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HomeMy WebLinkAbout2002-07-01 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION,ARIZONA REGULAR MEETING JULY 1,2002 The regular meeting of the District Board of the Water Utilities Community Facilities District (Apache Junction Water Company),City of Apache Junction,Arizona,was held on July 1,2002,at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Chairperson Coleman called the meeting to order at 6:00 p.m. ROLL CALL Board Members Present:Chairperson Douglas Coleman Vice Chairperson Anne Surra Mr.Rick Dietz Mr.R.E.Eck Mr.Brian Milkey Ms.Carol Urich Staff Present: Others Present: (Mr.Joe D6rbala was absent.) Interim District Manager George Hoffman Kathleen Connelly,-District Clerk Keith Lewis,District Treasurer Doug Dobson,District Operations Manager Brian Hall,District Water Superintendent John White,District Accountant Bill Farrell,District Counsel APPROVAL OF MINUTES OF JUNE 4,2002 MINUTES OF JUNE 4,2002,'BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 1 of 13 ).Ms.Urich MOVED THAT THE Mr.Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISCUSSION ON WATER SYSTEM NEEDS TO INCLUDE A HISTORY OF IMPROVEMENTS,FUTURE NEEDS AND CURRENT/FUTURE RATES AND CHARGES )District Water Superintendent Brian Hall briefed the board on the item. Ms.Urich asked if all three of these represent the majority of the single family homes. District Water Superintendent Brian Hall stated that is correct.Some of the newer homes have 1"meters;most homes are either five -eighths or three-quarters. Ms.Urich asked why it was only going up $4.30 for the one category and not the othertwo. District Water Superintendent Brian Hall stated it was because part of what triggered the proposal for him was the disparity in that.Most systems do not go from $5.65 for five -eighths to $17 for three-quarters. Ms.Urich stated i t seemed to her that they were jeopardizing the people with the smaller meter. District Water Superintendent Brian Hall stated they are the ones most out of balance when compared to other valley cities.The standard is $9 to $12 a month for a base rate.He felt that $9.95 wasP in the middle and way below the ones paying $17.If everything is equal,they will only notice a problem with the water if they have a lot of irrigation like a large drip system.It will drop the pressure to the house. Ms.Urich stated she is trying to anticipate questions they will get from the water users. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 2 of 13 District Wat& Superintendent Brian Hall stated i t is because of the disparity. Ms.Urich commented i t should never have been $5.65 to begin with. Mr.Eck commented i t used to be $10.65 twelve to fourteen years 'ago. District Water Superintendent Brian Hall stated it may have been reduced years ago as a compromise with the Corporation Commission in order to raise another rate. Mr.Eck stated the owner got greedy and went for more and the commission stated he was charging too much and ordered the reduction. Ms.Urich asked if the other rates were higher in the past and have been reduced at some time. District Water: Superintendent Brian Hall was unaware of any. There was general discussion as to when the rates went into effect. District Water Superintendent Brian Hall stated he is trying to make this explainable to the.customer.This addresses some of the current and future needs and impacts the existing customers at a fairly reasonable rate. Ms.Urich asked if the majority of the people are in the five -eighths inch category as one of the -slides states that the district feels this is reasonable because growth creates a need to expand the system.. District Water Superintendent Brian Hall stated it was referring to everything that has been talked about here including the connection fees.Growth will pay for more of the future Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 3 of 13 expansion of the system.Currently a developer pays $21,000 for an 8"meter installation;i t is proposed to be $60,000 in the future. Ms.Urich asked if he had any percentage as to the amount of homes in each of the three categories. District Water Superintendent Brian Hall stated they estimated 2,600 meters were five -eighths in the system. District Accountant John White stated the total residential meters as of June 30 is 3,066,with 2,100 at five -eighths..The growth has been in the other sized meters.The percentage is gradually decreasing. JMr.Dietz asked about billing increases in water usage over 10.000 gallons.He asked if fourplexes were billed individually or was there only one billing for the entire building. ..---'District Water Superintendent Brian Hall stated some are billed separately_ah4,sbri e master billed Mrr;,..DietZ tjted the ones that are master billed would be hit with the increase, immediately.. District Water Superintendent Brian Hall stated he is not aware of commercial accounts that use over 500,000 a month.. Mr.Dietz commented he is talking about apartment complexes or fourplexes and duplexes.They would be at that 10,000 already.They are getting that increase and there is no chance for conservation. District Water Superintendent Brian Hall suggested multiplying the residential rate by four for the fourplexes. He asked if they would be able to break down categories for the billing system. District Accountant John White stated i t probably could be done. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 4 of 13 Mr.Dietz commented the intent is to make the people not conserving pay,not hit those that have no chance. District Water Superintendent Brian Hall stated they could own a fourplex and have everyone stay at 5,000 but that amounts to 20,000 instead of 10,000. Mr.Dietz requested they look into that before they endorse it. Mr.Milkey asked how the district compares to Arizona Water Company insofar as the base rate.