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HomeMy WebLinkAboutMinutes - Minutes - Water Services Advisory Commission - Meeting Date: 3/2/2016 %him. Water Services Advisory GLENDt Commission Oasis Water Campus 7070 W.Northern Avenue March 2,2016,6:00 P.M. FINAL MINUTES I. CALL TO ORDER—6:00 p.m. II. ROLL CALL: Present: Commissioners Robin Berryhill, John Sipple, Ruth Faults, Ron Short, Vice-chair Roger Schwierjohn,and Chairman Jonathan Liebman Absent: Commissioner Robert Gehl Staff: Craig Johnson, John Henny, Dr. Doug Kupel, Ron Serio, Amanda McKeever, Drew Swieczkowski,Thomas Relucio,Anthony Weathersby, and Sally Melling,Recording Secretary III. APPROVAL OF MINUTES OF PREVIOUS MEETINGS Approval of the Final Minutes, February 3, 2016 meeting - Motion for approval made by Comm. Short, seconded by Vice-Chair Schwierjohn. APPROVED 6-0 IV. DIRECTOR'S REPORT—Craig Johnson,P.E.,Water Services Director Mr. Craig Johnson presented a brief update to the Commission on Glendale University and the class held at the Oasis Water Campus on February 24, 2016 for presentations by the Water Services and Public Works departments. He reported the 67th Avenue and Deer Valley Road Pipe Project has been completed and the intersection is back in use. With the pipe upgrades done, Zone 3 Water Delivery Zone now has a redundancy plan started to continue to provide water for residents and businesses. The Thunder- Bird Reservoir project is 95%complete and is in the testing phase with divers on site. Mr.Johnson replied to Chairman Liebman's question that only some Thunderbird Reservoir roof cover panels were replaced and added that the Cholla Water Plant reservoir was slated to get a new roof when that project begins. He also provided information on a Public Works Department street overlay project on Union Hills Drive from 59th to 75th avenues, and 59th Avenue from Bell Road to Union Hills Drive. This is scheduled to begin March 3 for a 2-3 weeks duration. Comm. Sipple asked how long it had been since WS Department staff had last worked in the Deer Valley Road area. Mr. Johnson explained staff temporarily finished the job before Christmas 2015 and then returned on January 18,2016. Mr. Johnson explained that staff presented the departmental budget on February 22 to Mr. Phelps, City Manager, and the Budget and Finance staff; and staff presented the Capital Improvement City of Glendale Water Services Department•7070 West Northern Avenue•Glendale,AZ 85303•(623)930-4100 March 2,2016 Water Services Advisory Commission Final Minutes Page 2 Projects budget yesterday, March 1. Department directors this year will present to Council during two full-day April workshops. ACTION: NO ACTION REQUIRED,INFORMATION ONLY V. BUDGET BRIEFING(INCLUDING CIP/RATES) Mr. Craig Johnson presented budgetary information to the Commission in place of Mr. Dan Hatch, Water Services Administrator. Mr. Johnson provided a brief history of the Water Services Department. Explanations covered challenges and solutions, changes, personnel growth, and planning process for the department's future progress. Mr. Johnson then proceeded to address the department's division components, functions, regulations impacting each division, short-term objections, long-term goals,and the budgets of each division. He informed the Commission of efforts being re-introduced by the city to bring back several items that were cut to assist with the funding shortfall the city faced in recent years. Mr. Johnson walked the Commission through how to read the budget account lines and explained the varied reasons for increases and decreases. He informed the Commission of many on-going projects and constant replacements such as water and sewer pipes, water meter and sewer manhole replacements, and sewer line cleaning. Several tentative rehabilitation projects were presented with explanations of their impact on the remaining budget funds. All planned work will be funded with available funds on a pay-as-we-go basis. Vice-chair Schwierjohn asked for more information on the Pyramid Peak Water Treatment Plant expansion. Mr. Johnson broke out the costs involving the two plant owners based on equity; the cities of Glendale at 77% and Peoria at 23% pay proportionate shares of the costs. Two projects are projected for PPWTP, one to update the plant and a second project to address the expansion. Peoria's involvement will cover 23% of the update costs and 100% of the expansion costs. Peoria will also pay Glendale for staff time involved and a third party consultant will be hired at Peoria's cost to manage the expansion project. Once the expansion is completed,the ownership will change as well as costs: Glendale's share and costs will drop proportionately from 77% to 56%, and Peoria's will rise from 23% to 44%. Anticipated completion date will be the end of 2019. After Mr. Johnson briefly explained the anticipated CIP program and the spend-down plan, he stated staff anticipates there will be a need to raise revenue at the end of Fiscal Year 2017/2018. Some of the choices that will be considered are: a rate increase, bond sales, incur more debt, or a combination of all the choices. He informed the Commission of the integral part they will play in the decision. Chairman Liebman asked for more information on the Automatic Meter Reading (AMR) program. Mr. Johnson explained it is still being evaluated. Some AMR meters are already in use in specific zones based on staff recommendations. Several other areas have been identified by staff as potential placement areas based on safety concerns (such as meters in traffic medians and at high vehicular traffic sites) or ease of use criteria(where a large numbers of meters for a single-vendor can be located in one site). Budget constraints and next-generation technology have slowed the drive to replace