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HomeMy WebLinkAboutMinutes - Minutes - Citizens Utility Advisory Commission - Meeting Date: 1/2/2019»< - -^- AGENDA CITIZENS UTILITT ADVISORY COMMISSION OASIS WATER CAMPUS 7070 NORTHERN AVE. GLENDALE, ARIZONA 85303 JANUARY 2, 2019 6:00 P.M. CALL TO ORDER Vice Chair Short called the meeting to order at 6:00 p.m. ROLL CALL Present: Vice Chair Short and Commissioners Amber Ford, Paul Smith, Robert Gehl and Robin Berryhill were present. Absent: Chair Liebman Also Present: Craig Johnson, Water Services Director; Vicki Rios, Director, Budget & Finance; Kerri Logan, Administration Deputy Director, Water Services; Dan Hatch, Water Services Administrator of Financial Programs; Angela Ruffalo, Management Assistant, Water Services; John Henny, System Operations Deputy Director; Ron Serio, Plant Operations Deputy Director; Megan Sheldon, Deputy Director Environmental Resources, Water Ser/ices; Russ Romney, Deputy City Attorney; Nancy Mangone, Assistant City Attorney; Mark Fortkamp, Superintendent, Water Services Ops/Maintenance CITIZEN COMMENTS If citizens wish to speak on a matter concerning the Citizens Utility Advisory Commission that is not on the printed agenda, please complete a yellow Citizen Comments Card. If citizens wish to speak on a matter that is on the agenda, please complete a green Citizen Comments Card. Provide the card(s) to the designated staff person prior to the beginning of the meeting. Once your name is called by the Chairperson, please proceed to the podium and state your name and address for the record. Please limit your comments to three minutes or less for items not on the agenda and five minutes or less for items on the agenda. No comments. APPROVAL OF THE MINUTES a. Citizen Utility Advisory Commission Minutes of December 5, 2018. Motion by Commissioner Gehl, second by Commissioner Berryhill, to approve the December 7, 2018 meeting minutes as written. Motion carried 5 -0. 5. DIRECTOR'S REPORT a. This report allows the Directors' of Field Operations and/or Water Services to update the Commission. The Commission is prohibited from discussing or acting on any of the items presented by the Staff since they are not itemized on the Citizen's Utility Advisory Commission Agenda. Update presented by: Craig Johnson, P.E., Director, Water Services Mr. Craig Johnson, Water Services Director, announced that Ms. Sheldon has recently accepted the offer to be the next Deputy Director for the Environmental Resources Department. 6. 2019 WATER SERVICES RATE STUDY UPDATE Presented by: Vicki Rios, Director, City of Glendale Budget & Finance and Dan Hatch, Administrator, Water Services Financial Programs Ms. Rios gave an update on the Financial Plan, which included the following: . Rate Schedule Approved October 2017 . Financial Plan Objectives . Use conservative growth assumptions for revenue . No higher percent increases than used in FY2017 plan . Use conservative inflation for Operating and Maintenance (O&M) expenses . Revise Capital Improvement Plan (CIP) as needed . Draw down fund balance for capital funding . Issue bonds for remaining capital funding . Meet financial targets by FY2024 . Revenue and Expenditure Assumptions . Detailed assumptions were provided for FY2020-24 - Growth, inflation, CIP Cash Flow, Bond Issue and Debt Service, Financial Target .Account and System growth increases . O&M Supplementals - Chemicals and SROG . 5-Year CIP total of $219 million, Glendale net is $162 million Mr. Serio presented the following: . 5-Year Capital Improvement Plan (CIP) . Net CIP . FY2020:$48.8 .FY2021:$37.1 . FY2022:$28.3 .FY2023:$19.4 . FY2024: $28.3 . New Projects: . Pavement Reconstruction: Water and sewer lines to be installed underneath. Staff is working with the Transportation Department on these projects. . 91st Avenue WWTP (SROG): A consultant assessed the plant and recommended over $100 million in repairs. Staff is working with other cities to identify items that can be reduced. . Water Supply Redundancy: Staff is looking at adding some groundwater wells in the northern part of the City in case of plant failure or drought. Also working on connectivity with Phoenix and Peoria. Mr. Serio explained that the CIP is a plan, but the City re-evaluates priorities as new information becomes available. For example, at the Arrowhead Water Reclamation Facility, a recent condition assessment of the discharge line found 70% of the pipe wall thickness has eroded in certain areas and needs to be replaced. Mr. Serio noted that if the pipe breaks, the plant would not be able to operate. Rehabilitation or replacement of this pipe was not included in the CIP approved last year, but now a project needs to be added to the CIP. Ms. Rios continued: . Rate Schedule Considerations . Water . Forecast annual increases in accordance with prior rate study (6.5%) . Absorb cross-connect fees into commercial rates . Change apartment customers from commercial to residential class - Residential rate is slightly higher than the commercial rate . Sewer . Forecast annual increases in accordance with prior rate study (5.5%) . Continue to adjust COS by class . Absorb pre-treatment fees into commercial rates - It costs more to bill and collect so the fees will be absorbed and included in the rate increase . Irrigation Service . Increase to 50% of cost over 3 years in accordance with Council Resolution Ms. Rios announced that staff will have firmer numbers at the next meeting along with justifications. Ms. Logan presented the following: . Urban Irrigation . Five Fiscal Years ending June 30: Revenue, Expenses, and Recovery of Expenses Percentage was provided for FY2014 through FY2018, as well as the 5-Year Average . Recovery of Expenses Percentage: .FY2014: 39% .FY2015: 32% .FY2016: 23% .FY2017: 19% .FY2018: 26% . 