractors' association once had a set of standards that they used.District Operating Manager Dobson thought Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 7 of 9 they all used MAG standards.Ms Urich requested that the sexist language be removed from Items 10 and 11.There was general discussion by the board over whether that was necessary or not.Ms Urich commented there also was a typographical error on the last page under number five,"permanent"is spelled wrong in the first line.District Operating Manager Dobson stated he basically recommends adopting the 600 and 700 specifications from MAG.Vice Mayor Surra moved to give direction to District Operating Manager Dobson to come back to us with any revisions for these policies and rate schedules so that we can vote on it at a later date.Mr.Eck and Chairperson Coleman reminded her that they were on Item 6,the district construction specifications.Vice Chairperson Surra stated he has to revise the language.District Operating Manager Dobson commented all he wants adopted are the 600 and 700 specifications, which are the last two items in the packet.Vice Chairperson Surra moved to revise our standards to meet the MAG standards.Mr.Durbala seconded the motion. Chairperson Coleman added this was for adopting parts 600 and 700.The vote was unanimous and the motion carried. 7.District Manager report. District Manager Shook stated the rate changes policy will be coming back to them for additional changes.The other policies will be brought back one at a time to bring everything up to current and contemporary form. 8.District Treasurer report. District Treasurer Lewis commented they are in good standing.They had a very good month for revenues.They were able to put away $25,000 more into investments this month. District Manager Shook reminded the board that they are in the process of working with State Land for a new well site.They will need a hydrology report.He believes with the number of hook ins forecast,it would be irresponsible of them not to drill another well.It should take a full year to get Department of Water Resources approval on the well site.They also need to look into either buying some capacity in the Mesa plant or building our own water treatment plant.They are getting close to getting approval of 5 acres right by the canal, which would be a perfect area to treat Central Arizona Project water.There will be a lot of capital type expenses that will need to be undertaken now or they will have to worry about the rates 3 to 5 years from now.Vice Chairperson Surra commented she could see Mr. Eck's point where all of the new people will be paying for this while all of the older people who had their money refunded will be benefitting from it.They should make sure some of the money comes out of the fees and not put all of it on the new families.District Manager Shook reminded them that a bond had been taken out to make improvements,and the current rate payer is paying towards that.This is called "buying capacity".However,he stated Mr. Eck brought up a good point and i t will be up to the board to determine a legitimate hook in fee and capital costs.Mr.Eck reiterated he does not have a problem with a fee,nor does Vice Chairperson Surra.They do not believe a non-refundable fee should be $250 when that total was refunded before.Vice Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 8 of 9 Chairperson Surra stated she would like to see some more figures or estimates of things that would justify the fee.District Manager Shook stated they could do that.He added their intention is to stop the refunding nightmare they currently have and to start collecting a hook in fee,the number to be decided by the board.They will try to project the number of houses and what the future costs will be to secure the amount of water that will be needed.However,a fee needs to be established:it can be adjusted at any time in the future. 7.District Counsel report. None. 8.Adjournment. Adjournment at 6:58 p.m. alfrt Douglas Al eman Chai rperson Kathleen Connelly District Clerk WATER UTILITIES COMMUNITY FACILITIES DISTRICT MINUTES CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular meeting of the Water Utilities Community Facilities District of the City of Apache Junction,Arizona,held on the 1st day of June, 1998.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 29th day of June,1998. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of June 1,1998 Page 9 of 9