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HomeMy WebLinkAbout2015-04-21 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING APRIL 21, 2015 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on April 21, 2015 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) Frank Blanco, District Director Joel Stern, District Legal Counsel John White, District Finance Manager Kathleen Connelly, District Clerk Bryant Powell, Assistant District Manager Donna Meinerts, District Treasurer Others Present:Matt Busby, Assistant to the City Manager Evie McKinney, Water Accounts Supervisor Andria Samuels, Administrative Assistant Liz Riley, Human Resources Director Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 1 of 13 Emile Schmid, District Engineer APPROVAL OF MINUTES OF MARCH 3, 2015 ) Vice Chairperson Barker MOVED THAT THE MINUTES OF MARCH 3, 2015, BE APPROVED. Mrs. Evans SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RSOLUTION NO. 2015-002: ADOPTING AMENDED FY 2014-2015 CLASSIFICATION PLAN AND AMENDED FY 2014-2015 COMPENSATION PLAN )District Director Frank Blanco stated the resolution deals with the classification and compensation plan that almost mirrors the city's plans.The council has approved the city's recommendations.The water district was included in the study as well.The distance between steps suggested by the consultant is 2.5% versus the current 4.3%.The water district agrees this plan would be more sustainable. This makes the cost of implementation for the water district to be around $18,500.For a one step increase in July it would cost around $23,500.No employees were disadvantaged by this or topped out.The water district is requesting the resolution be approved. Mr. Waldron MOVED THAT RESOLUTION NO. 2015-002, 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 "APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT CLASSIFICATION PLAN AMENDED FOR FISCAL YEAR 2014-2015"; AND "THE APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT COMPENSATION PLAN AMENDED FOR FISCAL YEAR 2014-2015"; ESTABLISHING AN EFFECTIVE DATE; AND DECLARING AN EMERGENCY, BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 2 of 13 Mrs. Evans SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DATE, TIME AND LOCATION FOR BUDGET WORK SESSIONS, TENTATIVE BUDGET ADOPTION AND FINAL BUDGET ADOPTION ) )District Director Frank Blanco stated the date, time and location for the water district work session parallels the city's budget efforts as well.The tentative budget adoption date would be May 19, 2015 and the final budget adoption date would be June 16, 2015. Vice Chairperson Barker asked when board members would receive the budget. District Finance Manager John White stated the city budget books will be distributed April 23, 2015 and the water district budget will be included. Vice Chairperson Barker MOVED THAT THE FOLLOWING DATES, TIMES AND LOCATIONS FOR FISCAL YEAR 2015-2016 BUDGET WORK SESSIONS, TENTATIVE BUDGET ADOPTION AND FINAL BUDGET ADOPTION BE APPROVED: BUDGET WORK SESSION ON MAY 5, 2015 AT 6:00 P.M. IN THE CITY COUNCIL CHAMBERS; TENTATIVE BUDGET ADOPTION ON TUESDAY, MAY 19, 2015 AT 6:00 P.M. IN THE CITY COUNCIL CHAMBERS; AND FINAL ADOPTION ON TUESDAY, JUNE 16, 2015 AT 6:00 P.M. IN THE CITY COUNCL CHAMBERS. Mrs. Evans SECONDED THE MOTION. VOTE:Unanimous. The -motion carried. BID_ RESULTS AND FUNDING STRATEGIES FOR: PROJECT WD 20l4-03BCONSTRUCTION OF A SURFACE WATER TREATMENT PLANT.)District Director Frank Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 3 of 13 Blanco gave some background information on how the water district got to where they are today.In 2007 there was a water resource assessment study report done by Damin S. Williams and Associates.There were three recommendations that resulted from the report.One was to acquire more Central Arizona Project water.Another was to build an interconnect facility to be able to move Central Arizona Project water from the city of Mesa into Apache Junction.This is water that is treated at the Brown Road water treatment plant.The third recommendation was to either build an Apache Junction water treatment plant or to partner with the city of Mesa or another entity on the construction of a facility.To date the water district has done the first two recommendations.They have the additional Central Arizona Project water which was recently leased from the Gila River Indian Community.A 100 -year lease for 1,000 acre feet of water.The water district also applied for and was successfully recommended for the reallocation of non -Indian agricultural and Central Arizona Project water.It is pending the Bureau of Reclamation's approval.The interconnect was constructed in 2008.The water district has been delivering Central Arizona Project that is treated at the city of Mesa Brown Road water treatment plant.Bids for building a water treatment plant have been collected, which was the third recommendation.The 2010 master plan also mentioned building a water treatment plant.The time frame was within five years. In 2013 the board directed staff to proceed with the building of an Apache Junction water district surface water treatment plant versus partnering with the city of Mesa or another entity as a minority owner because the water district would have such a small demand in comparison with many of the other cities.The water district would be disadvantaged in that they would not really have any voice on major decisions on how they would treat the water or the level of water quality they would expect to receive.Due to this, the board directed the water district to move forward with the water treatment plant project.The bid process is now complete.Plan specifications and permitting from Arizona Department of Environmental Quality have been submitted.They also did a pre -selection process.The initial phase is to supply the water district's current customer base -2 million gallons per day.The master plan of this facility takes