Water Utilities Community Facilities District - Regular Meeting

cell phones be put on silent. Roll call.

Chairperson Wilson?

Here.

Vice Chairperson Schroeder? Present. Board Member Cross?

Here.

Board Member Heck?

Here.

Board Member Johnson?

Here.

Board Member Nusser? Present. Board Member Soller?

Here.

You have a quorum, Your Honor.

Thank you. Approval of minutes for the May 2nd, 2026 and the May 19th, 2026 meetings. Mr. Chair? Yes.

Move that the minutes of the May 5th 2026 special meeting and May 19th 2026 meeting be approved Moved and seconded the roll call Board member heck Yes board member cross yes vice chairperson Schroeder.

Yes board member Nessar. Yes board member Johnson. Yes board member Soller chairperson Wilson Yes motion passes unanimously

Okay. Presentation, discussion, public hearing, and consideration of resolution number 2026-003. Mike.

Chairman Wilson and members of the board, we're on our final length of our budgeting this year. This isn't something you guys have seen, haven't seen in the past. We've been discussing this for a while. It's the same as the tentative budget. We're looking at consideration for adopting the estimated expenditures for Pesce Junction Water District for 26-27 budget. declaring such action shall establish WCVD's fiscal year 2026-27 budget also. Just a summary of last year's actuals that we spent. As you can see, charge for services and revenue. We had $8 million in revenue last year. We did have some earnings on our investments, and we had some miscellaneous income come in, roughly about $9.2 million last year. Oops, sorry. Operating expenses were about 4.5 million. We did have some capital outlay at 1.6, and then we put some into our reserves at 2.85, totaling that 9.23 million last year in total operating revenue. This year, we're looking at taking some out of our reserves because we have some capital projects we'll discuss here in a little bit. We're looking at charges of roughly $11 million in revenue, and then we're looking at going after some grants for $325,000, and then some investment earnings of $680,000. Looking at getting a bond proceeds to help fund the water public works building of $10 million and then some lease revenue from public works for that building of $900,000 this year. And then some miscellaneous revenue of $238,000, totaling about $28 million budget for next year. As you can see here, projected this year we're at $15 million. We're slightly going to be a little bit more. Our operating revenue, as you can see, went slightly up. Our costs for our general funds are roughly $7.3 million. We're going to have some debt service, including that new bond that we have of $1.8 million, including some outstanding debt that we've had from our plant from 2013. And then also we have a big capital outlay, which is about $10 million of that is going to be that water public works building. Then we always have contingency of roughly $500,000 for any emergencies, either well failure or pipeline failures or whatever we have in the system as part of that. So roughly a $28 million budget for next fiscal year. Any questions on that summary there?

Yes. Mike, tell me again, the miscellaneous, what's in that miscellaneous?

So these are some charges that we have. So a lot of our establishment charges and same-day service charges, they're miscellaneous charges that we establish at the counter. That adds up to that $230,000 that we have there.

Okay. It doesn't fit into any other category?

It's not. So mostly our revenue charges are for water sales and our base rate that come in under this level. So these are the miscellaneous other revenues that we have that aren't our standard. What's that? I was talking about expenses. Sorry, and expenses. Hang on. Sorry. $230. I need to get back to you on it, Peter, to be honest with you. I need to get back to you on that question there.

I'm just curious. We use that miscellaneous term a lot, and I always wonder.

Yes. I had that for you in our budget meetings, but I do not have it at the top of my head right now. I need to get back to you and answer that question.

That's fine. Thank you.

Any other questions?

Don't see any.

