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HomeMy WebLinkAbout11-22-2022 Special Council Meeting Summary Minutes 16, ,_ MARANA AZ CELEBRATING 45 YEARS MARANA TOWN COUNCIL SPECIAL COUNCIL MEETING 11555 W. Civic Center Drive, Marana, Arizona 85653 Second Floor Conference Center, November 22, 2022, at or after 11:00 AM Ed Honea, Mayor Jon Post, Vice Mayor Patti Comerford, Council Member Jackie Craig, Council Member Herb Kai, Council Member John Officer, Council Member Roxanne Ziegler, Council Member SUMMARY MINUTES CALL TO ORDER AND ROLL CALL Vice Mayor Post called the meeting to order at 6:00 PM and directed the Town Clerk to call the roll. Mayor Honea was excused. All other Council Members were present, constituting a quorum. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE: Led by Vice Mayor Post. APPROVAL OF AGENDA Council Member Ziegler moved to approve the agenda as presented. Council Member Comerford seconded the motion. Motion passed, 6-0. CONSENT AGENDA Special Council Meeting Summary Minutes November 22,2022 Page 1 of 13 Cl Resolution No. 2022-121: A resolution of the Mayor and Common Council of the Town of Marana, Arizona, approving the form and authorizing the execution and delivery of a loan agreement with the Water Infrastructure Finance Authority of Arizona from its Drinking Water Revolving Fund Program; delegating the determination of certain matters relating thereto to the manager of the town; providing for the transfer of certain monies and making certain covenants and agreements with respect thereto; authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by such loan agreement and this resolution and declaring an emergency (Jing Luo) Council Member Ziegler moved to approve the consent agenda. Council Member Officer seconded the motion. Vice Mayor Post requested a roll call vote. In favor: Vice Mayor Post, Council Member Craig, Council Member Comerford, Council Member Kai, Council Member Officer, and Council Member Ziegler. Against:None. Motion passed, 6-0. COUNCIL ACTION Al Resolution No. 2022-122: Relating to Elections; declaring and adopting the results of the Town of Marana general election held on November 8, 2022 (David L. Udall) Town Clerk/Assistant Town Attorney David Udall informed the Council that the Town had received the official canvass of votes of the November 8, 2022 general election and that Resolution No. 2022-122 now incorporated the results of the official canvass. Council Member Kai moved to approve Resolution No. 2022-122. Council Member Ziegler seconded the motion. Motion passed, 6-0. ITEMS FOR DISCUSSION/POSSIBLE ACTION D1 Relating to Water;presentation,discussion,and possible direction regarding the Town of Marana's one-megawatt allocation of Parker-Davis hydropower, drought preparedness plan, water conservation program, and water resources (Jing Luo) Water Director Jing Luo and Water Resources Coordinator Asia Philbin presented on this item. A copy of the PowerPoint presentation is on file with the Town Clerk's Office. Also on file with the Town Clerk are the following three handouts provided at the meeting: a copy of Marana Resolution No. 2007-177, a document titled, "Draft Table 1. Special Council Meeting Summary Minutes November 22,2022 Page 2 of 13 Summary Drought Stage Response Measures," and a document titled, "Brief Summary of Conservation Incentive Programs by local providers and AMWUA cities and towns." Dr. Luo introduced and then began presenting on the following topics: hydropower, water resource acquisition, designated assured water supply (DAWS) modification, droughts preparedness plan revision, and the Town's water conservation program. • Hydropower Update: o Dr. Luo showed a slide depicting the hydropower distribution process and explained that the Town has a one-megawatt (1MW) allocation of Parker- Davis hydropower. o Challenges (also see PowerPoint slide for a related bar graph): • Underutilization: the Town only uses approximately 50% of the 1MW. • High cost of scheduling services: the Town pays approximately $5,000 per month to Arizona Electric Power Cooperative (AEPCO) with a 3% annual escalation. • Past scheduling fee deferment-in which,the Town owed to AEPCO $216,000. • Accumulated loss over the last 13 years of$129,000. o Resolutions (also see PowerPoint slide for an image of a related letter): • In June 2022, AEPCO waived the deferment of$216,000 entirely. • Starting from September 2022, AEPCO/Trico Electric Cooperative (TRICO) stopped charging the $5,000 service fee. • Accumulated savings now of approximately $87,000 in place of an accumulated loss. • Moving forward, we will pay the TRICO rate for the power we use. • The 1MW of hydropower is still under the Town's contract until 2028, and the Town can decide how it wants to proceed thereafter. Regarding