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HomeMy WebLinkAbout2010-10-19 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION WATER COMPANY) CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING OCTOBER 19, 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 October 19, 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 Vice Chairperson Dietz Mrs. Robin Barker Mr. Douglas Coleman Mr. R.E. Eck Mr. Jeff Serdy Mr. Chip Wilson Staff Present:Kathleen Connelly, District Clerk Frank Blanco, District Director John White, District Finance Manager Kay Bigelow, District Legal Counsel Giao Pham, District Engineer Others Present:Bryant Powell, Assistant City Manager APPROVAL OF MINUTES OF SEPTEMBER 21, 2010 )Vice Chairperson Dietz MOVED THAT THE MINUTES OF SEPTEMBER 21, 2010, BE APPROVED. Mr. Coleman SECONDED THE MOTION. Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 1 of 9 VOTE:Unanimous. The motion carried. Chairperson Insalaco announced they would go on to Item No. 8. DISTRICT MANAGER REPORT None. DISTRICT DIRECTOR REPORT District Director Frank Blanco stated the land purchase for the federal land is still in process with the General Services Administration.We withdrew the application to Department of Health and Human Services at the last meeting.The intent is for General Services Administration to come back with some type of negotiated sale proposal.They are committed to getting something to us either this week or next week.It will be sent directly to Mr. Hoffman. Vice Chairperson Dietz commented that sale should be going through Pinal County. District Director Frank Blanco stated that is correct.It will be paid for by !Final County but the negotiations are between Pinal County, the water district, and General Services Administration He showed them,Ha graph to produce 1,000 gallons of water in the :time frame of January through December with the comparison from January 2010 to August 2010, 2009 and 2008.The top lines are 2009 with peaks relating to well repairs.The peak is because of the emergency _connection to Arizona Water. At those times we had to purchase water from Arizona Water.The next line is 2008-It is fairly flat until December which is attributable to winter visitors.The bottom line is 2010; in January into February they were using well water:insteaclof interconnect Central Arizona Project water.Those amounts closely ,match when they were using ,groundwater.In March and April the costs started dropping, rising slightly in May, June and July-relatedfto more water they had to produce, treat and increased.electrical costs for pumping.The big three costs - Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 2 of 9 water, energy and chemicals - totaled $441,000 in 2008.In 2009 they increased due to the emergency water.In 2010 the dollar amount dropped to $348,233.When they looked at the water produced, it also dropped in 2010. Vice Chairperson Dietz asked if those numbers include the rest of the year. District Director Frank Blanco stated these are January through August figures for 2008, 2009 and 2010. Vice Chairperson Dietz commented it is an equal comparison. District Director Frank Blanco stated they were spending more money for producing water in 2008.That was using Arizona Water and the groundwater system.In 2010 it dropped quite a bit.We also dropped in the dollar amount to produce the water, meaning they not only produced less water, but they produced it for a cheaper amount.The cost was $1.10 for a thousand gallons in 2008.In 2009 it was $1.23.In 2010 the average cost is 98 per thousand.We are able to optimize the system and produce water at a lower cost.The net income for 2010 is $661,863. Part of that money is being set aside for funded depreciation so that the district is able to repair lines and replace lines that need to be replaced. Mr. Eck asked if they are using a percentage for depreciation. District Finance Manager John White stated they use the cost of all the assets divided over the lifetime.In the:case of the water system, those assets are:spread out over the:years.The Mesa Interconnect, which cost about $2.8 million, -rounded to $3 million, over 30 years would be about $10,000 per year in depreciation They would take -that portion each month.Last year it was about $35,000 a month fOr depreciation.With the addition of the Mesa Interconnect, it will be about $40,000 a year including :the arsenic treatment. Mr. Eck stated they are putting thatin this depreciation fund for basically operations and maintenance. Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 3 of 9 District Finance Manager John White stated it is for capital replacement.As of June 30, 2010, they have $657,000 in the depreciation category.When they started this a couple of years ago, they were at $61,000 as of June 30, 2008.Last year on June 30 they were at $307,000.They keep building the funded depreciation.Our capital improvement program has some of that money being used for line replacement this upcoming year. Mr. Eck commented that is what he was wondering.They have that in one fund and capital improvements in another. District Finance Manager John White stated that is correct. This is for replacement of the existing infrastructure.We also have our capital facilities fees which are connection fees, but that is more for new enhancements, infrastructure or expansion. Vice Chairperson Dietz commented the connection fee should be added to the $3 million landfill fund. District Finance Manager John White stated they keep those separate.We do have two of them. Vice Chairperson Dietz commented they keep them separate. District Finance Manager John White stated that is correct. Mr. Eck apologized to Mr. Blanco for getting him away from what he was doing.He was just curious as to how the money was being handled. District Director Frank Blanco stated they are showing three fiscal years.The key point for depreciation is to not let the system fall apart so that they do not have surprises and have to spend a lot of money or borrow money to fix things.They are now putting money away to fix things instead of having to borrow when there is a crisis situation. Vice Chairperson Dietz commented there is a lot to fix. District Director Frank Blanco agreed but added they are getting there little by little.They have been running the interconnect for quite some time.They did have an outage related to Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 4 of 9 communication matters.The radio failed after the recent storm we had.They have replaced the radio and are sending the failed radio out to be repaired or replaced so that there is one on the shelf if it happens again.They have two radios, master and slave, and they will have back-ups for both.They were out for about a week -and -a -half because of this.With the radios available, they will be back up overnight.They are making progress on the design for the storage facility at Baseline. They had a meeting with the design consultant last Friday and they will be back in a week addressing the comments made at that meeting.They will move forward as quickly as possible for the request for proposal. District Engineer Giao Pham stated the consultants are also working on a city project for Central Arizona College.They are designing an upgraded water facility and extended water line. The road will not have to be torn up again when the college comes in.They will be saving costs by using their consultant and we will be paying the design cost and they will do the design for us. District Director Frank Blanco stated those are the water lines they talked about replacing with the depreciation fund.The intent is to start with the data system still in the works. They do intend to have that done this year.They met with the City of Mesa in August and there is some flexibility in the approach that Mesa is offering for the Central Arizona Project water treatment plant.One option is a Mesa -owned plant that the district would purchase into at a later date to make it co- owned.Another option is a modular plant design which enables them to purchase 1.1 million gallons per day capacity.That is the number we are looking at for an Apache Junction water plant versus a co -owned approach.Some initial work has been done on that.Mesa has gotten a pre -design report on the different types of processes they might be using for the water treatment. NCS has also begun looking at the cost analysis, comparing whether to use the Mesa option or Apache Junction Water as the sole proprietor of the water treatment plant.The initial outlay is coming in similar to an Apache Junction -owned water treatment plant.However, the operations and maintenance is not included in the preliminary analysis.He believes that will be the thing that makes the difference.He believes our operations Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 5 of 9 and maintenance costs will be lower then Mesa will have.The Apache Junction plant would have similar capacity and similar capital costs as Mesa.The big hurdle is we are still waiting on the federal land acquisition.The plant is