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HomeMy WebLinkAbout2004-08-17 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION,ARIZONA REGULAR MEETING AUGUST 17,2004 .The regular meeting of the District Board of the Water Utilities Community Facilities District (Apach6 Junction Water Company),City of Apache Junction,Arizona,was held on August .17: 2004,at the Apache Junction City Coundi Chambers pursuant to the notice required by Taw. •CALL TO ORDER .Chairperson Coleman called the meeting to orderat 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: Others Present: George Hoffman,District Manager Kathleen Connelly,District Clerk John White,District Finance Manager Doug Dobson,District Operating Manager Brian Hall,District Water Superintendent Bill Farrell,District Counsel Assistant City Manager Bryant Powell Parks and Recreation Director Jeff Bell Economic Development Specialist Ken Simpkins APPROVAL OF MINUTES OF JULY 20,2004 )Mr.Dietz MOVED THAT THE MINUTES OF JULY 20,2004,BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 1 of 15 THE MOTION. VOTE:Unanimous: The motion carried. Vice Chairperson Eck SECONDED RESOLUTION NO.2004-05;AUTHORIZING THE INCURRANCE OF DEBT NOT TO EXCEED $776,000 FOR WATER RELATED PROJECTS;AUTHORIZING DISTRICT OFFICERS TO ENTER INTO LOAN REPAYMENT AGREEMENT WITH THEWATER INFRASTRUCTURE FINANCE AUTHORITY )District Water Superintendent Brian Hall briefed the board on the item.He stated the arsenic treatment of Well #6 is budgeted for this amount this fiscal year.He is proposing the amount be covered by a loan from the Water Infrastructure Finance Authority of Arizona.The resolution allows staff to approach the Water Infrastructure Finance Authority for that loan:the resolution will become part of the application. Vice Chairperson Eck asked if this is for any specific type of treatment. District Water Superintendent Brian Hall stated he does not have a treatment specified as of yet.He will mention i t in the superintendent's report,although i t is not on the agenda so there cannot be a discussion on it. There was general discussion as to when the treatment type should be addressed.It was determined to be addressed in the superintendent's report. District Water Superintendent Brian• Hall stated they have not made a decision on what method to use but he should have that information available in two weeks. Chairperson Coleman closed the discussion with no further comments and called for a motion. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 2 of 15 Mr.Waldron MOVED THAT RESOLUTION NO.2004-005,A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA)AUTHORIZING THE INCURRANCE OF DEBT IN AN AMOUNT NOT TO EXCEED $776,000.00 FOR WATER RELATED.PROJECTS;AND FURTHER AUTHORIZING DISTRICT OFFICERS TO ENTER INTO A LOAN REPAYMENT AGREEMENT WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY FOR SAID AMOUNT ALL IN ACCORD WITH THE PROVISIONS AND POWERS SET FORTH. IN A.R.S. TITLES 48 AND 49 REGARDING SPECIAL TAXATION DISTRICTS AND THE WATER INFRASTRUCTURE FINANCE AUTHORITY,BE APPROVED. Mr.Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. AUTHORIZATION FOR TRANSFER OF APPROPRIATIONS TO CORRECT A CLERICAL ERROR IN A LINE ITEM TRANSFER OF JULY 6, 2004 )District Finance Manager John White briefed the board on the item.This is a typographical error;money was transferred to an account that does not exist. Chairperson Coleman asked if just a number had been left off. Finance Manager John White stated he copied the 08181 from another line item and forgot to transfer it over to the 08180.He was keeping the format consistent in the word document he was using. Chairperson Coleman closed the item with no further discussion and called for a motion. Mr.Dietz MOVED THAT THE . AUTHORIZATION FOR TRANSFER OF APPROPRIATIONS DUE TO A CLERICAL ERROR IN THE LINE ITEM TRANSFER OF JULY 4,2004,BE CORRECTED FROM $500,000 IN APPROPRIATIONS FROM LINE 008-08181-513-649 OTHER DEBT SERVICE -PLANT DIVISION TO $500,000 IN APPROPRIATIONS FROM LINE 008-08180-513-649 OTHER DEBT SERVICE EXPENSE -ADMINISTRATION DIVISION.BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 3 of 15 Mr.Waldron SECONDED THE MOTION. VOTE:Unanimous. The motion carried. MOTION FOR EXECUTIVE SESSION AT 6:15 P.M.,TUESDAY,AUGUST 17,2004 FOR THE PURPOSE OF CONSULTATION FOR LEGAL ADVICE REGARDING CHANGES IN ACCOUNT DEPOSIT CHARGES )District Clerk Kathleen Connelly stated that following the previous board meeting,there were some board members voicing concern about the proposed change in the account deposit procedure.The district counsel has advised this could be done either in an executive session or as a public item or both.It is the board's decision i f they want to go into executive session. There was general _discussion with the consensus being to proceed with this as a public item. District Clerk Kathleen Connelly briefed the