Water Utilities Community Facilities District - Regular Meeting

Because we know it might end early at 6. So you just have to start after 6 o'clock.

All right. So I would like to call the city of Apache Junction County. County. Apache Junction Community Council meeting. What? Water board. Water board. Where is the water board meeting?

Let's do water now. We need a good water board.

I flipped it over. There it is. All right, let me restart that. I'd like to call the City of Apache Juncture Water District special meeting of September 15, 2026 to order and request all cell phones to be put on the silent mode. Roll call.

Chairperson Wilson? Yes.

I think.

Something like that. I'm here.

What are you doing down there?

Vice Chairperson Schroeder?

Oh, I'm here.

Board Member Cross.

Here.

Board Member Heck.

Here.

Board Member Johnson.

Here.

Board Member Nesser. I'm here now. Board Member Seller. I'm here. You have a quorum, Your Honor.

Thank you. Approval of the minutes for the June 16th, 2026 special meeting. Do I have a motion of approval of the minutes?

Your Honor. Yes. So moved.

Second. Moved and seconded. Roll call. Thank you.

Board Member Soller? Yes. Vice Chairperson Schroeder? Yes. Board Member Nesser? Yes. Board Member Cross? Yes. Board Member Heck? Yes. Board Member Johnson? Yes. I'm sorry, Chairperson Wilson?

Yes.

Motion passes unanimously.

Thank you. Presentation, discussion, consideration, procurement of fleet vehicles.

You've got to stay with us here, Mike.

Go away, Matt. I skipped one. Presentation discussed. Consideration of procurement of custom trailer. That's it. Still mic.

Good evening, Chairman Wilson, member of this board.

Quick presentation on a custom trailer the district is looking to purchase. We put it in our budget for 2027. It's a pipe trailer so that we can haul pipe out to our job sites or for main breaks or different things happen. Our existing trailer is over 30 years old, needing some repairs, so we're looking to replace that. It's a custom decked or power tilt trailer to handle the weight of our water pipe pipes Staff is requesting approval of $30,000 for this trailer And here's a little idea of rendering what it possibly could look like Any questions on this one?

Yes Being that it's a tilt bed you plan on hauling other things besides pipes

Some minor equipment may be hauled on that, but mostly pipe. Can I get a question?

Yes. How old is the other trailer? I mean, what's the light expected?

It's roughly about 30 years old. 30 years old?

Oh, 30, okay.

Okay, so some of the wood decking we've replaced several times. It's getting older, so we're looking to replace it at this point in time with a more heavy-duty trailer that last year we built we got one for our Traco that we purchased a tilt trailer This one's a new another new trailer to replace that that has a steel decking rather than wood decking so it lasts a little longer It's this one's specially designed to haul heavy loads 14,000 it looks like correct Mike so

Basically, all the pipe that you haul or we haul is ductile iron, or do we also have to deal with plastic?

Most of the pipe that we haul is all ductile iron. That's what we put in our system. We don't put any kind of plastic into our system currently.

Hence the need for a heavy-duty trailer. Yes. Thank you. Okay.

Do I have a motion? Mayor? Yes. I move that the purchase of one custom trailer from Texas Pride Trailer LLC in the amount not to exceed $30,000 be approved.

Second.

Moved and seconded. Roll call.

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

Okay. Thank you. Presentation concluded. Discussion and consideration of procurement of fleet vehicles. Mike.

