Loading...
HomeMy WebLinkAbout2014-05-06 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING MAY 6, 2014 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on May 6, 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 Mr. Waldron Staff Present: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 Others Present:Bryant Powell, Assistant City Manager APPROVAL OF MINUTES OF APRIL 1, 2014 Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 1 of 11 ) Vice Chairperson Barker MOVED THAT THE MINUTES OF APRIL 1, 2014, BE APPROVED. Mrs. Evans SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISCUSSION ON PROPOSED DISTRICT BUDGET FOR FISCAL YEAR (FY) 2014-2015, INCLUDING PROPOSED RATES, FEES AND CHARGES APPLICABLE DURING FY 2014-2015; CLASSIFICATION AND COMPENSATION PLAN FOR DISTRICT EMPLOYEES; AND DISCUSSION ON DATE, TIME AND LOCATION FOR CONSIDERATION OF PROPOSED FINAL BUDGET. ) District Director Frank Blanco went over the 2014-2015 water district fiscal budget and highlighted what has been accomplished in the 2013-2014 year including the Baseline concrete storage tank and chlorination system, Baseline steel storage tank rehabilitation project and supervisory control and data acquisition system implementation. The water resource acquisition fee study is still in progress but he will be finalizing the report within the next week or so. When the water district meets for the final budget adoption they will have the adjusted rates if they change.The Water Infrastructure Funding Authority project finance application was approved which includes the Apache Junction Central Arizona Project water treatment plant project as well as the Gila River Indian Community Central Arizona Project water lease and the non -Indian agricultural Central Arizona Project water.Goals for 2014-2015 are to exercise the Central Arizona Project water lease option, Ironwood water line replacement, Old West water line loop, Apache Junction water treatment plant master plan and design and water treatment plant bid, well #6 maintenance and installation of a back-up generator, including booster station #2 and booster station #1 upgrade. District Finance Manager John White stated in the 2014-2015 budget the water district receives Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 2 of 11 $3 million, 1,000 acre feet annually, with a 100 year acquisition from the Gila River Indian Community.Also budgeted is the surface water treatment plant on the Central Arizona Project canal.To finance these projects the water district established a $9 million long-term financing package.He went over the water district budget revenue figures and fees handed out to the board members for review. Vice Chairperson Barker stated she noticed the water district decreased salaries in the proposed budget, cut out overtime but increased part time salaries. District Finance Manager John White stated the overtime was a payout of comp time for an individual who had a very large amount of vacation time due to accrual. It is a onetime payout.The water district has one part time staff member now.Their staffing level has decreased but they have added a part time individual. Mrs. Rizzi asked what is meant by a lifeline in the budget. District Finance Manager John White stated they have a three -tiered structure with three rates of consumption.The lowest is $3.88 per 1,000 gallons consumption.It is the same rate the water district had for all water consumption it inherited from Consolidated.The water district has not raised that rate in at least eight years since they have been increasing the rates.It is called a lifeline rate because it is the lowest rate they can give someone on a fixed income. The tier is 1 to 5,000 gallons.The next tier is 5,000 to 12,000 gallons and the last tier is 12,000 and above. All customers have the lifeline rate but only up to the first 5,000 gallons consumed, unless they have a fixed income. Mrs. Rizzi asked if the connection fee has to be paid in full up front or is there a payment plan available. District Finance Manager John White said they do not have a formal payment plan in place.The connection fees are usually paid up front. Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 3 of 11 Mrs. Evans asked why the hookup fees are different. District Finance Manager John White said a multifamily structure such as an apartment would be lower use because they would have typically a smaller lot. District Manager George Hoffman asked why the fee existed. District Finance Manager John White said it is in lieu of a development fee.Many cities with a water department will have a development fee and part of that fee is allocated for future development to the system to insulate the existing rate payers from the cost of the development.Even though it is not levied by the city it acts much like one. Mrs. Evans stated it appears it really does not matter if it is a 4,000 square