Water Utilities Community Facilities District - Regular Meeting

Chairperson Wilson?

Yes.

Vice Chairperson Schroeder?

Yes. Present.

Board member Cross?

Here.

Board member Heck?

Here.

Board member Johnson?

Here.

Board member Nesser? Present. Board member Solar?

Yes.

You have a quorum, your honor.

Thank you. Agenda, approval of minutes for the 04/21/2026 meeting. Do I have approval of the minute? Mr. Chairman? Yes. I move that the minutes of the meeting of 04/21/2026 be approved. Second. Moved and double seconded. Roll call.

Board member Heck?

Yes.

Board member Cross?

Yes.

Vice chairperson Schroeder?

Yes.

Board member Nesser?

Yes.

Board member Johnson?

Yes.

Board member Solar?

Yes.

Chairperson Wilson?

Yes.

Motion passes.

Presentation, discussion, consideration of resolution number 2020.

Mike.

Chairman Wilson, members of the board. Item two, we're discussing our classification and competition study implementation. We've talked about this in previous meetings, Varying our salary increases from employee depending on average market salary. As you guys remember, I think we were 75% of our positions were below market value. We're bringing them up, the average increase of among all positions is 8.8%. We're looking at 9.5% increase to health insurance premiums. So we're looking for a motion to move forward with this this evening. So consider considering for adopting the classification plan, compensation plan, flat in hourly schedule for fiscal year 2026 and 2027.

Okay. You got any questions, anyone? Alright. Do I have a motion for resolution number 2026Dash001?

Mister chair, I move that resolution number 2026Dash001 declaring as a public record and adopting certain documents filed with the district clerk entitled Apache Junction Water Utilities Community Facilities District Classification and Compensation Plan for fiscal year twenty twenty six, twenty twenty seven be approved.

Second. Moved and seconded. Roll call.

Board member Solar?

Yes.

Vice chairperson Schroeder?

Yes.

Board member Nesser?

Yes.

Board member Cross?

Yes.

Board member Heck?

Yes.

Board member Johnson?

Yes.

Chairperson Wilson?

Yes.

Motion passes.

Thank you. Presentation, discussion, public hearing consideration of resolution number 2026Dash002. Mike.

Again, we're going go over an overview of the proposed twenty twenty six, twenty twenty seven budget, proposed rates, fees, and charges, and then budget schedule review in the evening. Kind of give you an update on our budgets through actual through 2024. We roughly with our revenues and resources, revenues in twenty twenty four, twenty twenty five was 9,200,000. Uses was 9,200,000, so equal budget that year. Projected this year, we budgeted 15,000,000.

We're projecting to spend that 15,000,000. We do have a larger budget for the proposed budget in fiscal year twenty seven, but our revenues are going up as you can see over the last couple of years. These are service charges. As water deliveries increase, our revenues increase also among that. We do have some investment earnings that we earn interest on.

We're also gonna look at getting a bond for our water district building. We'll have some lease revenue from leasing space to city in that shared building that we'll have with public works also. And then we have some miscellaneous charges, roughly about $28,000,000 in operating revenue for the proposed budget for next year. Expenses, we're looking at $7,300,000 in operating expenses. We do have some existing debt services from when we built the water treatment plant, and then we're really taking on some additional debt services with that $10,000,000 loan or bond we're looking at receiving that year.

Looking at a capital outlay of roughly $18,000,000 roughly $10,000,000 more than we've done in the past, but most of that is going be covered by that building that we're looking at constructing in the proposed budget. We have a contingency of 500,000 for next year with a total budget about $28,000,000 So with our reserves and with some bonds that we're receiving, we'll have a equal budget again next year. Some of our restricted funds. So we collect system connection fees. So when we have to upsize a booster pump station or upsize a tank or build for new development, the system connection fees are paid by new development.

We can upsize those to provide service to those equal to the existing service we have to our equal our existing customers. We also do collect a water resource acquisition fee. So any new customers that come on, we charge a fee to. We'll be collecting $5,000,000 roughly next year in revenue. This goes into our piggy bank. And as we build those larger projects with the Verde Dam project we've been working on, working on some additional water supplies from State Land, we'll be looking at purchasing those. We'll have those that money in the bank. So when it's ready, we can purchase those supplies without taking out loans for those at that time. Any questions on those so far? Okay.

I don't see any movement.

Okay. Vehicles and equipment, some of our large purchases next year. We're looking at purchasing two new threefour ton service trucks, additional midsize truck, and one pipe trailer, roughly at 30,000. We have some large projects we're looking at doing next year. We're gonna replace a waterline, and baseline between our water campus too, which is public works.

