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HomeMy WebLinkAbout2015-05-19 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING MAY 19, 2015 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on May 19, 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: Others Present: (Mrs. Rizzi was absent.) Kathleen Connelly, District Clerk Joel Stern, District Legal Counsel Giao Pham, Utility Director Frank Blanco, District Director Donna Meinerts, District Treasurer Bryant Powell, Assistant City Manager Michael Loggins, District Superintendent John White, District Finance Manager Evie McKinney, Water Accounts Supervisor Andria Samuels, Senior Administrative Assistant APPROVAL OF MINUTES OF MAY 5, Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 1 of 13 2015 ) Vice Chairperson Barker MOVED THAT THE MINUTES OF MAY 5, 2015, BE APPROVED. Mr. Waldron SECONDED THE MOTION. VOTE:Unanimous. The motion carried. PROPOSED DISTRICT BUDGET FOR FISCAL YEAR 2015-2016 TO INCLUDE PROPOSED RATES, FEES AND CHARGES APPLICABLE DURING FY 2015-2016, CLASSIFICATION AND COMPENSATION PLAN AND DATE, TIME AND LOCATION FOR CONSIDERATION OF PROPOSED FINAL BUDGET District Director Frank Blanco briefed the board on the item.He wanted to review what was talked about at the last meeting and give an overview on their accomplishments and goals in line with their vision to acquire additional water supplies, long term treatment options and maintaining the water system.The accomplishments from this fiscal year include closing on the Water Infrastructure Finance Authority loan, paying off the 2004A bonds, restructuring the 2006 and 2008 bonds, exercising the Central Arizona Project water lease option, completing the plant design, bid and awarding the contract for the treatment plant.They are planning on a groundbreaking ceremony on June 3, 2015.Plant construction will begin soon thereafter.The Ironwood water line project is still on schedule and will be done this fiscal year. Vice Chairperson Barker commented he has accomplished a great deal this year.That is amazing. District Director Frank Blanco thanked her and stated they have had a lot of help and support.He thanked them for supporting them and approving their resolutions.They would not have been able to do that without their approval.The goals for 2015-2016 are to have the Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 2 of 13 water treatment plant at substantial completion and start up by the end of the fiscal year with the goal of reducing dependency on Mesa Central Arizona Project water.They are working on a couple of new intergovernmental agreements with Mesa and the sewer district.The sewer district will be working on an intergovernmental agreement with Central Arizona Groundwater Replenishment District.The plan is for the water district to have first right of refusal on purchasing the effluent credit. The credits the water district does not purchase will be purchased by Central Arizona Groundwater Replenishment District. The sewer district continues to recharge effluent within the district service area and they continue selling the credits. The first two years the Central Arizona Groundwater Replenishment District will purchase 100% of the recharge credits.That will allow the water district to basically catch up a little bit on our spending as the plant is expensive. After two years the district will again continue to recharge the Central Arizona Project water with the other partner that we have, Roosevelt Water Conservation District and their groundwater seeding facility, and with Salt River Project.With those GSF we also get a portion of the money returned to us; it is $25 per acre foot that we recharge there and they pay us back for.He believes it is a prudent way to go. Assistant City Manager Bryant Powell asked how much savings per year that will bring the district. District Director Frank Blanco stated currently they are spending about $178,000 for the effluent credits.In lieu of doing that we would be charged about 200 acre feet of Central Arizona Project water.It would be a savings of about $120,000. Chairperson Insalaco commented that is nothing to sneeze at. Vice Chairperson Barker commented that is a good plan. District Director Frank Blanco stated this year's budget is ambitious but they believe it is financially responsible.It includes the construction of Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 3 of 13 the surface water treatment plant.They are also updating the financial strategy for the plant, including no longer purchasing the credits for the next two years from the sewer but have them sell them to another entity.They will go over the rate adjustments later.The classification and compensation plan is similar to what the city adopted last night.The water bill is comprised of a monthly -based service