Okay. So other line items that we have, we have a funding source 62, which is our system connection fees. And then we also have 63, which is water exposition fees. So our system connection fees are the build-out infrastructure, like upsizing a booster station, tank, upsizing water main. So we receive funds for those, and then we have a water resource acquisition fee, and this is for additional water supplies. We're looking current year, projecting at $5.2 million, kind of projecting the same amount next year of roughly $6.1 million. Again, that last 163 account is put away for that Bartlett Dam project we're looking at, large projects, $20 to $30 million as we get further into the future, but just putting that in our savings for currently. System connection fees, we're looking at using 4.5 of our funds there. No water resource fees. As you can see, we had one here left, and this $334,000 was for the non-Indian agricultural water that we just finished paying off our fifth year of the five years of payment we had for them. And then we have some of our reserves that will be continued to add. Just some of the items that are in our budget. We're looking at purchasing two three-quarter ton trucks for $130,000, purchase one midsize truck at $50,000, and purchase one pipe trailer for $30,000. We also have a couple of pipeline projects that we're doing next year, a 12-inch water line and baseline in front of Booster Pump 2, which is part of Public Works. To Idaho, we've had several leaks on this line in the last 10 years, roughly a leak every other year. So we're having a big issue, and we want to get this main replaced before we replace the road out in front of the new Public Works building also. We're also working on another project, a 16-inch water line on Tomahawk from U.S. 60th Southern. You guys have seen this in the Public Works presentation. We have a storm drain project going on there and also a road improvement project. So we want to get out in front of that, replace, relocate the water line in that road so that we don't have any conflicts and we don't have leaks in there after we put a brand new road in there as part of that grant funding we had for Public Works. Then we're looking at installing electrical gear at Well 10, we just recently got done test pumping that. You guys may have seen some stuff on Facebook where we were wasting water. That was not the case. We were test pumping that well to see what we can produce and cleaning it up. It's another good producing well. We're looking at roughly about 2,000 gallons a minute. So a great producer in Apache Junction. Our two existing wells that we have are roughly 500 gallons a minute apiece. We have another one that we're coming online with Superstition Vistas that the developer drilled. And this is the first one the district has drilled by their own. So roughly a 2,000 gallon a minute well. And then we're looking at purchasing some effluent credits from the sewer district to add to more of our paper water so we have more water for the future as we move forward. We have first-order refusal. We have an agreement with them that we signed roughly a couple of years ago, and I believe it's a five-year agreement, five- to ten-year agreement. And then we have first-order refusal. If we don't want to purchase the water, they could go sell it to somebody else at those prices. We're going to replace and upgrade Booster Pump 2. We've been working through that. So we have Fund 61, which is our operating revenue, which is our existing customers replacing the existing booster pumps out there. And then Fund 62 is our system connection fees, which is for new development that has paid for this. So this is our savings account. We're using some of that money so that our existing customers aren't paying for this new infrastructure that we need for our system. We're also looking at replacing our media and treatment train 1, which is roughly 10 years old, When the plant was built, we noticed that our treatment train, too, that we just got finished installed and working is treating the water much better, not to a better quality, but it has a longer treatment time than our existing train. So we're backwashing that one more often than the other ones. What happens is when you initially install it, you have angular material that's in there, and over time it rubs against each other kind of like your river rocks and becomes smooth and just doesn't treat as well as it did in the past. It doesn't last as long. So we're looking at replacing that. And then we'll currently, as part of the project down there, we added the three more vessels. They actually are sitting on the slabs down there. So we'll have all five vessels basically with new media within a year apart from each other. We're also working with our public works building, roughly scheduled $2.25 million, fund 62, taking out for those new development that keeps paying into that so that we can help pay for the new infrastructure, new buildings that we need as part of that. We also are still working with Salt River Project in 22 other cities on our Bartlett dam raising, our Salt River Project for the River Sedimentation Mitigation Project. We're in year six of six. We roughly have about $500,000 in this project. This is going to be our last payment. And we're getting to roughly about 30% design at this time. Then we'll sign another agreement for final design and construction of that. Again, this is probably a finished project in 2034, 2035 at this point in time. So it's still years out before we get there. We do purchase all of our CAP water and deliver it to us, and that's roughly $1.5 million, which continually goes up because there's less water on the river, less water delivered, but they still have to maintain all those pumps and the canal as part of that, so still paying that. And then we still have our capital charge of $215,000, which is stabilizing out more as well. I'll show you some graphs here in a few minutes. Any questions on some of our major projects?

Yes. Excuse me. That $180,000 for the sedimentation mitigation, that's for six years? $180,000 divided over six years or each year?

So the initial phase of that agreement was for four years. We paid $100,000 each year. We've paid that already. They had some change orders because we had to do some additional studies as part of that, and it was $180,000 over the last two years. and this will be the final payment of the $180,000. All right.

Thank you.

Any other questions?

Okay.

And here's our CAP rates, as you can see. That's what I was talking about. Our capital fee was down at $23 back in 2016, 10 years ago, and it slowly increased, and now we're stabilizing more at $50. So this was the capital charge. The funds that originally built that CAP channel Each city has to pay this for their CAP water supply and to keep their CAP supply in existence. The other one is the O&M charge. It started out at 157, and as you can see, it's climbing. And again, this is because there's less water on the river. Still have to maintain all those infrastructure we have out there. So our price is slightly going up, as you can see, and continues to rise here into the future. Hopefully, we get some wet years, and this will come down. Any questions on that, on budget?

Don't see any.

Do we need to do a motion on that one, or do we want to move on to the next agenda item? Okay.

Oh, this is a public hearing, right? All right, this is a public hearing.

Excuse me.

I apologize. Got a cough in there. Presentation and discussion. Is there any additional discussion among council? I will now open the public hearing. There's a five minute time limit with a one minute warning that you will hear. Please state your name and address for the record. And I don't see anyone willing to step forward. So I will now close the public hearing and ask for a motion for resolution number 2026-003.

Mr. Chair?

Yes.

I move that resolution number 2026-003, the 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, 2026 and ending on June 30, 2027. Declaring that such actions shall establish the budget for the water utilities community facilities district city of Apache Junction Arizona for fiscal year 2026 to 2027 be approved second moved and seconded roll call Board member cross yes

Board Member Heck? Yes. Board Member Johnson? Yes. Vice Chairperson Schroeder? Yes. Board Member Nesser? Yes. Board Member Soller? Yes. Chairperson Wilson?