foot home or a 2,000 square foot mobile home on a lot.One will have a higher fee than the other one does, but the same amount of work is performed for both. District Superintendent Michael Loggins stated they look at averages of 2.6 to 3.2 living in a household versus an apartment.They base it on more people living in a single dwelling household and less people living in each apartment unit at an apartment complex. Mrs. Evans asked if it was the water usage not the amount of equipment needed to install the hookup that determined the fee.If you are in a manufactured home you presumably could not have 4 or 5 bedrooms like you 'would in a single family home.It appears to be assumed there is going to be less people at a manufactured home residence than a single family home.That is a huge assumption. District Superintendent Michael Loggins stated the average manufactured home is smaller than a single family residence most of the time so they take the average of it. Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 4 of 11 Mrs. Evans asked if it matters if a mobile home is in a park or on a lot. District Superintendent Michael Loggins stated it does not matter.Most of the time a park is master -metered.If a mobile home is placed on a lot it is still assumed to be smaller than a single family residence and not have the same number of people living in it. Mrs. Evans stated it is a very bad assumption. District Manager George Hoffman asked if she was wanting to look at changing the development fees in the future. Mrs. Evans stated she would. District Manager George Hoffman said it takes infrastructure to provide water so they have to determine how to apportion the cost for infrastructure. They approximated cost based on utilization.According to their consultant there are different ways of apportioning those fees to get to more accuracy and equalization.When board members look at the development fee study Mrs. Evans can give direction regarding the fees. Mrs. Evans feels everyone should pay the same. District Finance Manager John White asked if they would want to raise the fees of one group to match the others or lower fees to match the group paying less. The recommendations from the consultants is what is called the maximum defensible fee.This means if they wanted to equalize everyone, they could use the maximum defensible amount for the mobile home and bring single family homes down to the maximum defensible fee with the mobile homes.When this fee was originally adopted it was based on the type out of concern there might be deliberate undersizing of meters because the meter size is a common form of measuring how the fees are assessed. Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 5 of 11 District Manager George Hoffman stated perhaps they could readdress this in the future and bring the consultant back.The consultant has some awareness of what Board Member Evans is talking about.They could bring the consultant back to a meeting and refine the issue this year with their study. District Finance Manager John White stated they would like to have the water district's final budget adoption coincide with the city final budget adoption on June 17, 2014. Chairperson Insalaco asked if the fees would change the budget. District Legal Counsel Joel Stern said no. District Finance Manager John White stated the water district has a little more leeway than the city.Their fees can go up or down. PUBLIC HEARING ON PROPOSED BUDGET AND RATE SCHEDULES FOR FY 2014- 2015 )Chairperson Insalaco opened the public hearing on the item.There being no one wishing to speak, he closed the public hearing and called for any further discussion.There being no further discussion, he closed the item.This was a public hearing with no action taken at this time. RESOLUTION NO. 2014-004, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) DECLARING AS PUBLIC RECORD AND ADOPTING CERTAIN DOCUMENTS FILED WITH THE DISTRICT CLERK ENTITLED "THE CLASSIFICATION PLAN FOR FISCAL YEAR 2014-2015" AND "THE COMPENSATION PLAN FOR FISCAL YEAR Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 6 of 11 2014-2015." )Chairperson Insalaco called for a motion. Vice Chairperson Barker MOVED THAT RESOLUTION NO. 2014-004, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), DECLARING AS A PUBLIC RECORD AND ADOPTING CERTAIN DOCUMENTS FILED WITH THE DISTRICT CLERK ENTITLED "THE CLASSIFICATION PLAN FOR FISCAL YEAR 2014-2015" AND "THE COMPENSATION PLAN FOR FISCAL YEAR 2014-2015", BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO. 2014-005, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION, ARIZONA), PURSUANT TO A.R.S. §48-716, ADOPTING A PROPOSED BUDGET FOR THE FISCAL YEAR BEGINNING JULY 01, 2014 AND ENDING ON JUNE 30, 2015; ESTABLISHING A PUBLIC HEARING ON THE PROPOSED BUDGET; AND DIRECTING DISTRICT STAFF TO SOLICIT COMMENTS FROM THE CITY OF APACHE JUNCTION ON THE PROPOSED ANNUAL