charge, a water consumption charge and sales tax.The monthly -based service charge goes towards funding operations, system maintenance, machinery, equipment, staff and administrative costs.The water consumption cost is a more variable cost and funds energy, chemicals and raw water. Mr. Waldron asked if the sales tax they collect for the water district goes to the department of revenue under the simplification. District Clerk Kathleen Connelly stated it does. District Director Frank Blanco stated the proposed rate adjustments include a base rate increase of 5 percent, adjustments to consumption rate tiers and the consumption rates remaining unchanged.He showed them a graph of the base water rates for other providers in the vicinity.The district rate with the 5 percent increase is slightly below the average base rate, which is around $20.32. Arizona Water, Global Water, Gila Bend and FCOR for Anthem have higher base rates. Mr. Waldron asked where Global Water is located. District Director Frank Blanco stated Global Water is in the Town of Maricopai There might be some other service areas as well.The justification for raising the base rate is, although it is an increase, it is still below the average.Tiered rates were introduced in 2008 as a water conservation incentive.As -consumption rates increase, the consumption rate also increases.The rates increase as the amount of water increases as well.The water district has seen a decrease as a result of this in consumption from 132 gallons per person per day in 2007 to 107 gallons per Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 4 of 13 person per day in 2014.It is a significant decrease so it seems to be working for the customers to conserve or use a little less water.It amounts to about 360,000 gallons of water a day the district does not have to produce.It also prolongs the infrastructure in not having to go out and fix things right away and makes things last a little longer.The less the equipment is being used, the longer it will last, so it saves money in that respect as well.The lowest tier they have was previously up to 5,000 gallons.Mesa's first tier is at 3,000 gallons.The district is proposing 4,000 gallons for the lifeline rate of $3.88 per thousand gallons.It will have a direct impact on about 500 customers.Their bill could increase up to $1.60 per month.For the second tier, the proposal is to decrease the 12,000 threshold to 10,000.From 4,000 to 10,000 the rate would be at the second tier which is $5.48 per thousand gallons.The direct impact would be on about 180 customers, increasing their monthly water bill up to about $1.14 per month. The last tier would be anything over 10,000 gallons charged at $6.05 per thousand.It could affect 480 customers.The folks that are using over 10,000 are benefiting from the lower rate of the up to 4,000.They are paying at the lower rates until they hit the threshold of 10,000.There is still the incentive to use less water.The consumption rate per thousand gallons remains unchanged.When comparing the consumption rate to the other providers, the district's consumption rate is higher than the rest.By maintaining the rate, they allow for the gap to come closer.They are able to increase the revenues by raising the base rate and adjusting the tiers. Vice Chairperson Barker asked why he supposes that is.It is a dramatic difference. District Director Frank Blanco stated they should look at Gilbert. It is a groundwater system with prolific wells where they pump out lots of gallons of water.It used to be an agricultural area.They are able to take advantage of that by not using a surface area treatment plant or not using surface water.However, the homeowners in Gilbert also have to replenish the groundwater.The water district is the designated provider so we have to pay for the replenishment of Central Arizona Groundwater Replenishment District.In areas like Gilbert where they are not they designate a provider.Queen Creek is another one where the Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 5 of 13 homeowners have to pay for that replenishment.They pay for that through homeowners associations and taxes.As the tax increases over a period of time, they will start seeing more of an impact.Because it is spread out through the homeowners associations and all the homeowners, it is not such a dramatic impact. Chairperson Insalaco asked if they have that much groundwater. District Director Frank Blanco stated they pretty much have a groundwater system. Vice Chairperson Barker commented they are at the high end of the basin. Assistant City Manager Bryant Powell asked if he anticipates pressure over a period of time to try to get the consumption to go down.There may be a water policy decision at some point by their town council to raise rates.He does not know what theirs is but it is