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HomeMy WebLinkAbout2005-10-18 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION,ARIZONA REGULAR MEETING OCTOBER 18,2005 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 October 18,2005,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,Jr. Mr.John Insalaco Mr.Joseph Severs Mr.Kris Sippel Mr.Dave Waldron Staff Present: (Mr.Rick Dietz was absent.) George Hoffman,District Manager Kathleen Connelly,District Clerk Doug Dobson,Utility Director Brian Hall,District Operations Manager Others Present:None. APPROVAL OF MINUTES OF AUGUST 16,2005 ) )Vice Chairperson Eck MOVED THAT THE MINUTES OF AUGUST 16,2005,BE APPROVED. Mr.Sippel SECONDED THE MOTION. VOTE:Unanimous. Water Utilities Community Facilities District Meeting Minutes of.October 18,2005 Page 1 of 14 The motion carried. CONSIDERATION OF 1ST AMENDMENT TO AGREEMENT FOR TREATMENT AND DELIVERY OF CENTRAL ARIZONA PROJECT WATER BETWEEN THE CITY OF MESA,APACHE JUNCTION WATER COMPANY AND ARIZONA WATER COMPANY )District Operations Manager Brian Hall briefed the board on the item.He stated for the last 3 years the district has taken Central Arizona Project water through a three-way agreement wherein the City of Mesa treats it and Arizona Water Company delivers it. They had hoped to be further along on the direct connection with Mesa:as that is still in the works,they requested extension of the current agreement for at least another year.The current agreement expires October 21,2005.The other two entities have agreed.On October 10 the City of Mesa approved the agreement:the signed copy has not been received so a draft copy was placed in the packet for the board. Chairperson Coleman opened the item to board discussion.There being no discussion',he called for a motion. -Mr.Waldron MOVED THAT THE 1ST AMENDMENT TO THE AGREEMENT FOR TREATEMENT AND DELIVERY OF CENTRAL ARIZONA PROJECT WATER BETWEEN THE CITY OF MESA,APACHE JUNCTION WATER COMPANY AND ARIZONA WATER COMPANY BE APPROVED,AND THAT AUTHORIZATION BE GIVEN TO THE CHAIRPERSON TO SIGN THE AMENDMENT PENDING APPROVAL AS TO FORM BY THE DISTRICT ATTORNEY. Vice Chairperson Eck SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISTRICT OPERATIONS MANAGER REPORT District Operations Manager Brian Hall stated they are still finding i t difficult to move the Arizona Department of Water Resources on the Mesa agreement.Our attorney has stayed in touch with them every couple of weeks. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 2 of 14 Currently they are preparing to move their offices and their last reply to her •vas that the district is okay with an assured supply now so the district should not be worrying about this as there is no hurry.Ms.Bigelow stated she would stay on them as what they are doing is technically holding up a project.She has advised that she did get some final revisions from the City of Mesa on the agreement.Each time i t looks different,but i t still does the same thing in substance.They have been waiting for some type of assurance from the Department of Water Resources that the language within the agreement would allow the district to count the Central Arizona Project water as part of an assured supply in the future. Mr.Sippel asked how the new legal counsel is working out. District Operations Manager Brian Hall stated she is doing very well.There is a response every time he calls or leaves an email.Even if he does not call and lets this subject go for 2 weeks,he will get an email stating she has again followed up with the Department of Water Resources and their most current report and excuses.It does not alleviate the frustration of things not moving quickly but at least they are getting communications on a regular basis. Vice Chairperson Eck commented they should definitely be concerned about the assured water supply,but he is also concerned -about just getting the water. He asked if they have followed up on the process of purchasing the property or does he want to have the assured water supply before they move forward on that. District Manager George Hoffman stated they would like to come back to them at their next meeting in perhaps 2,weeks. to talk about some legal issues associated with property acquisition. District Operations Manager Brian Hall stated they have been going forward with one thought that if the Department of Water Resources came back and stated they could not write the agreement to count this as an assured supply in the future,then at that point they would have to decide if it was important enough for the district to build its own treatment plant so that they would have i t as an assured supply.This has been dragged out for so long that they may have to look at other options and start weighing in the balance of priorities.The priorities may have changed because of how long this has taken. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 3 of 14 Vice Chairperson Eck commented he does not see how the Department of Water Resources could not let the Central Arizona Project water count towards their assured water supply. District Operations Manager Brian Hall stated there are 3 tests that have to be met.There must be water that is continually available,legally available and physically available.Their first response was the district needed a 100: year agreement with Mesa or it does not count.