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HomeMy WebLinkAbout2004-04-06 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION,ARIZONA REGULAR MEETING APRIL 6,2004 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 April 6,2004,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 R.E.Eck Mr.Rick Dietz Mr.John Insalaco Mr.Brian Milkey Mr.Kris Sippel Mr.Dave Waldron Staff Present:George Hoffman:District Manager Kathleen Connelly,District Clerk Keith Lewis,District Treasurer John White: District Finance Manager Brian Hall,District Water Superintendent Bill Farrell,District Counsel Others Present:Bryant Powell,Assistant City Manager APPROVAL OF MINUTES OF MARCH 1,2004 )Mr.Dietz MOVED THAT THE MINUTES OF MARCH 1,2004,BE APPROVED. Mr.Waldron SECONDED THE MOTION. VOTE:Unanimous. Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 1 of 9 The motion carried. MOTION FOR EXECUTIVE SESSION AT 6:30 P.M. TUESDAY,APRIL 6,2004,IN THE CITY CONFERENCE ROOM FOR THE PURPOSE OF CONSULTATION WITH THE DISTRICT'S ATTORNEY REGARDING UTILITY OPERATIONS AND EMPLOYMENT POLICIES AND PROCEDURES )Mr.Dietz MOVED WE CONVENE TO AN EXECUTIVE SESSION AT 6:30 P.M.,TUESDAY,APRIL 6,2004,IN THE CITY CONFERENCE ROOM FOR THE PURPOSE OF CONSULTATION WITH THE DISTRICT'S ATTORNEY REGARDING UTILITY OPERATIONS AND EMPLOYMENT POLICIES AND PROCEDURES. Mr.Waldron SECONDED THE MOTION. VOTE:Unanimous. The motion carried. CONSIDERATION OF AWARD OF BID TO LOFTIN EQUIPMENT COMPANY FOR PURCHASE OF A NEW 250 KILOWATT EMERGENCY GENERATOR )District Water Superintendent Brian Hall briefed the board on the item.He stated they had set aside funds in this year's budget to provide temporary emergency power at Well No.5. They received 3 bids with the low bid being $35,181.85.The high bid was $45,000.Staff is recommending this purchase for emergency backup power from Loftin Equipment Company of Phoenix. Vice Mayor Eck asked if they already had a generator on the booster pump. District Water Superintendent Brian Hall stated they have one on Booster No.1. Vice Mayor Eck asked what would happen now if the power goes out. District Water Superintendent Brian Hall stated i t comes on automatically. Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 2 of 9 Vice Mayor Eck asked if that is the same for the well. District Water Superintendent Brian Hall stated that is correct.It is programmed to start if there has been a drop in power of four or five seconds.The same switch exercises the generator weekly for 20 minutes. Vice Mayor Eck commented this is a good thing to have. Mr.Milkey asked if the price includes installation. District Water Superintendent Brian Hall stated they will deliver i t and the district will hire a crane to set i t on to a concrete pad.The district will pour the concrete pad.The conduits for a generator were installed when the building was rebuilt at Well No.5. They will need to hire an electrician to make the connections once i t is in place. Chairperson Coleman closed the discussion and called for a motion. Mr.Milkey MOVED THAT THE AWARD OF BID FOR PURCHASE OF A NEW 250 KILOWATT EMERGENCY GENERATOR BE AWARDED TO LOFTIN EQUIPMENT COMPANY IN AN AMOUNT NOT TO EXCEED $35,181.85 BE APPROVED. Mr.Insalaco SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISCUSSION ON BUDGET CALENDAR FOR PREPARATION AND APPROVAL OF FY 2004-05 BUDGET.SELECTION OF MEETING DATES FOR BUDGET DISCUSSION AND/OR REQUIRED PUBLIC HEARINGS Water Utilities Community Facilities District Meeting Minutes of April 6.2004 Page 3 of 9 )District Finance Manager John White briefed the board on the item.He stated a proposed budget calendar has been provided in the packet.Staff is proposing to provide a balanced budget to the board on May 28 for their review,with budget study sessions, if necessary,in the first week of June.Tentative budget adoption is required by June 15:staff is proposing the formal presentation on June 14. They can make any adjustments to the budget reflected in the study sessions prior to formal adoption.which is scheduled for July 6.Staff is requesting approval of the calendar and any other things they would like to see on the calendar. The general consensus of the board was that the calendar looked good. Mr.Waldron asked if the two public hearing dates were June 14 and July 6. District Finance Manager John White stated that is correct. District Clerk Kathleen Connelly stated there are two public hearings.One is for the tentative action and the other is for the final action. hearing dates were June 14 and July 6. stated that is correct. District Finance Manager John White stated the deadline for final adoption is October 1.There is no reason why they cannot have i t adopted sooner. Chairperson Coleman closed the discussion and called for a motion. Mr.Milkey MOVED THAT BUDGET DISCUSSIONS AND/OR REQUIRED PUBLIC HEARINGS BE HELD AT THE CITY COUNCIL CHAMBERS IN ACCORDANCE WITH THE FISCAL YEAR 2004-2005 BUDGET CALENDAR PROVIDED BY STAFF. Mr.Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 4 of 9 DISCUSSION ON DISTRICT BOND REFINANCING OPTIONS )District Counsel Bill Farrell briefed the board on the item.He stated the proposed refunding is very similar to the wave that has been going on in residential refundings.Mr. O'Connor,the financial advisor,is in a position to offer the district an opportunity to borrow money now and to retire callable bonds previously issued by the district in 1997.In 2008,the district will have a nuMber of bonds that will total $4,243,000 that are all callable,ranging in interest from 5.4% to 5.8%.The district can,including costs and fees,borrow at an estimated 3.42 interest.The district can invest that money within arbitrage,which is the inability for the district toborrow at 3.4%and then put i t into an investment at a substantially higher interest rate.This interest is tax free.The bonds could be paid with an annual savings of about $15,000 and a cumulative savings of over $200,000. District Water Superintendent Brian Hall asked if there would be a possibility of replacing that reserve. District Counsel Bill Farrell stated they will be investigating the reduction in the amount of reserve.It will be an underwriting decision that the new bond issuers will come to.It might free up some cash in addition to the savings.The bond people will take their commissions and there will be other costs involved.There is still the $200,000 in savings after all is said and done.This is an introductory item tonight,the resolution will be on the agenda April 20. They will also hope to have the draft public offering statement that night. The credit rating of the district is excellent. Vice Chairperson Eck asked if this would be the bonds they already have out there plus a reserve. District Counsel Bill Farrell stated i t is not.The reserve is set aside in case for some reason the district falls short on its obligations semi-annually to honor the bond. Vice Chairperson Eck commented i t is just the actual bonds that are out right now. District Counsel Bill Farrell stated that is correct.It is the $5.395.000 beginning this year on through to 2017.Most of them are in small amounts. Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 5 of 9 Vice Chairperson Eck commented they will be combining all of them. District Counsel Bill Farrell stated some are callable and some are not.The district will continue to make ordinary payments until 2007 on the serial bonds.The district cannot get out of those.Beginning in 2008,they were callable.These were sold in 1997 in order to get the rate to guarantee the interest for a period of time. People will not put their money in if they believe they will be called right away.They will not be calling them until 2008,and those calls will bear 5.4%up to 5.82.However,the district can borrow now,invest carefully and securely,without getting a higher interest rate than what is allowed under the law,and then pay those bonds when the first call date comes forward. Chairperson Coleman closed the discussion and moved on to the next item. DISTRICT SUPERINTENDENT'S REPORT District Water Superintendent Brian Hall stated Stantec Consulting was given a set of criteria for equipping the'new Well No.8 on Coconino,inclusive of the building,wall,and the pipe connection,and they should have a proposal later this week or next week.It also includes putting together the specifications and any drawings required to go to bid.The Mesa Interconnect,which includes the hydrology study and 100 year assured water supply,is being worked on.He has been advised Mr.Farrell is setting up a meeting with the Mesa attorney to finish the language on that. Vice Chairsperson Eck asked if this is the wheeling contract. District Water Superintendent Brian Hall stated that is correct. Vice Chairperson Eck commented he thought that had been resolved. District Water Superintendent Brian Hall stated they are still working on the little things.Steve Noel stated he is confident they will find some extra water in the hydrology study.The district should be out of the woods on the restriction they have on planning.He is hoping it will be finished up by next week.They sent him more information regarding