Loading...
HomeMy WebLinkAbout2012-12-18 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING December 18, 2012 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on December 18, 2012, 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. Barker Mrs. Evans Mr. Serdy (Arrived 6:10 p.m.) Mr. Wilson Staff Present:Kathleen Connelly, District Clerk Frank Blanco, District Director John White, District Finance Manager Joel Stern, District Legal Counsel Brad Huza, Water System Superintendent Donna Meinerts, District Finance Director Others Present:Bryant Powell, Assistant City Manager Hazel Randall, Administrative Assistant APPROVAL OF MINUTES OF OCTOBER 16, 2012 ) Vice Chairperson Dietz MOVED THAT THE MINUTES OF OCTOBER 16, 2012, BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 1 of 18 Mrs. Barker SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO. 2012-010, A RESOLUTION OF BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT APPROVING THE WATER STORAGE AGREEMENT BETWEEN CENTRAL ARIZONA WATER CONSERVATION DISTRICT AND THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT ) District Director Frank Blanco stated they are requesting approval of an agreement with Central Arizona Water Conservation District to store Central Arizona Project water at the recharge facility at Ocotillo and the Central Arizona Project canal and later recover it from their recovery wells to develop long term storage credits. Mrs. Barker MOVED THAT RESOLUTION NO. 2012-010, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) APPROVING THE TERMS AND CONDITIONS OF THE AGREEMENT BETWEEN CENTRAL ARIZONA WATER CONSERVATION DISTRICT ("CAWCD") AND WATER UTILITIES COMMUNITY FACILITIES DISTRICT ("WUCFD")(CITY OF APACHE JUNCTION,ARIZONA) FOR STORAGE OF WATER AT SUPERSTITION MOUNTAINS RECHARGE PROJECT AND AUTHORIZING BOARD CHAIR TO SIGN THE AGREEMENT SUBJECT TO FINAL APPROVAL AS TO FORM BY DISTRICT LEGAL COUNSEL BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO. 2012-011, A RESOLUTION OF THE BOARD OF Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 2 of 18 DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT WATER LEASE AGREEMENT BETWEEN THE GILA RIVER INDIAN COMMUNITY AND SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT AND WATER UTILITIES COMMUNITY FACILITIES DISTRICT ) District Director Frank Blanco stated the agreement has been reviewed by the Bureau of Reclamation and by the Gila River Indian Community. The Bureau of Reclamation has made all of their changes and agreed with the request for changing some of the major things such as the city being able to take over ownership of the Gila River Indian Community water should the water district become part of the city. Another item was for the agreement to become effective on the date they accept the lease agreement. They are all in agreement with the changes but the water district does not have a signed agreement in hand from Gila River Indian Community. It is the water district's recommendation to wait until Gila River Indian Community provides the signed agreement. District Legal Counsel Joel Stern stated the issue is whether they want to take the risk of going through this again and them coming back with some new changes.He felt there may be a possibility they are going to change some of the language.It is a remote possibility but it is possible.He feels it would be prudent to get their signature and then vote on it.Once they sign it, it would be very hard for them to re -track and make changes in the agreement.Once it is signed it should be a done deal. District Director Frank Blanco stated the earliest that Gila River Indian Community could sign it would be sometime in January and there could be a situation where they might say that the board needs to sign it first. District Legal Counsel Joel Stern stated it could happen.They might ask where the district signature is and want to see it first.If that is the case, then communication will be brought before the board stating they want to see the board's signatures first so that the board does not change anything. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 3 of 18 Vice Chairperson Dietz asked if they could have a special meeting to vote on it, sign it and get it over to Gila River Indian Community. District Legal Counsel Joel Stern stated they could do that if they would like. Mrs. Barker MOVED THAT RESOLUTION NO. 2012-011, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT BETWEEN GILA RIVER INDIAN COMMUNITY AND WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION,ARIZONA) BE CONTINUED UNTIL THEY RECEIVE THE SIGNED AGREEMENT. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. INTERGOVERNMENTAL AGREEMENT ("IGA") BETWEEN SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT NO.1 ("SMCFD") AND WATER UTILITIES COMMUNITY FACILITIES DISTRICT ("WUCFD")(CITY OF APACHE JUNCTION) FOR SALE OF LONG TERM STORAGE CREDITS ) District Director Frank Blanco stated they have been working on this agreement over the past year with the sewer district.Staff has sent drafts back and forth.The agreement has been reviewed by Kay Bigelow, their past legal counsel and Joel Stern, the current district legal counsel.All the key issues have been addressed.Staff is in agreement that they can move forward and have the agreement executed.They have received an e-mail communication from Mr. Grabek indicating there may be a risk that the sewer board would not be amenable