BUDGET. for a motion. Chairperson Insalaco called Vice Chairperson Barker MOVED THAT RESOLUTION NO. 2014-005, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (APACHE JUNCTION, ARIZONA) PURSUANT TO A.R.S. §48-716, ADOPTING A PROPOSED BUDGET FOR THE FISCAL YEAR BEGINNING JULY 1, 2014 AND ENDING ON JUNE 30, 2015; ADOPTING PROPOSED RATES, FEES, DEPOSITS, WATER RESOURCE ACQUISITION FEES AND CHARGES APPLICABLE Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 7 of 11 FOR THE FISCAL YEAR BEGINNING JULY 01, 2014 AND ENDING ON JUNE 30, 2015; ESTABLISHING A PUBLIC HEARING ON THE PROPOSED BUDGET; AND DIRECTING DISTRICT STAFF TO SOLICIT COMMENTS FROM THE CITY OF APACHE JUNCTION ON THE PROPOSED ANNUAL BUDGET BE APPROVED; AND I FURTHER MOVE THE PUBLIC HEARING FOR FINAL BUDGET ADOPTION BE HELD ON JUNE 17, 2014 AT 6:00 P.M. IN THE APACHE JUNCTION CITY COUNCIL CHAMBERS, 300 EAST SUPERSTITION BOULEVARD, APACHE JUNCTION, ARIZONA. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DESIGNATION OF ACTING CHAIRPERSON TO SERVE IN THAT CAPACITY IN THE ABSENCE OF CHAIR AND VICE CHAIR ) ) Chairperson Insalaco called for a motion. Mr. Waldron MOVED THAT JEFF SERDY BE DESIGNATED AS ACTING CHAIRMAN BEGINNING MAY 6, 2014 AND ENDING WHEN THE CURRENT MAYORAL TERM ENDS. Vice Chairperson Barker SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DEBT SERVICE POLICY ) District Finance Manager John White explained the finance package with financial pictures. Vice Chairperson Barker asked if the water district was retiring the 2004 debt. District Finance Manager John White said yes. Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 8 of 11 Chairperson Insalaco closed the item with no further discussion.This was a discussion item only and he moved on to the next item. DISTRICT DIRECTOR REPORT District Director Frank Blanco gave the board members an update on the Water Infrastructure Funding Authority board meeting. Board members include the director of environmental quality, chief executive officer of commerce authority, state treasurer or representatives from these organizations; Director of Water Resources Lacey, chairman of the Arizona Corporation Commission and seven governor -appointed members representing various sizes of water systems as well as a tribal member.At the April 30, 2014 board meeting the board asked the water district one question about the Water Infrastructure Funding Authority proposed project.The board asked what the savings would be to the water district by having their own water treatment plant versus having the City of Mesa treat the Central Arizona Project water for the water district.The board was satisfied with the water district's answer and a motion was made by the Director of Water Resources Lacey.The loan is not to exceed $9,077,296. The good news is there is a forgivable principle amount of $1,000,000.The forgivable principle works in that the first $1,000,000 borrowed on the loan is actually forgiven up front. If the water district only borrows $7,000,000, for example, they still have a$1,000,000 forgivable principle.It is more or less like a grant.The reason for this is based on demographics and water rates.Having the higher rates is one of the reasons why the forgivable principle was awarded which is thought to help the water district control their rates.Financing of water rights is something the Water Infrastructure Funding Authority has not done in the past.The complete loan agreement is due May 16, 2014 and they should have a final draft done by May 9, 2014.The water authorization resolution is going to be scheduled for the June 3, 2014 meeting.Loan closing is scheduled for June 20, 2014 or as late as June 27, 2014. Payment for the Gila River Indian Community lease is due before July 30, 2014 at an amount of about $3,000,000.The Gila River Indian Community lease resolution authorizing the exercising of the lease has a lease option notice due before June 30, 2014 and payment is due on or before July 30, 2014.Water systems appear to be running normally. Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 9 of 11 DISTRICT MANAGER REPORT None. DISTRICT TREASURER REPORT District Finance Manager John White stated water district sales are up about $40,000.A lot of it is seasonal but single family residential homes compared this month and last month with last year at this time have gone up from 12.5 million gallons to 15.5 million gallons. ADJOURNMENT ) Chairperson Insalaco adjourned the meeting at 6:55 p.m. ACCEPTED THIS L'_.:)A7_10 DAY OF , 2014, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS &/1-40 DAY OF , 2014. n S. Ins aco hairperson ATTEST: Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 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 6th day of May, 2014.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 14th day of May, 2014. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of May 6, 2014 Page 11 of 11