So we're looking to replace some of our fleet vehicles. Typically we replace our vehicles over seven years old or 100,000 miles. Again, this is less vehicle maintenance. We've noticed over time as we get past those years and miles, you have to do additional maintenance on those vehicles. The transmission may go out. Heater cores may go out. They start to break down because these are used everyday vehicles for us. And we don't want these emergency vehicles to have an emergency themselves when we're out on one where it breaks down. So typically trying to replace those every seven years or 100,000 miles. We do have it in our budget currently for 2027 to replace two service trucks and a regular supervisor vehicle. So staff is recommending approval of $150,000. In this one, we've changed up a little bit on you. We are looking to purchase one service truck and one one-ton truck to haul around the future direct potable reuse trailer that we're currently working on. Because our vehicles currently cannot tow that around, we'll need to be able to tow that to different venues and different things that are happening out there. So we did change. So it's only going to be two vehicles this year. One is going to be the service truck. We're deleting one service truck. And then we combine those two funds that we have available to purchase that truck to pull around our non-potable water trailer because it is, again, another heavy-duty trailer. It's roughly 14,000 pounds itself because all the equipment we have in there and all the devices that are in that trailer, and it's roughly about 40 foot in length also. So kind of idea, here's our service trucks that we typically would purchase for the vehicle. These are 2027, 2500 Chevys. And then we also have the 3,500 one ton to pull around that gooseneck trailer. That would be part of the reuse trailer that we pull around. Any questions on our vehicles for this year?

Any questions? Yes.

So Mike, what, which milestone do we typically hit first on the vehicles? The seven years, a hundred thousand miles.

Typically it's going to be that seven years that we're hitting first. Most of the miles are here in town. Most of it, I guess you would look at more idling hours, more than anything on these vehicles. So we hit that seven-year mark sooner with those idling miles rather than miles actually on those vehicles.

And I think we then, don't we put them up for, the ones we're getting rid of, we put them up for auction?

Correct. We take them to auction, and typically we get anywhere between currently about $15,000 to $18,000 as we take those to auction. And then if the vehicle's still in good condition, possibly another department within the city may look to utilize that vehicle for other purposes amongst the city rather than just for water.

Any additional comments from anyone?

I guess I have to say, it's not a point of issue, but why do I feel like you've been buying Forge forever?

Public Works has been buying Forge forever roughly about three years ago, or probably it was the COVID era. When Ford had an issue with getting cards, we did not get vehicles for approximately two years. So the water district that time went back out to state contracts and decided to go with Chevy, comparing all the vehicles and contracts that we have currently out there.

Okay. And this 3500 is a four-wheel drive, correct? It says so. I believe so, yes. That'll get you out of problems. Yep.

Okay. Any additional discussion? Do I have a motion?

Mayor? Yes. I move the purchase of one replacement 2027 Chevy Silverado 2500 HD two-wheel drive regular cab truck and one new 2027 Silverado 3500 HD four-wheel drive crew cab truck from Midway Chevrolet utilizing the Corporate Arizona State Contract, CTR059320, in the amount not to exceed $150,000 be approved.

Second.

Moved and seconded. Roll call.

Board Member Heck?

Yes.

Board Member Cross?

Yes.

Vice Chairperson Schroeder. Yes. Board Member Nassar. Yes. Board Member Johnson. Yes. Board Member Soller. Yes. And Chairperson Wilson.

And you're an expensive person. Yes.

Motion passes unanimously.

Presentation goes to discussion and consideration of a lease agreement with Fort McDowell Yavapai Nation. Mike.

I'm going to take a break finally here. I'm going to actually introduce Brian Draper. He's our new deputy water director here. He's been with us for a couple months. He was with the city of Mesa for over 30 years. Decided to step away from Mesa and retire, but came back to work for Apache Junction Water District. So he's going to present on this next item here.

Good evening. Chairperson Wilson, Vice Chair, members of the board. Coming here to quickly go over this agreement. It is a one-year agreement. that we're going to set with Fort McDowell, you have Pi Nation. We did offer a bid. It was accepted. And so now we're going through the process of getting the agreement in front of you for approval. And then we'll forward that on to get the tribal communities signature on that as well. But you can kind of see a brief timeline of where this all began back in May. And now we're trying to put this into fruition. It's for 1,000 acre feet of water. There I have listed the cost, $450,000. There is opportunity if we act in good faith with the community. We could get additional years of water into the future. And so this, they're really just testing the waters. There's two other communities that they're offering this to. And then hopefully in the future, you know, we can, again, maybe get a longer lease on this, you know, five, 10, 15, 20 years. So with that, we're requesting approval prior to the October 1st, 2026 water order, which we have to submit to CAP. And we would like to include this water with that. And we will put it to beneficial use here within the community. And with your approval, we'll continue moving forward. Thank you.

