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HomeMy WebLinkAbout2014-04-01 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING APRIL 1, 2014 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on April 1, 2014 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 Barker Mrs. Evans Mrs. Rizzi Mr. Serdy Mr. Wilson Staff Present: Others Present: (Mr. Waldron was absent.) George Hoffman, District Manager Kathleen Connelly, District Clerk Frank Blanco, District Director Joel Stern, District Legal Counsel John White, District Finance Manager Michael Loggins, District Superintendent Donna Meinerts, District Treasurer Giao Pham, Utility Director Bryant Powell, Assistant City Manager Matt Busby, Assistant to the City Manager Eric McLaughlin, District Bond Counsel Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 1 of 9 APPROVAL OF MINUTES OF MARCH 18, 2014 ) Vice Chairperson Robin Barker MOVED THAT THE MINUTES OF MARCH 18, 2014, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION No. 2014-002, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), AUTHORIZING THE DISTRICT TREASURER TRANSFER DISTRICT MONEYS AND DISTRICT DEBT SERVICE FUNDS, IF ANY TO THE TRUSTEE OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) WATER REVENUE REFUNDING BONDS, SERIES 2004A TO BE USED TO PAY IN FULL THE OUTSTANDING 2004A BONDS; AUTHORIZING DISTRICT REPRESENTATIVES TO TAKE ACTION TO CAUSE THE RESTRUCTURE OF THE DISTRICT'S DEBT WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA; AND RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE DISTRICT AND OTHERS WITH RESPECT TO THE TRANSFER, PAYMENT IN FULL AND REDEMPTION OF THE BONDS BEING REDEEMED. ) District Finance Manager John White stated this was part of a financial package that involved the tribal water lease and the water treatment plant. He recognized Eric McLaughlin, a member of the Gust Rosenfeld law firm, as the water district's bond council and was present at the meeting.This package has been discussed at several Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 2 of 9 meetings and the strategy has been explained.He briefed the board on a list of concerns Greg Swartz had expressed.One concern was that, in the present condition, the bond issuers need to consent to new debt.The bond issuer reserves the right to require insurance or surety.Bond holders must consent to any indentured charges.Debt is bonded and documented as a public sale which brings in a wide range of security and tax laws.They conform to the issues with Water Infrastructure Funding Authority debt and debt must be overseen by a trustee. The best reason for this transaction is to make it easier and less expensive to borrow money with Water Infrastructure Funding Authority.There is an option to save $141,700 in interest the water district is bound to pay but if they retire it the interest payments go away and it is money they would not be able to recoup through alternate investments.This would have to be done now in order to achieve that potential three year savings. Staff recommends they adopt this resolution.This is something the City did with the Municipal Property Corporation debt as well. RESOLUTION No. 2014-002, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), AUTHORIZING THE DISTRICT TREASURER TRANSFER DISTRICT MONEYS AND DISTRICT DEBT SERVICE FUNDS, IF ANY TO THE TRUSTEE OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) WATER REVENUE REFUNDING BONDS, SERIES 2004A TO BE USED TO PAY IN FULL THE OUTSTANDING 2004A BONDS; AUTHORIZING DISTRICT REPRESENTATIVES TO TAKE ACTION TO CAUSE THE RESTRUCTURE OF THE DISTRICT'S DEBT WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA; AND RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE DISTRICT AND OTHERS WITH RESPECT TO THE TRANSFER, PAYMENT IN FULL AND Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 3 of 9 REDEMPTION OF THE BONDS BEING REDEEMED )Chairperson Insalaco called for a motion. Vice Chairperson Barker MOVED THAT RESOLUTION NO. 2014-002, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), AUTHORIZING THE DISTRICT TREASURER TO TRANSFER DISTRICT MONEYS AND DISTRICT DEBT SERVICE FUNDS, IF ANY, TO THE TRUSTEE FOR THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA),WATER REVENUE REFUNDING BONDS, SERIES 2004A TO BE USED TO PAY IN FULL THE OUTSTANDING 2004A BONDS; AUTHORIZING DISTRICT REPRESENTATIVES TO TAKE ACTION TO CAUSE THE RESTRUCTURE OF THE DISTRICT'S DEBT WITH THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA; AND RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE DISTRICT AND OTHERS WITH RESPECT TO THE TRANSFER, PAYMENT IN FULL AND REDEMPTIN OF THE BONDS BEING REDEEMED BE APPROVED. Mrs. Rizzi SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO. 2014-003, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES DISTRICT (APACHE JUNCTION, ARIZONA) FOR AUTHORIZATION TO EXERCISE THE DISTRICT'S OPTION UNDER THE GILA RIVER INDIAN COMMUNITY LEASE AGREEMENT TO ANNUALLY PURCHASE 1000 ACRE FEET OF CENTRAL ARIZONA PROJECT INDIAN PRIORITY WATER ) District Director Frank Blanco went over the schedule for the Water Infrastructure Finance Authority schedule funding.The Water Infrastructure Finance Authority board decision will be on April 30, 2014, the decision to approve the water district's project finance application.Following this there is an option notice by the Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 4 of 9 district manager due on or before June 30, 2014.The target date for that notice is June 26, 2014.Funding for the Gila River Indian Community lease and Central Arizona Project plant is scheduled before July 2014 and payment for Gila River Indian Community lease is due before July 30, 2014. The option notice by the district manager is hinged upon the board's approval of Resolution No. 2014-003.The funding for the Gila River Indian Community lease and Central Arizona Project plant is also dependent upon the Water Infrastructure Finance Authority board's approval on April 30, 2014.Ultimately, the payment for the Gila River Indian Community lease and moving forward with the project is dependent upon the previous items shown.He wanted to provide additional information on water in Arizona. There is a lot of information in the news about water issues such as shortages, conservation and rationing.The governor assigned a project to the Arizona Department of Water Resources recently.Over the past couple of years they have developed a document called Arizona's Next Century, A Strategic Vision for Water Sustainability.This was finalized in the first part of 2014.The entire document is several