in our 5 year capital improvement plan. Vice Chairperson Dietz commented they may be waiting on the federal land but the land is a given.We will be receiving that. District Director Frank Blanco stated the short answer is yes but they still have to work that through the Government Services Administration in terms on when it is purchased and when they acquire it. Vice Chairperson Dietz commented that should be getting done shortly. District Counsel Kay Bigelow stated it should be getting done. Unfortunately, they just have to wait for them to work through the process.We do know they are at the end of the process and it should end soon.However, they will still be coming to them to extend the agreement with Pinal County soon because it has a termination date in mid -December 2010 which is two meetings away.It is not anything Pinal County or the district has done, it is just moving the federal government process. DISTRICT TREASURER REPORT None. DISTRICT LEGAL COUNSEL REPORT District Counsel Kay Bigelow stated we did get another designation of assured water supply that is good until 2025. They also got an additional amount of water added to the designation.It is basically less than half of the Central Arizona Project water and some other things that were added to the designation. Vice Chairperson Dietz asked where we got the designation from. Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 6 of 9 District Counsel Kay Bigelow stated the Department of Water Resources has given us that designation.It is a certain amount of water that they deem to have a 100 year supply.It is 4,000 and some odd acre feet per year. District Director Frank Blanco stated the additional amount of water that they gave us is directly related to the 5 year capital improvement plan, including a water treatment plant. Prior to this, they were not counting any Central Arizona Project water. EXECUTIVE SESSION FOR DISCUSSION, DIRECTION, AND LEGAL ADVICE ON PROPOSED AGREEMENT FOR LEASE OF EXCESS CENTRAL ARIZONA PROJECT WATER FROM THE GILA RIVER INDIAN COMMUNITY/PROPOSED AGREEMENT WITH CENTRAL ARIZONA COLLEGE FOR ITS PARTICIPATION IN COST OF WATER LINE PLACEMENT called for a motion. )Chairperson Insalaco Mrs. Barker MOVED1 THAT AN EXECUTIVE SESSION BE HELD AT 6:00 P.M. ON TUESDAY, OCTOBER 19, 2010, IN THE CITY COUNCIL CONFERENCE ROOM FOR THE PURPOSE OF CONSULTATION FOR LEGAL ADVICE WITH THE DISTRICT'S ATTORNEY IN ACCORDANCE WITH A.R.S § 38-431.03(A)(3) AND (4) AND AS FURTHER OUTLINED ON THIS AGENDA. Vice -Chairperson Dietz SECONDED THE MOTION. VOTE:Unanimous. The _motion carried. Chairperson Insalaco adjourned the meeting to the city council conference room. Chairperson Insalaco reconvened the meeting. Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 7 of 9 ACTION ON PROPOSED 100 YEAR LEASE OF EXCESS CENTRAL ARIZONA PROJECT (CAP) WATER FROM THE GILA RIVER INDIAN COMMUNITY )Chairperson Insalaco called for a motion. Vice Chairperson Dietz MOVED THAT PROPOSED 100 YEAR LEASE OF EXCESS CENTRAL ARIZONA PROJECT (CAP) WATER FROM THE GILA RIVER INDIAN COMMUNITY (GRIC) AND THAT AUTHORIZATION BE GIVEN FOR THE DISTRICT CHAIR TO SIGN THE AGREEMENT SUBJECT TO FINAL APPROVAL AS TO FORM BY THE DISTRICT LEGAL COUNSEL BE APPROVED. Mr. Coleman SECONDED THE MOTION. VOTE:5-2 (Mr. Serdy and Mr. Wilson voted in opposition.) The motion carried. Mrs. Barker commented that was oneof the toughest decisions these :board members have had to -make in a. very longtime. PROPOSED AGREEMENT WITH CENTRAL ARIZONA COLLEGE FOR ITS PARTICIPATION IN COST.OF WATER LINE PLACEMENT Chairperson Insalaco called for a motion to postpone this item. Vice Chairperson Dietz movEa THAT PROPOSED AGREEMENT WITH CENTRAL ARIZONA COLLEGE (CAC) BE CONTINUED TO NOVEMBER 2, 2010. Mrs. Barker SECONDED THE MOTION. VOTE:Unanimous. The motion carried. Water Utilities Community Facilities District Meeting Minutes of October.19, 2010 Page 8 ,of 9 ADJOURNMENT ) Chairperson Insalaco adjourned the meeting at 6:58 p.m. ACCEPTED THIS 16TH DAY OF NOVEMBER , 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 16TH 2010. ATTEST: Kathleen Connelly District Clerk DAY OF NOVEMBER t o 4 L L " . " . .e-tr'__ ra.khn S. Insalaco 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 the regular meeting of the Water Utilities Community Facilities District of the City of Apache Junction, Arizona, held on the 19th day of October, 2010.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 29th day of October, 2010. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of October 19, 2010 Page 9 of 9