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HomeMy WebLinkAbout2004-05-18 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION,ARIZONA REGULAR MEETING MAY 18,2004 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 May 18,2004,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 6:08 p.m. ROLL CALL Board Members Present:Chairpersonj)ouglas Coleman Vice Chairperson R.E.Eck Mr.Rick Dietz Mr.John Insalaco ,Mr.Kris Sippel 'Mr:Dave Waldron (Mr.Brian Milkey was absent.) 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 Doug Dobson,District Operating Manager Others Present:Bryant Powell,Assistant City Manager Brian O'Connor,Bond Consultant APPROVAL OF MINUTES OF MAY 4,2004 )Mr.Waldron MOVED THAT THE MINUTES OF MAY 4,2004,BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 1 of 9 Mr.Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. CONSIDERATION OF RESOLUTION NO.2004-00h APPROVING ISSUANCE OF AGGREGATE PRINCIPAL AMOUNT OF DISTRICT WATER REVENUE REFUNDING BONDS SERIES 2004;AUTHORIZING EXECUTION OF A FIRST SUPPLEMENTAL TRUST INDENTURE',A BOND PURCHASE AGREEMENT AND A TAX CERTIFICATE AS TO ARBITRAGE AND PERTINENT SECTIONS OF THE 1986 INTERNAL REVENUE CODE AND AUTHORIZING THE EXECUTION OF SUCH OTHER DOCUMENTS AND THE TAKING OF SUCH OTHER ACTIONS AS NECESSARY )District Manager George Hoffman briefed the board on the item.He stated this is to reissue some debt at the current favorable interest rates.Mr.O'Connor is in attendance for technical questions or to give a brief overview of the mechanics of it.Mr. Farrell has also reviewed this. Mr.Waldron commented there is a blank in here for the dollar amount. District Clerk Kathleen Connelly stated they should have received an updated page stating not to exceed $5,000,000. There was general discussion as to what the motion should state. District Chairman asked if Mr. O'Connor or Mr.Farrell had any key points they would like to relay to the board. Bond Consultant Brian O'Connor stated these bonds were issued in 1997 to help pay off the loan that acquired the water district assets.They are now taking advantage of the low interest Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 2 of 9 rates and are refinancing as you would a mortgage.It will save some money. The key is that the water district had no previous loan performance prior to the initiation of this loan.As its performance has been excellent,i t has allowed the cash reserve fund to be released that was pledged in 1997.This was in the amount of $675,000.Staff is looking at that money to determine if the district wishes to further lower debt service,or a portion of i t for that use,with a portion of it going to make some improvements or capital expenditures in the water system. • Chairperson Eck asked if the $5,000.000 is the entire debt for the water district. Bond Consultant Brian O'Connor stated there is about 3 years of original bonds fhat will remain outstanding. They do not have a call feature:call feature allows them to be called back from investors. Vice Chairperson Eck asked if there would be 3 years of an additional payment of a settlement. Bond Consultant Brian O'Connor stated there would not.They are refinancing the bonds from 2008 to 2017. The years 2005,2006,and 2007 cannot be refinanced.It is a technicality called call protection.Those bonds were protected from the call feature. Vice Chairperson Eck asked how the value of the system would be compared to the bond that they are getting. Bond Consultant Brian O'Connor stated he does not normally value water systems but the district's assets are far in excess of their liability.The reason for the not to exceed number is that they have juggled around the numbers a little bit and they are not sure of the exact amount of dollars in cash they will use to reduce it.They are giving themselves some leeway and allowing staff to advise him what the district wants done with the money. Vice Chairperson Eck asked if they were borrowing any additional funding. Bond Consultant Brian O'Connor stated they are not. Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 3 of 9 Vice Chairperson Eck asked if this would help with rates in the future. Bond Consultant Brian O'Connor stated that is the goal. District Manager George Hoffman asked if the board has any preference.He would like to take out about $250,000 of that money and put the rest towards bond repayment.They would buy the principal amount down over time.If they took the $675,000 and put it back in it would end up saving them $980,000 over the life of the loan. They do have some cash needs and line extensions they would like to do. Mr.Dietz commented they would like to do the interconnect. Vice Chairperson Eck asked if they have the funds for the interconnect. District Water Superintendent Brian Hall stated they have already set aside enough money in the capital facilities fee fund for the interconnect.However,they need to redrill Well No.5 and hope to put in another well south. Vice Chairperson Eck asked Mr. Hoffman what he wanted the cash for. District Manager George Hoffman stated he has not talked to Mr.Hall about this and he asked him what he would be inclined to do. District Water Superintendent Brian Hall stated he would like to pay the debt down if they can,but he sees some major capital needs coming up in the next 3 to 4 years. District Manager George Hoffman asked him if he would like the entire amount. District Water Superintendent Brian Hall stated he would. Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 4 of 9 Mr.Dietz stated he liked that idea. District Water Superintendent Brian Hall stated it would give them more flexibility. Mr.Dietz stated i t give us more flexibility yet they still get a good interest rate on those bonds. District Water Superintendent Brian Hall stated he can work with it either way,but he would prefer to set the money aside for some capital needs in the future. Mr.Dietz asked if they could buy down some of that principal later if they find over the next few years that all of the funds are not needed. Bond Consultant Brian O'Connor stated they could structure it that way.He has had this question in the past and i t has never happened;they always find a way to spend the money. If the board desires it to be structured that way,he will do so. Mr.Sippel asked if they are going to spend the $675,000 just because they have it or is i t because they really need it to drill the well and other things. District Water Superintendent Brian Hall stated he will treat that money as they do the capital facilities fees: it will be used for major capital projects.They will not buy pickup trucks or computers with it.They have arsenic treatment to put on Well No.6:they did not make the funding list for WIFA on that project.They may still have a chance for the funding,but if they do not,the district is not released from the obligation to have water below the new standard by JanOary 23,2006. That is 20%below the existing standard.They cannot do it without the treatment process.He believes they will get the WIFA funding,but he wants to have a Plan B and Plan C available. Vice Chairperson Eck commented everything would have to fall just right not to touch that additional money. Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 5 of 9 District Water Superintendent Brian Hall stated they will need more wells in the future when they start using their water banked credits. Vice Chairperson Eck commented he understands Mr.Sippel's concern,as they can always find someplace to put money.He asked if a well down south would take at least half of that. District Water Superintendent Brian Hall stated the little well will run over $400,000 by the time i t is equipped and done.A large well will probably be over $500,000. Vice ChairperSon Eck asked how many gallons per minute the little well will produce. District Water Superintendent Brian Hall stated it will produce 250.gallons-per-minute.. Water is expensive in the desert.They have 3 pockets of money.One is unrestricted that they use for operating expense.The well would not be coming from that money. District Manager George Hoffman stated he is hearing from the board and staff that they should anticipate taking the full $675.000 out and not apply it towards principal repayment. Chairperson Coleman closed the discussion and called for a motion. Vice Chairperson Eck MOVED THAT RESOLUTION NO.2004-001,A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA) APPROVING THE ISSUANCE OF NOT TO EXCEED $5,000,000 AGGREGATE PRINCIPAL AMOUNT OF DISTRICT WATER REVENUE REFUNDING BONDS SERIES 2004;AUTHORIZING THE EXECUTION OF A FIRST SUPPLEMENTAL TRUST INDENTURE.A BOND PURCHASE AGREEMENT AND A TAX CERTIFICATE AS TO ARBITRAGE AND THE PROVISIONS OF SECTION 103 AND 141-150 OF THE INTERNAL REVENUE CODE OF 1986 IN CONNECTION THEREWITH;AND AUTHORIZING THE EXECUTION OF SUCH OTHER DOCUMENTS AND THE TAKING OF SUCH OTHER ACTIONS DEEMED NECESSARY TO EFFECT THE PURPOSES STATED HEREIN,BE APPROVED. Mr.Sippel SECONDED THE MOTION. VOTE:Unanimous. Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 6 of 9 Mr.Sippel SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISTRICT SUPERINTENDENT'S REPORT District Water Superintendent Brian Hall stated he does not yet have the hydrology study.He has been assured they were putting the finishing touches on i t and he thought he would have it today.He was advised the report looks very good... Vice Chairperson Eck asked which consultant this was. District Water Superintendent Brian Hall stated i t is Southwest Groundwater, Consultants.As soon as it comes in he would like someone to look at the draft independently.He would like to have Herb Dislip,formerly of the Arizona Department of Water Resources,look at it.If everything looks good, he will get the final draft and arrange a meeting with Arizona Department of Water Resources.They are getting close to needing to sign plats and certificates to supply water.Regarding the Mesa interconnect,Mr.Farrell and he had a meeting last week and iNent over 'several issues.Mr.Farrell had information on the property purchase and is hoping to finish some language regarding the term of the agreement that will be acceptable to the Department of Water Resources and the City of Mesa.Once that draft is complete and tentative approval has been received,they will put the final draft together for approval of the City of Mesa and the board.It will then be taken to the Department of Water Resources.It should put the district in good standing for several years to come regarding the 100 year assured water. Mr.Dietz asked how long it will take to get the connection up and running once all the paperwork is completed. District Water Superintendent Brian Hall stated the plans have been on hold at 90% Tor months.As soon as the consultant can finish putting the plans and specifications together,they will advertise for bid.He anticipates they could go to bid this fall and start construction this winter on the line and pump station.He hopes they will be taking water through that pump house by the end of 2005. Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 7 of 9 District Manager's Report None. District Treasurer's Report None. District Legal Counsel Report None. ADJOURNMENT the meeting at 6:24 p.m. )Chairperson Coleman adjourned ACCEPTED THIS 6TH DAY OF JULY ,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 6TH DAY OF JULY 2004. Douglas Cqleman Chairperson ATTEST: Kathleen Connelly District Clerk Water Utilities Community Facilities District 'Meeting Minutes of May 18,2004 Page 8 of 9 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 18th day of May,2004.I further certify that the meeting was duly called and held and that a quorum was present.. Dated this 20th day of May,2004. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of May 18,2004 Page 9 of 9