Yes, I have a question.

Okay.

So for years we've been talking about our water supply and how well we're doing and how we have this 100-year, you know, bank going on. So is this out of necessity or is this something out of, hey, it's available, let's just grab it?

Well, as part of the water order for next year, This year we were cut 817 acre feet, our NIA water, which is non-Indian ag. This coming year that will be gone, but then they're also proposing with the record of decision the Bureau just put out an additional 12% to 14% cut on top of that. So that will cut into our municipal and industrial supplies. So what this will offer up is a way to augment what we're going to be cut. Tribal water is less likely to be cut in this round.

And even if they do get cut, they get firmed in the Arizona Water Banking Authority and the federal government.

So this is something in future we would probably need to get. You can never have enough water. And so it's a little uncertain once we get into 2028 and then following years how deep the cuts will actually go. And so we want to make sure we have plenty enough renewable supplies to provide our customers before we have to dip into the groundwater.

Gotcha. Thank you.

Yeah, thanks.

Chair? Yes.

So with all the cuts that we're having with CAP water, does that also mean that our annual costs for using CAP water are being cut too? In other words, we're going to have some financial savings?

Well, on the actual water order, what we get cut, we don't have to pay O and R on it, but we still have to pay the capital, the annual capital cost, whether you take the water or not. If we're cut, we still have to pay capital to CAP, and that's how they repay the feds on the cost for the project.

Okay. Anyone else? OK. Do I have a motion for this? Mayor? Yes.

I move that the lease agreement for a Central Arizona project water between Apache Junction Water District and Fort McDowell Yavapai Nation for 1,000 acre feet of water 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. District Manager's report. I have no report, Your Honor. District Director's report. Mike.

Chairman Wilson and members of the board, Just a quick update. I wanted to show you guys where we're at on the project we've been working on. This is our surface water treatment plant on Ironwood. In the upper left-hand corner here, this garage door was the existing building. This seam here is the new building, which has three additional doors, which inside those has three additional filter trains that we have. So The past couple of years, we went from 2 million gallons a day to 4 million gallons a day of water production that we can provide at this plant. And now we're going from 4 to 10. So we used to have one filter. We added the second one, and now we'll have three. So in total of five filters with inside this building. So this is just some additional pictures of the building going up. This is the front of the building here on your right-hand side, just showing what's happening in here. This plant is under construction. It'll be under construction until possibly the end of or mid-2028 until that production comes online. So we're working through that process over the next year and a half, two years here. This is another portion of it. Inside that building also, we had initially two chemical skids. We added three more. In total, there'll be 14 chemical skids inside that building. So as you can see here, rows of chemicals as we treat the water. Here to the right, we have our equalization basin. This here is a piece of equipment they use. It's a slide rail system where they actually put these big posts in the ground. They slide these dividers in, basically, that holds back the wall of dirt because it's 30 foot deep. So they were able to dig straight down and then place this concrete mold and build this up so it's about 30 foot deep inside that water currently in there. So they did that all the way down. They built it up. They finished that portion of it. So now they're moving on. This is backfilling around it as they've removed these slides. So that held dirt in place. And then they'll move on to a reclaimed tank, which this will be set out there. It's a cone bottom tank. So we move some of that sludge and dirt that's filtered out of the water. It drains down to the cone bottom of that tank. We treat it a little bit more, squeeze the water out of it, turns into dirt, and then we haul that off to the dump. But again, this project here is still ongoing. We'll be working through that here. again, over the next couple years as we move forward with that plan. Currently, the CFDs are paying for that, and they turn it over to the Water District, and then those customers in those CFDs, as you guys approve bonds, would be paying back the development for those. Any questions on those so far? And a quick update. We sent out to you earlier this week, we had a water main break on baseline between Winchester and Idaho. We got called out on Saturday of a leak on baseline. We shut it down that night. We had work on Monday. We started the repair. We had a leak because when they put the pipe in, it was C900, a plastic pipe at that time. Unfortunately, there was not good bedding, so they put it on top of rocks or asphalt that was in the ground there. So over time, it vibrates. We have Caterpillar that drives through there. The heavy loads kind of compress that a little bit. And over time, they just wear a hole into that C900 pipe. That's why we currently no longer use that. So we had to repair that. We had to repair it on Monday to get everybody back in service. And then we also paved it back today, and by noon today we were back open to traffic on baseline. So we had that road closed for a couple days here while we did that repair. This is in our budget to be replaced this year, the section, basically from Public Works, which is a little further, all the way to Idaho, because this is roughly about the fifth main break we've had in this area over the last probably seven to ten years. So we want to get that taken care of. So that's why we had it budgeted for this year. So we'll continue to work towards that. We're in design. but then hopefully by springtime we'll have that main replaced so we no longer have these issues in that area. Any questions?

