Water Utilities Community Facilities District - Regular Meeting

I'd like to call the city of the Apache Junction Water District meeting of 05/05/2026 to order and request all cell phones be placed in silent. Roll call.

Chairperson Wilson? Here. Vice chairperson Schroeder?

Present.

Board member Cross? Here. Board member Heck?

Here.

Board member Johnson?

Here.

Board member Soller?

Here.

Board member Nesser. You have a quorum, your honor.

Thank you. Okay.

I let Matt know.

Your call has been disconnected. Presentation discussion of proposed district budget for fiscal year twenty twenty six, twenty seven. Mike.

Chairman Wilson and members of board, just a quick presentation tonight on our proposed twenty twenty six, twenty seven budget, proposed rates, fees, and charges, and our classification compensation plan, and then our budget schedule review. Here's our overall budget from the actuals in 2025. We had a revenue source of roughly $9,200,000 We spent last year $9,200,000 also, taking some of our reserves in some different areas. This year, we're closing a little bit bigger budget. As you can see here, we're going to take some money out of our reserves to fund some of our larger projects that we've planned for over the past few years here.

Our service charges are slowly on its way up. We're gaining additional customers each year. So as we gain customers, we earn new revenue, but we also have more expenditures with those also. We're looking at going after a few grants this year to gain some additional money. We have some investment earnings from what we have in the bank of about half $1,000,000.

Looking at bond proceeds to fund the Water District building with public works of $10,000,000, and then also some lease payments as part of that public works water building here. We do have some miscellaneous charges. Biggest bulk of this is late payments and same day service fees, roughly funding about 200,000 of the 238 those miscellaneous charges that we have. Sorry. Expenses this year, so in operating, so the wells for electricity, water supplies, different things will come over our operating revenue, which is 7,300,000.

We do have some debt service currently from funding our surface water treatment plant roughly fourteen years ago. We have roughly about another ten years left on that plan, and then we're going take on some new debt possibly with this budget of roughly that $10,000,000 So another $1,000,000 in debt service that we'll take on. Capital outlay, we're looking at spending roughly $18,000,000 this year. Most of that is also from the water public works building of $10,000,000 So really staying the same as our capital outlay in the past of $8,000,000 that we've had. We also can carry contingency, roughly about $500,000 due if we have a main break, a well go out of service, a pump go down.

So we have those funds available if we need to. This is our operating revenue. We also have our system connection fees, which we're looking to keep growing here with new development coming in. We're looking to collect about 1.15 in fiscal year 'twenty six, 'twenty seven. And we're also looking to collect on water resource acquisition fees of roughly $5,000,000 in additional revenue there.

We'll be using on system connection fees, and I'll explain this a little bit more in detail here in a minute, 4,500,000. We're not looking at spending any water resource acquisition fees. That's really collecting those fees, putting in a savings account before we have big large projects that we purchase additional water supplies or lease additional water supplies. Any questions on that so far? Some of the big things that we're doing next year is our vehicle and equipment.

We're looking at purchasing two new three quarter ton service trucks, roughly about $130,000 We're also looking at a midsized truck for $50,000 and then purchasing a large trailer to haul pipe around to deliver to our sites that we can install in the ground when we do have those main breaks or when we're installing new water mains throughout the system, roughly about $30,000 for that. Our major capital projects, we're looking at installing a 12 inches waterline baseline from our water campus to or public work yard all the way to Idaho. We've had several leaks in the last ten years, roughly about one every two years in the section between Winchester and Idaho. So we want to go in there and replace that main. We're gonna be redoing some of that roadway with the Public Works And Water Building, so we wanna make sure that we don't have any leaks in the future once we put that new asphalt down.

We're also working on another project, a 16 inch waterline in Tomahawk from US 60 to Southern. We're taking advantage of a future project you guys will see later at the city council meeting here tonight that Bullockworks will be doing the roadway. So we want to get in there and relocate some of the 60 inches waterline that's in conflict with the storm water and make sure that we don't have any leaks on this also as part of that project. So getting in front of them so that we can move forward with the paving of the roadway. We also drilled a well this year.

It looks like it's going to be a good producing well. So we're planning on equipping that well and installing electrical, which is roughly another $2,000,000 next year. And then we're going to also purchase effluent credits from the sewer district like we have in the past and roughly about 1,000 acre feet. So that's 10 acre feet for one hundred years, so we get roughly about 30 homes from that purchase there over the next one hundred years. We're also looking at replacing and upgrading our booster, Water Campus 2.