the hydropower agreement, Council Member Kai asked if the Town would be responsible for any holding costs until 2028 and asked what TRICO's retail rate was. Dr. Luo said there would not beholding costs to her knowledge and Ms. Philbin explained the retail rate varies, but could be around 15 cents per kilowatt hour for the Town, depending on the use. Council Member Ziegler asked if the Town was in a deficit and if the contract terminated in 2028. Dr. Luo confirmed the Town is no longer in a deficit and that the contract would terminate in 2028. Council Member Ziegler asked if the Town knew how much of the 1MW it would use between now and 2028. Dr. Luo said the Town would use the same Special Council Meeting Summary Minutes November 22,2022 Page 3 of 13 amount it currently uses, and Deputy Town Manager Erik Montague commented that it could change depending on how many wells come online and when the expansion of the reclamation facility comes online. Council Member Ziegler asked what the Town's options would be in 2028. Town Attorney Jane Fairall explained that the Town could renew the contract/apply for a reallocation if the Town wants to continue the relationship, or the Town could terminate the agreement without penalty. Vice Mayor Post asked what the Parker-Davis rate was. Dr.Luo said she would need to get back with the Council with the commercial and hydropower rate comparison. Vice Mayor Post asked why the Town is the only entity not making any money on a hydropower contract, and asked if the Town had approached Tucson Electric Power (TEP). Dr. Luo said the Town has approached TEP and that TEP was not interested. Ms. Fairall explained that TEP did not want to deal with anything less than 1MW.Vice Mayor Post commented that he was glad the Town was keeping its allotment,but was surprised it could not make it work financially. Mr. Montague explained that if the Town had been able to use the full megawatt, there would have been significant savings. Vice Mayor Post asked if the Town cold lay off the portion of the megawatt the Town was not using, and said that is what other entities do so they only use what they need. He also expressed concern at the high cost of scheduling and asked why the Town is not expecting TRICO to do more. Mr. Montague explained that the scheduling was required by contract, but that it is now being waived. Vice Mayor Post said the Town should negotiate a better deal because TRICO will profit well with the Town's current 1MW arrangement. He explained that the Cortaro Marana Irrigation District (CMID) has 3MWs, and that another entity pays CMID them for what they do not use. He said CMID also banks power with TEP,which can be withdrawn and used during high-usage times. He asked if this was the best deal the Town could get. Council Member Kai asked if the Town had engaged the services of a power attorney, and Dr. Luo said that Michael Curtis is the Town's outside power attorney. Ms. Fairall explained that Mr. Curtis has been engaged throughout the process. She also explained that the starting point is with the contracts already in place with TRICO and AEPCO. She said the Town is currently negotiating from a position where it is required to pay the scheduling fees it agreed to pay and where it is required to pay back the deferred $216,000, and that the Town has come a long way to see a gain rather than a net loss. Vice Mayor Post said that makes sense. Ms. Fairall also explained that Mr. Curtis informed staff of the Town's options regarding the contracts and that the Town was restricted from laying off the megawatt. As a result, Town staff works with him on other options to optimize the current arraignment. Special Council Meeting Summary Minutes November 22,2022 Page 4 of 13 Council Member Ziegler asked how long we have been in this contractual relationship. Mr. Fairall said the Town has been in the contractual relationship since 2008, and that it was seen as a good deal at the time. She said if the Town had been able to use the full megawatt, it would have experienced savings. Council Member Ziegler asked if the Town could terminate the agreement early, and if so, what the penalties would be. Dr. Luo explained if that were the case,the Town would still need to pay the TRICO rate,but it would no longer have hydropower as an option. Council Member Kai said he thinks the Town should ask Mr. Curtis to get more creative and see what he can do about the 1MW. He commented that the fee waivers received are good,but that the Town is still paying the full retail rate. Vice Mayor Post said the Town could renegotiate with all parties involved in 2028 and make a decision at that time. Ms. Fairall said that was one of the benefits of continuing the contractual relationship until 2028, especially since the Town is no longer