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HomeMy WebLinkAbout2016-06-21 WUCFD MINUTESWATER UTILITIES COMMUNITY FACILITIES DISTRICT CITY OF APACHE JUNCTION, ARIZONA REGULAR MEETING June 21, 2016 The regular meeting of the District Board of the Water Utilities Community Facilities District, City of Apache Junction, Arizona, was held on June 21, 2016 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.) Bryant Powell, District Manager Kathleen Connelly, District Clerk Joel Stern, District Legal Counsel Frank Blanco, District Director Donna Meinerts, District Treasurer Matt Busby, Assistant City Manager Michael Loggins, District Superintendent John White, District Finance Manager Andria Samuels, Senior Administrative Assistant Al Bravo, Public Information Officer Evie McKinney, Utility Billing Supervisor APPROVAL OF MINUTES OF MEETING Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 1 of 14 OF APRIL 19, 2016 )Chairperson Insalaco commented they have three different sets of minutes and they all have to be done separately.He called for a motion. Vice Chairperson Barker MOVED THAT THE THAT THE MINUTES OF APRIL 19, 2016, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. APPROVAL OF MINUTES OF MEETING OF MAY 3, 2016 )Chairperson Insalaco called for a motion. Vice Chairperson Barker MOVED THAT THE MINUTES OF MAY 3, 2016, BE APPROVED. Mrs. Evans SECONDED THE MOTION. VOTE:Unanimous. The motion carried. APPROVAL OF MINUTES OF MEETING OF MAY 17, 2016 )Chairperson Insalaco called for a motion. Vice Chairperson Barker MOVED THAT THE MINUTES OF MAY 17, 2016, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 2 of 14 DISCUSSION ON PROPOSED FINAL BUDGET AND RATE SCHEDULE FOR FISCAL YEAR 2016-2017 )District Director Frank Blanco briefed the board on the item.He commented part of the budget includes the finishing of the water treatment plant, the replacement of Well 6, the purchase of a generator for the water treatment plant and the Central Arizona Project Municipal and Industrial charges.There has been an increase of $125,000 for electricity for the water treatment plant.There is a decrease of $100,000 for the water treated by the City of Mesa.There is also a decrease of $140,000 in the reserve capacity with the City of Mesa related to the new water treatment plant coming online.There is an increase of $110,000 for Central Arizona Project water to be delivered to us in lieu of the City of Mesa. Chairperson Insalaco asked what the difference is, if the district budget is up or down. Vice Chairperson Barker asked if this is the same thing they have been looking at. District Director Frank Blanco stated we have seen this before.He reminded them they have $10,000 in the line item for water conservation to help with the water conservation demonstration project at the new downtown park. Chairperson Insalaco closed the discussion with no further comments and moved on to the next item. PUBLIC HEARING ON PROPOSED FINAL BUDGET AND RATE SCHEDULES FOR FY 2016-2017 )Chairperson Insalaco opened the public hearing on the item.There being no one wishing to speak, he closed the public hearing and moved on to the next item. RESOLUTION NO. 2016-006, ADOPTING ESTIMATES OF EXPENDITURES FOR FISCAL YEAR 2016-2017 AND DECLARING SUCH ACTION SHALL ESTABLISH THE Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 3 of 14 BUDGET FOR FISCAL YEAR 2016-2017 called for a motion. )Chairperson Insalaco Mrs. Evans MOVED THAT RESOLUTION NO. 2016-006, A RESOLUTION OF THE BOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), ADOPTING ESTIMATES OF EXPENDITURES BY THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA), FOR FISCAL YEAR BEGINNING JULY 1, 2016 AND ENDING JUNE 30, 2017; DECLARING THAT SUCH ACTION SHALL ESTABLISH THE BUDGET FOR THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) FOR FISCAL YEAR 2016-2017, BE APPROVED. Mrs. Rizzi SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO. 2016-007, RE -ADOPTING ALL EXISTING RATES, USER FEES AND CHARGES FOR FISCAL YEAR 2016-2017 )District Director Frank Blanco stated this is to re -adopt some of the existing rates and new rates for monthly base service, service and meter installation fees, consumption, system connection fees, standpipes and fire hydrant meters.It establishes an effective date of October 1, 2016.They propose a base rate increase of 5%.The average base rate will be $21.34, about a 2.7% increase for an average customer and a family of five high use would have a 1.36% overall increase.There is a 3.1% increase for the service meter connections. Vice Chairperson Barker commented she thinks she has about half of them memorized. Chairperson Insalaco closed the discussion with no further comments and called for a motion. Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 4 of 14 Vice Chairperson Barker MOVED THAT RESOLUTION NO. 2016-007, A RESOLUTION OF THEBOARD OF DIRECTORS OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT (CITY OF APACHE JUNCTION, ARIZONA) RE -ADOPTING ALL EXISTING RATES, USER.FEES AND CHARGES. FOR FISCAL YEAR 2016-2017 INCLUDING NEW RATES FOR MONTHLY BASE SERVICE, CONSUMPTION, SERVICE AND . METER INSTALLATION FEES, SYSTEM CONNECTION FEES, WATER RESOURCE ACQUISITION FEES, STANDPIPES, FIRE HYDRANT METERS; AND ESTABLISHING AN EFFECTIVE DATE, BE APPROVED. Mr. Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. RESOLUTION NO 2016-009, DECLARING THAT PORTIONS OF PUBLIC UTILITY EASEMENTS LOCATED ON 6TH AVENUE BETWEEN VISTA .ROAD AND RAINDANCE ROAD, AND RAINDANCE ROAD BETWEEN 6TH AVENUE AND 7TH AVENUE, ARE NO LONGER NECESSARY FOR PUBLIC USE AS PUBLIC UTILITY EASEMENTS AND ARE HEREBY EXTINGUISHED ) District Director Frank Blanco briefed the board on the item.This is for an extinguishment of a public utility easement that is no longer required for public use.The easement is no longer needed for the water utilities and staff recommends extinguishment. Chairperson Insalaco asked if there is .a property owner. District Director Frank Blanco stated he believes there is. Chairperson Insalaco asked if someone lives there. District Director Frank Blanco stated they do.There is a building that actually encroaches into the area. Blanco.stated he believes. there is... someone lives there. Water Utilities Community Facilities District MeetingMinutes of June 21,.2016 . Page:5.°f 14 Vice Chairperson Barker commented it is right on the easement, about half of it. District Director Frank Blanco stated it is no longer needed for water utilities. Mr. Wilson asked if the north side of the 6th Avenue alignment will also be abandoned.They could make it all at one time. District Director Frank Blanco stated the hatched area would be abandoned. Mr. Wilson commented the north side is not abandoned yet. District Director Frank Blanco stated not yet. Vice Chairperson Barker commented he is asking if that part of the roadway had been extinguished there.If it has not, it has not been driven on for a very long time.There is .another area that has not been done.One encroaches on it.She wondered how they were getting in.She apologized for getting hung up on road extinguishments that had nothing to do with this one. Chairperson InsaIaco closed the discussion with no further comments and called for a motion. Mrs. Evans MOVED THAT RESOLUTION NO. 2016-009, 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 6TH AVENUE BETWEEN VISTA ROAD AND RAINDANCE ROAD AND RAINDANCE ROAD BETWEEN 6TH AVENUE AND 7TH AVENUE ARE NO LONGER NECESSARY FOR PUBLIC USE AS PUBLIC UTILITY EASEMENTS AND ARE HEREBY EXTINGUISHED. Vice. Chairperson Barker SECONDED THE MOTION. VOTE:Unanimous. WaterUtilities Community Facilities District Meeting Minutes of June 21, 2016 Page 6 of-14, The motion carried. DISTRICT MANAGER REPORT District Manager Bryant Powell thanked the board for their continued support for the policy of incremental changes and increases to the water rates across the board.He remembered sitting at a meeting seven years ago where they had not done any increases for five years.He has seen this with the sewer district and water district where these have been implemented. He urged them to keep the dialogue open with the residents as far as the sustainability of the water.He thanked Frank and the district staff for another great job on their budget and proposing on how to move the water district forward. DISTRICT DIRECTOR REPORT District Director Frank Blanco stated Lake Mead is important to the district as it is the reservoir used to determine whether or not there is a shortage on the Central Arizona Project system. He showed them a graph on Arizona Water Management success from 1957 onward depicting the population, the water usage and Arizona's gross domestic income.The water use was only minus one percent less in 1957 than it was in 2014.There has been a 493% growth in population in that time, a 1,652% increase in gross domestic income but the water usage is almost exactly the same.It is related to water conservation and being more efficient with the water use in Arizona.This is for Arizona as a whole.Part of that has to do with the Central Arizona Project Canal and being able to bring water in to Central Arizona. District Manager Bryant Powell asked what about agriculture. District Director Frank Blanco stated agriculture had an impact on that but it has continued to exist even though the water use has come down.Part of that is the more efficient use of water in irrigation.There is a Colorado River Shortage Declaration that is likely to happen within the next five years, but not likely to occur before 2018.It will depend on the snowpack, rain and how well they manage the water resources.Some Arizona water users will be impacted by a shortage declaration.Water district agriculture and on river users with priority 4 entitlements will not be impacted.They will not see a Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 7 of 14 reduction at the first tier one