into account future expansion.The facility has been master Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 4 of 13 planned for 10 million gallons per day, five times the initial phase.This enables self-reliance for Central Arizona Project water treatment and delivery, enhances water quality and water supply and reliability.The water district received five bids on April 1, 2015.All five companies met the requirements of having built a water treatment plant that treats and delivers Central Arizona Project surface water.The bid results showed Garney as the responsive lowest bidder.They came in at $9.166 million.The water district has seen in the past five years a downturn of the economy which gave them very competitive bids. Even though the bids came in a little bit higher than they were wanting them to be, they were still about $700,000 lower than the engineer's estimate of $9.863 million.Garney was about a half -million lower than the next bidder, which was Hunter.The highest bidder was $10.3 million.If the water district were to set aside the lowest bidder and the highest bidder, the middle bids were very competitive and were within 2%.Base bid 1 is the packaged water treatment plant and that was preselected and is a pre -negotiated price.All the bidders had the same price of about a half -million dollars on this one.There was also a base bid 2 and bid alternative 1 through 4.The total bid from Garney is $9,166,800.The total base bids included the water treatment module, the facility itself and the building.All of the onsite piping, excavation and everything that goes with this site is included in the total base bid of $9.8 million.The other bids are an alternate bid 1 which was for paving, curb, gutter and some decorative wrought iron fencing at the entrance of the facility.Alternate bid 2 is for redundant pumps.The pumps are primarily used for a dewatering facility.Dewatering is basically removing the solids from the liquid.While going through the water treatment process, the solids are filtered out.Something has to be done with the solids and those are run through a separate treatment process that removes the usable water from the solids.The solids are hauled off to a landfill. Solids are organic matter that is removed from the raw water from the canal itself, such as sticks or dirt.Bid alternate 3 is a sewer line.It is a pipeline that connects the water treatment plant to the sewer district's main line.It would connect the onsite sewage that is generated from the occupants of the building and also enables the water district to pump some of the solids into the wastewater treatment facility in the event there was an upset with the treatment process and the Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 5 of 13 water district was overloaded with solids and unable to remove them and dry them out. Assistant City Manager Bryant Powell asked which way the pipeline goes. District Director Frank Blanco stated the pipeline goes from the treatment plant to the sewer district.There is very low use in terms of the onsite sewage generated by employees.One of the alternatives would be to build a septic tank.Bid alternate 4 is a transmission main that would be built along Ironwood to take water to the storage tanks at Baseline, Buena Vista and 16th Avenue.There are certain items that are required in order for them to have a water treatment plant.He showed slides using different colors to show what was required.The total base bid, bid alternate 3 and 4 are required in order for them to operate and treat water and deliver it where it needs to be.Alternate 1 is the paving, curb, gutter, iron fencing and decorative fencing which is not required.They could possibly get by with chain link fencing. This was bid out separately in case they had extremely high bids that were higher than the engineers estimate and they had to cut back.Bid alternate bid 2, the redundant pipes, are redundant. Even though they are not really needed it adds to the reliability of the treatment process.Without the redundancy, if a pump goes down the plant can be compromised and they would not be able to treat water at the capacity they would like to. To recap, the cost is $115,000 for alternate bid 1, alternate bid 2 is $128,000, alternate bid 3 is $146,000 and alternate bid 4 is $340,000.Alternate bid 4 is a higher item.It is a 16 inch transmission main and will get the water to the storage facilities.It is a transmission main that in the future can be expanded to the south to serve other growth. Chairperson Insalaco asked if the prices were included in the base bid. District Director Frank Blanco stated the total bid is $9,166,800 plus a contingency of about 5%.The contract amount would not exceed $9,625,140. This was what he recommended to the board.A financing plan was developed in 2014 by the bond council to payoff and restructure the district's outstanding debt on more efficient and favorable Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 6 of 13 terms.It was recommended was to terminate an indenture and payoff 2004A bonds.Another recommendation was to borrow additional monies from Water Infrastructure Finance Authority to finance projects based on restructuring and paying off the bonds.Actions taken in 2014 were the water board authorized the district to pay off the 2004 bonds by resolution on April 30, 2014; payoff occurred June 20, 2014 and a Water Infrastructure Finance Authority loan of $9,077,296 was applied for and approved with a $1 million forgivable principle.This means the district pays back about $8 million plus interest. One million of what the district is receiving from the Water Infrastructure Finance Authority is a forgivable loan, basically a grant.Another action taken in 2014 was the water district exercised their 100 -year -old lease from the Gila River Indian Community tribe.This was done in June or July of 2014.The Water Infrastructure Finance Authority loan is $9 