losing money. Council Member Comerford commented that the drought has an effect on all of this as well. Dr. Luo continued with the presentation. • Water Resource Acquisition Update: o Colorado River Water Shortage - 2023 Forecast Under IG and LBDCP. • 1050'<= Mead Elevation > 1045'. • Tier 2a shortage volume = 592 thousand-acre-feet of water (KAF). • 400 KAF per IG. • 192 KAF per LBDCP. • Pre-mitigation pool level impacts: • 100% reduction to Ag. • 100% reduction to NIA. • No reduction to Indian and M&I o Water Resource Acquisition Task Force Topics Schedule • Dr. Luo showed a table viewable in the PowerPoint slides and explained the makeup of the task force. She said that so far, the task force has developed an inventory of opportunities for water right acquisitions. o Other On-Going Water Resource Projects: Special Council Meeting Summary Minutes November 22,2022 Page 5 of 13 • Minimize the loss of effluent in the Santa Cruz River beyond the Trico Rd. gage, beyond which, the effluent currently flows into another active management area. • Getting a proposal from Dibble Engineering to evaluate the feasibility of effluent diversion at El Rio for other regional partners. • Coordinating with CMID/Cairo Engineering on potentially creation of long-term storage credits (LTSC). • Coordinating with Tucson,Bureau of Reclamation(BOR),and others. • Explore Opportunity for Direct Potable Reuse (DPR) • Getting a proposal from Carollo Engineers for a feasibility study. Council Member Kai asked if the Town has contacted the BOR regarding regarding the Santa Cruz River. Dr. Luo confirmed the Town has approached the BOR and is trying to schedule a meeting. Dr. Luo continued with the presentation. • DAWS Modification Update: o DAWS modification is on schedule. • May 26th, 2022: the Arizona Department of Water Resources (ADWR) recognized the Town's submitted application. • October 17,2022: ADWR issued the first Notice of Deficiency (which was expected and is a normal part of the process). • November 8, 2022: deficiency review meeting with ADWR. • December 16, 2022: deadline for Marana's response to deficiency. • The Town is still on track to complete by May 2023. • Dr. Luo highlighted the image of the deficiency letter in the PowerPoint slide. o Key Response Items: • System Connectivity. • Demand/Population Projection. • Locations of Tucson Water Pumping. o Dr. Luo showed a with a graph depicting the historic groundwater level trends near the Marana Service Area and said the aquifer is fairly healthy. Special Council Meeting Summary Minutes November 22,2022 Page 6 of 13 Council Member Craig asked if the data points on the graph constituted different wells. Dr. Luo said they did, and explained the wells represent the Town's water service area. Vice Mayor Post asked if staff has ever considered selling some of the Town's fringe water service areas to other companies. Dr. Luo said staff has not seriously considered it. Vice Mayor Post asked if staff has investigated having another water company come into Marana to serve new customers. Dr. Luo explained the Town has a wheeling agreement with Tucson Water, but otherwise staff has not considered bringing in anther water company. Council Member Ziegler said San Tan subcontracts water service there. Dr. Luo said these ideas were something staff could consider, but the focus tonight was on the acquisition of additional water resources. She then continued with the presentation. o Marana Water Resources Moving Forward: ■ Continue on the Water Resources Task Force and projects. Council Member Craig asked if there were any leads yet on water acquisition opportunities for the Town. Dr. Luo said some opportunities to purchase water exist based on conversations held during the task force meetings, and that staff would present on the task force's findings in March. Dr. Luo continued with the presentation. ■ Continue on DAWS modification process with ADWR. ■ Optimize the use of supplies. • Continue to store and recover Central Arizona Project (CAP) water and effluent (ongoing). • Continue to generate long-term storage credits (LTSC) and groundwater credits (ongoing). • Increased coordination with AWBA, CAP, CAGRD for water order (ongoing). • Execute AWBA agreement for self-recovery (completed). ■ Conduct a New Rate Study in FY24. ■ Brief Council and get Council input. • Prepare final drought preparedness plan for Council adoption. • Water conservation fee proposal. Special Council Meeting Summary Minutes November 22,2022 Page 7 of 13 Council Member Ziegler asked what company the Town is using for the rate study. Dr. Luo said the Town has been using Raftelis Financial Consultants, Inc. Ms. Philbin continued with the presentation. • Drought Preparedness Plan Revision Update and Discussion: o Best Practice and Regulatory