shortage.The water district has a significant amount of rights to Central Arizona Project water which will help us overcome the initial shortages on this declaration. Chairperson Insalaco asked if they would need a humongous amount of snowpack to get this out of the danger zone. District Director Frank Blanco stated the El Nino that was supposed to develop this year really did not develop to the level they thought it would.The best thing they can do is conserve the water.No one can really predict the weather but if there is a significant amount of snowpack it will definitely help us in the long run. Chairperson Insalaco asked if that would be the snowpack for one season or would it have to continue for a while to get it back in shape. District Director Frank Blanco stated it would have to continue for a while. Vice Chairperson Barker commented he keeps educating people on how important this is. Mr. Serdy commented there has always been talk about draining Lake Powell and putting it back how it was.He asked if any communities use Lake Powell and if they did do that what it would mean to Lake Mead. District Director Frank Blanco stated Lake Mead and Lake Powell actually work together.The design is for the upper storage, Lake Powell, to feed into Lake Mead. Mr. Serdy commented it is all the same system and it is all necessary. District Director Frank Blanco stated it is all necessary and it all works together.He showed a slide of the Lake Mead elevations going back to 1937.It was first filled in 1937. There are significant increases in the 1940s, drops in the early 1950s, increases again and then coming all the way to 2016. They are reaching elevation 1073.8; 1075 is a significant elevation and the first one where a shortage would be declared. Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 8 of 14 However, they still stand to gain additional water in Lake Mead before the end of the year.The declaration for a shortage is based on the elevation of Lake Mead.The inflow is 9.0 million acre feet.The outflow is water going to Arizona, California, Nevada, New Mexico plus downstream deliveries and losses.That is 9.68 million acre feet so there is already a little bit of a deficit.Evaporation losses are estimated to be a 0.6 million acre feet.The balance is negative 1.2 million acre feet. Given the apportionment, they are in a situation where it is very precarious.They are basically using all the water that is being developed and then some.He showed a slide on the structural deficit which depicted the three levels of shortage declarations.Because there has not been a significant amount of rainfall or snowfall filling those two lakes, there has not been a significant gain in the storage.They are basically draining the storage.The elevations are 1075, 1050 and 1025. Those are the three key elevations that are used to determine how much water reduction Arizona would be getting.When they reach 1075 there is a reduction of 320,000 acre feet statewide. It will not directly impact the district.The first and the second reductions will not impact the district.He does not believe even the third reduction would dramatically impact the district with its current population.If we look at expanding, growing, developing the city and increasing the population, they will then need to think about it and focus on water conservation. Vice Chairperson Barker asked if they have placed the district in a pretty good position with the water acquisitions they have made over the last couple of years.They have stored up for this eventuality as well as new growth. District Director Frank Blanco stated that is correct.In 2017 there is a projected tier one shortage impact.The first shortage would be 320,000 acre feet, 400,000 acre feet the second and 480,000 acre feet the third.The Non -Indian Agricultural water priority is being pursued by the district. The Indian priority and Non -Indian Agricultural priority are further down and would not be impacted by these three.The district is doing well in terms of being reduced in our current allocations because of the municipal, industrial and Non -Indian Agricultural priority water that we have leased recently in the past three years.He showed a slide on the district with the Central Arizona Project allocation which is 40% of the water Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 9 of 14 portfolio, the groundwater capacity which accounts for 32%, long term storage credits developed by recharging some of the allocated Central Arizona Project water in agricultural areas in Roosevelt Water Conservation District and Salt River Project, the Gila River Indian Community water recently acquired through lease that adds to the capacity, and the pending Non -Indian Agricultural water.It has not been released from the Bureau of Reclamation as of yet.They are doing environmental impact studies on the effect of delivering the water to cities that have applied for the allocation.They may be