In Idaho Road, we had several leaks over the past five years on that line due to heavy traffic, so we're gonna be replacing that line. We're also doing a project in conjunction with our public works department on 16 inches water main on Tomahawk from US 60 to Southern. We had to do some vertical realignments and get that in before we actually do the storm water and then actually pave over that road. So we're doing things ahead of time here. We're also looking to install electrical equipment and pumping gear at Well 10, roughly $2,000,000 in cost, and then also purchase effluent credits from Apache Junction Sewer District of about $300,000 Additionally, at Water Campus two, we started part of that project this year.

We'll continue moving forward, taking some other operating revenue to replace our existing pumps that are there and add electrical gear, and then also add taking out a fund 62, which is system connection fees for those additional pump that we will be installing as part of that project also for new development that came in and paid for that. We're also looking at replacing our media and treatment train one and coating our existing pipes at the plant. Our plant's roughly ten years old. The media has and it's at the end of its useful life, so we're looking at replacing that so that we can get the best out of our treatment process we can. It's roughly about $300,000 in that project.

And also our Water Public Works Building, roughly about $2,250,000 in fund 62, which is our system connection fees. As we're growing, we need more admin staff so that we can pay for a portion that that new development pays for. We also have some expenditure increases for our project. We have our final payment, six of six for a 30% design for a hun for a $180,000 with SRP for the Verde Bartlett Dam raising. This is year six of six, so this will be end of that payment, but then we'll be signing on to another agreement to move from 30% plans to go to 90% plans, which will be a larger fee as we get moving forward.

But this is just for next proposed for next fiscal year. CAP, we roughly went up to $100,000 or at 1,500,000 for operation and maintenance fees. That's to deliver that water to the district through the canal. And then we also have our capital charges that we have to pay. It's $215,000 to keep our CAP water for the future. Any questions on those currently? Okay. As you can see, these are mostly CAP numbers. We started out real nice and flat here on our OM fee. And then over the past ten years, it's doubled, almost tripled in price here, and it can continue to be going up because less water is being delivered through that canal.

So we still have to pay for all that infrastructure and maintenance of it, so the price goes up for our O and M expenses. The capital charge kinda leveled out once we jumped up here back in 2020. Continually, it's gonna stay around $55 to $58 per acre foot as we move forward. So kinda stabilized out, but the capital charges are still there. Moving on to rates.

We're looking at doing a rate increase here up to our base rate from currently, it's $33.11 to $34.77. Just a slight increase of 5%, but it doesn't increase the entire bill by 5%. It's gonna be less as I show you here in a minute. So we're looking at doing a base rate increase proposed at 5% increase to base rate. No change to our consumption rate and no change to our consumption tier with those individuals or customers that are in the city limits.

Outside the city limits and county islands, we're looking at a 5% increase to the base rate, a 5% increase to the consumption rate, and no change in consumption tiers at this point in time. What does that really mean to an overall customer? If you're in the city limits and your existing bill is 7,500 gallons per month, it's roughly $75. This additional increase would change it to $76.83, roughly a dollar 83 change to your bill on average if you use that same amount of water the next month. Bill is outside the city.

In the county island, your current bill is roughly $90.53 for that same 7,500 gallons, and a new bill would be $95.05, roughly a $4.52 increase. Overall increase to your bill would be about 4.8% or just under 5%. The difference between if you live in the city or in the county, your bill in the city would be $76.83. And if you lived in the county, it'd be $95.05. We are also looking at increasing our system connection fees.

And, again, these fees pay for that those new developments for their portion of tanks, booster pumps, wells, treatment plants, and we're looking at increasing by CPI of 1.7% over last year, so going from $7,900 to $8,030 per single family resident. We also are looking to increase the Radius and Blossom Rock development agreement fees. They currently pay for all the infrastructure through a CFD. We're looking at raising those because we still have to pay for equipment, building spaces, and other things. So we're still looking at raising those by a CPI of 1.7% going from $570 to $580.

We do have our water resource acquisition fee. A single family would pay $3,840 We're looking at raising that 5% to $4,030 As you guys are aware, the cost of water continues to go up. If we're gonna get ahead of the curve, we're trying to be able to put this in our bank and be able to purchase this water when it becomes available like we continue to do out there. Council member Cross, you asked me last meeting about system connection fees and water resource acquisition fees and how does Apache Junction look compared to the rest of cities. This kinda gives you a chart.