million, less $200,000 the water district has spent on the planning and design of the plant, and $3 million was spent on the Gila River Indian Community lease.The remaining amount is $5,780,402.Looking at local funding the district has capital replacement fees, capital facilities fees, land sale proceeds and an economic development agreement.Some of these items, specifically the economic development agreement money are programed.The district has to pay off debt, so even though they are incurring additional debt they have to continue operating and making sure they are meeting requirements of being financially sound even though they are building new projects.The funding strategy the district is proposing is going keep them able to pay their bills and keep their 1.2 ratio that is required to remain solvent.A portion of the economic development agreement and capital replacement fees are used to pay debt but another portion can go to pay for other projects.The total Water Infrastructure Finance Authority and local combined totals $11,415,471.Since this project is an expensive endeavor it is not to be taken lightly.He wanted to give the board as much information as he could so they could make a sound decision.He is confident the board will but he did not want to go off and say this is what we came in at, these are the bids and approve the project.This is why he is taking the time to go over the details and how the district is going to pay for the project.The recommendation is to award a contract for $9,625,140 to Garney Companies, Inc. Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 7 of 13 Assistant City Manager Bryant Powell stated this is a big step for the community in controlling its destiny, the future and the economic development of the community.The efforts the district has made over the past several years to get the city to this point and develop the financing mechanism, such as working with Water Infrastructure Finance Authority and getting a million dollars of a recoverable loan, have been huge and having the assets to be at this point establishes them in becoming independent from different groups they have had to work with since the beginning.He applauded Frank and his staff for all the work they have done in getting to this point. Vice Chairperson Barker asked what they see as the time frame for getting the project done. District Director Frank Blanco stated the construction time frame is a year. Essentially 12 months, two months for getting everything set and making sure everything is operating properly.It is a whole year construction process.The local funding is being replenished continually.Revenues are being allocated into the individual funds.When funds become available they are used to pay the capital replacement fees.Land sale proceeds have also started to be replenished as well.The land sale proceeds were earmarked for the treatment plant and got the district where they needed to be.Some of the money on the land sale proceeds was used to pay off the 2004 debt.Without having paid off that debt the Water Infrastructure Finance Authority loan would not have been possible. District Finance Manager John White stated he wanted to elaborate on one item regarding the use of the land sale proceeds.The district took $1,560,000 to pay off in advance three years on the land sale proceeds.Part of the financing plan is to replenish money the district in effect borrowed from the land sale for the debt service.There is an "in lieu of" repayment to the land sale subfund in order to help replenish that.The intent of the land sale proceeds was always by policy for the water treatment plant so they are replenishing it.He recently did a transfer of a half -million dollars from the operating fund back into the land sale proceeds to help keep it going. Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 8 of 13 Assistant City Manager stated when he introduced the city's new development director Larry Kirch to the former state land commissioner they used the opportunity to talk about Lost Dutchman Heights and some other city efforts.When he started talking about this project he could sense a positive response from the former commissioner by her body language and by her asking him more questions about it. The district has had a couple of follow up meetings with folks interested in what the district's surface water treatment allocation is and what, exactly, the district is doing with the Gila River Indian Community.This information is something that can be passed on to those who are interested in the district's future growth corridor. Mrs. Evans MOVED THAT THE AGREEMENT BETWEEN APACHE Junction WATER UTILITIES DISTRICT AND GARNEY COMPANIES, INC. FOR THE CONSTRUCTION OF A SURFACE WATER TREATMENT PLANT IN AN AMOUNT NOT TO EXCEED $9,625,140.00 BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. DISTRICT MANAGER REPORT None. DISTRICT DIRECTOR REPORT District Director Frank Blanco gave an update on the water system, water quality and coliform rule.The district had an issue with a main break.It was really challenging because there was a fiber optic box right over the pipeline.They had to get the cable company to come out and properly secure it. They put in a new 12 inch pipe main.They replaced the 12 inch valve as well.The main was at Cortez and US 60.They were fortunate the break only affected one customer.They worked with the customer to let him know when the water would be off. Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 9 of 13 They left the water on as long as possible.Prior to this break they had another main break in the same area.It affected the RV park that is southeast of the location.There were lots of people out of water for a couple of days.When they fixed the other main leak they added some additional valves that allow them to be able to fix things like this without putting people out of water.Total coliform rule requires monthly monitoring of total coliforms.Public notices are required if two samples indicate the presence of coliform.If it happens in one month they are required to do a public notice.The way the sampling is done is by sampling locations throughout the district in the most vulnerable areas which are furthest away from chlorination so there may be stagnate water.A sample was taken when it was rainy.It was also a bit windy.When they sent confirmation samples to their lab, within 24 hours they came back with the absence of any bacteria at all.The rules say if you have two of themin one month they are required to give public notice. Prior to this they had one sample that came back positive in 2011.They take samples on a routine basis every Monday morning.They do a series of 15 a month, so lots of samples have been taken but in this case because it happened twice in one month they did the public notice.The public notices were mailed to all water district customers.The decision was to do one mass mailing instead of putting them in with the bills. That way the public gets the notice the same way at the same time.They have had two phone calls since then.One was a gentleman just asking how the process worked.He was not concerned about the water quality.He just wanted to know basically how and where they sample the water.The other call was a person concerned about an odor coming out of her restroom. In both instances there was no real concern about the safety of the water, which is important for the district to continue to keep the public trust in place.The Water and Economic Forum was for planning the future in northeast Pinal County.He appreciated the city staff and board members that attended the forum on March 31, 2015.The purpose of the event was to foster regional cooperation and increase understanding of water's role in economic development.It was intended to give -a foundation and, in turn, learn about Arizona's success in water management and how to:keep it going into the future.One thing that came up at the forum was Chandler's approach to obtaining water in advance of development and how they approach economic development and water.It was really valuable for staff and Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 10 of 13 board members to see, and, hopefully, reinforcing to members of the board that they are investing in something that is really going to make a difference to the community.Their support and vision to move forward with these major infrastructure projects in acquiring water is very important and goes a long way.When they look at water as an asset, they have a water portfolio with the board's help and support that they have started to build upon.Originally they had 2,919 acre feet of Central Arizona Project water and they were permitted 2,372 acre feet of ground water.Prior to 2008, they were using 98% ground water and using very little of their Central Arizona Project water allocation.Since then, they moved forward with the additional infrastructure they built and were able to supply 70% and some days 100% surface water.Some days they are able to supply 100% groundwater.To have this type of flexibility really goes a long way.There are very few municipalities or water systems that are able to do this.There is 1,000 acre feet of new acquired Gila River Indian Community water adding to the water portfolio and 817 acre feet they have applied for on the non- Indian agricultural water, also Central Arizona Project water. There is 241 acre feet of long term storage credits they developed with the sewer district.December 31, 2015 is the deadline when the intergovernmental agreement expires with the sewer district.Since the water district, sewer district and the city are all government but separate entities they are not really under one umbrella.It makes it a little bit more challenging in terms of working to benefit all three entities. The water district, for example, has to pay the sewer district $172,000 a year for the purchase of the long term storage credits.A utility would basically own those credits or a municipality would own those credits.There would be no money transfer so those funds would be able to be used to recharge additional Central Arizona Project water and have those credits developed in that manner.This is one of the challenges the district has.They ,are working through it and have met with Darren from the sewer district and will be meeting with Central Arizona Project staff to talk about possibly having the sewer district in an agreement with them as well to sell them long term storage credits so the water district can better utilize their Central Arizona Project water, get more of it and recharge it in a different manner.They are trying to develop .a win -win situation with a third party.They talked about not going to a private water broker but working with themselves and another Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 11 of 13 governmental agency.They are trying to have this in place by the end of the year.He stated the water festival is the day after tomorrow and he hoped to have as many of the board members there as possible. Mr. Waldron complemented the water district staff on their professionalism and hard work in fixing some vandalism that was done to meters by his home. DISTRICT TREASURER REPORT None. ADJOURNMENT ) Chairperson Insalaco adjourned the meeting at 6:40 p.m. ACCEPTED THIS DAY OF M4 -V , 2015, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE MATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS 2015. Kathleen Connelly District Clerk /114/, hn S. In a 1arC(4,laco DAY OF Chairperson Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 12 of 13 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 21st day of April, 2015.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 28th day of April, 2015. Kathleen Connelly District Clerk 7 -2c4Ee Water Utilities Community Facilities District Meeting Minutes of April 21, 2015 Page 13 of 13