to signing the agreement. Staff has done all the work they can do on the agreement on their level Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 4 of 18 and agree that it is a good agreement. This agreement is a 40 year term agreement.It helps for their assured water supply and saves them about $19,000 in the rates they are paying the sewer district because the rates become effective on the actual date Central Arizona Project rates become effective versus six months sooner. There were some benefits that were discussed and were presented at the last district meeting. Mrs. Barker asked what the drawback was for the sewer district. Assistant City Manager Bryant Powell asked how long has staff been working on the agreement. District Director Frank Blanco stated that they have been working on it for at least a year. Assistant City Manager Bryant Powell asked how many more years are there on the agreement. District Director Frank Blanco stated there are two years left. Assistant City Manager Bryant Powell stated for long term planning they should work together with the sewer district. He asked how many days ago they got the e-mail and what it said. District Director Frank Blanco stated they got the e-mail within the past week.In the e-mail Mr. Grabek expresses his concern that perhaps the sewer district would not be willing to sign the agreement at this time. They want to sign the agreement closer to the date that it expires. District Legal Counsel Joel Stern stated perhaps this matter could be continued to next month so that they can talk to Mr. Grabek and also Mr. Greger, the district counsel for the sewer board.He does not understand why they do not want to sign the agreement at this time.There was no explanation given to him and he did not talk to either one of them about it. He asked if anyone felt it would be a problem to continue it one more month. Assistant City Manager Bryant Powell stated it would not be a problem.He asked Frank Blanco if he had a chance to talk to the sewer district manager and if so what the conversation was. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 5 of 18 District Director Frank Blanco stated he talked to the sewer district manager on the phone who told him he had talked to the board members one on one, not as a quorum, about some of his issues.He felt there was some reluctance to move forward. Frank asked him if this is something they can take care of administratively through a letter with the understanding that they will continue the term of the agreement even though it may expire in 2015.He also told him they would charge them when it is appropriate versus six months ahead of time.Frank stated he does not have anything in writing from him and the sewer district manager has not agreed to this at this point.There could be an administrative solution that would be an interim thing but in terms of the agreement itself, there is no reason as to why the sewer board would not sign the agreement at this time. Mrs. Barker asked if there is a downside for the sewer district with this agreement. District Director Frank Blanco stated there is not a downside to this agreement and there could be something really positive for the sewer district in firming the relationship between the sewer district and the water district by agreeing to purchase the long term storage credits for at least another forty years.He does not know of any downside to this agreement and no downside was expressed to him. District Legal Counsel Joel Stern stated that he would contact Clarke Greger tomorrow by e-mail and try to find out any information he can. Mrs. Barker, MOVED THAT THE INTERGOVERNMENTAL AGREEMENT ("IGA") BETWEEN SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT NO. 1 ("SMCFD") AND WATER UTILITIES COMMUNITY FACILITIES DISTRICT ("WUCFD")(CITY OF APACHE JUNCTION) FOR SALE OF LONG TERM STORAGE CREDITS BE CONTINUED TO THE NEXT MEETING OF THE WATER BOARD. Vice Chairperson Dietz SECONDED THE MOTION. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 6 of 18 VOTE:Unanimous. The motion carried. DISCUSSION OF PROFESSIONAL SERVICES AGREEMENT FOR SYSTEM CONNECTION AND WATER RESOURCE ACQUISITION FEES BETWEEN TISCHLERBISE AND APACHE JUNCTION WATER UTILITIES COMMUNITY FACITITIES DISTRICT ) District Director Frank Blanco stated this is a professional service agreement to do a study on their system connection fees and water resource acquisition fee.They have the 2008 system connection fee study that was done by TischlerBise.This is the same firm.The scope of work is to update the study and include water resource acquisition fees.Prior to the original study in 2008 there had not been a rate adjustment.The study contained information that allowed the board to decide on a rate adjustment so with the board's approval they were able to raise the rates at that time. The recommendation after raising the rates was to look at it after five years including water resource acquisition fees. Water resource costs are currently absorbed by the water district rate payers.The current and future cost for Central Arizona Project water is absorbed by current rate payers.The cost for new wells, long term storage credits and the cost for recharge is currently being absorbed by current rate payers. Some of these components are related to sustainability which makes sense that our current rate payers would pay for them, but some are also tied into future growth.By having a water resource acquisition fee for future growth it would help growth pay for itself.Other cities in the valley have this fee in place.The water district does not currently have this fee. Mrs. Barker asked how it would be charged. District Director Frank Blanco stated the fee would be applied to new development. Assistant City Manager Bryant Powell stated they would be in the connection fees or water resource fees. