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HomeMy WebLinkAbout2014-06-03 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING JUNE 3, 2014 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on June 3, 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 Mr. Serdy Mr. Wilson Mr. Waldron Staff Present: (Mrs. Rizzi 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 Others Present:Bryant Powell, Assistant City Manager APPROVAL OF MINUTES OF MAY 6, 2014 Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 1 of 8 ) Vice Chairperson Barker MOVED THAT THE MINUTES OF MAY 6, 2014, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISCUSSION OF AMENDMENTS TO THE DISTRICT'S OUTSTANDING WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA LOAN #920111-06 AND LOAN #920133-08 AND AUTHORIZATION OF THE LOAN AGREEMENT #920250-14. ) Sara Smith, bond counsel for Gust Rosenfeld law firm, showed a few slides with an overview of the water district's financing plan.The financing plan has three objectives.One objective is the district wants to payoff and restructure the district's current outstanding debt to provide for future debt on terms that are more efficient and more favorable to the district.The district also wants to restructure its old debt so it can terminate the indenture that was entered into by the district in 1997 and has been amended a couple of times.In order to terminate the indenture, they have to pay off all of the outstanding bonds which were issued under that indenture.The third objective is to borrow additional monies from the Water Infrastructure Finance Authority to finance some new projects.In April the district authorized Resolution No. 2014-002 which authorized the district to pay off the 2004A bonds on June 20, 2014.A couple of days ago the district technically paid off those bonds by transferring money from the district to the trustee.They will be redeemed by the trustee on July 1, 2014.There are three items the district wants to take care of: pay off the 2006A and 2008A bonds and enter into a new Water Infrastructure Finance Authority loan. Resolution No. 2014-007 authorizes the district to enter into two amendments to the original loan and bond purchase agreements that were entered into in 2006 and 2008.What these amendments do is amend the terms so that it transforms the loan and bond purchase agreement into a straight loan agreement with Water Infrastructure Finance Authority so that all of the same payment Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 2 of 8 terms and amounts will stay the same.Technically, what it does is the indenture and the bonds will be treated as being paid off in full as of June 20, 2014.This will.allow the trustee to release the indenture.All the bonds Will be gone as of June 20, 2014.The Water Infrastructure Finance Authority is agreeing to loan the district just over 9 million dollars with only about 8 million having to be paid back as long as the district follows all the covenants under the Water Infrastructure Finance Authority loan. The district will be able to exercise their hundred year lease option for the Central Arizona Project Indian priority agricultural water from the Gila River Indian Community.The water district will be able to acquire 817 acre feet of reallocated non -Indian agricultural Central Arizona Project water.The water district will also able to design and construct a 1.5 million gallon a day Central Arizona Project water treatment plant. Vice Chairperson Barker asked if they had already passed the resolutions to take care of this loan agreement. Ms. Sara Smith said the resolution that was adopted in April only dealt with the 2004A bonds.What that resolution also did was allow the water district to go forward and negotiate with the Water Infrastructure Finance Authority.With Resolution No. 2014-007, they are allowed to go forward and pay off the 2006A and 2008A bonds and enter into the new Water Infrastructure Finance Authority loan immediately. Vice Chairperson Barker stated the resolution number on the slides does not match the resolution number in her packet. Ms. Sara Smith stated she misunderstood what the resolution number would be and put the wrong number on the slide presentation. Vice Chairperson Barker asked what the life is of the loan. Ms. Sara Smith stated the life of the loan is 20 years and the payments are going to Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 3 of 8 annually be approximately $594,341 a year.The last payment will be in July of 2034.The final terms will be locked in on June 18, 2014.She will be back on June 19, 2014 to have the loan documents signed by the water district.The loan closes on the June 20, 2014. RESOLUTION NO. 2014-007, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), APPROVING AMENDMENTS FROM THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA RELATED TO THE DISTRICT'S OUTSTANDING WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA LOAN #920111-06 AND LOAN #920133-08; APPROVING LOAN AGREEMENT #920250-14 FROM THE WATER INFRASTRUCTURE FINANCE AUTHORITY OF ARIZONA TO FINANCE A WATER LEASE, ACQUISITION OF WATER RIGHTS AND A WATER TREATMENT FACILITY; AND AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION. )Chairperson Insalaco called for a motion. Vice Chairperson Barker MOVED THAT RESOLUTION NO. 2014-007, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISTRICT MANAGER REPORT Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 4 of 8 None. DISTRICT DIRECTOR REPORT District Director Frank Blanco talked about the consumer confidence report.Every year the water district is required to publish a consumer confidence report.The report includes information on the water quality they deliver to their customers.It includes information on the sampling, the results of the sampling and that the district has been in compliance with all of the requirements.The consumer confidence report will be coming out June of 2014.He addressed the Water Infrastructure Finance Authority loan debt funding sources and how the water district actually will pay for the loan. On May 29, 2014 a