- District Water Superintendent Brian Hall stated the base rate is just under $11 and includes the first 1,000 gallons of water.The base rate varies with meter sizes.Some of the fees are higher than ours and vice versa.They are comparable for the average water users.They do not have a connection fee for residential. Mr.Milkey and District Water Superintendent Brian Hall discussed Mr.Milkey's water bill differences. Mr.Milkey commented on the annual .report that was sent to his house which shows that the average household would use 15,000 gallons a month. District Water Superintendent Brian Hall stated that report comes from the Department of Water Resources.They do not take into account winter visitors and the numbers are not accurate.Our average water bill runs from 6,000 to 7,000 gallons for the average household. Some people use 25,000 to 30,000 a month. Mr.Milkey suggested they go from 0 to 19,999 at the $3.88 fee and then there would only be three categories for the 20,000 and up. District Water Superintendent Brian Hall stated they did not want to have two different rate structures;one for commercial and industrial and one for residential.However,he is there to do what the board wants to do.They have talked about conservation over the Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 5 of 13 years,and it was the feeling that the board had wanted to do something more about conservation.They are doing incentive and education programs.The conservation committees have stated at their meetings that the number one thing to promote conservation is to hit people in their pocketbooks.But they want to be fair about it. Mr.Milkey commented like families greater than two. District Water Superintendent Brian Hall stated he has a family of six and when sewer rates went up,he had to train his kids quickly to prevent their rate from going up another $200 a month.Larger families do make a difference,but it will cost them more than the family with two kids. Mr.Milkey commented he does not .doubt his figures on the average used;but i t seems they use more than that a month. District Water Superintendent Brian Hall stated they can start the increased rate at whatever they want.They have held the consumption rate the same for several years,only changing some connection fees and others.The graduated consumption could be changed to something that they think will work.They can try something for a year and see what i t is doing for the district,and after a year adjust it accordingly. Ms.Urich asked if having three categories would give incentive to conserve water if that was done.She also asked if Arizona Water has the different categories that we have. District Water Superintendent Brian Hall stated they do not.The City of Mesa has one graduated rate which is over 12,000 gallons.The increase is 47% once you reach 12,000 gallons,and they start a lot lower than the district does.He targeted 20% as a place to start.The City of Tempe has a very complicated formula. .Vice Chairperson Surra commented on how the mobile home parks meter the.rental -space's individually and pass the cost of water on to the renter. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 6 of 13 District Water Superintendent Brian Hall stated there are several parks with master meters.He does not know how they pass the charges on. Vice Chairperson Surra suggested the fourplexes could do the same thing if they are interested in seeing who is conserving water. District Water Superintendent Brian Hall stated it would depend on how they were plumbed to begin with.If there is only one water line,it would feed all the.building. Vice Chairperson Surra asked how the parks passed on the water charges. District Water Superintendent Brian Hall stated :if the water bill goes up,they can then pass the charges along. However,even if you conserve in a fourplex,it will go over 10,000 gallons so there is no incentive to conserve. Mr.Eck commented those that were concerned put in individual meters if they were plumbed right.However,to put in new meters now,it would cost them $1,300 or $1,400 to do so. District Water Superintendent Brian Hall stated i t is $1,344 plus the installation of the service and the meter. It would be close to $1,700 to $1,800. Mr.Eck commented he believes they are making a wise decision.With the growth,the fees needto be raised as they were way under.He likes the base increase to $9.95. Mr.Dietz agreed. Mr.Eck stated tiers are a, good concept,but i t scares him because of the price of $3.88 per thousand.It is not there to increase any revenues. District Water Superintendent Brian Hall stated they had to make some assumptions for the budget.It was balanced Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 7 of 13 with the assumption that we would be going to the $9.95.They did not propose any additional revenue from this. Mr.Eck commented it would not affect anything else. District Water Superintendent Brian Hall stated the step rates are to promote water conservation.If it truly works,they would not expect more revenues but less water usage. Mr.Eck suggested trying another type of conservation first and do this next year if it does not work;this is because the rate is so high. Mr.Dietz asked if they could take an annual average or two-year average and if they go over 20%,than increase them to the $4.66 rate,or if they have had an additional usage of water. District Water Superintendent Brian Hall stated they have about 3,400 total services and they would have to be individually monitored. Mr.Dietz commented they would still have to do it with this. District Mater Superintendent Brian Hall stated i t is already built into the system to take a tiered rate.He commented there must be some kind of compromise,but individually billing for services is not feasible. Vice Chairperson Surra suggested raising the rate the first time it jumps to a higher gallon rate for this year,and go to the 19,999 gallons as the first rate.This would only give them two tiers. Mr.Eck commented he is not for the tiered system. Vice Chairperson Surra stated she is.Some people have to be hit in the pocketbook to wake up. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 8 of 13 • Mr.Eck commented he believed they would be at $3.88. Vice Chairperson' Surra did not agree.They are already accustomed to having a high rate.It is a small system and they cannot compete with a large system.It is $9.95 here,but $18 in Overgaard,-with $20 .including the taxes:Arizona Water is offsetting their prices here in the valley by .charging more in the rural areas.We cannot do that.She would like to hit the pocketbook of the big user,but she does not want to harm families.She would like to see it go froM 0 to 19,999 for the first tier and have just one other :tier. Hall stated that would be at $4.66. is correct. District Water -Superintendent Brian V--fckhaTr son Surra stated that •,Di St"rict ;Oater- Superintendent Brian Hall stated it would be back to the $3.88 'for the 100',000 and up.- Vice Chairperson Surra stated that is correct. District Accountant John White stated the current bill for about 12,000 gallons for a new Trend Home was $110.Calculating what the proposed new rate would be for that home,the bill would be $117. There was general discussion about keeping the base rate at $3.88 and the status of the conservation effort. large users being affected by the bill. users he was talking about. fourplexes and eightplexes. Mr.Eck was concerned about the Vice Chairperson Surra asked what Mr.Eck stated he was talking about Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 9 of 13 Vice Chairperson Surra commented those are commercial establishments. Mr.Eck commented there is no commercial rate,and those with swimming pools are affected. Vice Chairperson Surra commented those people growing grass need to have a wake up call.She does not want to encourage that. District Water Superintendent Brian Hall stated he needs some kind of consensus from the board. Ms.Urich asked if there were many customers in the 100,000 gallons and up and if they are commercial. District Water Superintendent Brian Hall stated it could also be someone who has an Olympic sized swimming pool in their backyard and drains i t and fills it once a year. Ms.Urich asked why they are getting a cut rate. District Water Superintendent Brian Hall stated if a business uses 100,000 gallons or more,i t probably is not going onto the ground for landscaping. Ms.Urich suggested if they charge More for over 100,000 the commercial users could find some conservation methods,too. District Water Superintendent Brian Hall commented most smart business people will save if they can or they cut into their profits.He does not want a commercial rate or two -rate tiers. However,he is not.locked into this.It is just a proposal. Chairperson Coleman stated he agreed With Mr.Eck.He added if the only reason for raising the rates is to promote conservation they should do an education plan stating if they do not conserve, they have to raise the rates.Conserving allows the costs to remain the same. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 10 of 13 - Mr.Milkey -and Mr.Dietz 'agreed. Vice Chairperson Surra stated she could go along with their proposal for a consensus. District Water Superintendent Brian Hall stated that they want everything that is in this proposal less the graduated rates. Vice Chairperson Surra stated there were some good hints in the report that came out that dealt with conservation. DISCUSSION ON SCHEDULE FOR ADOPTION OF TENTATIVE AND FINAL DISTRICT BUDGETS FOR FISCAL YEAR 2002-2003 )District Treasurer Keith Lewis briefed the board on the item.The tentative budget has to be presented to them by July 15,2002.It can be adopted anytime between then and October 1, 2002.He proposed the tentative budget adoption be on July 15.Last year the final budget was at the first meeting in September.Thej,will -receive their tentative budgets tomorrow.He-had to wait to see what the rate changes would be before he could run it. Chairperson Coleman closed the discussion and moved on to the next item. EXECUTIVE SESSION AT 6:15 P.M.,MONDAY, JULY 1,2002,IN THE CITY CONFERENCE ROOM FOR THE PURPOSE OF CONSULTATION FOR LEGAL ADVICE WITH THE DISTRICT'S ATTORNEY AND CONSULTATION WITH DISTRICT REPRESENTATIVES REGARDING NEGOTIATIONS FOR THE PURCHASE, SALE OR LEASE OF REAL PROPERTY )Vice Chairperson Surra MOVED THAT WE RECESS INTO AN EXEC SESSION FOR PURPOSESOF ADVICE FROM OUR LEGAL COUNSEL WHO IS PRESENT TONIGHT. Mr.Dietz SECONDED THE MOTION. Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 11 of 13 ' VOTE:Unanimous. The motion carried. (Recessed into executive session at 6:45 p.m.,reconvened at 7:12 p.m.) DISTRICT MANAGER REPORT None. DISTRICT TREASURER REPORT None. DISTRICT COUNSEL REPORT None. ADJOURNMENT )Chairperson Coleman adjourned the meeting at 7:12 p.m. ACCEPTED THIS 15TH DAY OF JULY 2002,BY THE CHAIRPERSON AND DISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY),CITY OF APACHE JUNCTION,ARIZONA. SIGNED AND ATTESTED TO THIS 15TH DAY OF JULY Douglas' Weman Chairperson . ATTEST: Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 12 of 13 ,2002. 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 July, 2002.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 8th day of July,2002. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of July 1,2002 Page 13 of 13