These are comparable cities that charge for water system connection fees, this column here, water resource fees in this column here, and then wastewater fee. This is our sewer district fee that they currently charge at the sewer district. So anybody charges fees, we're roughly in the middle. As you can see, just that slight increase that we had from last year, we're not moving up or going above anybody else. We just had a slight increase in staying in the same position where we were before.

So I I know that it looks like a large fee, but an acre and a quarter lot that had to go out and drill their own well, you may know better than I do, but it's roughly about 25 to $30,000 if you had to drill your own wall well. So this would be kind of the same price, roughly at about $17,000 if you needed water service from us, that now we have to guarantee the water quality and quantity rather than somebody drilling a well that has to go after and not guaranteed anything. Any questions?

Yes. Mr. Chair. Mike, I have a question going back to the public the new public works building construction.

Yes, sir.

So the I think you said the estimated cost was around $40,000,000 is that?

That's correct.

Okay. So we're not are we going to phase in the capital dollars for that? Is that how much?

That's correct. So we're looking at just spending $10,000,000 next year. And then as we phase in over time, there'll be additional supply. So this is fiscal year 'twenty seven budget. Fiscal year 'twenty eight, there'll be additional dollars as part of that

Okay. All right.

Basically, it'll go through different two different fiscal years? Correct. Two to three different fiscal years we're looking at.

So you can and you can work out the how you work at the development and construction of it to work with the funds that you have available then for it, I guess. Correct.

Daryl.

Mike, thank you for providing that extra information. Also, currently, how much CAP water are we using on a daily basis, and what percentage is that of our overall use on a daily basis?

On a daily basis? So we are currently maxed out our plant. So we're using roughly about, I would say, about 60% of our CAP through our treatment plant, but we continually are sending it to groundwater savings facilities and underground storage facilities. So we're utilizing 100% of our CAP water on an annual basis. So we can recharge that.

As we mentioned earlier, we budgeted to purchase some credits from Darren. We take that water and we put it in the ground to earn our own credits so we don't have to pay somebody else for those credits. So we're continually utilizing that. As we move forward with the new development down south, and that's why it was limited to the first four square miles, that's where we felt comfortable that we could service with our existing water supplies. So in the next five years, our existing water supplies will be gone, and that's why we're looking at those additional supplies working on the Bartlett. These are ten, fifteen, twenty year future projects that we have to look forward to just like ten years ago when we leased a 100 or a thousand acre feet from the Gila River Indian community. So we have to look into the future to see where where we're gonna be at and what we need. So those are projects we're looking forward to. Okay. Thank you.

Anyone else? Okay. Thank you. And this is a public hearing, isn't it? No, it's not. Yes. Yeah. Yes, it is. Okay. Yep. Alright. I will now open the public hearing. There's a five minute time limit with one minute warning. You will hear. Please state your name and address for the record.

Anyone like to speak on this? I see no movement. So I guess I will now close the public hearing and ask for a motion for resolution number twenty twenty six dash zero zero two. Mister chair?

Yes. I move that resolution number 2026Dash002, a resolution of the board of directors of the water utilities community facilities district, City Of Apache Junction, Arizona, pursuant to ARS 40 eight-seven 16, adopting a proposed budget for the fiscal year beginning 07/01/2026, and ending on 06/30/2027 adopting proposed rates, fees, deposits, water resource acquisition fees and charges applicable for the fiscal year beginning 07/01/2026, and ending on 06/30/2027 Establishing a public hearing on the proposed budget and directing district staff to solicit comments from the city of Apache Junction on the proposed annual budget be approved. Second.

Moved and seconded. Roll call.

Board member Nesser?

Yes.

Board member Johnson?

Yes.

Board member Cross?

Yes.

Board member Heck?

Yes.

Board member Solar?

Yes.

Vice chairperson Schroeder?

Yes.

Chairperson Wilson? Wilson?

Yes.

Motion passes.

Thank you.

Did I have to do a further We motion

have to get the rest on there.

Do a further motion on that then. Okay. Okay. I further move the public hearing for final budget adoption be held on 06/16/2026 at 6PM in the Apache Junction City Council Chambers, 300 East Superposition Boulevard, Apache Junction, Arizona.

Second.

Moved and seconded. Roll call.

Board Member Nesser? Yes. Board Member Johnson?

Yes.

Board Member Cross?

Yes. Board Member Heck? Yes.

Board member Solar?

Yes.

Vice chairperson Schroeder? Yes. Chairperson Wilson?

Yes.

Motion passes.

Thank you. District manager's report. Bryant.

I have no report, your honor.

District director's report. Mike.

No report, your honor.

Alright. District treasurer's report.

No report.

Okay. Thank you. Since there's no further discussion, I will now adjourn this meeting.