board on the item.Vice Chairperson Eck and Mr.Dietz had expressed some concern about the proposal to require the reposting of a deposit following delinquency on an account.The basic question was what was considered delinquent.There is no definition for delinquent. Vice Chairperson Eck commented he also had a concern over reestablishing a security deposit simply over the matter of being late two times in any twelve given months.He could see i t if it was the first year,like a probationary year.However,it was proposed that if the customer is late two times in any twelve given months a security deposit would be charged. Mr.Dietz commented they could have had great service for 9 years. Vice Chairperson Eck commented he would like the board to discuss this with the superintendent. Water Utilities Community Facilities District, Meeting Minutes of August 17,2004 Page 4 of 15 - , , •••. District Clerk Kathleen Connelly commented she believes John White is the one they need to talk to. Finance Manager John White stated the deposit would be required after the third time.There is no definition of delinquent.Staff was discussing that if someone would have a billing arrears of at least 4 or 5 weeks behind,based on the billing cycle,3 times within a year,they would then request a deposit.Staff was also talking about giving a warning letter after the customer had two.The customer would be forewarned rather than just getting a letter stating their account has been behind 3. times and they will have to pay a deposit.He had done some research and on accounts that do not have deposits since July,when the deposit system starting tracking,they have had 23-24% that have gone past . the 15*day due date.It does not mean that they are delinquent or have been given a delinquent notice.From July 2003 through September 2003,most of the accounts without deposits did pay the amounts in arrears,or they paid their balance.There is one account where they would have pre-empted a charge off because Of this.This is an idea to try to prevent charge -offs: if the board is not comfortable with it,it can be struck. Vice Chairperson Eck asked if he was worried about skips. Finance Manager John White stated that is correct. Vice Chairperson Eck commented he would honor something more like turning off the customer twice in any twelve months.Those people are more prone to skipping than the person who pays their bilk when the check comes at a certain time of the month.He has seen it where there is that individual who will pay past the 15 day period or 10 day shut off. Finance Manager John White commented they would not be having this discussion if everybody paid 18 days after the bill came.Staff Was discussing those that are 4 to 5 weeks in arrears or 4 to 5 weeks past the billing date.It would basically be after a bill had been generated with the old balance still due.That is the where the biggest potential for problems lies. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 5 of 15 Mr.Dietz asked if that is when they are carried over from previous bills for a month or two. Finance Manager John White stated that is correct. Vice Chairperson Eck commented they do not go two months;they turn off monthly,although they are in the second month at the time. Finance Manager John White commented they do turn offs monthly. District Water Superintendent Brian Hall stated i t is generally five -and -a -half weeks following the initial billing. Mr.Dietz commented they would require a new deposit if that happened 3 times in a one year period. District Finance Manager John White stated that is correct. Mr.Dietz commented that would then constitute them being shut off 3 times. Vice Chairperson Eck commented he would rather see it that i f i t happened twice in twelve months of actually being shut off,then reestablish the security deposit. Mr.Dietz commented he believes that is what they are saying.They shut off at 5 to 6 weeks late,and they are saying they would require a new deposit after they have been 5 to 6 weeks late 3 different times within a year. Mr.Waldron asked if the idea was not to get to the point of shut off. Vice Chairperson Eck commented they are trying for profit or payment. Water Utilities Community Facilities District Meeting Minutes.of August 17,2004 Page 6 of 15 District Finance Manager John White stated they are trying to prevent problems.He was not thinking of one specific problem when he came up with this idea.He primarily thinking of preventing skips.When they have a service disconnect for nonpayment and they reestablish,the district does ultimately recover the money.It is when they leave and move to another location outside the district that the money is not ultimately recovered. Vice Chairperson Eck commented there is a 15 day billing period and then they go into the delinquent period. District Finance Manager John White stated that is