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 7 of 18 District Legal Counsel Joel Stern stated that in Title 9 there is the development fee which does not apply to the district so their fees are not called development fees.It is a similar concept coincidently. Vice Chairperson Dietz stated it is a one time fee like the capital facilities fees they will be able to hold on to for future development and so forth. District Director Frank Blanco stated these fees are not so much for water infrastructure as they are for renewable supplies of Central Arizona Project water.The proposal of this agreement with TischlerBise is not to exceed $16,240.Additional meetings will be $2,800.Since it is below the $25,000 threshold limit the question did come up if it is an agreement that needs to be approved by the board and signed by the chairperson. District Legal Counsel Joel Stern stated it does not need to be signed by the chairman and can be signed by the district manager unless the chairperson wants something prepared for his signature. District Chairperson Insalaco stated he felt there was no need for his signature since it was under the $25,000 threshold. District Clerk Kathy Connelly asked what happens if there are enough of the $2,800 additional meetings to put them over the $25,000 threshold limit. District Director Frank Blanco stated it should not happen because the consultant has been approved by the city for a city development fee study.Some of the meetings they will be having will cover some of the concerns the water district may have as well as concerns the city may have.He does not envision them going above $25,000.The reason they are using TischlerBise is they are doing a city development fee study at the same time which should cause a little bit of savings.He stated the $16,240 fee includes one or two meetings.The $2,800 would be for additional meetings if required. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 8 of 18 District Chairperson Insalaco asked if the $2,800 for an additional meeting would be counted towards the $25,000. District Director Frank Blanco stated it would be counted towards the $25,000 but he does not see a reason for additional meetings. DISTRICT MANAGER REPORT None. DISTRICT DIRECTOR REPORT District Director Frank Blanco stated he will be giving a water system update and talk about an agreement that they have an option to enter into with Salt River Project and some of the other cities in the East Valley that addresses some regional options for water resources in the East Valley.He will talk about Arizona Department of Water Resources groundwater fees, Central Arizona Project non -Indian agricultural water and Arizona Department of Water Resources assured water supply connected to that. Well 5 is providing 28% of the total demands.Well 6 is at 13% of the total demands and their Mesa interconnect is currently serving 67% of the 1.4 million gallons per day average demand. This is calculated from January 1st through December 16th of 2012.Mr. Brad Huza will give an update on Well 8. Water System Superintendent Brad Huza stated they have been working with a consultant, Southwest Groundwater Consultants, to identify the problem as to why Well 8 quit functioning and also to come up a tentative plan to try to put in back on line.The reason it started nonfunctioning was because the screen had a lot of calcium carbonate in it.They tried to scrub it but it did not get it off because the screen is located in two different aquifers.It is located in the upper aquifer and the bedrock aquifer. The water chemistry mixing causes the calcium carbonate to start precipitating out and start to plug the screens.The only practical way to clean it out is through an acid wash.There are a number of well rehab companies in the valley that do this acid wash.This is good news but the bad Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 9 of 18 news is that it will cost $45,000 to $50,000 to take care of it. It is going to cause some operational changes if they decide to use Well 8 as a reproduction well or a recharge well once it is repaired.It is going to have to be used on a continual basis so as not to let the water go stagnant and be able to precipitate out.They looked at whether they could plug off one of the aquifers and only use one or the other.They could but that would diminish the yield or the capabilities of recharge so drastically it is not cost effective to do it.They really need all the screening capabilities which Well 8 has right now.They will try to put a bid together to firm up the cost of well repair but the cost of $45,000 is the estimate their consultant came up with. Mr. Serdy asked if this was something only Beeman can do or if there were other specialists that could take care of the problem. Water System Superintendent Brad Huza stated there are a handful of companies that can do this.Weber Company, Layne Christensen Company and two or three others can do this wash. Mr. Serdy asked how big the area is that