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HomeMy WebLinkAbout2013-03-16 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING March 19, 2013 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on March 19, 2013, 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. Waldron Mr. Wilson Staff Present: (Mr. Serdy was not present) George Hoffman, District Manager Kathleen Connelly, District Clerk Frank Blanco, District Director Joel Stern, District Legal Counsel Brad Huza, Water System Superintendent Giao Pham, District Engineer John White, District Treasurer Others Present:Bryant Powell, Assistant City Manager Hazel Randall, Administrative Assistant APPROVAL OF MINUTES OF JANUARY 15, 2013 Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 1 of 10 ) Vice Chairperson Dietz MOVED THAT THE MINUTES OF JANUARY 15, 2013, BE APPROVED. Mrs. Barker SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION No. 2012-011, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), AUTHORIZING THE EXECUTION OF THE WATER LEASE AGREEMENT BETWEEN THE GILA RIVER INDIAN COMMUNITY AND WATER UTILITIES FACILITIES DISTRICT ) ) District Director Frank Blanco stated they are requesting approval of Resolution No. 2012-011.This resolution is tied into the approval of the changes to the Gila River Indian Community agreement.The bureau of reclamation had some changes they wanted to make to the agreement so they are asking for the changes be approved. Some of changes favor the water district in terms of some of the issues that were in the original agreement.This allows for the right to use lease water for any purpose consistent with Arizona law including ground water recharge.The original agreement did not specify they could use it for ground water recharge.The lease begins on the lease effective date for this revision.The original contract specified it would begin and be effective the option effective date.There is a difference of almost three years between those two dates. Vice Chairperson Dietz stated this would allow them to use Well 8 if they desired to recharge ground water credits.He asked if they could use their Central Arizona Project water to do that. District Director Frank Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 2 of 10 Blanco stated it would allow them to do that at Well 8 or any other recharge facility that is approved by the state. Another change is a clause that now allows a lessee to assign their interest to the successor.Essentially, if the water district was to go away someday and the city had the water utility then, the lease would transfer over to the city.This was not in the original agreement.This is the most important change on the agreement.The Gila River Indian Community and Water Utilities Community Facilities District can renegotiate the agreement at any time during this term.The positive thing about this is they can renegotiate before it expires. 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) APPROVING THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT BETWEEN GILA RIVER INDIAN COMMUNITY ("GRIC") AND WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) AND AUTHORIZING BOARD CHAIR TO SIGN THE AGREEMENT SUBJECT TO FINAL APPROVAL AS TO FORM BY DISTRICT LEGAL COUNSEL BE APPROVED. Vice Chairperson Dietz SECONDED THE MOTION. VOTE: Unanimous. The motion carried. DISCUSSION AND CONSIDERATION OF AGREEMENT FOR CONSTRUCTION OF SUPERVISORY CONTROL AND DATA ACQUISITION SYSTEM BETWEEN APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT AND KELLER ELECTRICAL INDUSTRIES, INC. ) District Director Frank Blanco stated they received four bids.The lowest bid was for $153,242.This was the base bid plus the alternate.They included an alternate in case bids came in too high for them to move forward on the project.The base bid included the two water reservoir storage facilities and the booster stations. The alternate includes the wells as well as the interconnect. Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 3 of 10 The alternate includes a complete supervisory control and data acquisition system versus just phasing it in by starting off with just the reservoirs at Baseline and Buena Vista.They feel they have received some good bids.The high bid including the alternate, was $292,895 and the medium was $191,502.60.They are requesting the water district award the contract to Keller Electric Industries for a bid in the amount of $153,242, plus 15% for unforeseen change orders.The total would be a $176,228.30. -Vice Chairperson Dietz MOVED THAT THE AGREEMENT BETWEEN APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT AND KELLER ELECTRICAL INDUSTRIES, INC. FOR CONSTRUCTION OF SUPERVISORY CONTROL AND DATA ACQUISITION SYSTEM BE APPROVED. Mr. Dave Waldron SECONDED THE MOTION. VOTE: Unanimous. The motion carried. DISTRICT MANAGER REPORT None. DISTRICT DIRECTOR REPORT District Director Frank Blanco stated there has been action on the long term storage credits intergovernmental agreement between the Superstition Mountains Community Facilities District No. 1 and Apache Junction Water Utilities Community Facilities District on the part of the sewer district.The sewer district has tabled it.The intergovernmental agreement would allow the water district to buy long term storage credits.The sewer district was to sell the credits to the water district.It would allow the water district to purchase additional excess credits that the sewer district could develop.The current agreement expires on December 31, 2015.In the new agreement the term is for forty years.It would expire December 31, 2050. They are concerned about getting the new agreement in place. Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 4 of 10 Although 2015 is still a ways off, it is still something they feel is pressing to some degree.The sewer district manager is reviewing costs.He would like action to take place a little bit closer to the expiration date.This information came from the minutes of the sewer district meeting provided by the city attorney.The water district board options could also include tabling and waiting until they are a little bit closer to the expiration date or they could direct staff to move forward with the intergovernmental agreement and come back with a resolution for the board to approve the intergovernmental agreement as they had agreed to in the preliminary versions of it. District Legal Counsel Joel Stern stated he went to the sewer board meeting and was shocked to hear they wanted to table it because of the cost.They really did not know what the cost was and wanted to analyze that.They wanted to look into it because they thought maybe the cost should be more in line with the Central Arizona Project cost.They did not have a handle on what it should be and so they wanted to look at it.He felt maybe they wanted to get closer to the expiration date to get a more realistic cost in their mind or a more current cost as they get closer.He felt they had a legitimate reason to talk about cost. Chairperson John Insalaco asked if they have to wait until real close to expiration date or can they plan something for the beginning of next year. District Legal Counsel Joel Stern stated the water board could meet with Mr. Grabek and find out where he is going with it and what they are doing with the cost.They could ask who they are meeting with and how they are coming up with the costs.He stated he could meet with their attorney and have a meeting with District Manager George Hoffman or District Director Frank Blanco, to find out what they want to do.He does not know how long it will take but they could set it up. District Manager George Hoffman stated he thought the sewer district had already told them what they wanted.They want the city council to give them zoning. Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 5 of 10 District Legal Counsel Joel Stern stated it did not come up at the sewer district meeting. District Manager George Hoffman stated the sewer district told them what they wanted and that time is a negotiating advantage to the party that feels they are pressured by time.The party that does not really care what happens has a negotiating advantage, especially if you tell them that. Mrs. Barker asked what happens if this expires and they do not get it. District Director Frank Blanco stated there are some options he has been looking into with Brad Huza and staff.One is something called a water exchange.They are currently talking to a representative from Red Mountain Golf Course about exchanging some of the water district's Central Arizona Project water for some of the water Red Mountain Golf Course has rights to through a type 2 ground water right.The way that an exchange works would not necessarily be a substitute for the long term storage credits which are affluent.They should also try to keep these credits if they can.This is another option that is out there.They are already beginning to explore.They could enter an exchange agreement with Red Mountain Golf Course that would allow the district to exchange some of their Central Arizona Project water for some of the water they have rights to under type 2 groundwater rights by applying through Arizona Water Resources and getting approval.The golf course takes water out of the Central Arizona Project Canal.It is counted as groundwater.The water district pumps their wells and that is counted as Central Arizona Project water.It is an exchange and it is all handled through Department of Water Resources. There is an application process to go through.They have to show they are not pumping any additional groundwater then they are already pumping.Five hundred acre feet is right in line with how much groundwater they normally pump on a regular basis annually.He stated he would like to come back to the board with some additional information and get the board's approval to go forward with this.It expands their water portfolio. Arizona Department of Water Resources is currently looking at re -allocating some non -Indian agricultural use water.It is Central Arizona Project water the farmers turned back into Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 6 of 10 Central Arizona Project because the water was too expensive to use.They could not afford to spend $100-$120 acre foot for water when they could pump it for much cheaper than that. Rather than pay for the Central Arizona Project Canal, capital cost and other taxes involved, they turned the water back in to Central Arizona Project.Now it is up to Arizona Department of Resources to re -allocate the water.This water is a possibility for the water district to use as well.There may be a possibility they could tie non -Indian agricultural water into an exchange and be able to provide some Central Arizona Project water to the golf course. Assistant City Manager Bryant Powell asked District Director Frank Blanco to explain how much of an expenditure that was for the water district a year and much it was in revenue for the sewer district. District Treasurer John White stated he does not remember but he believes it is probably in the area of $150,000 to $200,000 that they pay for the long term storage credits.He said he would get back