5-Year Average: 26% . 50% Cost Recovery . Average Annual Expense and Revenue provided . Council has instructed that 50% Cost Recovery is required for Urban Irrigation . Staff has indicated it would take an increase of $3.78/month per customer for the next three years to achieve 50% cost recovery. Commissioner Berryhill inquired if churches and schools were included in the 23 miles of Urban Irrigation being repaired. Ms. Logan replied in the positive and noted that churches and schools pay for Urban Irrigation based on the size of their lots. Mr. Fortkamp confirmed that churches and schools pay for their share of the 50% cost recovery. Ms. Rios stated that if there is a major repair, the City pays for the repair and the customers continue paying their Urban Irrigation rate Ms. Rios explained that there is no extra assessment for repairs. Commissioner Gehl commented that many Urban Irrigation users are on a fixed income and expressed concern regarding the proposed rate increase. Commissioner Gehl stated that some of the downtown urban irrigation users have abandoned flood irrigation, the lots look run down, and trees are dying. Commissioner Gehl commented that if this continues, there will be a loss of the historic downtown aesthetic. Ms. Logan stated that staff realizes this is a rate increase, however, staff is weighing-in on the direction that Council has provided. Commissioner Berryhilt relayed that she does not want what happened in the City of Peoria to occur in Glendale, whereby Peoria discontinued Urban Irrigation and now there are no trees in downtown Peoria. Commissioner Berryhill noted that rates are being increased for Urban Irrigation, sewer, and water and this is in a lower-income area so an increase needs to be thought out carefully. Commissioner Berryhill stated that she did not see any Urban Irrigation projects on the CIP that was distributed. Mr. Fortkamp relayed information on the following Urban Irrigation projects: . All components have been identified via gps location and an electronic database for this information is being pursued. . Three major valves have been replaced at a cost of approximately $900.00 per valve. . Three major repairs were made of approximately 300 feet of 12-inch pipe at an estimated cost of $1 1,000 per 300-feet on the following streets: 61st Avenue, Northview, and Orangewood. . Two irrigation boxes required repair due to vandalism. . Repairs on lateral cracks were made, which had to be hand-dug for access. . There is an upcoming, planned repair on Myrtle Avenue from 56th Avenue to 58th Avenue. There is a tendency for leaking in this area and a truck with a CCTV camera will be needed to determine why the leak is occurring and what is needed for repair. Commissioner Berryhill asked for the cost of recent repairs. Mr. Fortkamp reiterated the three repairs at approximately $11,000.00 per 300-feet and the repairs at lateral points for a cost of $1,800.00. Commissioner Berryhill inquired as to the total amount spent on repairs over the last few years. Mr. Fortkamp did not have that figure at hand and will provide a follow-up to the Commissioners. Ms. Rios asked for any additional comments or feedback regarding Urban Irrigation. Commissioner Berryhill reminded staff about researching potential grants for Urban Irrigation, given the income level in the area and the historical factor, so that assistance can be given to those who would like Urban Irrigation but cannot afford it. Ms. Rios believed that staff had researched grants previously, but will have her Grants Administrator follow up again. Mr. Johnson stressed that it is important to keep the downtown green, which is the reason that Council supported the 50/50 cost share. Mr. Johnson added that staff has done a great job at controlling the contractor costs. Mr. Johnson felt that Council was supportive of the aesthetic value, however, the challenge is the affordability for some of the residents in the area. Vice Chair Short commented that having Urban Irrigation in the downtown area serves a public service because the historical character of the downtown area is very unique. Vice Chair Short added that the citizens are doing as much as they can to preserve the trees and character of downtown Glendale and wondered if Council could increase the City's percentage from 50% to 70% or 75%. Commissioner Berryhill suggested the following possibilities for helping those who cannot afford Urban Irrigation: From the Heart Program to help fund the cost and hlabitat for Humanity or similar agencies for volunteer help with repairs to berms or other items. Commissioner Berryhill stated that Urban Irrigationhelps to recharge the groundwater. Ms. Mangone commented that some of the suggestions would require a new or amended ordinance to change the 50% cost recovery directive. Ms. Mangone noted that there were two or three years of public outreach conducted prior to Council's decision. Ms. Rios noted that Council direction would be needed to direct From