hundred pages long.There are five points that have surfaced as a result of the studies that were done on the water situation in Arizona.One point is there is not a statewide crisis.There is some local areas that need immediate attention.Apache Junction is one area that has limited groundwater availability.While the state as a whole is not currently facing an immediate crisis, Arizona is at a point where it must begin to face future water supply and management challenges.The water district is at a crossroads as to how to decide what action they need to take to face these challenges. Resolution No. 2014-003 is one of the actions they want to take to face these challenges.There is a growing imbalance between supply and demand within the next 25 years.The non -Indian agricultural water allocation was based on a supply and demand imbalance that was projected for the year 2020 in Apache Junction.This was the basis for the reallocation of some of that non -Indian agricultural water that was recommended by the Arizona Department of Water Resources.Over the next 25 to 100 years, Arizona will need to identify and develop additional water supplies to meet projected water demands.Since there is a lack of an immediate problem this could equal a risk of not investing in our future.The plant and the Gila River Indian Community lease equal the current improvement but also are an investment in our future.Success depends on how well the water Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 5 of 9 district manages existing water supplies and develops future supplies and infrastructure.The water district is working towards managing their existing and developing future water supplies by optimizing their existing Central Arizona Project allocation, conserving groundwater and seeking out additional supplies.Water supply importation will be required for some areas of the state to realize their full growth potential. Importation of additional resources is not something the water district is currently working on.It would be something like desalination or other things of that nature.They will be required for some of the areas within the state to realize full growth potential.A strategic vision for water supply is needed to guide economic stability through the next century. The water board shares this strategic vision.He displayed a picture of the water board chairman signing the lease agreement which was done back in 2011.He was trying to give the board members additional background information.It was his responsibility as water district director to provide them with enough information to make a choice that is going to affect everyone for the next 100 years.The lease option was purchased March 31, 2011.The lease option notice is due before June 30, 2014.The payment for the Gila River Indian Community water is due before July 30, 2014.It is 1,000 acre feet at a cost of about $3.2 million. Resolution No. 2014-003 is authorization for the water district to issue the lease option notice and exercise the Gila River Indian Community lease option.It provides the legal right to 1,000 acre feet of wet water per year for a 100 years.This meets the assured water supply requirement for physically, continuously and legally available water supply for 100 years. Vice Chairperson Barker thanked District Director Frank Blanco and his staff for giving the board members this type of overview over and over until they now understand what he is saying. Everything he is displaying is something the board members have heard, dissected and understand.They know they can make a decent decision at this point. Chairperson Insalaco called for a motion. Mrs. Evans MOVED THAT RESOLUTION NO. 2014-003, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 6 of 9 JUNCTION, ARIZONA)FOR AUTHORIZATION TO EXERCISE THE DISTRICT'S OPTION UNDER THE GILA RIVER INDIAN COMMUNITY LEASE AGREEMENT TO ANNUALLY PURCHASE 1,000 ACRE FEET OF CENTRAL ARIZONA PROJECT INDIAN PRIORITY WATER, BE APPROVED. Mrs. Rizzi SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISCUSSION ON POLICY AND PROCESS FOR DESIGNATING AN ACTING CHAIRPERSON. ) District Clerk Kathleen Connelly stated the city council which is the water board's counterpart has a provision in the city code that requires designation of an acting mayor who operates under the function of the mayor and vice mayor should they both be absent.They will be facing this situation this summer where both the chair and vice chair will be gone.The district manager would like to have somebody available on an ongoing basis should an emergency situation arise.It is on the agenda strictly for discussion and to make the board members aware of this situation. She was hoping to put it on the May 6, 2014 agenda for the board members to actually make a motion to designate someone in the event of an emergency. DISTRICT MANAGER REPORT None. DISTRICT DIRECTOR REPORT None. DISTRICT TREASURER REPORT District Finance Manager John White did a brief overview of the financial status for the month through February 28, 2014.They have about $2,068,000 through February 2014. This is about a 4% increase from last year which was about $1,987,000. It had been Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 7 of 9 6% last time he did a report which went through-December.The big reason for that was at the beginning of this year they were still enjoying the tail end of the prior year's rate increase even though they did not have a rate increase this year.Water sales are $1,450,000 so far this year.The base charges are the monthly meter charges just for having service.If customers were to quit accepting water and the water district quit delivering to the customers at all the water district would still receive $888,000 this year.It was $862,000 a year ago. Water district staff workers are trying to make sure the meters are reading more accurately and they are doing some more change out, $953,000 versus $874,000 a year. ADJOURNMENT ) Chairperson Insalaco adjourned the meeting at 6:25 p.m. ACCEPTED THIS &--71/DAY OF / n , 2014, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE!WATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS 2014. ATTEST: hleen Connelly District Clerk DAY OF 17 ( 4 L " L i lohn S. Insalaco L,/Chairperson Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 8 of 9 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 1st day of April, 2014.I further certify that the meeting was duly called and held and that a quorum was present. Dated:this 8th day of April, 2014. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of April 1, 2014 Page 9 of 9