to them with a more precise figure. Mrs. Barker asked how it compares to the other methodologies that they are looking at. District Director Frank Blanco stated they are very early in the process now but it could be something as simple as having the Red Mountain Golf Course either pay for 50% of the Central Arizona Project water and the water district pay the other 50%. They would withdraw their water from the wells and it would be counted 100% of Central Arizona Project water even though, they are paying for half and Red Mountain Golf Course was paying the other half.It could be something simple or something a little bit more complicated in which they might be able to leverage a better bargain which could put the water district in a better position.It could potentially help them finance some additional Central Arizona Water such as the non -Indian agricultural water. Mrs. Barker stated they are not in a corner.She felt they should look at all these other options.Then, if the sewer board comes back and decides to do the agreement, they could Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 7 of 10 decide then.She did not see the urgency to make a decision now. District Director Frank Blanco stated if they look at when the original agreement was entered into with the sewer district they did not have the ability to deliver some Central Arizona Project water.They did not have the Mesa agreement or inter -connect. Things are much different now and they are looking at other potential resources as well.They are not in the same situation they were in 10 years ago. Mrs. Barker stated they should continue to explore their options. Assistant City Manager Bryant Powell asked if it was the case that they could sell the affluent at a different rate.He stated he is a current sewer district customer and a current water district customer.If the expenditures can go down for the water district and the sewer district can get more money elsewhere, it could be a win -win if there truly is a market out there.He asked if they know if there is a market out there. District Director Frank Blanco stated it has not happened yet. At one time there was excess Central Arizona Project water and people were able to use excess Central Arizona Project water directly.As of 2014, there is no more excess Central Arizona Project water.There could be a market for long term storage credits.It could be the sewer district could get more money for the credits than what the water district is paying for them currently. Vice Chairperson Dietz asked if it possible Arizona Water Company might be interested in purchasing long term storage credits from the sewer district. District Director Frank Blanco stated Arizona Water does not have to necessarily replenish the groundwater that they pump, because when they build a subdivision, the homeowners association and the homeowners are responsible for replenishing the water that is delivered to the owners.They are in a little bit different situation than the water district is.Arizona Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 8 of 10 Water does not have any long term storage credits right now.It is hard to tell what they may have in mind later. In 2012 the water district ordered 1,146 acre feet of Central Arizona Project water and actually used 1,149 acre feet.There was a very small difference there of 0.25%, which is good.This is important because when they order the water they either take it or pay for it.So in this instance they took a little more than they ordered which is where they want to be.Lost and unaccounted water is something Arizona Department of Water Resources regulates so they want water providers to be able to account for all of the water that they deliver.Every year the Arizona Department of Water Resources requires an annual report from all water providers and takes the information provided them to see how much water was treated, either pumped out of a well, or used from the interconnect or any other resource.They also look at how much water was actually used and delivered.The two numbers are evaluated to make sure they are accounting for all the water they are pumping out of the ground or that they treat. The three year average for 2007-2009 is at 12.32%, 2008-2010 is 9.5%, 2009-2011 is 8.43%.Annually the rate in 2009 was 9.01%, 2010 at 8.19% and 2011 at 8.14%.Ten percent is what is required by the Arizona Department of Water Resources.They need to be at or below 10%.In 2009 the three year average was actually higher than 10% but the annual was at 9%.They have been getting better at this with the three year average for 2011 at 8.43% and the annual 8.14%.April is water awareness month and this will be on the marquee on Apache Trail.There is a whole list of water events throughout the state.They do not have anything in the city planned yet.He mentioned providing a meter reading session for those who want to learn how to read their water meter.He is not sure how many hours this would take away from their staff, but thought it would be relatively easy. DISTRICT TREASURER REPORT None. ADJOURNMENT Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 9 of 10 ) Chairperson Insalaco adjourned the meeting at 6:28 p.m. ACCEPTED THIS 7TH DAY OF MAY , 2013, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS 7TH 2013. ATTEST: 24 Kathleen Connelly District Clerk DAY OF hairperson MAY 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 March, 2013.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 2nd day of April, 2013. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of March 19, 2013 Page 10 of 10