-If it is not a 100 -year agreement,it would not be legally available for 100 years or physically available for 100 years if they stop allowing one to. take water. Vice Chairperson Eck asked if that is what Arizona Water has with the Department of Water Resources as they use their allotment. District Operations Manager Brian Hall stated -they do but they do not have an assured water supply. Vice Chairperson Eck commented he thinks the Department of Water Resources needs to be challenged. District Operations Manager Brian Hall stated they are challenging them. Vice Chairperson Eck stated they have changed staff so much that they are very frustrating to deal with. District Operations Manager Brian Hall stated they have now backed off the 100 years because no one will sign a 100 -year agreement.They have verbally said that if there is a 10 -year agreement and they are shown that there are plans to either build a plant or buy capacity in a plant,it would make them legally bound to serve the district.That will probably work for the next 10 years. They have not been able to get them to commit from probably to that the language will work and to go ahead. Vice Chairperson Eck commented it amazes him because this works between other municipalities,such as between Phoenix and Mesa.Gilbert and Mesa,and Scottsdale and Tempe. District Operations Manager Brian Hall stated he is not familiar with those, but Arizona Water Company does not have a designation as an assured supplier. They just buy the water when they need it. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 4 of 14 Vice Chairperson Eck asked if he feels he might be in a place where he might need some political help as far as the chair and water board.- District Operations Manager Brian Hall stated he thinks he has some legal help that is staying after it.He would like to give that another week or two and see where they are. Vice Chairperson Eck commented he had been told it might be another year -and- a -half before they are tied in. District Operations Manager Brian Hall stated that is just physical.If they had a signed agreement done in a couple of months they would still have other questions and hoops that they have to jump through.They have to go through the bidding process,finalize the construction,and land acquisition discussions. Vice Chairperson Eck commented the changes in the agreement cause another concern as the longer this goes on,there are different players.He is concerned about trying to get that. District Operations Manager Brian Hall stated with the recent events,he is the first person who would like to go out and turn the faucet on right now. They could use the water. Vice Chairperson Eck commented he thinks i t is important for the acquisition of large parcels of property. District Operations Manager Brian Hall agreed. Vice Chairperson Eck commented he knows he has been working hard on this,but if he feels he needs help politically on this,just ask them and they could possibly write a letter or make a phone call. District Operations Manager Brian Hall stated he is closer to the technical aspect of things and the district manager is closer to the political needs and issues.They will work together on that.If at any point he feels they need to get more political involvement,he is open to that.He is not opposed to any help.The next issue is Well No.5,and that issue makes him anxious.He knows they have received communications over the last couple weeks on the difficulty they are having with Well No.5.It seems like every two -and -a= Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 5 of 14 half years or so the sand eats the pump bowls up.They were going through the change out period and in 2003 they put a camera down the hole and i t basically culminated in the project to replace that well.The well is basically falling apart.There is virtually no casing left in the well;i t is in chunks and pieces.A few weeks ago the pump started to fail again.They assumed it was starting to wear big holes in the pump bowl and they did not want to wait until it dropped to nothing.They got some emergency quotes from 3 pump companies to pull the pump,replace it without replacing any pipe,and the quotes were in the $15.000 to $17,000 range,which is under the new purchasing guidelines and allowed them to do that.They therefore moved ahead with that. They have held off redrilling this well until the arsenic treatment was finished and Well No.8 on line so there would be additional water resources and there would not be the need to blend Wells 5 and 6.They have reached a point where that will not work.If they can get in there quickly,cycle the pump out of the hole,spin a new pump,cycle it back in the hole and turn the thing back on they should be good for several more months while they are working the rest of this out.They new the well was in bad shape,but when they put the pump rig over the well to pull the pipe and pump out it would not budge.The well has already collapsed.It fell in on itself.The decision was made that they needed some work done on the motor so they left it off for a couple of days.They have continued to purchase