probably not 107 gallons per person per day. District Director Frank Blanco stated that is correct.The other issue is because it is owned by the city, some of that is subsidized by the general fund.They are not paying for the true value of the water. Vice Chairperson Barker commented that skews the spread. District Director Frank Blanco stated that is correct.He anticipates that will change over time.When one looks at the average comparison of a small family of four using about 4,340 gallons per month, the total increase would be about $1.60 per month.The 4,000 is charged at the lowest rate and the 340 is charged at the next rate.The high use customer, a family of 5 with nice turf, trees and landscaping would be looking at about $4.51 per month for an increase.The residential system connection fees have been increased about $100 across the board for the single family, multi -family and manufactured homes.The proposed budget adoption is set for today and must be adopted no later than July Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 6 of 13 15, 2015.They still have time to adopt it later if they choose not to do so tonight.Final budget adoption is scheduled for June 16, coinciding with the city final budget adoption.The final budget must be adopted no later than September 30, 2015. RESOLUTION NO. 2015-005, ADOPTION OF CLASSIFICATION PLAN FOR FY 2015-2016 AND ADOPTION OF COMPENSATION PLAN FOR FY 2015-2016 )District Director Frank Blanco stated this is very similar to what they did last time. Chairperson Insalaco commented what they are doing for the city. District Director Frank Blanco stated it is for adopting the preliminary budget and classification and compensation plans. Chairperson Insalaco called for any questions. There being no questions, he called for a motion. Vice Chairperson Barker commented they took a title out of the water district and put it into the city.She asked if they have to do anything with it in the water district. District Clerk Kathleen Connelly stated they do not.It is not in the attachment. Vice Chairperson Barker MOVED THAT RESOLUTION NO. 2015-005, 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 APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT CLASSIFICATION PLAN FOR FISCAL YEAR 2015- 2016" AND "THE APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT COMPENSATION PLAN FOR FISCAL YEAR 2015-2016, BE APPROVED. Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 7 of 13 Councilmember Evans SECONDED THE MOTION. VOTE:Unanimous. The motion carried. PUBLIC HEARING ON PROPOSED BUDGET AND RATE SCHEDULES FOR FISCAL YEAR 2015-2016 )Chairperson Insalaco opened the public hearing.There being no one wishing to speak, he closed the public hearing and moved on to the next item. RESOLUTION NO. 2015-003, ADOPTING A PROPOSED BUDGET FOR FISCAL YEAR 2015-2016, ADOPTING PROPOSED RATES, FEES, DEPOSITS, WATER RESOURCE ACQUISITION FEES AND CHARGES APPLICABLE FOR THE FISCAL YEAR AND ESTABLISHING A PUBLIC HEARING ON THE PROPOSED BUDGET )Councilmember Evans MOVED THAT RESOLUTION NO. 2015-003, A.RESOLUTION OF THE BOARD OF DIRECTORS OFHTHE'WATER UTILITIES COMMUNITY FCILITIES DISTRICT (CITY OF APACHE .JUNCTION, ARIZONA), PURSUANT TO A.R.S. § 48-716, ADOPTING A PROPOSED -BUDGET FOR .THE FISCAL YEAR BEGINNING JULY 1, 2015 AND ENDING ON JUNE 30,,2016; .ADOPTING PROPOSED RATES, FEES, DEPOSITS, WATER RESOURCE ACQUISITION TEES AND CHARGES APPLICABLE FOR THE FISCAL YEAR BEGINNING JULY '1, 2015 AND ENDING ON JUNE 30, 2016; ESTABLISHING A PUBLIC HEARING ON THE PROPOSED BUDGET;. AND DIRECTING DISTRICT STAFF TO SOLICIT COMMENTS FROM THECITY OF APACHE JUNCTION ON THE PROPOSED ANNUAL BUDGET; BE APPROVED. I FURTHER MOVE THE PUBLIC HEARING FOR FINAL BUDGET ADOPTION BE HELD ON JUNE 16, 2015 AT 6:00 P.M. IN THE APACHE JUNCTION COUNCIL CHAMBERS, 300 EAST SUPERSTITION BOULEVARD, APACHE JUNCTION, ARIZONA. Vice Chairperson Barker SECONDED THE MOTION. VOTE:-Unanimous. Water:Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 8 of 13 The motion carried. RESOLUTION NO. 2015-007, DECLARING PORTIONS OF PUBLIC UTILITY EASEMENTS LOCATED ON DESCANSO ROAD, VISTA ROAD, 18TH AVENUE AND 19TH AVENUE NO LONGER NECESSARY FOR PUBLIC USE AS PUBLIC UTILITY EASEMENTS AND ARE HEREBY EXTINGUISHED )District Director Frank Blanco requested the board pass the resolution to extinguish these easements.He believes they were previously extinguished by the city last year.This is the Bel Agave subdivision.It has been replatted and has a whole new subdivision going in there.There is no need for the existing alignments or easements. Assistant City Manager Bryant Powell asked if there was any update on Bel Agave. District Director Frank Blanco stated he got a call from Mr. Kaufmann about a week -and- a -half ago.He is still interested in doing an agreement for development. Assistant City Manager