Yeah.

How old is that pipe? So that pipe was installed with a sewer drister back in 1998, so roughly about 30 years old. Yep. But we've noticed a lot of it's still in good condition, but unfortunately where we have that heavy loads, we're having some issues with it at this point in time.

Yeah.

All right. I'm going to bring up Stacy Ramirez, our utility billing supervisor, to do the next couple presentations here to get you guys caught up to speed on some of the other things we're working on with the district.

Thank you, Mike.

Hello. Good evening. I am Stacy Ramirez, utility billing manager. So tonight we're going to talk about bad debt collections and outsourcing to Valley Collection Services. So first of all, what is a bad debt? So a bad debt is going to be a final billed account that's over 90 days, 90 to 120 days delinquent. So these are closed accounts. So what's changing? We're now moving those collection accounts over to Valley Collections. Why now? We're going to move these. We're going to get ahead of our growth. And this is a milestone for the district. We're the first ones to outsource to Valley Collections. What we plan this project to accomplish is to recover balances for the ratepayers funds and standardization to create one process for staff and to document to reporting for auditing purposes. The district has a due diligence on these accounts, so we must do the due diligence. First, we're going to review these accounts that are final billed. We're going to attempt to contact these customers, and we're going to apply our criteria. Once this is done, then we're sending these accounts to Valley Collections for them to collect on. Valley Collections is used through lots of towns and cities in Arizona to include Gilbert, Queen Creek, Tempe, Glendale, to say a few. How Valley Collection attempts to collect outstanding bad debt, they're going to mail an invoice to these customers, they're going to make a telephone call to these customers, and then they're going to put it on their credit. How we recover the funds back to the district. There's zero upfront fees. They're going to take 12.5%. We're going to retain the 87.5%. And we're going to get paid on the 15th of the month through a wire transfer, or ACH. So an example, if we send an account that's $100, we're going to receive the 87.5%. And they're going to retain their portion at $12.50. What can we expect? These rates are just a benchmark. The average runs between 11 and 15% on collection accounts for utilities. They're suggesting or telling us they could receive up to 15 to 18% here in Arizona. So again, this is just a benchmark. This is an example of the invoice that would be mailed out to them. It will have our name on it with our original account number, an itemized bill, the amount. It will have instructions on how to dispute the debt, and then payment options, and then also the customer right for information. Do you have any questions for me?

Yes.

Pardon me?

Question. I realize you might not have the exact figure, but what percentage of your receivables do you determine turns into uncollectible bad debt that you have to write off?

That's a great question. Under 2% currently. How much? Under 2% currently.