water from Arizona Water Company.They are operating under an alternate blending program that the Department of Environmental Quality allows them to blend with Arizona Water Company and Well 6.The pump motor was brought back and put in place,turned back on and i t is virtually pumping about the same gallons per minutes as i t was before they shut it off and tried to pull it.They were afraid it would collapse even more around i t but for some reason it does not sound the same. It sounds like there is more bind on it.They were not quite sure what was going on.This afternoon the pump quit.When they finally recognized that, they took the top off the motor and manually turned the pump shaft and i t seemed like it turned alright but i t seemed like something was not quite right.They got an electrician over there and got the electronics reset. They fired the well up and within about 90 seconds it was obvious something was not right.The pump would run smoothly and then labor,the pressure would drop and then come back up,even though they were still pumping about 550 gallons per minute.This is a 230 amp motor and the display board showed i t was running at 270 amps to 280 amps and spiking to 350 amps and bouncing to 400 amps and 500 amps before dropping ,back down.It ran 12 minutes, overheated and shut itself off.As of this afternoon,the electrician stated they would ruin the motor and some of the controls if they continue to try to Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 6 of 14 force it to run.They would also have to babysit i t 24 hours a day to get i t to run.The well replacement is estimated to be no earlier than next spring by Beeman's.That will not work.Everything had been lined up to drill this well in the future,the notice of intent to drill a replacement well had been approved by the Department of Water Resources,and the only thing that is lacking is a driller's card.In order to go through that process,they must select a driller.They went to the next lowest bidder from last time,Lane Christiansen,another local company,and they advised they could drill the well in 4 to 6 weeks.They asked them to work up a price and unless it was too high they would be the drilling company and were told to put the district well on the list.Lane Christiansen advised they were local,were assuming the district would grow in the future and wanted to do some business with the district again.The district has some restrictions due to the size of the well so they are bringing in a pump"rig from California that is smaller in stature and has a self-contained, mud recycling system.The Department of Water Resources has received official notice that they are the driller of record.They are beginning to create the drill card.Scott Miller of the Department of Water Resources will be out next week to do a site assessment which is the final step for the drill card.The down side is the district thought it would be able to produce most of its own water until the well went down this afternoon.Now water will have to be bought for the additional 3 to 4 weeks. Mr.Waldron asked if they have been given a cost for drilling the well. District Operations Manager Brian Hall stated he has not gotten a cost back from them.Beeman drilling told them that the costs have gone up due to the cost of fuel and steel going up and they would have drilled i t for $375.000. Vice Chairperson Eck commented i t has gone up considerably.He recalled the last time it was $300,000. District Operations Manager Brian Hall stated they were way out of whack with the completion of Well 8.In this case,they had budgeted $365.000 which is in the neighborhood.The fuel surcharge is what has put it over. Vice Chairperson Eck commented they have the $365,000 in the budget. District Operations Manager Brian Hall stated they do. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 7 of 14 Vice Chairperson Eck asked if they had the additional cost for the purchase of water in the budget. District Operations Manager Brian Hall stated they have some flexibility but that was not in the budget.They had planned to purchase water in January and February again when the Central Arizona Project plant is down in Mesa.Last year they had to purchase additional water at that time.This is going to cost the district,especially with their graduated rate,as the more you use, the more per thousand you pay with Arizona Water.The district pays the retail rate on this particular meter.It is not happy news,but he wanted to make sure they were fully aware of it.There is one other issue.Their water is higher in arsenic than Well 5.In order to make the blend work,they need more of it.They are only able to give us so much right now as they have a 4 million gallon reservoir down.The district is squeezing as much out of them as possible.The Department of Environmental Quality is requiring the district to take an arsenic sample daily while they are on the alternate plan. The down side is if they took the sample every day and knew the results immediately,they would know to back off Well 6 or get water some place else. Unfortunately the results come 5 days to a week after the test date.They will be keeping a close eye on i t and watch the trend.They will be closer to the maximum