correct. Vice Chairperson Eck asked if they need to reestablish a security deposit if they go into that delinquent period 3 times in 12 months. District Finance Manager John White stated that is correct.This is a policy decision for the board. Mr.Sippel asked if staff then turns the water off and the customer has to come in and they have to pay the deposit before the water is turned back on,and the bill is paid in full'. District Finance Manager John White commented that is not what is written but i t sounds more like what the vice -chairperson is leaning towards,if he understood him correctly. Vice Chairperson Eck commented he thought it would be more strict to do i t 2 times in a twelve month period, that they are actually turned off.Those people are more likely to skip then lag in payments past the 15 days. District Finance Manager John White stated that would be clear enough to define.Once i t is already shut off,;at that point you would need the new deposit to reestablish the account. Mr.Dietz commented they should have to reestablish with a deposit and pay in full once they are shut off. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 7 of 15 Mr.Waldron asked if they would still send a letter stating they have been delinquent the 2 times. District Finance Manager John White slated if they are changing this to the second time,they might want to send the letter after the first time. Vice Chairperson Eck and Mr. Waldron agreed. .Vice Chairperson Eck commented i t is a little stricter:he thinks they would be going after it.He.understands what he is trying to do and thinks i t is very noteworthy.He feels they are really trying to go after people that'are Skipping 'so that they do not lose out on the money.The ones that are actually shut off twice in a 12 month period would be more prone to skip. Mr.Sippel stated he was good with that. District Finance Manager John White stated i t sounds reasonable from a staff level and i t is something they could work with. Vice Chairperson Eck commented they should have a certain amount of time after the second shut off.If it is included just to get their water back on after the shut off,and they have the money to pay the reconnect fee plus the past bill,there should be something like a 30 day period to establish the security deposit.It could be a hardship situation and then they would not only be telling them that they have to pay:they might be seeing checks from various organizations that are trying to help them out. Finance Manager John White commented that by the time the fees are added up,i t could easily be a three figure amount. Vice Chairperson Eck asked i f within 30 days of the second one in 12 months would be reasonable. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 8 of 15 Finance Manager John White stated it would.He does not believe this will be a daily occurrence.There were few cases he looked at that had gotten their deposit back,or that they had a very long time. ago. Vice Chairperson Eck commented that is because they had to have 12 consecutive months. Finance Manager John White stated .that is correct.-He also noted that when there were problems,it was generally in the month or two preceding their finaling'the account.It could be .a situation where they have run into a problem like losing their job or .they are also having a'problem with the landlord and are being evicted. However,that is just speculation. Mr.Insalaco asked if this would be• set in cement or would they be considering hardships. •District Counsel Bill Farrell commented they could add an attachment to the resolution as presently written that may designate a delegation of discretion on this issue.It currently does not say how it may apply.It should .be clarified. Vice Chairperson Eck commented he understands that they are just trying to get collections. District Clerk Kathleen Connelly stated if they want to make a change they should present it during item number 10.She suggested they might want to bring back a written policy. Vice Chairperson Eck commented that sounded like a good idea.It might be better not to do i t tonight. District Counsel Bill Farrell stated the statute requires that they change the rates by a certain date. They have the possibility of one more meeting before those rates have to be set. Mr.Waldron asked if they can approve the budget without the rate change. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 9 of 15 District Water Superintendent Brian Hall stated there is always .a way that states you can change the rates. However,both could be done if you want the resolution rewritten. District Clerk Kathleen Connelly asked if they can approve it with amendments. Mr.Sippel stated he believes staff wants the budget approved by October 20. District Water Superintendent Brian Hall stated they would have to approve i t during the meeting prior to that. Vice Chairperson Eck commented they would have to hold the budget up just for this one item. District Clerk Kathleen Connelly asked if they could approve Resolution 2004-004 with amendments,which could be done tonight. Vice Chairperson Eck commented they can talk about it when they get to item number 10. Chairperson Coleman closed the item with no more discussion and moved on to the next item. PUBLIC HEARING ON PROPOSED FINAL BUDGET AND RATE SCHEDULES FOR FISCAL YEAR 2004- 2005 )Chairperson Coleman opened the public hearing on the item.There being no one wishing to speak,he closed the public hearing and moved on to the next item. PROPOSED RESOLUTION NO.2004-003, TENTATIVE BUDGET ADOPTION FOR FISCAL YEAR 2004-2005 )Chairperson Coleman called for any discussion by the board.There being no discussion,he called for a motion. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 10 of 15 Mr.Waldron MOVED THAT RESOLUTION NO.2004-003,A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA)FULLY ADOPTING ESTIMATES OF EXPENDITURES BY THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA),FOR FISCAL YEAR BEGINNING JULY 1,2004,AND ENDING JUNE 30,2005:DECLARING THAT SUCH SHALL ESTABLISH THE BUDGET FOR THE WATER UTILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA),FOR FISCAL YEAR 2004-2005,BE APPROVED. Mr.Insalaco SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO.2004-004,RE -ADOPTING THE EXISTING RATE SCHEDULE FOR MONTHLY MINIMUM CHARGES AND SERVICE LINE AND METER INSTALLATION CHARGES INCLUDING BUT NOT LIMITED TO SYSTEM CONNECTION AND RECONNECTION FEES,GENERAL SERVICE CHARGES,STAND PIPE FEES AND FIRE HYDRANT - METER CHARGES;ADOPTING NEW RATES AND CHARGES FOR ACCOUNT DEPOSIT REFUNDS AND REPOSTING OF DEPOSITS FOR REPEAT DELINQUENT ACCOUNTS;AND ESTABLISHING AN EFFECTIVE DATE )District Counsel Bill Farrell briefed the board on the item.He stated there is an amendment to the resolution as written.On page 3 of the attachments to the resolution,the line beginning with "Customers who have had deposits"should be amended to read "Customers who have had deposits refunded may be required to repost a deposit if water service has been shut off twice in a consecutive twelve month period.Hardships caused by this provision can be appealed to the district manager." Vice Chairperson Eck asked if the last part needed to be added. District Counsel Bill Farrell stated he believed so. Water Utilities Community Facilities District Meeting Minutes of August 17,2004'.. Page 11 of 15 Vice Chairperson Eck commented the language states "may",which should leave discretion. District Counsel Bill Farrell stated i t gives the criteria and if Brian or John make the decision to shut off the water,and the,customer is receiving checks from the car wash to benefit him,there should be some place to go that is meaningful and gives an opportunity to be heard. Vice Chairperson Eck asked him to repeat the amendment. District Counsel Bill Farrell repeated the change.He stated the board would not then hear the cases:i t could be done very easily administratively. Chairperson Coleman closed the discussion with no more comments and called for a motion. Vice Chairperson Eck MOVED THAT RESOLUTION NO.2004-004,A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA) RE -ADOPTING THE EXISTING RATE SCHEDULE FOR MONTHLY MINIMUM CHARGES AND SERVICE LINE AND METER INSTALLATION CHARGES INCLUDING BUT NOT LIMITED TO SYSTEM CONNECTION AND RECONNECTION FEES.GENERAL SERVICE CHARGES,STAND PIPE FEES AND FIRE HYDRANT CHARGES:ADOPTING NEW RATES AND CHARGES FOR ACCOUNT DEPOSIT REFUNDS AND REPOSTING OF DEPOSITS FOR REPEAT DELINQUENT ACCOUNTS:AND ESTABLISHING AN EFFECTIVE DATE,BE APPROVED WITH THE FOLLOWING AMENDMENT: THAT CUSTOMERS WHO HAVE DEPOSITS REFUNDED MAY BE REQUIRED TO REPOST A DEPOSIT IF THE WATER SERVICE HAS BEEN TURNED OFF TWO TIMES OR MORE IN ANY GIVEN CONSECUTIVE TWELVE MONTH PERIOD.ANY HARDSHIPS CAUSED BY THIS REPOSTING OF DEPOSIT MAY BE APPEALED TO THE DISTRICT MANAGER. Mr.Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISTRICT SUPERINTENDENT REPORT Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 12 of 15 District Water Superintendent Brtan'Hall stated his only item is in regards to research done into different methods of arsenic treatment for Well #6. There are three viable treatment options.They threw out membrane filtration because of the waste of water;it takes 10% to 20%of the water.They are initially looking at a process called coagulation filtration;they add a chemical to pull the arsenic together and run it through a filter that catches the particles.The system they are looking at is a reusable media; the filter is flushed every 8 hours.The water that is flushed out precipitates out.The water off the top of the tank is drawn again through the treatment process and there is ultimately a thick layer of sludge on the bottom that is dried out and