Roughly, we're going take $2,200,000 from our operating revenue from our existing customers because we're replacing our existing pumps there. And then we're going to add additional pumps, which will take from our Fund 62, which is system connection fees, which we talked about earlier, so that new development actually funded those pumps so that our existing customers did not. We're also looking at replacing treatment train one media encoding pipe at our Supercision Area Water Plant of roughly $300,000 Media is roughly about ten years old, so end of its useful life, so we're going be replacing that so we can continue to treat at a high level. Then we're also looking to fund some of our water and public works buildings without getting a loan. These are funds that we've saved up from our system connection fees that development has paid for, and we're looking at spending $2,250,000 in that next year in our proposed budget.

We also have some increase in expenditures. We've been working with Salt River Project on the Verde River Sedimentation Mitigation Plan. This is year six of the study. This is 30% plans. Going through it, The first four years was $100,000 The last two years is $180,000 and this will be our last payment of the to get to 30% design.

There'll be additional contracts signed that we'll bring back to you in the future for additional dollars, but this will be it for next fiscal year. Also on our Central Arizona project operation and maintenance fees, as we'll see in a later slide, the fees still continue to go up. They roughly went up to $100,000 from last year, so continue to increase there. We also have capital charges that went up also on our CAP fees. So even without using our water or getting it delivered, we have to pay that $215,000 per year to keep those water resources available to us.

Any questions on those major projects or increases that we have currently?

Yes. MR. My question so regarding the capital projects. So you have, in the proposed budget, a capital outlay of eighteen DAY: million dollars

Yes, sir.

Is that so what we're looking here doesn't add up to that. You have are you saying you

That's true. These are all the major projects. Roughly, big project we're talking about is the $10,000,000 for the Public Works Building. Right. So then we have about 8,000,000 Oh,

I forgot the $10,000,000

I forgot. So we have, you know, here's three projects, roughly $3,500,000 Here's another four point there's $75,000,007,700,000 And this last one, around $9,000,000 or so.

I forgot the $10,000,000 Okay, cool. Just want to make sure you weren't hiding something else in

there yet.

Nope. Buy yourself a Ferrari or something.

No. Any other questions?

You can't get a Ferrari for that price.

10,000,000 won't you

get him as much as he can.

He will in the corner office he needs to decorate.

He will. Yes. Real quick. Yes. I drove down Tomahawk from

Southern to 60. Beautiful looking road, but

they didn't fix one

pothole. Just made it look pretty.

That is correct. And that was a Pinal County project. As you guys will hear later tonight at the city council meeting, there is a public works project coming in the very near future that will hopefully correct those issues and make a nice road for us.

I'm glad that

I go, well, this looks really nice. And I'm like, wait a minute.

Yes. Just kind of give you guys an idea on CAP fees. As I talked about earlier, they're increasing. But But as you see in the early twenty fifteen, so we really got into some low water in Mead and Lake Powell, the fees were staying pretty consistent operating maintenance fees. And then over time, over the last six years, they're slowly climbing, almost doubling.

And now we continually see a rise here because there's less water in the canal to deliver to Apache Junction or even to other areas. So the less water there is, there's still the same amount of pumps out there. They still have to pump that water through, so there's higher capital O and M cost for us. Our capital fees slowly increased, they've been stabilizing over the last five years here, looking to stabilize here roughly about $60 per acre feet. So those stable out, but our O and M fees are still continuing to rise at this point.

I'll talk about our rates. So we're looking at a proposed rate increase, 5% on our base rate. And this is how we compare to other cities. This is our base rate. Currently, we're at $33.11 We're looking at raising that to $34.77 The average base rate over these 13 cities is roughly $30.26 So we're roughly about $4.5 over the average throughout the other cities.

There are some cities that are higher than us, there's other cities that are lower than us currently. So the proposed rate increases is 5% increase in the base rate. So the base rate really pays for the maintenance of the system, keeping up with the water mains, keeping up with our plants. Those capital fees you guys have there, some of those keep up with that. The consumption rate is really the water produced out there.

So any chemicals, any water, any electricity, we're not looking to change any of those. And then we have tiered rates for water conservation. So you have 0 to 400 as your first tier rate, 400 to 10,000 is your second rate, and then 10,000 and above is your third tier promoting those conservations because as you go up, the price goes up as you get higher. If you're living in the county and the district is here, looking at doing a base rate increase of 5%, consumption rate increase of 5%, and no changes to those tiers currently. So what does that mean to a typical customer that uses 7,500 gallons a minute or 7,500 gallons per month?