Bryant Powell asked if they mentioned anything about pulling .a permit yet. District Director Frank Blanco stated no permits yet but he is wanting to talk about agreements. Chairperson Insalaco closed the discussion with no further comments and called for a motion. Mr. Waldron MOVED THAT RESOLUTION NO. 2015-007, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) DECLARING THAT PORTIONS OF PUBLIC UTILITY EASEMENTS LOCATED ON DESCANSO ROAD BETWEEN 16TH AVENUE AND 18TH AVENUE, VISTA ROAD BETWEEN 16TH AVENUE AND 19TH AVENUE, Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 9 of 13 18TH AVENUE BETWEEN TOMAHAWK ROAD AND WICKIUP ROAD, AND 19TH AVENUE BETWEEN VISTA ROAD AND WICKIUP ROAD ARE NO LONGER NECESSARY FOR PUBLIC USE AS PUBLIC UTILITY EASEMENTS AND ARE HEREBY EXTINGUISHED, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. PROFESSIONAL SERVICES AGREEMENT WITH CAROLLO ENGINEERS, INC. FOR THE CONSTRUCTION ADMINISTRATION AND INSPECTION SERVICES FOR THE CENTRAL ARIZONA PROJECT SURFACE WATER TREATMENT PLANT )District Superintendent Mike Loggins briefed the board on the item.He stated staff would like to recommend a professional services agreement with Carollo Engineers for the construction administration and inspection services for the surface water treatment plant.They will be doing all the reviews on the submittals and special inspections onsite.They will keep track of the budget and track the schedule. Chairperson Insalaco called for any discussion.There being no discussion, he called for a motion. Vice Chairperson Barker MOVED THAT THE PROFESSIONAL SERVICES AGREEMENT BETWEEN APACHE JUNCTION WATER UTILITIES COMMUNITY FACILITIES DISTRICT AND CAROLLO ENGINEERS, INC. FOR THE CONSTRUCTION ADMINISTRATION AND INSPECTION SERVICES FOR THE CENTRAL ARIZONA PROJECT SURFACE WATER TREATMENT PLANT IN AN AMOUNT NOT TO EXCEED $620,907.00, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 10 of 13 The motion carried. DISTRICT MANAGER REPORT None. DISTRICT DIRECTOR REPORT District Director Frank Blanco requested District Superintendent Mike Loggins to brief the board on the Central Arizona Project water treatment plant. District Superintendent Mike Loggins stated they met with the contractor about two weeks ago and had a pre -construction meeting.They are having weekly meetings with the contractor in order to get all the submittals taken care of and get the proper equipment that were in the specifications out.These were the specifications that were bid on with them.They also met with development services and public works today to get all their permits in place so they may start construction and move dirt on June 15.They met with Salt River Project today to try to get all the utilities on board so they may have their services available by January 1.The plant will be up to where they will need those services by then.Staff would like to invite the board on June 3 at 8 a.m. for the groundbreaking ceremony onsite.They would appreciate it if all of them would be there. Vice Chairperson Barker asked if there would be coffee. District Superintendent Mike Loggins stated there will be coffee and doughnuts. Chairperson Insalaco commented this will make former Vice Mayor Rick Dietz real happy as this was one of his requests for a long, long time.He saw him last Wednesday at breakfast and he was tickled to death about this. District Superintendent Mike Loggins stated at the Arizona Water Conference he did a presentation on the Central Arizona Project plant and our diversified water portfolio.There was about 50 to 60 people he presented to for about 30 minutes.They were all interested in the project out here.They asked us to come back in a couple of years and give an update on where we are at Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 11 of 13 and how things are going.It sounds like he has been tasked with coming back next year while they are hopefully under construction or finished at that point in time.It is also about how they will be operating the plant two years from now. Chairperson Insalaco commented very good; nice recognition. DISTRICT TREASURER REPORT None. ADJOURNMENT ) Chairperson Insalaco called for a motion to adjourn the meeting. Vice Chairperson Barker SO MOVED. MOTION. VOTE:Unanimous. The motion carried. Mr. Wilson SECONDED THE Chairperson Insalaco adjourned the meeting at 6:30 p.m. ACCEPTED THIS 14 -r/I DAY OF \Lade ,2015, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS / 6 -174 DAY OF 2015. n S. Insalaco airperson Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 12 of 13 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 19th day of May, 2015.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 1st day of June, 2015. Kathleen Connelly 00District Clerk Water Utilities Community Facilities District Meeting Minutes of May 19, 2015 Page 13 of 13