completed by the end of this year or next.He is attending a meeting on it tomorrow for a status update. Mrs. Rizzi asked if anyone can come in and take the Central Arizona Project allocation from us once it has been allocated. District Director Frank Blanco stated the 2,919 acre feet has been allocated to the district.The 1,000 acre feet is water they are leasing from the Gila River Indian Communities.That is a 100 year lease.That water belongs to the district for 100 years.The other is in perpetuity; it belongs to the water district.As we see growth to the south of us they need to keep in mind they will have to pursue additional water resources for significant growth. District Manager Bryant Powell stated when he listens to what cities like Tempe and Chandler did thirty to fifty .years ago these were the types of strategies that were.ln place in terms of getting :your portfolio of different types:of water they can dip into'for different reasons.He applauded their efforts and his leadership in getting this.The other one=that.is on here that they need to remember is the -.State Land Department has 1,000Hacre -feet dedicated to the Apache Junction area.He will work hard to keep his relationship very positive with them.It is their Central Arizona Project -allocation for :the area east of Meridian and .the city.They have not put -that on there as it has not.been figured out yet.That will be another big chunk of 3,000 or -more homes and 6,000 -more people.We -need to remember. that, too. District Superintendent Mike Loggins gave-aniupdate on the water treatment plant.It is progressing on time and on budget.They started training a month ago on each individual -component.They are starting commissioningof the package water treatment plant. Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 10 of 14 They have a plant start up team in place.The lead operator was hired in February to oversee the final construction and understand what is going on out there.He will get all the training he needs before he actually operates the plant.They hired a consultant for the next six months to help them get through the process.He showed them pictures of the current building, including the laboratory for water quality samples and where they can go over dailies.They can go through all the chemicals they need to add to process the water.He showed them a slide of some of the equipment they have there.In the same room they have the SCADA computers that control the plant.The operators can control different pumps throughout the plant and see what is going on with the flow rates, chemical dosing, levels in tanks and other things.There are several different screens.When the board comes out for a tour in the fall they will be shown things in more depth.He showed a slide of the filter with flowing water.They are producing potable water at the plant currently but they are trying to determine the proper does of chemicals needed to optimize the plant so they are not dosing more chemicals than needed and wasting money. Vice Chairperson Barker commented they must be really proud of it. District Superintendent MikeLoggins stated they -are -very excited.The operators love going out to the:field, check things out, watch things happen out there and work hard with the contractor, vendors and suppliersto get this .up ancL going. They are hoping to put water through the distribution system in mid -July.They will get further updates as they get more into it.They cansee the finish line getting closer every day and there:is an end to this process It will be good when they get there.. Vice Chairperson Barker commented good job. Senior Management Assistant Andria Samuels stated the consumer confidence report is required under the 1996 Safe Drinking Water Act Amendment.It has to contain water system information and monitoring information from the previous calendar year.This one will be for 2015.It has to be delivered to the customers and Arizona Department of Environmental Quality by July 1.Last year was the first year they went paperless.Prior to that it was included in every customer's bill as a small trifold Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 11 of 14 pamphlet.Last year they decided to go big and it 8.5 X 11 booklet.The customers were told through that it would be available online.If they wanted paper copy in hand they could either call or write be sent to them.Paper copies were made available office and other public places like the library and the mass media communities like the mobile home parks in case customers did not have access to the internet or they were not getting a mailed copy.They had great feedback last year.People called in looking for them, were told it was available online and looked there instead of requesting a paper copy.They had about 10 people that requested a mailed copy.There was no high demand for paper copies.A lot of people took it from the lobby when they were waiting.They appreciated it being