the Heart Program funds to Urban Irrigation and staff would need to find a non-profit to partner with to perform work on Urban Irrigation. Ms. Rios stated that there is a non-profit that specializes in sustainability and will reach out regarding potential for Urban Irrigation. Ms. Mangone stated that the City has a number of contracts to obtain recharge credits and it would be challenging to obtain recharge credits for Urban Irrigation. It could open up a lot of legal agreements already in place. Commissioner Berryhill clarified her meaning in that the water is going back into the ground. Ms. Mangone understood, however noted that this does not help to offset the cost to the customers. Commissioner Berryhill commented that the Arrowhead Reclamation Water is a benefit to the north and the area is very green, however, as one drives south it is not as green. Mr.Johnson reminded that the City is willing to pay for 50% of the aesthetic benefit for Urban Irrigation. Mr. Johnson added that Arrowhead Amenities owns all of the effluent water, for which the Arrowhead HOA's pay the cost. Mr. Johnson agreed that they have the benefit, however, they pay for it. Commissioner Smith stated that he is not a supporter of Urban Irrigation. Commissioner Smith said he moved to the desert decades ago due to allergies, however, many others who moved to the desert did not like that it was brown and therefore planted the same plants from other areas, such as the Midwest, which have again caused allergies. Commissioner Smith did not agree that some people should pay for irrigation for grasses and trees on other people's property and commented that there are likely others in Glendale who feel the same way. Commissioner Smith relayed that this is using tax dollars to benefit only one small section of society. Commissioner Berryhill shared that she is a fourth-generation Arizonan and she has seen the desert disappear. Commissioner Berryhill stated that the City would not be what it is today if irrigation was not brought down to the City and the reason water is available is because of the canals. Vice Chair Short commented that the City has very generous Council members who each have a $15,000 discretionary fund. Vice Chair Short suggested that if each Council member allocated $3,000 of their fund to Urban Irrigation, it would reduce the increase to the rates. Ms. Rios presented the following: . Calendar of Review and Council Approval . January 2019 CUAC: Present preliminary CIP, Operating Budget, and supplementals . February 2019 CUAC: Present results of rate review . March 2019: Council workshop for rate review . May - June 201 9: Council approves budgets . June 2019: Council approves rates . January 2020 and 2021 : Rates are effective Vice Chair Short commented on the 3% inflation rate assumption for raw water and wondered if this was sufficient. Mr. Johnson stated that CAP will be raising its rates and gives the City a forecast for two to three years at a time. Mr. Johnson confirmed that 3% was an appropriate number in light of what is known at this time and furthermore, the City has some flexibility due to contingency built into the budget. Vice Chair Short inquired about SRP. Mr. Johnson stated that SRP is in total control of their drainage system, it is in better shape that the Colorado River, and its storage is also in better shape percentage-wise. Mr. Johnson explained that the Colorado River is overused as the demand is higher than the supply. Vice Chair Short thanked staff for the presentation. 8. COMMISSIONER COMMENTS AND SUGGESTIONS Commissioner Smith thanked all present for their input this evening as it has been very informative. Commissioner Ford asked for a breakdown of the Other category in the pro-forma budget. Mr. Hatch will provide a breakdown to the Commissioners. Commissioner Ford asked if the CIP spreadsheet provided was listed in priority order. Mr. Johnson noted that the spreadsheet is the current approved CIP and is not in priority order. Ms. Rios explained that the priority can be gleaned via the fiscal year funding cycles for each project, which however can change based on need or budget. Commissioner Berryhill thanked staff for all of the information and specifically thanked Ms. Logan for speaking with her earlier today. Commissioner Berryhill commented on her support of Urban Irrigation and would like to see it remain as a benefit to the City. FUTURE AGENDA ITEMS February 2019 Meeting: 1. Rate Review Results 2. FY19-20 Budget Review The tentative list of 2019 Agenda Topics as approved by the Commission at the December meeting was provided. 9. NEXT MEETING The next regular meeting of the Citizens Utility Advisory Commission will be held on February 6, 2019 at 6:00 p.m., at the Oasis Water Campus, 7070 W. Northern Ave., Glendale, Arizona, 85303 10. ADJOURNMENT Motion by Commissioner Gehl, second by Commissioner Smith, to adjourn the meeting at 7:29 p.m. Motion carried 5-0. SPECIAL ACCOMMODATIONS For special accommodations, please contact Angela Ruffalo at (623) 930-4116 at least three (3) business days prior to the meeting, hlearing impaired persons may use the Arizona Relay Service by dialing 711. Pursuant to A.R.S. 38-431(4), one or more members of the Citizens Utility Advisory Commission may be unable to attend the meeting in person and may participate telephonically Respectfully submitted, Denise Kazmierczak ^M^t^}-^^^-- ^^^<y