disposed of at the landfill.They did a pilot study on that method,and i t has a capital cost of $750,000 to $800,000.He is waiting on some numbers for the operating cost.The company had stated the pH level and water temperature do not matter,but they have found that i t does matter.This created more steps and adjustments.The second method is the one the district was plugged into by the state over two years ago when they started the arsenic master plan.It involves running the water through granular ferrous hydroxide,or iron,to filter the arsenic out.The down side is they have to throw away the media 2 to 3 times a year and i t costs about $2.30 to $2.75 a pound,and they need about 25 tons each time.It is a simple method;they just test it and when the media starts to overload and not pull the arsenic out,water gets sent to the other tank so the media can be *dug out.None of these methods' waste is considered hazardous material. If it should happen some time in the future,he would rather have to get rid of a small amount than a large amount.The third method is called ion exchange.It is more complicated but i t comes basically self-contained.The difference in the process is that there is a pretty good reason to take. this company up on a contract to..help operate i t in the future.The district can do some things locally to minimize the cost but the company would have to be contracted initially to come in and provide the chemicals,take care of the major' maintenance of the facility,and take care of waste disposal.The price to operate this is $135 per acre foot,or 41.5 cents per thousand gallons.This is figured for Well #6 only;the other wells and interconnect will not require treatment.There are two options for owning the plan;one is a separate lease payment of about $5,500 per month for the capital equipment;the other option would be to continue with the Water Infrastructure Finance Authority loan.There are pluses and minuses to each. Technology changes and they may want to do something different in a few years.He commented the last Water Infrastructure Finance Authority loan had an interest rate of approximately $3,800 to $4,000 per month;the lease would run $5,500 per month but i t can end.He has sent special test results on Water Utilities Community Facilities District Meeting -Minutes of August 17,2004 Page 13 of 15 several different items to a'company with-dispoal media to assist in the decision.He expects the information to'be back in the next week or two and he will bring back his recommendation then.The representative of Basin Water has proposed that the district set up a full scale plant as a demonstration project here in the valley.They have none in the valley at this time.He hopes they would be able to negotiate most of the $100,000 mobilization charge out and that they would set i t up so that the district gets some benefit from them being able to use the district as a show and tell.He believes the actual capital costs for all of these methods are within a small percentage of each other.The operating costs will help them to make the decision. DISTRICT MANAGER REPORT None. DISTRICT TREASURER REPORT None. DISTRICT COUNSEL REPORT District Counsel Bill Farrell commented he believed they would not have another meeting until September 21,2004.because of the Labor Day Holiday. District Clerk Kathleen Connelly stated they usually do not have a work session if they miss the Monday meeting. District Counsel Bill Farrell suggested they start a half hour earlier on September 21 as he will hopefully have the Mesa contract and the details of the acquisitions on the arsenic issue.It could be a long meeting for the water district on September 21.He added an effective date was called for in the resolution but he did not read an effective date in the resolution:he stated they would establish one and get i t back to the board. District Clerk Kathleen Connelly stated it coincides with the adoption of the budget. District Counsel Bill Farrell stated they will establish an effective date to coincide with billing cycles. Water Utilities Community Facilities District Meeting Minutes of August 17,2004 Page 14 of 15 ADJOURNMENT )Chairperson Coleman adjourned the meeting at 6:42 p.m. ACCEPTED THIS 7TH DAY OF DECEMBER ,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 7TH 2004. ATTEST: Kathleen Connelly District Clerk . DAY OF DECEMBER Douglas C4eman Chairperson WATER UTILITIES COMMUNITY FACILITIES DISTRICT MINUTES CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of theregular meeting of the Water Utilities Community Facilities District of the City of Apache Junction,Arizona,held on the 17th day of August,2004.I further ,certify that the meeting was duly called and held and that a quorum was present. Dated this 18th day of October,2004. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of August 17,2004'. PagePage 15 of 15