needs to be acid washed. Water System Superintendent Brad Huza stated there is 300 feet of screen.The calcium carbonate is throughout the screen and there are no open areas in the screen.When it was drilled there was no level specific water chemistry run on it. Vice Chairperson Dietz asked if this happened from lack of use. Water System Superintendent Brad Huza stated if the water stands stagnant, then they mix the chemistry, it will precipitate out. This is why if they acid wash it they will need to put it back in production to keep this problem from happening again.This will not be hard to do. Mr. Serdy asked what the cost is to do a whole new well. Water System Superintendent Brad Huza stated he would have to do some research on that but felt it would cost in excess of Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 10 of 18 $500,000 plus to drill a new one.There has been $700,000 put into Well 8 already. If they do decide to drill a new one, they may want to do a well siting study to find a site more conducive from a water quality standpoint because Well 8 has higher arsenic levels.The well produces about 250 gallons per minute. Chairperson Insalaco asked what does Well 5 produce compared to Well 8. District Director Frank Blanco stated Well 5 brings in about 600 gallons a minute. Vice Chairperson Dietz asked if they could pour water down into Well 8 and just use it for recharge water for recharge credits. Water System Superintendent Brad Huza stated that could be done on a regular basis with little or no impact on water production schedules. Vice Chairperson Dietz stated they would not have to worry about cleaning the screens or filters. Mrs. Barker asked if they would still have to clean them. Water System Superintendent Brad Huza stated anytime they have a rechargeable they have to bring water back out to make sure they keep the screens operational.He has talked to the sewer district and they will let him hook up with them to clean the screens. Vice Chairperson Dietz asked if they could drill for new groundwater with the lease agreements they have. District Director Frank Blanco stated they could. Vice Chairperson Dietz asked if there are some sites south of the city that look positive for groundwater. District Director Frank Blanco stated there was a siting study done before he was part of the district.Those locations were south of Baseline.Nothing was done in terms of drilling some pilot holes to see exactly what the aquifer was like.Future Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 11 of 18 analyses would have to been done before drilling.Salt River Project is interested in doing some of the analyses to determine where that groundwater is available and what the good sites might be for future wells. Vice Chairperson Dietz stated he felt there needs to be some kind of back up program just in case anything happened to Central Arizona Project water or anything like that. Chairperson Insalaco asked how long they could let Well 8 be in the condition it is in. Water System Superintendent Brad Huza stated he reviewed videos of the well from 2008 and 2009.There was definitely some degradation that occurred.He estimates the longest they could let it go in the condition it is in would be about 18 months and still be able to do a scrubbing and acid wash to get it where it needs to be. Chairperson Insalaco stated he was wondering if the $45,000 was worth it to save it.He mentioned they already have $700,000 into Well 8.If they could spend $45,000 to save it versus $700,000, it does not seem that much to him. District Director Frank Blanco stated they did budget $50,000 this year for the project, so there is money for the project if they decide to do it. Vice Chairperson Dietz asked how much of a benefit it is to the district to use it for recharge. District Director Frank Blanco stated that is what they would like to use it for as a pilot.They still have to clean it out regardless of what they use it for.They will not have a clear answer on how they can use it until they try to clean it out and bring it back to where they could pump some water out and also inject some water into it to the capacity they need for recharge. Vice Chairperson Dietz asked if they would still be able to draw water from it with it cleaned out. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 12 of 18 District Director Frank Blanco stated they would be able to do that but the water would still have to be blended because it is above the maximum contaminant level for arsenic. Assistant City Manager Bryant Powell asked Frank Blanco if his thinking was to bring this for discussion only as part of his report and at some point bring it back. District Director Frank Blanco stated this was for discussion only and at some point they would bring it for project approval once they get some additional numbers.The water system booster stations interconnect needed a minor modification to bring in some Central Arizona Project water treated by the City of Mesa. They used their pressure, basically, to fill their Baseline tank.They avoided the cost of running the pumps at the interconnect because there is enough pressure in the Mesa system to fill Baseline. They would typically only use the pumps to fill the Buena Vista site.This modification cost less than $10,000 and staff can do the work so the cost would be for the material.They are using the Baseline tank and the new tank for