Currently, our existing customer will pay roughly $75 With a proposed increase, it would be $76.83 So it's $1.83 increase per month to their bill, roughly 2.4% overall increase to their water bill. If you live in the county, you pay $90.53 The pros increase is $95.05 and the difference is roughly $4.52 with 4.8% overall increase to their average bill. Comparing the city and county, same customer using the same amount of water, roughly you're paying about a $19 difference between the two bills because you get some of the benefits in the city or in the county of some of the city employees that we have here and the district employees that pay into that. So their bills are slightly higher. And this is common throughout other major cities throughout the Phoenix area.

Our system connection fees. This is for new development. If you're a new development coming in, these are what we're spending on the Water Campus too. We need to expand that booster pump station because of the new demand on our system. So we're using some of that money. So every time a new single family comes in, we're looking collecting raising that fee 1.7%, which is a CPI adjustment. Consumer Price Index. So we're going from $7,900 per unit to $8,030 per unit. We also have a system connection fee for Blossom Rock and Radiance. They do not pay as high as system connection fee because they're paying for all their infrastructure down there.

So they're paid for the surface water treatment plant, the booster pump station, a new well down there. They paid for all that infrastructure, so we pulled that out. And the last things that we have in there is equipment, vehicles for the people to drive as we had to expand and add new employees, and also part of the office space, and that's why we're putting it into the office building this year. So they pay for those fees still. We do have a water resource acquisition fee, looking at raising that 5% from $3,840 to $4,030 And this is to put this in our bank to as we get new development in, we need to go find those future water supplies to make sure we have enough and those customers pay as they come in for their future water needs.

So we're looking to raise that to $4,000 per single family. Any questions on those fees?

Yes. How do those fees for the water acquisition compare to other communities?

Very similar, but we had that last year in a spreadsheet. And I'll bring that back to you again at the next presentation if you'd like to see that councilmember cross.

Okay. And then a fiveeight water meter

JACK Yes, sir.

And a tapping sleeve. What's the difference in cost ten years ago compared to today? In other words, that brass body obviously went up in price.

The brass body, I mean, we're talking roughly probably about $1,000 back in the day, and we're probably looking at about double that cost currently, about $2,000

For just the meter?

Just the meter and brass and the copper that goes in there. As we all see those prices go up, we continue to rise here.

Okay. Thank you.

Any other questions?

Anyone else?

Nope. Okay. We're also proposing a classification study implementation. This is very similar to what the city's proposing that you guys seen at the work session last night, looking at an overall increase of 8.8%. This was because we were low market value in 75% of our classes, and they needed to bring those up so that we're looking at raising some of those compensation plans for people.

We also have an increase to our health insurance plans, 9.5%, that will be shared by the district and employees, just like the Sydney's plans. Any questions on that one? Okay. And then just the upcoming schedule, we're looking at our tentative budget on 05/19/2026 at six p. M. Then our final budget on 06/16/2026 at 6PM. Here at City Council Chambers at 300 East Superstition Boulevard, Apache Junction, Arizona 85119. Any questions on our upcoming schedule? Okay. And the report, your honor.

Okay. All right. District manager's report. No report, your honor. Okay. District director's report.

Just a quick report here. Just wanted to give you guys an update on our Apache Junction Water Festival. We had four schools, three from here from Apache Junction and one from Superior. We had six classes, roughly one hundred fifty four fourth graders that were out there. I know Mayor joined us. I think Vice Mayor was out there for a little bit also. Thank you guys for showing up. We had over 25 volunteers. Another great day to educate our youth here in Apache Junction on water conservation and how the watershed works and a lot of things. We've been doing this probably for the last twelve years plus, and we continue to educate our youth on conserving water out there.

The kids love to spray.

Yes. At the end of our event every year, this is what's unique about our festival, we have the fire department come out there, probably about 90 degrees the day of the event. Sprayed all the kids off, cooled them off. They had a nice lunch out there and enjoyed the rest of the day and then went back to school after that. A great event for community.

Just want to give you guys an idea of where our I talked about it in our resources under operating revenue. As you can see here, we're very consistent for several years. And then in 2023, we moved up 10,000,000 gallons a year. 'twenty four, we moved up another 10,000,000 gallons a year. In 'twenty five, we moved up another 10,000,000 gallons a year. So you guys can see we're producing more water as we're bringing in more customers, which brings in some more of that revenue, but it also increases our expenditures over those years also. Any questions on a quick recap there? Thank you.

District Treasurer's Report.

No report, Your Honor.

Okay. Thank you. And since there's no more, I'll adjourn this meeting. Thank you.