manual meters with AMR meters. Chairman Liebman then asked if and how efficiency rates are measured. Mr.Johnson replied that it is done on a yearly mathematical scale of number of gallons treated versus cost per gallon, and the city is benchmarked against other cities. Mr. Johnson mentioned several cost cutting measures March 2,2016 Water Services Advisory Commission Final Minutes Page 3 taken such as a power-trim program for several of the sites with Arizona Public Service and the establishment of different chemical contracts. Mr. Johnson also shared that as he runs the leader forum for the AMWUA (Arizona Municipal Water Users Association) Valley cities, he has the monthly information for each of the ten member cities. He stated that everyone is basically at the same level of measurement, some are a bit ahead of us. He explained that the entire City of Phoenix is currently using AMR meters but comparing Glendale with Phoenix is hard due to Phoenix's large size over which to distribute the costs. Mr. Johnson then replied to Chairman Liebman's mention of privately owned, profit-driven businesses. He explained that those rates are brought before the Arizona Corporation Commission for approval and, usually, private providers' services are supplied at higher customer charges. Mr.Johnson explained that many of the upcoming CIP projects will be in retrofitting and upgrading the plants and facilities to modernize them with current technology. This will realize savings in personnel, chemicals,and energy use. Mr. Johnson confirmed funds are "carried over"year to year when Chairman Liebman asked if that is still the practice for Capital Improvement Project funds. Comm. Faulls asked how long the $40 million projected to remain as a budget balance at the end of Fiscal Year 2017 would last. Mr. Johnson explained that at the anticipated project schedule, spending down to $40 million would occur in a little over two years. He further explained that the department will hold the $40 million in reserve. It is to be held as an emergency fund and also to help satisfy many of the fmancial rules that must be met such as bond covenants, debt ratio, and debt service. Vice-chair Schwierjohn brought up the continuing drought. Mr. Johnson acknowledged the on- going and anticipated challenges. He informed the Commission of an upcoming item going before Council in which a portion of Glendale's water allotment would be converted from Lake Mead water to water stored behind Roosevelt Dam to assist with maintaining the Lake Mead water level above the critical trigger point of 1,075 acre feet of depth. He stated that although it is at this trigger point that water is pulled from agricultural uses, he assured the Commission it will not impact any Arizona city allotments. Comm. Berryhill asked about the raw water supply and costs. She questioned if moving the expense from Operating Costs to Capital Improvement Costs was the reason for the rates increase being planned. Mr. Johnson explained that it is an asset and should therefore be changed to the proper category. Dr.Kupel helped to clarify that this is only to"true up"the accounting process on how water is accounted and budgeted for. Mr. Johnson also said that lower water costs for Salt River Project(SRP)water is off-set by the higher chemical and energy costs of treating it versus the initially more expensive, but cleaner, Central Arizona Project (CAP) water since SRP water has more organic contaminants. Comm. Berryhill stated she thought that SRP water was gravity-fed. Mr. Johnson explained that it is gravity fed to us but then the plants must treat it and pump it out into the water distribution system thereby incurring energy costs. Comm. Berryhill asked if the El Nino weather system had helped any. Mr. Johnson said that El Nino is basically a water supply issue,the cost issue is due to pumping&availability of electrical power since CAP is going to have to pay for electrical costs. Mr. Johnson also addressed the environmental issues facing CAP with the Navajo (coal powered) Generating Station and suggested interested parties can go on the CAP website to learn more. March 2,2016 Water Services Advisory Commission Final Minutes Page 4 Comm. Short asked for more information on rehabilitating the pipe system since most of the older pipes are in the downtown area. Mr. Johnson stated that there have been both water and sewer system master plans developed to assist with determining priority areas. He added that the average age of water pipes is 35-40 years and sewer pipes is 40 years. He reminded the Commission that age is not the major determining issue since clay pipes can last a long time. One measure of the success of the sewer line replacement program is that in the entire 59 square mile city area, only one sanitary sewer overflow was reported last year. Comm. Short then asked about the proposed Draft Glendale General Plan (Envision Glendale 2040) and asked for clarification on the service boundaries for the far west areas specifically the Loop 303 area. Mr. Johnson confirmed that private providers will provide service, not the city, in areas west of 115`" Avenue by Council directive. Comm. Short then asked about service for the areas north and east of Luke Air Force Base. At this time, Ms. McKeever issued a Point of Order reminder that the agenda item being discussed is the Budget Briefing(Including CIP Rates). NO ACTION REQUIRED,INFORMATION ONLY VI. CALL TO THE AUDIENCE No audience members spoke. VII. FUTURE AGENDA ITEMS Water Quality—CCR(Consumer Confidence Report) VIII.NEXT MEETING: April 6,2016, 6 p.m. IX. ADJOURNMENT — Motion to adjourn was made by Comm. Sipple, seconded by Comm. Berryhill. MOTION APPROVED by voice vote. The meeting adjourned at 7:40 p.m. Respectfully submitted, Sally ling,Recording cretary