storage.They have full capacity of 2 million gallons and 4 million gallons for the entire system.They no longer have to worry about having enough water stored, but they need to make sure they turn the water over so it stays fresh. Vice Chairperson Dietz asked how soon could they get the other tank at Baseline ready for repair. District Director Frank Blanco stated there is still additional work at the new tank for a level sensor and some electrical work being done there.They can sense the level of the water by looking at the old tank to estimate the level until the sensor is fixed.He hopes to have the tank completely operational by March and a chlorination system installed at the Baseline facility. Vice Chairperson Dietz asked if they would shut down the other tank to do repairs on it once the new tank was fully operational. District Director Frank Blanco said they would do repairs at that time.They did have a break in the distribution system Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 13 of 18 north of Broadway and Ironwood.They discovered a couple of PVC lines running in parallel which should have been copper that had a break.The draft agreement they have been discussing for review is not an agreement that requires action from the board. It is an agreement between the parties to agree to look at regional opportunities for providing water to the East Valley which includes Apache Junction, Queen Creek, Roosevelt Water Conservation District area and Arizona Water.They are being spearheaded by Dave Roberts of Salt River Project.There are some opportunities for water exchanges, building a pipeline corridor to move water back and forth between where it currently is which might be west of them in the Roosevelt Conservation District area.They are looking at raw water supply redundancy. There is quite a bit of infill area just west of Ironwood that used to be an agricultural area.There is a Roosevelt Water Conservation District canal in this area that brings water north that is Salt River Project water that connects to their eastern canal located approximately at McKellips and the 101.Not only does Salt River Project water run into this canal but also ground water.The canal is also connected to the Central Arizona Project so there is also Central Arizona Project water in this canal system.When they look at raw water system redundancy there could be a potential for a corridor along Guadalupe Road that could bring a pipeline to augment or supply the water treatment plant if there are some issues with the Central Arizona Project Canal such as a shortage or if the canal is down.There are a lot of opportunities with the cities,the other private water company and Salt River Project working together to look at future planning on what they might be able to do in terms of addressing their water issues.One opportunity is to exchange Salt River Project water for Central Arizona Project water. There is also an opportunity to build a dual pipeline where some of the effluent could be brought over for exchange. District Legal Counsel Joel Stern stated part of why this effort is happening is because in 2010 House Bill 2661 was passed which created the Water Resources Development Commission. The state said they wanted to create this commission of 15 members. The point of this law was to discuss what Arizona demands were for water for the next 25, 50 and 100, years and what water supplies were available throughout the state. Legislative recommendations Water Utilities Community Facilities District • Meeting Minutes of December 18, 2012 Page 14 of 18 were made on how to change the law to help out local communities to address the water needs.This is where some of the cooperative activity is coming from.There is actually some statutory authority that started the whole effort.There was a commission supplemental report that came out on September 27, 2012. He stated he could give the board a copy if they would like one. It was directed in the 2010 law to have been issued by September 30, 2012, so they made it by 3 days. District Director Frank Blanco stated the Arizona Department of Water Resources groundwater withdrawal fee is $3 per acre foot, which was $2.75 in 2005. The long term storage credit recovery fee is $1 and has not changed in many years.There is a minimal impact on the cost to produce water.The major cost is in energy, chemicals and raw water. The replenishment cost for raw water that they pump out of the ground is $437 per acre foot. In 2014, it will be $492 per acre foot. For every acre foot of groundwater that is pumped it needs to be replenished at that cost.In 2005, it was only $188 so it has more than doubled in 10 years. It will continue increasing.Pumped groundwater is water that is not recovered as a long term storage credit. It is not Central Arizona Project water that was recharged or effluent that was recharged that is now considered effluent or Central Arizona Project water in the form of a long term storage credit. If it is not being recovered as a long term storage credit it is pumped underground and costs $437 per acre foot to replenish. Non -Indian agricultural priority water has a reallocation process that is going on.It is going to be a complicated process.Arizona Department of Water Resources is responsible for this process.This water was developed from water that was given up by non -Indian agricultural users.There was some Central Arizona Project