available. There was no clamor to have it delivered again in their bills. The customers will be notified again of the 2015 report through their bills and they will also have a press release.It will be available online this week.She is also considering social media but that has not been finalized.This year is different from the prior years as on page 3 they show the total coliform violations they had in March 2015.That month they had two positive samples and they did a public notice.Since this was considered a non -acute violation, Arizona Department of Environmental Quality went back and revised the rule.Effective April 1, 2016, that violation no longer exists at that level and will not require a public notice.If it had happened this year, it would not have had to be reported at all.All subsequent tests have resulted in negative samples.It will also include the unregulated contaminant monitoring rule part 3.Every 5 years the Environmental Protection Agency puts out a list of about 30 contaminants they do not currently regulate.They ask water systems to test for these contaminants to see if the results, along with health studies, show they should be pursuing regulations in the future.In 2016 they will be integrating the water treatment plant; we will be our own surface water treatment system.She thinks they can go even bigger because online has made it easier for people to see a more informative report.They can highlight the district's growth and development.They will know these rates and increases are going to improve their infrastructure and keep it maintained. DISTRICT TREASURER REPORT Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 12 of 14 is now a full their bill a physical in for one to in their District Finance Manager John White stated there was one technical correction on the budget resolution, correcting the word approved instead of proposed which was in the packet. There were no substantive changes with numbers or anything like that.Revenues are up about 5% for the year.We did have a rate increase last year and an incremental increase in the base rate so that is expected.The noncapital expenditures have some incremental increases programmed in there such as the salary adjustment this year and Mesa increasing their prices as well yet the change is only about $28,000 there.The increase in the revenues was $158,000.The debt service amount through May is a little over a million dollars.It was at 997,000 last year. That is because of additional borrowings and more interest on the treatment plant loan.Residential sales are up $135,000 over last year and the nonresidential sales are up incrementally as well.The miscellaneous charges are down a little bit. Operating expenditures are up incrementally.The administrative expenses are $680,000 versus $670,000.The plant expenses are $1,428,000 versus $1,414,000.They are up a little bit because of the capital outlay for the treatment plant, showing about $8 million this fiscal year versus $800,000 last fiscal year.The expenses to date on the treatment plant are almost $10 million. Garney is $8.7 million and there is $1 million through Carollo Engineering for their design and construction management. Chairperson Insalaco asked how much more money they will need or if there is a final cost. District Finance Manager John White stated he thought the project was $9.96 million with Garney. Chairperson Insalaco commented there will be enough then. District Finance Manager John White stated there will roughly be another million.They do have a Water Infrastructure Finance Authority loan that still has about $3-4 million to draw down on.Earlier this month he requisitioned $1.3 million they will be receiving by the end of the fiscal year. Vice Chairperson Barker asked if they get part of the Water Infrastructure Finance Authority loan back. District Finance Manager John White stated that has already been taken into account.She is correct.The first million of the Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 13 of 14 $9.7 million loan is what they call a forgivable principle.We borrowed $3,096,000 for the treatment plant but only $2,096,000 is what has to be paid back.It was very fortunate they were able to take advantage of that.They do have a program through Water Infrastructure Finance Authority to do that. ADJOURNMENT ) Chairperson Insalaco adjourned the meeting at 6:40 p.m. ACCEPTED THIS /40 174 DAY OF f i 670 6 -7-, 2016, BY THE CHAIRPERSON AND DISTRICT BOARD OF THE WATER UTILITIES COMMUNITY FACILITIES DISTRICT,(CITY OF APACHE JUNCTION, ARIZONA). SIGNED AND ATTESTED TO THIS 2016. ATTEST: Kathleen Connelly District Clerk rz,r-w DAY OF 4/16. -it -r , 01John S. Insalaco Chairperson 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 June, 2016.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 6th day of July, 2016. Kathleen Connelly District Clerk Water Utilities Community Facilities District Meeting Minutes of June 21, 2016 Page 14 of 14