Yes.

Motion passes unanimously.

Thank you. Okay. Presentation, discussion, and public hearing consideration of Resolution No. 2026-004. Mike, continue. All right.

This is readopting all existing and adopting new potable and non-potable rates, user fees, charges for fiscal year 26-27, including the potable and non-potable rates, system connection fees, water acquisition fees, and establishing an effective date of 7-1-26. The district is proposing a base rate increase. Our current base rate is $33.11. We're proposing to move it to $34.77. As you can see, we're slightly above some other cities. Gilbert, with their big, huge rate increase, has jumped among other cities. You'll see some more coming up in the future here. But as we move forward, we're in the middle of the pack currently, slightly above average right now. Customers that live in the city limits will see that base rate increase 5%, no change in their consumption rate, and no change in their tiers. People in the county and county islands will get a base increase of 5%, a consumption rate increase of 5%, and no change to their tiers. What does that mean for the city customer? As you can see here, our base rate was $33.11, moving to $34.77, adding their taxes and consumption for the average customer, 7,500 gallons per month. there'll be $1.83 increase to their bill monthly. So 2.4% overall increase to their bill. If you live in a county island, the base rate would jump from $34.10 to $35.81. You'll see an increase in consumption rate. 5035 to 5286. Total increase of roughly $4.52 on that same 7,500 gallon per month bill. So roughly a 4.8% increase to their average bill. Difference between if you live in the city and the county on the proposed rates. If you lived in the city, it would be $76.83. And if you lived in the county, it would be $95.05. Roughly $20 higher or about 20% higher if you live outside the city. Residential system connection fees so this is again for all those improvements for new development. This isn't for existing customers So a single-family resident would pay seventy nine hundred dollars currently and we're looking to raise that to eight thousand thirty dollars The proposed increase is one point seven percent which is a CPI adjustment that we're utilizing for cost of construction We're also looking to increase the rate for radiance and blossom rocks that same 1.7%, they do not pay for the infrastructure. So that's why they, as part of the development agreement, they only pay for new equipment, new vehicles, and for housing or office space for the district. So they pay a much lower rate because they pay for all that infrastructure on their own outside of the system connection fee. The last one we have is our water resource acquisition fee. So this is, again, to go purchase that water. We're raising it up. 5% from that $3,840 to $4,030. As you guys all remember, we've talked about in the past, the price of water is not going down. Ten years ago it was $3,000 an acre foot, and today it's $30,000 an acre feet. So we're trying to keep up with the price of water. So when we do need to go purchase it, like we're looking at doing with the Bartlett Dam, we have those funds available to us so we can purchase that water for new development as we move forward. And how do we compare to other cities throughout the valley on our system connection fees and water resource acquisition fees? Again, we're looking to raise ours slightly this year from the $16,000, almost $17,000, to just over $17,000. We're in the middle of the pack. Some of Phoenix's fees are up to $30,000, and then we go back to Chandler, which is roughly $10,000. And there's some that are higher, and there's some that are lower as part of this, but these were the ones that we're at in the middle of the pack currently. Any questions on our rates and fees?

No. One's moving. OK. So are you ready to continue on? OK.

Yes, to a public hearing now.

This is a public hearing, so I'll open it up to the public. And again, I don't think we have anyone down here that's wanting to jump forward. So I will now close. and ask for a motion for resolution 2026-004.

Mayor, I move that resolution number 2026-004, resolution of the Board of Directors of the Water Utilities Community Facility District, City of Apache Junction, Arizona, re-adopting all existing and adopting new portable and non-portable rate user fees and charges, service connection fees, and water acquisition fees for fiscal year 2026 to 2027 and establishing an effective date be approved. Second. Second.

Moved and seconded. Roll call.

Vice Chairperson Schroeder?

Yes.

Board Member Nesser? Yes. Board Member Heck? Yes. Board Member Soller? Yes. Board Member Johnson? Yes. Board Member Cross? Yes. Chairperson Wilson? Yes. Motion passes unanimously.

Okay. District Manager's Report. Acting Brian? No report, Your Honor. District Director's Report. Mike?

Just a quick thank you guys for approving these rates and the infrastructure that we do here. You know, the two to five percent Obviously, you can tell with how many customers we have in here on how we've been maintaining this for the last 10 years. I believe Gilbert's probably going through a different council meeting, going 50% to 100% and not seeing what we have there. So I really like what we're doing here and what you guys keep approving and working through these smaller increments. It really helps out our customers so they don't see that big jump in the end and we don't have them all here. So I really appreciate that. Thank you. District Treasurer's Report.

All right, so there'll be no further discussion. I will adjourn this meeting. Thank you.

Hey, Peter.