water that was allocated to non -Indian agricultural users. The water became very expensive for the non- Indian agricultural users to use so they chose to give it up. They decided to use groundwater they could pump out of the ground themselves which cost them less than $10 per acre foot. Arizona Department of Water Resources is responsible for the reallocation process. Their goals are to use this water to reduce ground water overdraft, use it for areas of limited physical availability and to meet current and future demands. There was an Arizona Department of Water Resources public comment letter that was due in November. He wrote in the comment Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 15 of 18 letter three key points which are that Arizona Department of Water Resources should help with the Apache Junction groundwater availability problem, that one of the charges was unjustified and that Non -Indian Agricultural should help serve state lands. The state lands being master planned in the Portalis area have some Central Arizona Project water that has been assigned or designated for Apache Junction state land. It is not enough water to cover the entire development and state land is saying it is not on the table for this development.The total amount of water is 96,295 acre feet and 51,000 of that is for municipal and industrial users within the Central Arizona Project service area.The Central Arizona Project service area is Maricopa County, Pinal County and Pima County.It is lower priority water and only about 70% of the water will be available. An average amount of 64,000 acre feet of water will be available annually.That will be reduced to 58,000 acre feet by 2030. That is the total amount'of water, not the municipal and industrial portion.The municipal and industrial portion will be reduced accordingly by 70%. Potential uses for this water are direct delivery, recharge for long term storage credits or recovered Central Arizona Project water.Since it is low priority there is an issue because at certain times the water will be partially available or not available so it is not something they can rely on, but it could supplement their current water portfolio.The application for this water is due February 18, 2013.The cost is comprised of three components: the debt component, which is the amount that is required by the farmers that gave up the water to pay back Central Arizona Project for constructing the canal system; the $899 which is the back capital charges component and the third one is $1,000 for supply availability charge.He did not feel it was right for them to charge supply availability when it is not always going to be available.The initial estimate is about 2,288 per acre foot of water and so if they add 30% to that since it is only available 70% of the time it is close to $3,000 per acre foot which is the Gila River Indian Community amount.Groundwater allowance was determined in 1995 and calculated based on the groundwater that was being pumped in 1994.At that time it was Consolidated Water.The groundwater allowance was based on what they were pumping around 7,365 acre feet.That allowance is groundwater that could be pumped over 100 years, 10 years, 5 years or whatever but once that water is used up there is no Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 16 of 18 more allowance for groundwater.This is groundwater the state allows them to pump and at some point they will need to get renewable supplies.There is a 3 year free option. Consolidated wrote a letter requesting it, however it was overlooked by Arizona Department of Water Resources.For the first 3 years that this was implemented in 1995, they could continue pumping groundwater in and it would not count against their groundwater allowance. Since it was overlooked by Arizona Department of Water Resources for the first few years they continued deducting the groundwater allowance if they did not have the three years for free.This caused the 2009 balance to be 510 acre feet.After an adjustment was made the 2009 balance went up to 3,127 acre feet.The net effect is that it reinstated 2,617 acre feet of groundwater allowance.This is an error Arizona Department of Water Resources made. There was a project where they had to go through all their data bases to get one accurate data base.In doing so they discovered this error. What this means in terms of money is the value of the 2,617 acre feet of groundwater allowance at $437 per acre times 2,617 is about 1.1 million dollars.There is a lot of value to that in terms of Arizona Department of Water Resources discovering the error and giving them back the credit.The cost avoidance value increases over time. In 2017-2018, Central Arizona Groundwater Replenishment District tax will be at $633 per acre foot.So that would make that 1.1 million cost avoidance of replenishing even higher than that. DISTRICT TREASURER REPORT None. ADJOURNMENT adjourned the meeting at 6:56 p.m. ACCEPTED THIS ) Chairperson Insalaco DAY OF , 2013, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS DAY OF 2013. Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 17 of 18 n S. Insaraco hairperson ATTEST: Kathleen Connelly District Clerk 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 December, 2012.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 8th day of January, 2013. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of December 18, 2012 Page 18 of 18