population and demand projections for the next 10 years.He received the final report on the pilot Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 6 of 9 study for arsenic treatment yesterday,but he has not yet opened it.They are a lot better off than they were 2 to 3 years ago.Because of the extreme temperature of the water in Well No.6 and the high pH,the pH alone was not a factor,but when the temperature was added,it was a problem and required they adjust the pH.That is an additional chemical that needs to be added to the water.He is concerned about things breaking loose in the pipes when they change the chemical characteristics of the water.The water is clean, but it will look nasty if stuff breaks off and comes out of the faucet in chunks.They may need to adjust the pH down to treat i t for arsenic but then adjust i t back up at the end of the treatment train.This would possibly prevent a shock to the system They would need a few extra pumps and a larger building to house everything in.They have also been discussing a muriatic acid tank to adjust the pH that is 2,200 gallons and needs to be filled every 2 weeks.There is still some work to be done:the final report also has operating costs in it.They were adjusting the arsenic down to nearly undetectable.The new limit in 2006 is 10 parts per billion,the district target will be about 5 parts per billion.If their target is half. they probably will not have to adjust the pH that much.They may get 4 or 6 weeks out of a tank to adjust the pH. Vice Chairperson Eck asked if he was locked in on a certain way to do the treatment. District Water Superintendent Brian Hall stated he is not.The coagulation filtration from an operational standpoint .seemed less expensive than disposable media. Vice Chairperson Eck commented there is more information out all the time on - it.Many cities have done private plants and they are now sharing information. District Water Superintendent Brian Hall stated they are looking at that. Vice Chairperson Eck commented his supervisor is on a national committee and if he is advised of anything new,he will keep him informed. District Water Superintendent Brian Hall stated they will have to be making some decisions shortly in order to get this underway.They have applied to Water Infrastructure Financial Authority for a potential loan.The district is not on the fundable list but they tend to intimate that if the district is ready to go,they may be back on the fundable list.He will come back to the Water Utilities Community Facilities District Meeting Minutes of -April 6,2004 •Page 7 of 9 • board once he narrows down the options.He will need some debt authority from the board by way of the resolution if they are to receive the loan.He added they have turned in the final requisition for payment to the Water Infrastructure Financial Authority for the Royal Palm project.That project is behind the district.The district was $778,000 under the initial proposal.He would like to borrow $680,000 for the arsenic treatment,which is well within the original scope and the'district's ability to pay. Vice Chairperson Eck asked if the funds would go under the interconnect or anything like that. District Water Superintendent Brian Hall stated the interconnect is funded in this year's budget out of the capital fees..The design plans on the Ironwood water line to service the motocross plant are at 30%;they have been sent out to all the authorities for their comments.The federal government is requiring a vulnerability assessment and a self assessment of the water system as part of homeland security.That is due by the end of June;they are about 85%complete on that.They will have 6 months to update the emergency response plan once i t is completed. Vice Chairperson Eck commended Mr.Hall on the fantastic job he is doing.He added he does not know of a single company that has a position as unique as his with so much responsibility. District Manager's Report None. District. Treasurer's Report None. District Legal Counsel Report None. ADJOURNMENT the meeting at 6:25 p.m. )Chairperson Coleman adjourned Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 8 of 9 ACCEPTED THIS 4TH DAY OF MAY ,2004,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 4TH 2004. ATTEST: Kathleen Connelly District Clerk DAY OF MAY Doualas Coleman Chairperson V/Ce, Lip/i7 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 6th day of April,2004.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 8th day of April,2004. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of April 6,2004 Page 9 of 9