contaminant level then they are when i t is blended with Well 5. Well 5 is about 6.5 parts,Arizona Water runs'23.to 27 in that connection. District Manager George Hoffman asked if this scenario could result in the district buying the water at a cost higher than what it can sell i t for. District Operations Manager Brian Hall stated last time with the water they bought it ended up costing the district $3.44 per thousand gallons on the graduated rate.The district :sells its water for $3.88 per thousand:however, there are additional electrical and pumping costs to blend it and get it back out to the system.If it is not a lose situation,i t is just about a break even situation. Vice Chairperson Eck commented that is terrifying. District Operations Manager Brian Hall stated for a short term i t is not as terrifying as the long term of not having the water. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 8 of 14 Vice Chairperson Eck commented he really thinks that the interconnect is the thing for the district.They need to definitely discuss if it is or if they need to go a different route. District Operations Manager Brian Hall stated when they talk about the purchase of real property in the upcoming weeks they will get down to some of the issues. District Manager George Hoffman commented he believes they are getting close to the point of escalating the level of discussions.He thinks they need to let Kay see what fruit she can yield,and then bring in a third party consultant and have a couple of them go down and sit with the director.If they cannot do that,then they may need to do .a political move. Vice Chairperson Eck commented he hopes everyone realizes that when they talk about having to pay $3.44 per thousand gallons for this water that it only costs the district $0.24 per thousand gallons. when theAli,strict pumps its own' water. District Operations Manager Brian Hall stated i t runs a little more than that. By the time i t is pumped out of the well and put back in the system they are probably talking about $0.80 to $0.90 per thousand gallons. District Manager George Hoffman stated they clearly cannot run a utility based on that cost. District Operations Manager Brian Hall stated they would lose money for sure. Vice Chairperson Eck commented surface water would be our tie in.The new arsenic maximum contaminant level goes down to 10 in January 2006.There is no problem with surface water;there is a problem with well water. District Operations Manager Brian Hall stated that may be discussed further and it may be the board's intention or direction to say they hope this thing works for assured water in the future,but either way it works they think i t needs to be hooked up right now.He has tried to give them his best guess as to how things should fall into place at this point.He would like to get some direction on this at a future meeting. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 9 of 14 District Manager George Hoffman asked him to walk them through the next few months.He asked if they would end up in a real squeeze in January and February with Arizona Water Company's Central Arizona Project allocation.He would like them to know what is out there. District Clerk Kathleen Connelly asked if this is related to anything on the agenda. District Manager George Hoffman stated i t is part of the discussion on Well 5 going down and the scenarios that could accrue to Well 5. District Operations Manager Brian Hall stated it ties into this Mesa agreement.The district has a couple of things that will help improve the water resources in the short term.One of them will not come on line until February,which is Well 8,and it will only produce 250 gallons per minute. Well 6 is run 13 to 14 hours a day.They have cut it back that far because they have to balance the blend.They run Well 5 all day because it is low in arsenic and Well 6 could be run 15 hours a day. Vice Chairperson Eck asked what the arsenic level is for Well 6. District Operations Manager Brian Hall stated i t is at 70 plus parts,and the maximum contaminant level is 50.Once they get arsenic treatment on Well 6, it will treat it to less than 5 parts,and the idea is to give them some extra room to see it before it gets to 10 parts.Technically,they could run the well for 24 hours for a short time.There is a maximum that they could run i t annually.The maximum they can pump out of it is 1,000 acre feet.If the arsenic treatment is in place before the January 23 deadline,and i f everything operates correctly,they will get some more water out Of that.If Well 5 had been producing regularly and made it past the January/February no Central Arizona Project water time frame,then they would have purchased additional water while Well 5 was down for redrilling.They wOuld not have had to purchase as much water as Well 8 would have been on line and Well 6 that can produce 45% more water in a day's time.That would have helped us get through that period.With the history of last year,where they were scheduled to take 225 to 250 gallons per minute yet got by with 75 to 100 gallons per minute,i t indicated that the wells picked up some of the slack. He was feeling confident they could get through that period with Wells 5,6 and 8 without buying