Requirement • Arizona Drought Preparedness Plan (2004, 2007- present) • ADWR is the responsible party with reliance on: o Drought Monitoring Technical Committee (MTC) o Governor's Drought Interagency Coordinating Group (ICG) o Local Drought Impact Groups (LDIGs) o Others (e.g. municipal water providers, such as the Town) • The Drought Preparedness Plan is meant to address: o Conditions of precipitation, streamflow, forest health and drought declarations or disaster designations. o Events with impacts exacerbated by drought, for example: wildfires and flooding. o State, community, and individual actions. • Set requirements for Community Water Systems and municipal water providers to develop a Drought Preparedness Plans (DPP). o Features of the Town's DPP(also see the PowerPoint slide for images of the Town's 2007 DPP and the new draft DPP): • Council Adoption of the DPP (Resolution No. 2007-177) (will be revised in the new DPP). • Stages of advancing drought(Four) (will remain the same in the new DPP). • Indicators for each stage (four) (will be revised in the new DPP to two indicators, one local and one regional). • Triggered indicators determine drought stage (two of four) (will be revised in the new DPP to be one of two). • Consistency with other providers (Water CASA) (will remain the same in the new DPP). • Voluntary measures 4 compulsory measures (Stage 1,2 - Stage 3,4) (will remain the same in the new DPP). Special Council Meeting Summary Minutes November 22,2022 Page 8 of 13 ■ Compulsory measures are tied to the Town Code (14-7-4 Emergency Water Conservation) (will remain the same in the new DPP). ■ Drought management team involving multiple Town departments (will be new in the new DPP). ■ Process for declarations and communications (will be new in the new DPP). o Ms. Philbin showed a slide depicting drought conditions from 2000 - 2022 from the U.S. Drought Monitor, and said that in contrast with the Town's current DPP - which is focused on local drought indicators - the Town's new DPP would focus on both local and regional indicators. Ms. Philbin showed a slide with an image depicting the comparison of indicators, triggers, and stage assessment, and noted the first tier in the upper-right- hand column should be 1,075-1,050 instead of 1,090-1,075. Please see the PowerPoint slide for more information. o Drought Management Team (DMT): ■ Interdepartmental team led by the Water Department. ■ Involves staff with subject matter expertise. • Communications • Outreach • Development • Logistics ■ Town departments to demonstrate / lead by example. o Ms. Philbin showed slides outlining how the DMT would operate in the different drought stages, what the drought response measures (for the Town and for the public) would look like at various stages, and regarding the process of adopting a new DPP. Please see the PowerPoint slides for additional information. Council Member Craig commented that the proposed DPP stage response measures did not include a requirement to get rid of ornamental grass. Ms. Philbin said the measures do include getting rid of ornamental fountains, but said it currently does not include a measure regarding ornamental grass.She said it could be considered and deferred to Mr. Udall regarding what options the relevant Town Code provisions allow the Council to utilize. Mr. Udall explained that the Town Code currently does not include a provision banning ornamental grass when a DPP is activated, but it is something that could be considered. Council Member Kai recommended educating residents, particularly youth, on water conservation. Council Member Ziegler said parents should be focused on as well. Vice Special Council Meeting Summary Minutes November 22,2022 Page 9 of 13 Mayor Post expressed concern that the new DPP may negatively impact commercial water haulers that help those who have lost their wells due to drought. Ms. Philbin said that can be taken into account in defining and clarifying the measures. Ms. Philbin continued with the presentation. • Water Conservation Program Update and Discussion: o Ms. Philbin showed a slide depicting a flow chart of the Town's Conservation Program-Adaptive Management.Please see the PowerPoint slide for more information. o Conservation Program-Past(see slide for further images and information): ■ Water CASA of Southern Arizona • Helped the Town in the beginning to address system water loss, i.e. "lost and unaccounted for water." • Helped the Town establish its 2007 DPP(Resolution No. 2007- 177,a copy of which was included as a handout at the meeting and is on file with the Town Clerk's Office). • Helped the Town develop BMPs (Basis for Annual Conservation Efforts Report). ■ Multiple factors lowered gallons per capita per day (GPCD) 1997- 2022: • Active conservation programming. • EPA