That's good.

We're getting ahead of the growth.

Pay your bill, Peter. Chair, if I could just ask you, Stacey, could you just tell a success story that we have with a veteran in one minute or less? Could you just briefly tell what you did for that customer?

So we have a chronic customer that's always delinquent.

He cuts his lock off his meter.

We have to go out and try to collect our money. He actually went to collections, or he started the process of collections, and he went for bankruptcy court, if I remember correctly, right? It was a bankruptcy court. We were able to get a hold of this customer and actually reach out to the vets that had a program that they were making payment. So we were able to, instead of having, we wouldn't have received the money, right, if it went to bankruptcy anyways. So we reached out to our contacts. We knew it was a vet, and we got that account paid in full. So staff does a great job. My staff does a great job at making attempts to call and using those resources that we have. Our last thing we want to do is send these accounts to collections.

A couple leg breakers out there? Yes, sir.

That's what I wanted to say, that there was some success stories when you have collections and people do pay, and there are some resources for certain people that also they can assess them in getting paid. So I just wanted to point that out and she does do a wonderful job.

The VCS, are they allowed to negotiate the debt? You know, 50 cents on the dollar, 10 cents on the dollar, what?

We haven't had that conversation since we're barely sending those accounts off here shortly, probably within the next couple weeks. If there ever is a phone call like that, we'd look at our contract and we'd have that discussion.

Yes.

Stacy, I assume that you're going to go to this situation because it's an issue. correct? I mean, it's like, how much money is owed to Apache Junction? Any ballpark figure?

Right over $24,000 we'll be sending out to be collected on.

And is that just for one year, this year, everything for the last 10 years?

So prior to this year, we were writing off bad debt. So we were receiving zero prior to. We just didn't have the numbers to have to go out and outsource. Again, we're looking ahead for the future. Our numbers are quite low, but we're going to set the standards.

Yeah, we've moved to, what was it, about 4,500 customers to now over 9,000?

We just hit 9,000 this week.

Yeah, so it's important to get this as part of the regular operating procedure early on.

Mr.

Chair? Yes. Yeah, just a comment. I was in an industry where we had to go to third-party collection agencies because they're They know how to do it. They know what to do. And I think it's a great idea because it saves you guys having to be the bad guy in all of this. And so it's worth that 12% if you can get that 87%.

Right. Yes, sir.

Good decision.

Anybody else? Thank you.

Thank you.

Okay. Our next project or slide is going to be on text to pay. This is a simple, convenient way to pay your water bill. So what is text to pay? It's a new way to receive a message that you have a text that your bill is due. So it's fast and convenient, secure, and it's just another method of payment. Customers can enroll through text to pay through their customer portal. They choose text to pay. They confirm the payment method is correct, and then the payment is processed. So once we send out a bill, they will receive a text that your bill is now due. They've already selected it. They know what method of payment, and it'll come out of their account. How will the customers learn about this? We'll do a bill insert. We'll do on our website. You can send out email notification, social media, and then also our customer service staff will get that information out. How many customers do we expect? Well, it'll grow over time. Our numbers will grow over time with people or our customers signing up for text to pay. So after we launch, we'll have better numbers. And then results will help us measure the success of the program by those numbers. Technology and growth. This gives the customer another modern payment option. It helps us improve our customer service and then it supports the district as we continue to grow. Do you have any questions?

Mike, that plate's still way out of date.

I have one in this aspect. Is it using a credit card or are you going to directly go into the person like Checking account and withdrawing the money from their account.

Yeah, that's a great question. The customer will actually go to their customer portal and they'll elect which method they would like. Checking, savings, debit, credit. No, not yet, but we've looked into it. We will be there one day, I'm sure. We should be done with this by the end of the year, if not next month.

Okay.

Any other questions? Thank you so much.

Thank you.

Thank you.

District Treasurer's Report. Okay, I will adjourn this session.