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HomeMy WebLinkAbout2010-06-15 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING JUNE 15, 2010 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 June 15, 2010, at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Chairperson Insalaco called the meeting to order at 6:00 p.m. ROLL CALL Board Members Present:Chairperson Insalaco Mr. Douglas Coleman Mr. Rick Dietz Mr. Jeff Serdy Mr. Chip Wilson (arrived at 6:28 PM) Staff Present: (Vice Chairperson Eck and Mrs. Barker were absent.) George Hoffman, District Manager Kathleen Connelly, District Clerk Frank Blanco, District Director John White, District Finance Manager Kay Bigelow, District Legal Counsel David Fern, Utility Director Donna Meinerts, District Finance Dir. Others Present:Bryant Powell, Assistant City Manager Hazel Randall, Administrative Assistant APPROVAL OF MINUTES OF APRIL 20, 2010 Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 1 of 11 )Mr. Dietz MOVED THAT THE MINUTES OF APRIL 20, 2010, BE APPROVED. Mr. Coleman SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO. 2010-007, TO ACQUIRE CERTAIN REAL PROPERTY OWNED BY THE UNITED STATES, LOCATED IN THE COUNTY OF PINAL, STATE OF ARIZONA ) )District Legal Counsel Kay Bigelow briefed the board on the item.She stated it allows them to acquire the Central Arizona Project excess land through a process that will hopefully even be free.If not, it will be at a very, reduced cost.It is the end of a long process.We have told the county they do not want to be overly taxed, but they do want to be whole.This would make the district whole. District Director Frank Blanco stated this is for the application to the Health and Human Services Department.They are working parallel with the General Services Administration.They have two ways to do this. This particular one is for an application that needs to be to them by June 21. Mr. Dietz commented if they get this land for free, Pinal County would owe the district a little hunk of money.He asked if they can have them deed the second option of land to the district since the district went out on its own and purchased the number one property on the Central Arizona Project. District Legal Counsel Kay Bigelow stated the county will have to pay the district anything that the district has to pay to the federal government.The county will actually pay for the land.The district has always just been the applicant in this process.There has never been a sense that if there is money owed, it is coming out of Pinal Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 2 of 11 County's pocket for the one that they got for the Ironwood Road expansion.They have agreed, as part of the agreement, that there is a residual piece that is part of the piece that the district has now and that they do not need.They will give that to the district because it will be adjacent to the piece that we are getting from Central Arizona Project. Mr. Dietz commented that it has been in the works all along that they would have that excess property at that site that we own. District Legal Counsel Kay Bigelow stated they have paid us for the infrastructure that we have already done and is sort of stranded now because the district had to change things.We had the package plant in there and the Central Arizona Project water in 2006.They have paid for the attorney fees and the engineering report using the old site.The only thing left that they have to pay is the difference between what it would have taken to attach the site they secured for us compared to the old site.She does not know if the costs are any different for the Central Arizona Project site.Obviously there would be some for the site that is next to the sewer plant. Mr. Dietz commented he does not recall that being the deal.He recalled that they were going to pay for everything that had to be paid for, which they have, but they were also going to provide us one of the two other sites. District Legal Counsel Kay Bigelow stated that is correct.If we get the site from Central Arizona Project, that they either pay for of if there is no cost to it, then they have followed through with their obligation. They are just giving us a piece to swap.That piece will have been gotten. Mr. Dietz commented the way he looks at it is the water district has gone out, made the application, and got that piece of property at no cost. Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 3 of 11 District Legal Counsel Kay Bigelow stated that is not necessarily the case.Pinal County has paid some of the costs that the district has incurred as part of the application process.There was a $15,000 fee that the district had to pay and an appraisal or some engineering fee.They have paid along the way for any step in that process that required money.They have paid.The district does not have any money out of pocket for that.The deal was that they were to make a net zero for giving them the ability to save costs by expanding Ironwood Road on our existing piece.It was not that they would give us something more than what we had, but that we would come out with a net zero.If they gave us the site by the sewer plant, we would be in the plus column.If there is some sort of cost to this, the county will have to pony up, and they have along the way. Mr. Dietz commented these were costs they were going to incur regardless. District Legal Counsel Kay Bigelow stated those were costs they were incurring to keep it from not being a cost to the district.They incurred a whole bunch of other costs for the Ironwood Road expansion, including a process with State Land and they had to acquire a piece from Central Arizona Project, plus all those other things.It was always agreed upon that they saved money by building on the existing district property.The idea was that they would save money, but they would not cost the district anything.They would secure land for us and make sure that we had that, and make sure that we were net zero on costs. Mr. Dietz commented he did not know that Pinal County had actually paid anything for the federal purchase of the Central Arizona Project property.He had understood that it was something that the city was doing and there was the possibility that we could get it at no cost or for a very small fee that the district would pay for. District Legal Counsel Kay Bigelow stated that is correct. Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 4 of 11 Mr. Dietz commented he thought the district was going after the property on its own. He still feels that leaves Pinal County on the hook for getting us a piece of property in exchange for the one they built their bridge on, regardless of whether we go out and get this other one. District Legal Counsel Kay Bigelow stated that for whatever reason, as they started down these paths, it made it easier to have the district as the applicant in the federal process.We are the ultimate end user. She does not know how it came out other than she thinks they thought they could work with Central Arizona Water Conservation District easier because we are a water entity.For whatever reason, Pinal County became the applicant on the state land piece.That is how it worked out.However, it was made clear to them that whatever costs came up through the federal process they had to write checks for.They have.Frankly, if we cannot get this free or nearly free, whatever the price is, the county will have to pay.The district will negotiate and try to hold it down because Apache Junction taxpayers are part of the pool of people that have to pay for it anyway.It has been an application without cost through the federal process.That is what has been happening through this.If the land is free, then Pinal County does not have to pay for that.There is no extra over here because that would have us have more money and property than we started out with. Mr. Serdy asked what about the time that was spent on it and how far it has put us back. He asked if they could put a value or price on that. District Legal Counsel Kay Bigelow stated they talked about that when they were at the end of getting this agreement together with them.At that time the district was well on the way to purchasing the site for the interconnection with Mesa.We knew that we would be able to take our Central Arizona Project allocation all the way through the Mesa contract and have that done.It was not as time critical to have our own Central Arizona Project treatment plant on that property.Had it put us back and had we needed the plant before and not be able to have the room to wait a couple Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 5 of 11 of years, it would have then been a component of that.We would have fought heavily for that. Mr. Serdy commented he was concerned about all the meetings she had with them in order to pay for her time. District Legal Counsel Kay Bigelow stated they did pay for her time.We gave them a bill that stated how much Gammage and Burnham has cost the district and they reimbursed that about a year to fifteen months ago. That happened right after the agreement was signed, again with the idea of making it net zero. Mr. Dietz commented it was still stated at the beginning, sitting in Sandie Smith's office, that this was of the essence and that it needed to be done yesterday.All the way through, there has been an importance on time so that we could get the studies done and get everything we needed to get done.Even with the Mesa interconnect going, this has still been a priority, or should have still been a priority. But it is not. District Legal Counsel Kay Bigelow stated the time has been way longer than we have ever thought.One of the things that scared all of us was when we were faced with the fact that they had done what they had done. It was one of the factors that was most upsetting.The good news is that Pinal County made it a priority but they have had a couple of difficult agencies to try to hurry things through. She does not know anything that can hurry up State Land.It just does what it does. Mr. Dietz commented he still thinks they should have put a toll bridge on it, especially now with the San Tan stuff going on. District Legal Counsel Kay Bigelow stated without the pressure being put by George and others, they would never have come to any sort of agreement with us. Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 6 of 11 District Manager George Hoffman stated the context has changed from where it was a couple of years ago.At that time they had Portalis coming on line with hundreds of thousands of homes and the district had to provide water.Obviously, we know how that story has turned out. Chairperson Insalaco closed the discussion with no further comments and called for a motion. Mr. Coleman MOVED THAT RESOLUTION NO. 2010-007, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) TO ACQUIRE CERTAIN REAL PROPERTY OWNED BY THE UNITED STATES, LOCATED IN THE COUNTY OF PINAL, STATE OF ARIZONA, BE APPROVED. Mr. Dietz SECONDED THE MOTION. VOTE:Unanimous. The motion carried. BUDGET, RATES, PROPOSED DATES FOR ADOPTION OF BOTH THE TENTATIVE AND FINAL BUDGETS FOR THE YEAR BEGINNING JULY 1, 2010 AND ENDING JUNE 30, 2011 ) )District Finance Manager John White briefed the board on the item.The books were provided to them last Friday.He gave them a powerpoint presentation that touched on the addition of the Mesa interconnect, the modeling and capital improvement program, the replenishment of depreciation for capital replacement, water treatment plant design, infrastructure upgrades, future water acquisitions, rate increases, and system connection fees.He briefed them on the increases for each type of customer.The proposed budget has to be adopted by July 15.The final budget can be adopted anytime afterwards up to October 1.There is only one meeting between now and July 15.Staff is recommending final adoption for August 3. Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 7 of 11 Mr. Dietz asked if it would cause a problem going to August 3 on the tentative. There was general discussion where it was determined the August 3 date was for final adoption, not tentative. District Finance Manager John White commented they had a problem last year when they got direction from the board to hire TischlerBise and they had to do some of the field work late in the summer.They had to push it out then. Chairperson Insalaco called for a motion. District Clerk Kathleen Connelly advised this is for discussion only.The tentative will be July 6.When they do the tentative adoption, they will confirm that they want August 3 for final adoption. Chairperson Insalaco closed the item with no further discussion. DISTRICT MANAGER REPORT None. District Director Frank Blanco requested they do the District Treasurer report first so that they can get all the financial information. DISTRICT TREASURER REPORT District Finance Manager John White stated he had already passed out a copy of the treasurer's report for May, highlighting the areas of interest.Revenues are up from last year, consistent with a rate increase.Operating expenditures have been lowered incrementally.They are looking at a $1.2 million budget, slightly under $1.220 million budget from last year.The Water Infrastructure Finance Authority check reimbursed most of the Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 8 of 11 expenditures for the Mesa interconnect.Money has been set aside for the big ticket items and capital facilities fees. DISTRICT DIRECTOR REPORT District Director Frank Blanco gave an update on various items. The Mesa interconnect is currently running and supplying two- thirds of the system demands Monday through Friday.The wells are run on the weekends.The wells will keep the chlorination system the way it needs to be.They are slowly transitioning to using some of the interconnect on the weekends.The intent is to keep the chlorine residuals up where they need to be to avoid any positive sample results on the total chloroform bacteria. They got a notice from the City of Mesa this afternoon where they got a positive result last week and one this morning. Given the size of the system, it is expected they will get an occasional positive sample.When that occurs, all of the wells currently running have to have samples taken at the source.The laboratory then does a confirmation that there is no problem. The last one came back negative and we anticipate this one will also.Part of it has to do with keeping the chlorine residuals where they need to be, especially in the summertime.The target is about 1.0 to 1.5 in the system.A swimming pool is typically 5.0 and higher.They have noticed a temperature variance upon running the water from the interconnect.Groundwater is typically 102 degrees to 105 degrees; the water from the interconnect is about 79 degrees.The cost per thousand gallons in January 2009 was $1.20, based on the cost of water treated by the City of Mesa and that purchased from Central Arizona Project, the cost of chemicals for Well #6 and the cost of electricity.They cannot control the other costs.In January 2010, the cost was $1.01; the target is $1.00 per thousand gallons.February 2009 was $1.19; the interconnect was off in February 2010 with a cost of $1.22.March 2009 was $1.05, this year it was $0.98.In April 2009 it was $1.14 and it was $0.79 in 2010.They will produce more water in the summer months so the cost will either stay there or drop more.They have received the letter from Phoenix AMA for their designation of assured water supply.The designation is good until 2025 or until demands equal 3,850 acre feet per year.They will have to go back and reapply for designation if the demands reach that high.They have to reapply in 2023 for the next designation. Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 9 of 11 It was important for the board to adopt the 5 year plan so that they could get credit for some Central Arizona Project water. They will be required to build a treatment plant or go into partnership with another city in 5 years.He advised he will be giving a lengthy presentation on the water master plan and intends to break it up into smaller segments.They have two options for property for the water treatment plant.One is the Health and Human Services releasing the free property to the district, although nothing is really free.It has strings, with one requiring the water treatment plant be in place within 36 months.It will be up the board on that action.The other is a direct sale from General Services Administration with Pinal County paying for the property.They made a splash on May 6 with their water festival. DISTRICT LEGAL COUNSEL REPORT None. ADJOURNMENT adjourned the meeting at 6:40 p.m. ) Chairperson Insalaco ACCEPTED THIS 6TH DAY OF JULY , 2010, 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 2010. 6TH DAY OF JULY ATTEST: Kathleen Connelly District Clerk S. Insalaco airperson Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 10 of 11 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 15th day of June, 2010.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 17th day of June, 2010. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of June 15, 2010 Page 11 of 11