water sense/predominance of lower use appliances. • Economic downturn and great recession. • Ms. Philbin showed slide with a graph depicting the lowering. Please see the PowerPoint slide for more information. Council Member Craig asked if the decrease was influenced by the increase in multi- family apartment housing. Ms. Philbin said that she believes it was conceptually, but staff has not looked at the data on it yet. o Conservation Program- Present: ■ Conditions: • ADWR Fifth Management Plan (5MP) - includes progressively more rigorous regulatory measures. • Colorado River: shortage + structural deficit reducing M&I supply to the Tucson Active Management Area (TAMA). Special Council Meeting Summary Minutes November 22,2022 Page 10 of 13 • Accelerated growth - residential and non-residential construction. • Uncertainty and high cost for new supplies. • New grant opportunities. ■ Efforts: • Continuing past efforts(replacing Water CASA with in-house efforts). • Marana Water Festival. • Marana Citizens' Water Academy. • Eye on Water (customer portal). • Drought Preparedness Plan update. • Ms. Philbin also showed slides with photographs and relevant graphs. o Conservation Program- Future: ■ Conditions (see slides for a flow chart and other relevant information): • Continued drought. • Continued growth. • Supply uncertainty. Ms. Philbin said the Water Department is hoping to hire a conservation professional and Council Member Ziegler asked if it was within the Town's budget. Ms. Philbin confirmed that it was. Council Member Craig asked about changing the Town's building codes to require more water conservation for new construction, such as water recirculating pumps. Ms. Philbin said the Town could consider making changes to the Code. Vice Mayor Post commented that the Town needs to maintain Town-owned turf for recreation purposes and that it is in a position to maintain it responsibly with respect to water conservation. Ms. Philbin thanked the Council Members for their feedback. Ms. Philbin continued with the presentation. ■ Increased outreach and engagement: • Citizens' Water Academy (CWA). • Rebate Programs: o Instant water heaters. o Low flow toilets. o Rainwater harvesting. • Programs for HOAs / commercial, new construction. • Coordinate contracts and partnerships. Special Council Meeting Summary Minutes November 22,2022 Page 11 of 13 • Evaluate effectiveness of current programs. • Research and implement additional programs. o Proposed Conservation Program - Annual Cost Estimate (see slides for tables relating to fee schedule change proposals): ■ Personnel: approximately $69,000. ■ Rebates: approximately $50,000. ■ Additional Elements: approximately $30,000. • Supplies for CWA, outreach events. • Subject matter expertise: o Contracts. o Partnerships. o Training and networking. ■ Total: approximately $150,000/year Mr. Montague requested feedback between this special meeting and when staff returns with an action item regarding the new DPP. Dr.Luo also requested feedback on funding levels. Dr. Luo recommended the Town take the following steps going forward: • Continue working on water resources acquisition related projects. • Finalize the new Drought Preparedness Plan for Council's adoption. • Finalize the Water Conservation Program/fees for Council's adoption. Council Member Comerford commented that the Town should not enact measures substantially different from the City of Tucson in order to maximize consistency and avoid confusion because many of Marana's citizens are Tucson Water customers. Dr.Luo said the Town strives to be in line with Tucson and other jurisdictions in the region. EXECUTIVE SESSIONS Pursuant to A.R.S. § 38-431.03, the Town Council may vote to go into executive session, which will not be open to the public, to discuss certain matters. El Executive Session pursuant to A.R.S. §38-431.03 (A), Council may ask for discussion or consideration, or consultation with designated Town representatives, or consultation for legal advice with the Town Attorney, concerning any matter listed on this agenda for any of the reasons listed in A.R.S. §38-431.03 (A). FUTURE AGENDA ITEMS Special Council Meeting Summary Minutes November 22,2022 Page 12 of 13 Notwithstanding the Mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Section 2-4-2(B). ADJOURNMENT Vice Mayor Post asked for a motion to adjourn the meeting. Council Member Ziegler moved to adjourn the meeting. Council Member Kai seconded the motion. Motion passed, 6-0. Meeting adjourned at 7:36 PM. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council special meeting held on November 22, 2022. I further certify that a quorum was present. David L. Udall, Town Clerk fiana MARANA AZ ESTABLISHED 1971 Special Council Meeting Summary Minutes November 22,2022 Page 13 of 13