wire transfer of approximately $1.6 million was sent to Wells Fargo for the 2004A bonds.The water board authorization resolution will be voted on tonight and on June 19, 2014 the bond counsel will meet with the district authorized representatives for signatures.That is prior to the June 20, 2014 closing date.On June 20, 2014 the Water Infrastructure Finance Authority will close on the loan as soon as they receive the signatures and authorized resolution.Approximately June 26, 2014, the water district will issue a notice to the Gila River Indian Community notifying them of the water district's desire to exercise the lease option.The water district sent a letter to the Gila River Indian Community this past month notifying them of the water district's desire.On or before July 30, 2014 a $3.1 million payment will be due to the Gila River Indian Community.Then the water district will have Gila River Indian Community water.It is linked to water board authorization and also to the closing of the loan on June 20, 2014.The loan agreement the water district is entering into is funded only by the water district.The city is not responsible for paying any of the monies on the loan.A portion of the loan will be paid through water system connection fee revenues.The water resources will be paid for through the water resource requisition fee revenues and also through the economic agreement of shared tax revenues the water district has.The proposed fee structure for 2014-2015 includes a 2.8% increase which is based on the construction consumer price index.This coming year, 2014-2015, the water district has in the budget some money set aside for a rate study that will adjust the district's rates Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 5 of 8 once again.This will not be based on the index but on an actual study.At that time the district will look at different factors on how they establish water system connection fees.The current structure includes a single family unit cost of $4,050, a multifamily of $3,900 and a manufactured home/RV space of $3,820.When talking about a manufactured home/RV space, it is important to recognize this is for manufactured homes or RV's that are in parks.When looking at single family homes it includes manufactured homes located on a normal residential lot not in manufactured home parks.If a mobile home or modular united is installed or constructed on a residential lot then the hook-up fee or the system connection fee is applied as if it were a single family home.With the water district there are no new developments for manufactured homes.The last one was probably before the year 2000.The bottom line is the water district has not applied the manufactured home/RV space system connection fee.The water resource acquisition fees are used to fund the Central Arizona Project Gila River Indian Community lease water and also the Central Arizona Project Gila River non- Indian agricultural water.The report on this is being finalized, however, it does reflect a change from the district's current charge of $853. It is for an equivalent dwelling unit that has been determined by the district's consultant, TischlerBise, who is working on it.The current rate is $853 and the new proposed rate is $823 which is slightly less than the current rate.It is attributed to the Gila River Indian Community financing terms.The district also ended up with a smaller reallocation of Gila River Indian Community water than was anticipated which was included initially in last year's fees.The other portion is the non -Indian agricultural water was less than what they had applied for.The Gila River Indian Community financing terms is the other portion that attributed to the slight reduction in cost.An equivalent dwelling unit is a single family residence with a 3/4 -inch meter regardless of the type of construction.Larger meters have a higher equivalent dwelling unit fee. District Superintendent Michael Loggins gave a systems update. He stated the district had all their wells running at capacity now.The Signal Butte interconnect with Mesa is running great right now and no pumps are down.The SCADA system installed last year has helped the district with the efficiency of one of their wells run 99% of the time in low peak for Salt River Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 6 of 8 Project rates and no time of use there.The district hopes to get at a 100% use but they are at a 99% use now.The district is saving money based on the supervisory control and data acquisition system that helps the district do that.The system is running great right now and they are ready for the summer. DISTRICT TREASURER REPORT District Finance Manager John White gave some preliminary information since they are still crunching May's numbers.The residential revenues year-to-date are about $2.5 million contrasted with about $2.4 million a year ago.The water district's residential sales were up by about $100,000.Last month he reported the water sales were about 15 million gallons on the single family residential which was up substantially from last year and the previous month.This past month's sales were at 15.9 million gallons which is a slight increase over the previous month.Last year the water district single family residential sales were at about 14 million gallons so this was also an increase.It is not that much of an increase year to year as the district had last month which was about 15.5 million versus 12.5 million gallons but it still is a significant increase.The other residential sales categories dropped compared with the previous month and also year-to-date. ADJOURNMENT ) Chairperson Insalaco adjourned the meeting at 6:26 p.m. ACCEPTED THIS 0 71 DAY OF ‘E/AJE , 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 DAY OF JAie , S. InsIlaco lseliairperson Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 7 of 8 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 3rd day of June, 2014.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 5th day of June, 2014. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of June 3, 2014 Page 8 of 8