water.Now,there are critical times.One is as they put Well 6 through its new process and replumb it to tie into the arsenic Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 10 of 14 treatment,they had planned on having that well down for a little while.He and Ron Grittman believe there is a way to pre -build the plumbing.It has a bypass to the treatment system.They can set up the plumbing,leave the well in place the way i t is,and on one day connect i t at both ends and turn on the well to run it through the bypass through the new treatment equipment through its series of pipes.As needed,they would shut it down for short periods to start the arsenic treatment process.They believe they can get past the arsenic start up without being too critical.Well 5 will still be down.By the time they drill the new well,get approval from Arizona Department of Environmental Quality and hook i t back into the system,it will be at least 7 or 8 weeks and possibly more.The district has already potholed where the existing connection is.has ordered some steel pipe,and is putting i t together in-house.They will then be ready to go when approved by the Arizona Department of Environmental Quality and bring a pump company in to drop a pump in the hole,hook i t up and get it going.Last year Arizona Water Company had a low enough demand to keep the water going in the middle of the winter.That was 100 gallons per minute.If they need to come up with 500 gallons per minute from their wells,that causes him to lose some sleep. District Manager George Hoffman asked what would they.do if things did not happen the way they hoped. District Operations Manager Brian Hall stated they would have to move into stage 4 of the drought management plan. Vice Chairperson Eck commented they have to work a little harder with Arizona Water regarding the additional water. District Operations Manager Brian Hall stated they have been really good. They are hesitant to say up front that they have plenty,but their response has always been if they have the water they will do it. Vice Chairperson Eck commented he thinks they do that be default to cover themselves,as he would. District Operations Manager Brian Hall stated they just want you to know up front that if it comes down to a pinch,and there is not enough water for both,then their customers will come first.The district would do the same thing.They are conservative in their estimates and they have always refused to commit until the very end.He was nervous because the district did not Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 11 of 14 need much last year,but it would have gotten behind over a two -month period. They stated that if they were able to do it they would do it.They were able to do it and afterwards told him they were able to do it with ease.They are like the gentleman who turned on the connection today and did a lot of adjusting,then commented that sometimes it gets a little tight,but they always make it work out.They have some wells they are not running as much right now,and that will allow them to run those wells then more.The worst scenario would be beyond having to put a notice in the paper stating the well is down and asking people to conserve water,which is.what they have done in the past. Vice Chairperson Eck suggested construction hydrant meters. District Operations Manager Brian Hall stated they have been working on a conservation or drought plan to bring before the board.They are trying to meld i t in with what the Corporation Commission requires of Arizona Water.He would like to be equal with all water users in the city so they all have the same rules and regulations.It states simply beCause there is a catastrophe with one water provider does not mean there is always one with another.In a drought situation,i t looks equal.In a situation with a problem with a water source,it may not look equal.They may just have to go out do some mandatory curtailment. Vice Chairperson Eck commented he finds i t hard to understand that the district was formed 10 years ago and still is not self-sufficient.A lot has been done,but he thought they would have had their own water by now. District Operations Manager Brian Hall stated the slowness of some of this does frustrate him.They do what they can with the things they have control over.He cannot say enough about how he appreciates the work done by the new legal counsel.He is actually getting real communication and can see a real push there.But they need to talk more about specifics in the future. DISTRICT MANAGER REPORT None. DISTRICT TREASURER REPORT None. Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 12 of 14 DISTRICT COUNSEL REPORT None. ADJOURNMENT meeting at 6:40 p.m. ) Chairperson Coleman adjourned the ACCEPTED THIS 15TH DAY OF NOVEMBER 2005, 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 NOVEMBER ,2005. ATTEST: Kathleen Connelly District Clerk Douglas Coleman Chairperson Water Utilities Community Facilities District Meeting Minutes of October 18, 2005 Page 13 of 14 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 16th day of August,2005.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 21st day of October,2005. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of October 18,2005 Page 14 of 14